FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period.........to.........
Commission file number 0-15347
GROWTH HOTEL INVESTORS
(Exact name of registrant as specified in its charter)
California 94-2964750
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's phone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports ), and (2) has been
subject to such filing requirements for the past 90 days. Yes X . No .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) GROWTH HOTEL INVESTORS
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
June 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 3,780 $ 3,600
Restricted cash 198 189
Deferred costs 696 739
Receivables and other assets 265 231
Investment in unconsolidated joint venture 8,499 8,153
Investment properties:
Land 3,098 3,098
Buildings and related personal property 20,712 20,234
23,810 23,332
Less accumulated depreciation (9,166) (8,734)
14,644 14,598
Total assets $ 28,082 $ 27,510
Liabilities and Partners' Equity
Liabilities
Accounts payable and other liabilities $ 582 $ 562
Notes payable 5,421 5,433
Minority interest in joint ventures 68 76
Partners' Equity (Deficit):
General partner (993) (1,034)
Limited partners' (36,932 units outstanding
at June 30, 1996 and December 31, 1995) 23,004 22,473
Total partners' equity 22,011 21,439
Total liabilities and partners' equity $ 28,082 $ 27,510
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but that does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
See Notes to Consolidated Financial Statements
b) GROWTH HOTEL INVESTORS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Hotel operations $ 2,066 $ 2,187 $ 3,690 $ 3,845
Equity in unconsolidated
joint venture operations 659 739 1,145 1,024
Interest and other revenue 69 58 101 106
Total revenues 2,794 2,984 4,936 4,975
Expenses:
Hotel operations 1,280 1,210 2,421 2,306
Interest 176 203 345 409
Depreciation 224 178 432 333
General and administrative 206 97 381 227
Total expenses 1,886 1,688 3,579 3,275
Net income before minority
interest in joint ventures'
operations $ 908 $ 1,296 $ 1,357 $ 1,700
Minority interest in joint
ventures' operations 6 (11) 9 (22)
Net income $ 914 $ 1,285 $ 1,366 $ 1,678
Net income allocated to
general partner $ 64 $ 91 $ 96 $ 118
Net income allocated to
limited partners 850 1,194 1,270 1,560
$ 914 $ 1,285 $ 1,366 $ 1,678
Net income per limited
partnership unit $ 23.02 $ 32.33 $ 34.39 $ 42.24
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
c) GROWTH HOTEL INVESTORS
CONSOLIDATED STATEMENT OF PARTNERS' EQUITY
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited General Limited
Partnership Partner's Partners' Total
Units Deficit Equity Equity
<S> <C> <C> <C> <C>
Partners' (deficit) equity at
December 31, 1995 36,932 $ (1,034) $ 22,473 $ 21,439
Net income for the six months
ended June 30, 1996 -- 96 1,270 1,366
Cash distributions for the six
months ended June 30, 1996 -- (55) (739) (794)
Partners' (deficit) equity at
June 30, 1996 36,932 $ (993) $ 23,004 $ 22,011
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
d) GROWTH HOTEL INVESTORS
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,366 $ 1,678
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 474 378
Equity in unconsolidated joint venture
operations (1,145) (1,024)
Minority interest in joint ventures' operations (9) 22
Deferred income -- (25)
Deferred costs paid -- (775)
Change in accounts:
Receivables and other assets (34) (121)
Accounts payable and other liabilities 21 (223)
Net cash provided by (used in) operating
activities 673 (90)
Cash flows from investing activities:
Properties and improvements additions (478) (919)
Unconsolidated joint venture distributions 799 806
Restricted cash increase (decrease) (9) 69
Net cash provided by (used in) investing
activities 312 (44)
Cash flows from financing activities:
Cash distributions to partners (794) (825)
Notes payable principal payments (11) (16)
Net cash used in financing activities (805) (841)
Net increase (decrease) in cash and cash equivalents 180 (975)
Cash and cash equivalents at beginning of period 3,600 4,899
Cash and cash equivalents at end of period $ 3,780 $ 3,924
Supplemental information:
Interest paid $ 308 $ 410
<FN>
See Notes to Consolidated Financial Statements
</TABLE>
e)
GROWTH HOTEL INVESTORS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of NPI Realty Management Corp. ("NPI
Realty" or the "Managing General Partner"), all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended June
30, 1996, are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-K for the year ended December 31, 1995.
