<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1997
--------------------
Commission file number 0-14633
---------------
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3294820
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27611 La Paz Road, P.O. Box A-1, Laguna Niguel, California 92677-0100
-------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(714) 643-7700
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
--------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 12(g), 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding twelve 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 [ ]
<PAGE> 2
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE MONTHS ENDED JUNE 30, 1997
INDEX
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Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Net Assets in Liquidation -
June 30, 1997 (Unaudited)............................................ 3
Statement of Changes of Net Assets in Liquidation -
Three Months Ended June 30, 1997 (Unaudited)......................... 4
Balance Sheet -
December 31, 1996.................................................... 5
Statements of Operations (Unaudited) -
Three Months Ended March 31, 1997 and Three and Six
Months Ended June 30, 1996........................................... 6
Statement of Cash Flows (Unaudited) -
Six Months Ended June 30, 1996....................................... 7
Notes to Financial Statements (Unaudited)............................ 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........................ 12
PART II. OTHER INFORMATION.................................................... 14
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DAMSON/BIRTCHER REALTY INCOME FUND-II
STATEMENT OF NET ASSETS IN LIQUIDATION
JUNE 30, 1997
(UNAUDITED)
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ASSETS (Liquidation Basis):
- ---------------------------
Properties held for sale $23,053,000
Investment in Cooper Village Partners 3,664,000
Cash and cash equivalents 1,429,000
Accounts receivable 83,000
Other assets 6,000
-----------
Total Assets 28,235,000
-----------
LIABILITIES (Liquidation Basis):
- --------------------------------
Accounts payable and accrued liabilities 766,000
Accrued expenses for liquidation 281,000
-----------
Total Liabilities 1,047,000
-----------
Net Assets in Liquidation $27,188,000
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
STATEMENT OF CHANGES OF NET ASSETS IN LIQUIDATION
For the period from April 1, 1997 to June 30, 1997
(Unaudited)
<TABLE>
<S> <C>
Net assets in liquidation at March 31, 1997 $ 27,255,000
Increase (decrease) during period:
Operating activities:
Property operating income, net 732,000
Cooper Village equity income 76,000
Interest income 20,000
General and administrative expenses (255,000)
Leasing commissions (30,000)
------------
543,000
------------
Liquidating activities:
Distribution to partners (610,000)
------------
(610,000)
Net decrease in assets in liquidation (67,000)
------------
Net assets in liquidation at June 30, 1997 $ 27,188,000
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31, 1996
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ASSETS
Properties held for sale (net of valuation
allowance of $1,028,000) $ 22,318,000
Investment in Cooper Village Partners 3,630,000
Cash and cash equivalents 1,639,000
Accounts receivable 30,000
Accrued rent receivable 436,000
Prepaid expenses and other assets 159,000
------------
$ 28,212,000
============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 636,000
------------
Partners' capital(deficit):
Limited Partners 27,746,000
General Partner (170,000)
------------
27,576,000
------------
Commitments and contingencies
$ 28,212,000
============
</TABLE>
Note: The balance sheet at December 31, 1996 has been prepared from the
audited financial statements as of that date.
