February 28, 2000
United States
Securities and Exchange Commission
Washington, D.C. 20549
RE: Jacques-Miller Income Fund L.P.-II
Form 10-KSB
File No. 0-15758
To Whom it May Concern:
The accompanying Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. The
Partnership believes that this accounting principle change is preferable because
it provides a better matching of expenses with the related benefit of the
expenditures and it is consistent with industry practice and the policies of the
Corporate General Partner.
Please do not hesitate to contact the undersigned with any questions or comments
that you might have.
Very truly yours,
Stephen Waters
Real Estate Controller
<PAGE>
FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d)
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[No Fee Required]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[No Fee Required]
For the transition period from _________to _________
Commission file number 0-15758
JACQUES-MILLER INCOME FUND L.P.-II
(Name of small business issuer in its charter)
Delaware 62-1244325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 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___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the Partnership's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $31,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
Item 1. Description of Business
Jacques-Miller Income Fund L.P.-II (the "Partnership" or "Registrant") is a
Delaware limited partnership formed in July 1985 for the purpose of making first
mortgage loans, wrap-around mortgage loans and other loans secured directly or
indirectly by interests in real property substantially all of which may be made
to affiliated public and private real estate limited partnerships. The
Partnership Agreement provides that the Partnership is to terminate on December
31, 2028 unless terminated prior to such date. The Registrant has made loans
providing, generally, for repayment of principal between 8 and 15 years after
funding. Substantially all of the assets of Jacques-Miller, Inc. (the "Corporate
General Partner"), a Tennessee corporation, were acquired by an affiliate of
Insignia Financial Group, Inc. ("Insignia") in December 1991, however, such
assets purchased did not include the general partner interest of the
Partnership. On October 1, 1998, Insignia merged into Apartment Investment and
Management Company ("AIMCO"), a publicly traded real estate investment trust,
with AIMCO being the surviving corporation(the "Insignia Merger"). On December
10, 1998, AIMCO entered into an agreement with the sole shareholder of the
Corporate General Partner pursuant to which AIMCO was granted the right to elect
the directors of the Corporate General Partner. In connection with this
transaction, the then current officer and director of the Corporate General
Partner resigned and AIMCO appointed a new director who, in turn, appointed new
officers of the Corporate General Partner. The Corporate General Partner does
not believe that this transaction has had or will have a material effect on the
affairs and operations of the Partnership. See "Item 9. Directors, Executive
Officers, Promoters and Control Personal Compliance with Section 16(a) of the
Exchange Act".
The offering of the Registrant's limited partnership interests (the "Interests")
terminated on October 15, 1987. The Registrant received gross proceeds from the
offering of approximately $12,390,000 and net proceeds of approximately
$11,200,000.
See "Item 6. Management's Discussion and Analysis or Plan of Operation" for
information with respect to the Registrant's current note holdings.
Mansion Hill Apartments in Chattanooga, Tennessee, and Kingswood North
Apartments in Norcross, Georgia, were acquired during 1990 through foreclosure
proceedings. During 1991, these properties were sold. During 1991, the
Registrant acquired La Plaza Apartments ("La Plaza") through similar
foreclosures proceedings and during 1992, Willow Oaks Apartments ("Willow Oaks")
and Brighton Way Apartments ("Brighton Way") were foreclosed upon by separate
limited partnerships of which the Registrant is the sole limited partner. On
February 1, 1993, Brighton Way was sold, on January 17, 1995, Willow Oaks was
sold, and on May 24, 1996, La Plaza was sold. The Partnership's sole remaining
assets are three notes receivable.
Effective June 30, 1989, Jacques-Miller, Inc. sold the economic benefits and
economic rights in Jacques-Miller sponsored limited partnerships, including the
Registrant, to Balanced Holdings Partners, L.P., an affiliate.
The Registrant has no employees. Management and administrative services are
performed by an affiliate of the Corporate General Partner, pursuant to
management and administrative agreements.
Item 2. Description of Properties
The Partnership no longer owns any investments in real estate.
Item 3. Legal Proceedings
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature arising in the ordinary course of business.
Item 4. Submission of Matters to a Vote of Security Holders
The Registrant did not submit any matter to a vote of its security holders
during the quarter ended December 31, 1999.
<PAGE>
PART II
Item 5. Market for the Partnership Equity and Related Partner Matters
There is no established market for the Units and it is not anticipated that any
will develop in the foreseeable future. As of December 31, 1999, there were 926
holders of record owning an aggregate of 12,400 Units. Affiliates of the
Corporate General Partner owned 3,881.01 Units or 31.30% at December 31, 1999.
Pursuant to the terms of the Partnership Agreement, there are restrictions on
the ability of the Limited Partners to transfer their Units. In all cases the
Corporate General Partner must consent to any transfer.
No cash distributions were paid during the years ended December 31, 1999 or
1998. There are no material restrictions upon the Registrant's present or future
ability to make distributions in accordance with the provisions of the
Registrant's Partnership Agreement.