The balance sheet at December 31, 1995, was derived from audited financial
statements at such date.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Note B - Transactions with Affiliated Parties
Growth Hotel Investors (the "Partnership") has no employees and is dependent on
the Managing General Partner and its affiliates for the management and
administration of all partnership activities. The Partnership Agreement
provides for reimbursement of certain expenses incurred by affiliates on behalf
of the Partnership. The following transactions with affiliates of Insignia
Financial Group, Inc.("Insignia"), National Property Investors, Inc. ("NPI"),
and affiliates of NPI were charged to expense in 1996 and 1995:
For the Six Months Ended
June 30,
1996 1995
Reimbursement for services of affiliates (included
in general and administrative expenses) 136,000 63,000
The general partner is Montgomery Realty Company-85 ("MRC-85"), a California
general partnership. The general partners of MRC-85 are Fox Realty Investors
("FRI"), a California general partnership, and NPI Realty. On February 13,
1996, NPI Realty, which acquired its interest in MRC-85 from Montgomery Realty
Corporation on November 15, 1995, became the managing general partner of MRC-85.
On January 19, 1996, all of the issued and outstanding shares of stock of NPI,
the sole shareholder of both NPI Equity Investments II, Inc. ("NPI Equity"), the
managing general partner of FRI, and NPI Realty was acquired by an affiliate of
Insignia. In connection with these transactions, affiliates of Insignia
appointed new officers and directors of NPI Equity and NPI Realty.
Note C - Restricted Cash
Restricted cash at June 30, 1996, and December 31, 1995, represents funds
provided for and maintained by certain properties pursuant to the related notes
payable agreements, to meet future capital requirements and debt service
payments.
Note D - Amendment to Service Agreement
The Partnership paid $775,000 in January 1995 to Metric Management, Inc. ("MMI")
amending their services agreement to provide for a reduction in the monthly
asset management fee from $29,750 to $5,500. This amendment eliminated fees
payable to MMI for its assistance in refinancing and sales of properties owned
by the Partnership and provides the Partnership with the ability to terminate
MMI's services at will.
The buyout of the service contract is being amortized over the remaining term of
the services agreement of 10 years. For the six months ended June 30, 1996,
$39,000 has been amortized and is included in general and administrative
expenses.
Note E - Distributions
The Partnership made distributions in June 1996 and May 1995, of approximately
$794,000, including $739,000 distributed to the limited partners ($20 per
limited partnership unit) and $55,000 to the general partner.
Note F - Investment in Unconsolidated Joint Venture
The following are the condensed balance sheet as of June 30, 1996, and December
31, 1995, and condensed statements of operations for the three and six month
periods ended June 30, 1996 and 1995, for the Partnership's investment in Growth
Hotel Investors Combined Fund No. 1 (the "Combined Fund"), which is reported
under the equity method of accounting.
GROWTH HOTEL INVESTORS COMBINED FUND NO. I
CONDENSED BALANCE SHEETS
(in thousands)
June 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 2,902 $ 3,657
Restricted cash 827 570
Deferred costs and other assets 1,704 1,100
Investment Properties
Land 10,369 10,369
Buildings and related personal property 78,924 77,031
Less: Accumulated depreciation (29,314) (27,313)
Investment properties, net 59,979 60,087
Total assets $ 65,412 $ 65,414
Liabilities and Partners' Capital
Liabilities
Accounts payable and other liabilities $ 1,721 $ 1,552
Due to an affiliate of the joint
venture partner 828 756
Notes payable 40,499 40,836
Minority interest in consolidated
joint venture (5,033) (4,037)
Partners' Equity
GHI 8,499 8,153
GHI II 18,898 18,154
Total partners' equity 27,397 26,307
Total Liabilities and Partners' Equity $ 65,412 $ 65,414
Note: The balance sheet at December 31, 1995 was derived from audited financial
statements at such date.