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months Six Months
Ended Ended Ended
March 31, 1997 June 30, 1996 June 30, 1996
-------------- ------------- -------------
<S> <C> <C> <C>
REVENUES
Rental income $1,157,000 $1,227,000 $2,403,000
Interest income 20,000 15,000 28,000
---------- ---------- ----------
Total revenues 1,177,000 1,242,000 2,431,000
---------- ---------- ----------
EXPENSES
Operating expenses 255,000 251,000 515,000
Real estate taxes 187,000 182,000 380,000
Amortization 17,000 17,000 33,000
General and administrative 244,000 164,000 316,000
Adjustment to the carrying
value of real estate - 68,000 68,000
---------- ---------- ----------
Total expenses 703,000 682,000 1,312,000
---------- ---------- ----------
Income before equity
in earnings 474,000 560,000 1,119,000
Equity in earnings of Cooper
Village Partners 91,000 63,000 218,000
---------- ---------- ----------
NET INCOME $ 565,000 $ 623,000 $1,337,000
========== ========== ==========
NET INCOME ALLOCABLE TO:
General Partner $ 6,000 $ 6,000 $ 13,000
========== ========== ==========
Limited Partners $ 559,000 $ 617,000 $1,324,000
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 1996
-------------
<S> <C>
Cash flows from operating activities:
Net income $ 1,337,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization 33,000
Equity in earnings of Cooper Village Partners (218,000)
Adjustment to carrying value of real estate 68,000
Changes in:
Accounts receivable (50,000)
Accrued rent receivable 29,000
Prepaid expenses and other assets 15,000
Accounts payable and accrued liabilities (4,000)
-----------
Net cash provided by operating activities 1,210,000
Cash flows from investing activities:
Investments in real estate (106,000)
Distributions received from
Cooper Village Partners 185,000
-----------
Net cash provided by investing activities 79,000
Cash flows from financing activities:
Distributions (928,000)
-----------
Net cash used in financing activities (928,000)
Net increase in cash and cash equivalents 361,000
Cash and cash equivalents, beginning of period 1,055,000
-----------
Cash and cash equivalents, end of period $ 1,416,000
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED
(1) Accounting Policies
The financial statements of Damson/Birtcher Realty Income Fund-II, Limited
Partnership (the "Partnership") included herein have been prepared by the
General Partner, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. These financial statements include
all adjustments which are of a normal recurring nature and, in the opinion
of the General Partner, are necessary for a fair presentation. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted, pursuant to the rules and
regulations of the Securities and Exchange Commission. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Partnership's annual report on Form 10-K for
the year ended December 31, 1996.
Liquidation Basis of Accounting
On February 18, 1997, the Partnership mailed a Consent Solicitation to the
Limited Partners which sought their consent to dissolve the Partnership
and sell and liquidate all of its remaining properties as soon as
practicable, consistent with selling the Partnership's properties to the
best advantage under the circumstances. A majority in interest of the
Limited Partners consented by March 13, 1997. As a result, the Partnership
has adopted the liquidation basis of accounting as of March 31, 1997. The
difference between the adoption of the liquidation basis of accounting as
of March 13, 1997 and March 31, 1997 was not material.
Under the liquidation basis of accounting, assets are stated at their
estimated net realizable values and liabilities are stated at their
anticipated settlement amounts. The valuation of assets and liabilities
necessarily requires many estimates and assumptions, and there are
substantial uncertainties in carrying out the dissolution of the
Partnership. The actual values upon dissolution and costs associated
therewith could be higher or lower than the amounts recorded.
The Partnership adopted the liquidation basis of accounting on March 31,
1997. Comparison of results to prior years, therefore, is not practical.
The Statement of Net Assets in Liquidation and Statement of Changes of Net
Assets in Liquidation reflect the Partnership in the process of
liquidation. Prior financial statements reflect the Partnership as a going
concern.
Earnings Per Unit
The Partnership Agreement does not designate investment interests in
units. All investment interests are calculated on a "percent of
Partnership" basis, in part to accommodate reduced rates on sales
commissions for subscriptions in excess of certain specified amounts.
A Limited Partner who was charged a reduced sales commission or no sales
commission was credited with proportionately larger Invested Capital and
therefore had a disproportionately greater interest in the capital and
revenues of the Partnership than a Limited Partner who paid commissions at
a higher
8
<PAGE> 9
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (Cont'd.)
(1) Accounting Policies (Cont'd.)
rate. As a result, the Partnership has no set unit value as all
accounting, investor reporting and tax information is based upon each
investor's relative percentage of Invested Capital. Accordingly, earnings
or loss per unit is not presented in the accompanying financial
statements.
Carrying Value of Real Estate (Prior to Adoption of the Liquidation Basis
of Accounting)
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121 "Accounting for the Impairment
of Long- Lived Assets and for Long-Lived Assets to Be Disposed Of," ("FAS
121"). This Statement requires that if the General Partner believes
factors are present that may indicate long-lived assets are impaired, the
undiscounted cash flows, before debt service, related to the assets should
be estimated. If these estimated cash flows are less than the carrying
value of the asset, then impairment is deemed to exist. If impairment
exists, the asset should be written down to the estimated fair value.