Note F - Investment in Unconsolidated Joint Venture (continued)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues $ 10,408 $ 9,965 $ 19,186 $ 18,340
Expenses (8,526) (7,699) (15,967) (14,810)
Income before minority
interest in joint
venture's operations 1,882 2,266 3,219 3,530
Minority interest in joint
venture's operations 194 63 389 (304)
Net income $ 2,076 $ 2,329 $ 3,608 $ 3,226
Allocation of income:
GHI $ 659 $ 739 $ 1,145 $ 1,024
GHI II 1,417 1,590 2,463 2,202
Net income $ 2,076 $ 2,329 $ 3,608 $ 3,226
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Investment Properties:
A description of the hotel properties in which the Partnership has an ownership
interest, together with occupancy and room rate data follows:
<TABLE>
<CAPTION>
Average Average Daily
Occupancy Rate Room Rate
For Quarter Ended For Quarter Ended
June 30, June 30,
Name and Location 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Growth Hotel Investors:
Hampton Inn-Syracuse 52% 57% $58.93 $53.47
East Syracuse, New York
Hampton Inn-Brentwood 81% 79% 68.94 58.74
Nashville, Tennessee
Hampton Inn-Aurora 70% 80% 59.95 55.01
Aurora, Colorado
Hampton Inn-Albuquerque North 68% 83% 56.57 54.06
Albuquerque, New Mexico
Growth Hotel Investors
Combined Fund No. 1:
Hampton Inn-Memphis I40 East 75% 79% 53.88 52.57
Memphis, Tennessee
Hampton Inn-Columbia-West 78% 86% 59.72 53.82
West Columbia, South Carolina
Hampton Inn-Spartanburg 63% 70% 52.40 46.51
Spartanburg, South Carolina
Hampton Inn-Little Rock, North 75% 80% 51.98 47.98
North Little Rock, Arkansas
Hampton Inn-Amarillo 65% 72% 52.60 48.93
Amarillo, Texas
Investment Properties: (continued)
Average Average Daily
Occupancy Rate Room Rate
For Quarter Ended For Quarter Ended
June 30, June 30,
Name and Location 1996 1995 1996 1995
Growth Hotel Investors
Combined Fund No. 1:
(continued)
Hampton Inn-Greenville 79% 81% 57.54 $ 51.74
Greenville, South Carolina
Hampton Inn-Charleston-Airport 80% 79% 55.61 53.74
North Charleston, South Carolina
Hampton Inn-Memphis-Poplar 83% 84% 68.13 64.24
Memphis, Tennessee
Hampton Inn-Greensboro 81% 88% 64.98 57.59
Greensboro, North Carolina
Hampton Inn-Birmingham 76% 84% 60.21 57.73
Birmingham, Alabama
Hampton Inn-Atlanta-Roswell 80% 84% 64.02 57.48
Roswell, Georgia
Hampton Inn-Chapel Hill 86% 86% 61.45 55.34
Chapel Hill, North Carolina
Hampton Inn-Dallas-Richardson 82% 78% 56.17 50.32
Richardson, Texas
Hampton Inn-Nashville- 79% 87% 67.33 61.28
Briley Parkway
Nashville, Tennessee
Hampton Inn-San Antonio-Northwest 63% 65% 58.53 58.28
San Antonio, Texas
Hampton Inn-Madison Heights 74% 69% 58.19 53.32
Madison Heights, Michigan
Hampton Inn-Mountain Brook 81% 75% 61.24 57.17
Birmingham, Alabama
Hampton Inn-Northlake 78% 80% 59.81 53.82
Atlanta, Georgia
</TABLE>
The Partnership's net income for the three and six month periods ended June 30,
1996 was approximately $914,000 and $1,366,000, respectively, as compared to
$1,285,000 and $1,678,000, respectively, for the corresponding periods of 1995.
The decrease in net income is attributable to a decrease in hotel operations
revenue and an increase in general and administrative expenses, hotel operating
expenses, and depreciation expenses. The decrease in hotel operations revenue
was due to a decrease in occupancy partially offset by increases in rates at the
Partnership's Albuquerque and Aurora properties. The decrease in occupancy at
the Albuquerque property is related to the construction of new hotels in the
area. The increase in general and administrative expenses is due to an increase
in legal and audit expenses and cost reimbursements for partnership
administration due to the transition of Partnership administration in 1996. The
increase in depreciation expense in 1996 is due to the additions to property and
improvements during the third and fourth quarters of 1995, as well as, the
purchase of assets in 1996 related to renovations at the Partnership's Hampton
Inn - Albuquerque property. Interest expense decreased during the six month
period ended June 30, 1996 due to the pay off of the Hampton Inn-Brentwood
property mortgage on December 1, 1995.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the hotel market environment of its investment properties to
assess the feasibility of increasing rates, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rates and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of concessions and room rate reductions
to offset softening market conditions, there is no guarantee that the Managing
General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership had unrestricted cash of $3,780,000 as
compared to $3,924,000 at June 30, 1995. Net cash provided by operating
activities increased due to the Partnership incurring costs of $775,000 during
the first quarter of 1995 in relation to a buyout agreement as discussed in
"Item 1. Financial Statements-Note D". Net cash provided by investing
activities increased for the six month period ended June 30, 1996, due to the
decrease in additions to property improvement.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of approximately $5,421,000 includes mortgages with
maturity dates in 1997. A balloon payment on the mortgage encumbering the
Partnership's Hampton Inn - Aurora property is due in May 1997 in the amount of
approximately $3,046,000. The Partnership's Hampton Inn - Albuquerque has a
balloon payment due in May 1997, in the amount of approximately $2,375,000. The
mortgages encumbering the Partnership's unconsolidated joint venture, the
Combined Fund's, Hampton Inn-Birmingham and Hampton Inn-North Lake properties in
the amounts of $2,444,000 and $2,387,000, respectively matured on August 1,
1996. The Managing General Partner is confident that extensions of these loans
will be granted. The Combined Fund has balloon payments due in December 1996 of
approximately $35,323,000. The Managing General Partner is discussing with the
lender options for extending these mortgages. The Managing General Partner is
currently in the process of retaining an investment advisor to assist in the
sale of the assets. It is expected that the Partnership will begin marketing
its properties for sale pursuant to the terms of the settlement discussed in
"Part II-Other Information Item 1. Legal Proceedings" during the second half of
1996. Future cash distributions will depend on the levels of cash generated from
operations, property sales and the availability of cash reserves. The General
Partner made a cash distribution in the second quarter of 1996 totalling
$794,000 of which $739,000 was distributed to the limited partners and $55,000
was distributed to the general partner.