Further, assets held for sale, including any unrecoverable accrued rent
receivable or capitalized leasing commissions, were carried at the lower
of carrying value or fair value less estimated selling costs. Any
adjustment to carrying value were recorded as a valuation allowance
against property held for sale. Each reporting period, the General Partner
reviewed its estimates of fair value, which were decreased or increased up
to the original carrying value. Finally, assets held for sale are no
longer depreciated. The General Partner adopted FAS 121 at December 31,
1995 and the adoption did not have a material impact on the Partnership's
operations or financial position, as prior to December 31, 1995, the
Partnership had not had any properties held for sale.
As noted above, as of December 31, 1995 the General Partner decided to
account for the Partnership's properties as assets held for sale, assuming
an average 12 month holding period, instead of for investment.
Accordingly, the General Partner compared the carrying value of each
property to its appraised value as of January 1, 1996. If the carrying
value of a property and certain related assets was greater than its
appraised value, less selling costs, the General Partner reduced the
carrying value of the property by the difference. Using this methodology,
the General Partner determined that Atrium Place, Kennedy Corporate
Center, Lakeland Industrial Park and Cooper Village (58% interest) had
carrying values greater than they had appraised values, and therefore
reduced their carrying values by $167,000, $500,000, $40,000 and $789,000
to $829,000, $2,625,000, $4,929,000 and $3,704,000, respectively.
Utilizing the same methodology, assuming a twelve month holding period,
for the year ended December 31, 1996, the General Partner determined that
Ladera-II Shopping Center and Kennedy Corporate Center had carrying values
greater than their respective appraised values, less selling costs. As a
result, the carrying values were adjusted by $185,000 and $343,000 to
$2,200,000 and $2,460,000, respectively. In addition, the carrying value
of Atrium Place was reduced in September 1996 by $75,000 in order to
reflect its approximate selling price and the carrying value of Lakeland
Industrial Park was increased by $40,000 to $5,300,000, its estimated fair
value less selling costs.
9
<PAGE> 10
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (Cont'd.)
(2) Transactions with Affiliates
The Partnership has no employees and, accordingly, the General Partner and
its affiliates perform services on behalf of the Partnership in connection
with administering the affairs of the Partnership. The General Partner and
affiliates are reimbursed for their general and administrative costs
actually incurred and associated with services performed on behalf of the
Partnership. For the three months ended June 30, 1997 and 1996 the
Partnership incurred approximately $34,000 and $31,000, respectively, of
such expenses. For the six months ended June 30, 1997 and 1996, such
payments were $57,000 and $62,000, respectively.
An affiliate of the General Partner provides property management services
with respect to the Partnership's properties and receives a fee for such
services not to exceed 6% of the gross receipts from the properties under
management provided that leasing services are performed, otherwise not to
exceed 3%. Such fees amounted to approximately $37,000 and $43,000,
respectively, for the three months ended June 30, 1997 and 1996. For the
six months ended June 30, 1997 and 1969, such expenses were $78,000 and
$83,000, respectively. In addition, an affiliate of the General Partner
received $26,000 and $30,000 for the three months ended June 30, 1997 and
1996, respectively, as reimbursement of costs of on-site property
management personnel and other reimbursable expenses. For the six months
ended June 30, 1997 and 1996, such costs were $56,000 and $56,000,
respectively.
Leasing fees for the three months ended June 30, 1997 and 1996, included
charges of $17,000 and $5,000, respectively, from the General Partner and
its affiliates for leasing services rendered in connection with leasing
space in a Partnership property after expiration or termination of leases.
Such fees amounted to $17,000 and $10,000, respectively, for the six
months ended June 30, 1997 and 1996.
As previously reported, on June 24, 1993, the Partnership completed its
solicitation of written consents from its Limited Partners. A majority in
interest of the Partnership's Limited Partners approved each of the
proposals contained in the Information Statement dated May 5, 1993. Those
proposals were implemented by the Partnership as contemplated by the
Information Statement as amendments to the Partnership Agreement, and are
reflected in these financial statements as such.
The amended Partnership Agreement provides for the Partnership's payment
to the General Partner of an annual asset management fee equal to .65% for
1997 and .75% for 1996 of the aggregate appraised value of the
Partnership's properties as determined by independent appraisal undertaken
in January of each year. Such fees for the three months ended June 30,
1997 and 1996, amounted to $42,000 and $50,000, and for the six months
there ended, $84,000 and $100,000, respectively.