On February 15, 1996, Devon Associates, a New York general partnership,
commenced a tender offer (the "Offer") for up to 15,000 of the outstanding Units
at a purchase price of $705.00 per Unit. Due to the participation in the tender
offer by affiliates of NPI Realty, and the Managing General Partner's related,
existing and potential conflicts of interest, the Partnership, in its Schedule
14D-9 filed with Securities and Exchange Commission and sent to limited
partners, expressed no opinion and made no recommendation as to whether limited
partners should tender their Units pursuant to the Offer. The expiration of the
tender offers described above was midnight, New York time, on March 25, 1996.
See Items 2-4 of the Schedule 14D-9 of the Partnership, as filed with the
Commission on February 29, 1996, as amended by "Amendment No. 1" thereto, as
filed with the Commission on March 7, 1996, and as further amended by "Amendment
No. 2" thereto, as filed with the Commission on March 14, 1996, and as further
amended by "Amendment No. 3" thereto filed with the Commission on March 18, 1996
(collectively, the "Schedule 14D-9"), for additional information with respect to
the Offer and the current and potential conflicts of interest of MRC-85, which
Items 2-4 are incorporated herein by reference. Devon Associates acquired
13,396 units with respect to this offer. See Part II Item I - Legal Proceedings.
On March 13, 1996, the Partnership received a letter advising that the
Partnership's and Growth Hotel Investors II ("GHI II") joint venture partner in
certain of the hotel properties was offering $147,000,000 in cash for all 28
hotel properties directly or indirectly owned by the Partnership and GHI II.
See "Amendment No. 2" to the Partnership's Statement on Schedule 14D-9, as filed
with the Commission on March 14, 1996, for a more complete description of this
offer, which "Amendment No. 2" is hereby incorporated by reference herein. By
the terms of the offer, the offer expired on March 31, 1996. The Managing
General Partner determined that before the offer could be recommended, if at
all, to the Partnership's limited partners further analysis of the hotel
properties and their value was needed. See "Part II. Item 1 - Legal
Proceedings" for information with respect to the marketing of the hotel
properties for sale in connection with the settlement of the actions arising out
of the Devon Associates tender offers.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
William Wallace, Mildred Wallace, Edith G. Martin, Paul Allemang and Gwen
Allemang, on behalf of themselves and all others similarly situated, and
derivatively on behalf of Growth Hotel Investors, a California limited
partnership and Growth Hotel Investors II ("GHI II"), a California limited
partnership, Plaintiff v. Devon Associates, Montgomery Realty-85, GHI
Associates, Cayuga Associates, L.P., Cayuga Capital Corp., Insignia Financial
Group, Inc., L.P., and Fleetwood Corp., Defendants and Growth Hotel Investors, a
California Limited partnership, and Growth Hotel Investors II, a California
limited partnership, Nominal Defendant, Supreme Court of the State of New York,
County of New York, Case No. 9600866. (the "Wallace Action").
On February 21, 1996, William and Mildred Wallace, holders of Units of GHI, and
Edith G. Martin and Paul and Gwen Allemang, holders of Units of the Partnership,
commenced an action on behalf of themselves and others similarly situated, and
derivatively on behalf of GHI and the Partnership, in the Supreme Court of the
State of New York, County of New York, against, among others, MRC-85 and certain
of its affiliates pertaining to the tender offer for up to 21,000 partnership
Units of GHI II and up to 15,000 partnership Units of the Partnership which
commenced February 15, 1996. The action alleged, among other things, that the
tender offers constituted (a) a breach of fiduciary duty owed to limited
partners and the partnerships, and (b) a breach of the provisions of the
partnership agreements of such partnerships. The action, which was brought as
both a derivative action and as a class action on behalf of all limited
partners, sought to enjoin the tender offers as well as monetary damages in an
unspecified amount.