In addition to the aforementioned, the General Partner was also paid
$19,000 and $20,000, related to the Partnership's portion (58%) of asset
management fees, property management fees, leasing fees, reimbursement of
on-site property management personnel and other reimbursable expenses for
Cooper Village
10
<PAGE> 11
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - UNAUDITED (Cont'd.)
(2) Transactions with Affiliates (Cont'd.)
Partners for the three months ended June 30, 1997 and 1996, respectively.
For the six months ended June 30, 1997 and 1996, such payments amounted to
$37,000 and $42,000, respectively.
(3) Commitments and Contingencies
Litigation
The Partnership is not a party to any pending legal proceedings other than
ordinary routine litigation incidental to its business. It is the General
Partner's belief that the outcome of these proceedings will not be
material to the business or financial condition of the Partnership.
(4) Accrued Expenses for Liquidation
Accrued expenses for liquidation as of June 30, 1997, includes estimates
of costs to be incurred in carrying out the dissolution and liquidation of
the Partnership. These costs include estimates of legal fees, accounting
fees, tax preparation and filing fees, professional services and the
general partner's liability insurance. The actual costs could vary
significantly from the related provisions due to the uncertainty related
to the length of time required to complete the liquidation and dissolution
and the complexities which may arise in disposing of the Partnership's
remaining assets.
11
<PAGE> 12
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership completed its acquisition program in December 1988 and is
principally engaged in the operation of its properties. The Partnership's
original objective had been to hold its properties as long-term
investments. However, an Information Statement, dated May 5, 1993,
mandated that the General Partner seek a vote of the Limited Partners no
later than December 31, 1996, regarding prompt liquidation of the
Partnership in the event that properties with appraised values as of
January 1993, which constituted at least one-half of the aggregate
appraised values of all Partnership properties as of that date, were not
sold or under contract for sale by the end of 1996. Given the mandate of
the May 5, 1993 Information Statement, at December 31, 1995, the General
Partner decided to account for the Partnership's properties as assets held
for sale instead of for investment. In a Consent Solicitation dated
February 18, 1997, the Partnership solicited and received the consent of
the Limited Partners as of March 13, 1997, to dissolve the Partnership and
gradually settle and close the Partnership's business and dispose of and
convey the Partnership's property as soon as practicable, consistent with
obtaining reasonable value for the properties. The Partnership's
properties were held for sale throughout 1996 and continue to be held for
sale.
Certain of the Partnership's properties are not fully leased. The
Partnership is actively marketing the vacant space in these properties,
subject to the competitive environment in each of the market areas. To the
extent the Partnership is not successful in maintaining or increasing
occupancy levels at these properties, the Partnership's future cash flow
and distributions may be reduced.
Regular distributions through June 30, 1997 represent cash flow generated
from operations of the Partnership's properties and interest earned on the
temporary investment of working capital net of capital improvement reserve
requirements. In December 1996, the Partnership made a special
distribution of $720,000 representing 100% of the net proceeds from the
sale of Atrium Place. Future cash distributions will be made principally
to the extent of cash flow attributable to operations and sales of the
Partnership's properties and interest earned on the investment of capital
reserve, after providing for capital reserve and payment for capital
improvements to the Partnership's properties.
Results of Operations for the Three Months Ended June 30, 1997
Because the Partnership adopted the liquidation basis of accounting on
March 31, 1997, a comparison of the results of operations is not
practical. As the Partnership's assets (properties) are sold, the results
of operations will be generated from a smaller asset base, and are
therefore not comparable. The Partnership's operating results have been
reflected on the Statement of Changes of Net Assets in Liquidation since
March 31, 1997 (the date of adoption of the liquidation basis of
accounting).
For the three months ended June 30, 1997, the Partnership generated
$732,000 of net operating income from operation of its properties
(exclusive of Cooper
12
<PAGE> 13
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Cont'd.)
Results of Operations for the Three Months Ended June 30, 1997 (Cont'd.)
Village Partners). Results for the period were lower than the results in
1996 due to the sale of Atrium Place in November 1996.
Interest income resulted from the temporary investment of Partnership
working capital. For the three months ended June 30, 1997, interest income
was approximately $20,000.
General and administrative expenses for the three months ended June 30,
1997 include charges of $93,000 from the General Partner and its
affiliates for services rendered in connection with administering the
affairs of the Partnership and operating the Partnership's properties.