R&S Asset Partners, a Florida general partnership, and Jessie B. Small, on their
own behalves, on behalf of all others similarly situated, and derivatively on
behalf of the Nominal Defendants, Plaintiffs, v. Devon Associates, Cayuga
Associates, L.P., Cayuga Capital Corp., Fleetwood Corp., Carl C. Icahn, Michael
L. Ashner, Martin Lifton, Arthur N. Queler, Insignia Financial Group, Inc.,
IFGP, Corp., National Properties Investors, Inc., NPI Equity Investment II,
Inc., Fox Fealty Investors, Portfolio Realty Associates, L.P., Emmet J. Cashin,
Jr., Jarold A. Evans, W. Patrick McDowell, Apollo Real Estate Advisors, L.P.,
and Montgomery Realty Company-85, Defendants, and Growth Hotel Investors, a
California Limited Partnership, and Growth Hotel Investors II, a California
Limited Partnership, Nominal Defendants, Superior Court of the State of
California, County of Los Angeles, Case No. BC145220 (the "R&S Asset Partners
Action").
On February 28, 1996, R&S Asset Partners, holders of Units of GHI, and Jesse B.
Small, holder of Units of the Partnership, commenced an action on behalf of
themselves and others similarly situated, and derivatively on behalf of GHI and
the Partnership, in the Superior Court of the State of California, County of Los
Angeles, against, among others, MRC-85 and certain of its affiliates pertaining
to the tender offer for up to 21,000 partnership Units of GHI II and up to
15,000 partnership Units of the Partnership which commenced February 15, 1996.
The action alleged, among other things, that the tender offers constituted (a) a
breach of fiduciary duty owed to the limited partners of the partnerships, (b)
negligent misrepresentations pertaining to the disclosure set forth in the offer
to purchase, (c) common law fraud, and (d) a breach of the provisions of the
partnership agreements of such partnerships. The action, which was brought as a
derivative action and as a class action on behalf of all limited partners,
sought to enjoin the tender offers as well as monetary damages in an unspecified
amount.
See "Item 3" of the Schedule 14D-9, which is incorporated herein by reference,
for additional information with respect to the above actions.
On March 15, 1996, counsel for the plaintiffs and defendants in the Wallace
Action and the R&S Partners Actions agreed in principle to settle these actions,
which settlement has subsequently received final court approval. In connection
with the settlement MRC-85 agreed to take such actions as are reasonably
necessary and consistent with its fiduciary duties to procure offers for the
purchase of the Partnership's and GHI's assets which maximize the value of the
limited partner assignee units. MRC-85 further agreed to deal fairly and in
good faith with persons expressing an interest in making a bona fide offer to
purchase such assets and, subject to its fiduciary duty, provide such bona fide
offers with access to the Partnership's and GHI's books and records for due
diligence purposes. If MRC-85 determines that an offer to purchase its assets
is acceptable MRC-85 will prepare a plan of liquidation and submit such plan to
the Partnership's partners for approval. Also in connection with the
settlement, the plaintiffs will release all claims they may have arising out of
the tender offers. The Partnership is currently in the process of retaining an
investment advisor to assist in the sale of the assets. It is expected that the
Partnership will begin marketing its properties pursuant to the terms of the
settlement during the second half of 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.
b) Reports on Form 8-K: None filed during the quarter ended June 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GROWTH HOTEL INVESTORS
By: MONTGOMERY REALTY COMPANY-85,
Its General Partner
By: NPI REALTY MANAGEMENT CORP.
Its Managing General Partner
By:/s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: August 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Growth Hotel
Investors 1996 Second Quarter 10-Q and is qualified in its entirety by reference
to such 10-Q filing.
</LEGEND>
<CIK> 0000769129
<NAME> GROWTH HOTEL INVESTORS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,780
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 23,810
<DEPRECIATION> 9,166
<TOTAL-ASSETS> 28,082
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 5,421
0
0
<COMMON> 0
<OTHER-SE> 22,011
<TOTAL-LIABILITY-AND-EQUITY> 28,082
<SALES> 0
<TOTAL-REVENUES> 4,936
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,579
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 345
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,366
<EPS-PRIMARY> 34.39<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1
</FN>
</TABLE>