Also included in general and administrative expenses for the three months
ended June 30, 1997 are direct charges of $162,000 relating to audit fees,
tax preparation fees, legal and professional fees, insurance expenses,
costs incurred in providing information to the Limited Partners and other
miscellaneous costs.
Accrued expenses for liquidation, as reflected in the Statement of Net
Assets in Liquidation as of June 30, 1997, are not included in results of
operations for the three month period ended March 31, 1997. The
liquidation basis of accounting was adopted on March 31, 1997 therefore,
it was not appropriate to include such adjustments in the results of
operations for prior periods.
13
<PAGE> 14
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
So far as is known to the General Partner, neither the Partnership nor its
properties are subject to any material pending legal proceedings.
On March 25, 1997, a limited partner named Bigelow/Diversified Secondary
Partnership Fund 1990 filed a purported class action lawsuit in the Court
of Common Pleas of Philadelphia County against Damson/Birtcher Partners,
Birtcher Investors, Birtcher/Liquidity Properties, Birtcher Investments,
L.F. Special Fund II, L.P., L.F. Special Fund I, L.P., Arthur Birtcher,
Ronald Birtcher, Robert Anderson, Richard G. Wollack and Brent R.
Donaldson alleging breach of fiduciary duty and breach of contract and
seeking to enjoin the Consent Solicitation dated February 18, 1997. On
April 18, 1997, the court denied the plaintiff's motion for a preliminary
injunction. On June 10, 1997, the court dismissed the plaintiff's
complaint on the basis of lack of personal jurisdiction and forum non
conveniens.
On June 13, 1997, the Partnership, its affiliated partnership, Real Estate
Income Partners III, and their general partner, Birtcher/Liquidity
Properties, filed a complaint for declaratory relief in the Court of
Chancery in Delaware against Bigelow/Diversified Secondary Partnership
Fund 1990 L.P. The complaint seeks a declaration that the vote that the
limited partners of the Partnership and Real Estate Income Partners III
took pursuant to the respective consent solicitations dated February 18,
1997 were effective to dissolve the respective partnerships and complied
with applicable law, that the actions of the General Partner in utilizing
the consent solicitations to solicit the vote of the limited partners did
not breach any fiduciary or contractual duty to such limited partners, and
an award of costs and fees to the plaintiffs. The defendant has answered
the complaint. No motions are pending at this time.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
27 - Financial Data Schedule
b) Reports on Form 8-K:
None filed in quarter ended June 30, 1997.
14
<PAGE> 15
DAMSON/BIRTCHER REALTY INCOME FUND-II, LIMITED PARTNERSHIP
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.
DAMSON/BIRTCHER REALTY INCOME FUND-II
<TABLE>
<S> <C>
By: BIRTCHER/LIQUIDITY By: BIRTCHER INVESTORS,
PROPERTIES a California limited partnership
(General Partner)
By: BIRTCHER INVESTMENTS,
a California general partnership,
General Partner of Birtcher Investors
By: BIRTCHER LIMITED,
a California limited partnership,
General Partner of Birtcher Investments
By: BREICORP,
a California corporation,
formerly known as Birtcher
Real Estate Inc., General
Partner of Birtcher Limited
Date: August 12, 1997 By: /s/ ROBERT M. ANDERSON
------------------------------
Robert M. Anderson
Executive Director
BREICORP
By: LF Special Fund I, L.P.,
a California limited partnership
By: Liquidity Fund Asset Management, Inc.,
a California corporation, General
Partner of LF Special Fund I, L.P.
Date: August 12, 1997 By: /s/ BRENT R. DONALDSON
-------------------------
Brent R. Donaldson
President
Liquidity Fund Asset Management, Inc.
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENT OF
NET ASSETS IN LIQUIDATION OF DAMSON BIRTCHER REALTY INCOME FUND II AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,429,000
<SECURITIES> 0
<RECEIVABLES> 83,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,518,000
<PP&E> 23,053,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,235,000
<CURRENT-LIABILITIES> 1,047,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 27,188,000
<TOTAL-LIABILITY-AND-EQUITY> 28,235,000
<SALES> 0
<TOTAL-REVENUES> 0<F1>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0<F1>
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0<F1>
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Statement of Operation is not presented in
liquidation basis of accounting.
</FN>
</TABLE>