Several tender offers were made by various parties, including affiliates of the
Corporate General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these tender offers, AIMCO and its affiliates currently own
3,881.01 limited partnership units in the Partnership representing 31.30% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters. When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of
their affiliation with the Corporate General Partner.
Item 6. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-KSB and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership's net loss for the year ended December 31, 1999, was
approximately $24,000 compared to net income of approximately $48,000 for the
year ending December 31, 1998. The increase in net loss is attributable to a
decrease in revenues which was partially offset by a decrease in expenses. The
decrease in revenues is directly attributable to the settlement of the notes
receivable from Woodlawn Village and Tall Oaks in 1998. Expenses decreased as a
result of a decrease in general and administrative expenses resulting from
decreases in legal fees and reimbursements to the Corporate General Partner as
compared to 1998. Legal fees decreased in 1999 due to the payment of a legal
retainer in 1998 to cover the cost of collecting the remaining notes receivable
not settled during 1998. The Partnership currently holds three notes from
affiliated partnerships which require payments from excess cash flow (see
discussion below).
Liquidity and Capital Resources
At December 31, 1999, the Partnership held cash and cash equivalents of
approximately $825,000 compared to approximately $774,000 at December 31, 1998.
The net increase in cash and cash equivalents for the year ended December 31,
1999 is approximately $51,000 resulting from net cash provided by operating
activities.
During 1998 the Partnership agreed to accept a payment of approximately $70,000
in full satisfaction of the note receivable from Woodlawn Village. The
outstanding balance of this note receivable totaled approximately $501,000,
including accrued interest, and was fully reserved. The Partnership received
this payment in April 1999. Additionally in 1998, the Partnership agreed to
accept a payment of approximately $28,000 in full settlement of the Tall Oaks
note receivable. The outstanding balance for this note receivable totaled
approximately $682,000, including accrued interest, and was fully reserved.
Income was recorded as a result of the reduction in the allowance on the notes
and is recorded as recovery of bad debt on the 1998 consolidated statement of
operations.
The Partnership held three notes receivable at December 31, 1999, totaling
approximately $937,000 with approximately $1,350,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,157,000 of deferred interest revenue.
Additionally, these three notes are due from related partnerships. All three
promissory notes are unsecured by the related partnerships and are subordinated
to the underlying mortgages of the respective partnerships.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $370,000, the "Catawba Club Note" matured November
1, 1997. A second note in the amount of approximately $454,000 with accrued
interest due in the amount of approximately $415,000, the "Quail Run Note,"
matured June 1, 1997. A third note in the amount of $70,000 with accrued
interest due in the amount of approximately $565,000, the "Highridge Note",
matured May 1, 1996. All three notes were in default at December 31, 1999. The
Partnership is currently seeking to receive full payment and resolution of these
notes. Payments on these notes are restricted to excess cash flow after payment
of the first and second mortgages and are dependent on excess cash flow from the
properties or sales proceeds. No payments were received in 1999 or 1998 on these
three notes. All three notes are fully reserved.
No distributions were made during the years ended December 31, 1999 and 1998.
Future cash distributions will depend on the levels of net cash generated from
the collection of notes receivable and the availability of cash reserves. The
Partnership's distribution policy is reviewed on an annual basis. There can be
no assurance, however, that the Partnership will generate sufficient funds from
operations to permit distributions to its partners during the year 2000 or
subsequent periods.
Several tender offers were made by various parties, including affiliates of the
Corporate General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these tender offers, AIMCO and its affiliates currently own
3,881.01 limited partnership units in the Partnership representing 31.30% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters. When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of
their affiliation with the Corporate General Partner.
Year 2000 Compliance
General Description
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Corporate General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have recognized a date using "00" as the year 1900 rather than the year
2000. This could have resulted in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. No material failure or erroneous results have occurred in the
Managing Agent's computer applications related to the failure to reference the
Year 2000 to date.
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
<PAGE>
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership has not
been materially adversely affected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely affected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
<PAGE>
Item 7. Financial Statements
JACQUES-MILLER INCOME FUND L.P.-II
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheet - December 31, 1999
Consolidated Statements of Operations - Years ended December 31,
1999 and 1998
Consolidated Statements of Changes in Partners' (Deficit) Capital - Years
ended December 31, 1999 and 1998
Consolidated Statements of Cash Flows - Years ended December 31,
1999 and 1998
Notes to Consolidated Financial Statements
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Partners
Jacques-Miller Income Fund L.P.-II
We have audited the accompanying consolidated balance sheet of Jacques-Miller
Income Fund L.P.-II as of December 31, 1999, and the related consolidated
statements of operations, changes in partners' (deficit) capital and cash flows
for each of the two years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Jacques-Miller
Income Fund L.P.-II at December 31, 1999, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
February 21, 2000
<PAGE>
JACQUES-MILLER INCOME FUND L.P.-II
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1999
Assets
Cash and cash equivalents $ 825
Notes receivable from affiliated parties (net
of allowance of approximately $2,287) (Note C) --
$ 825
Liabilities and Partners' (Deficit) Capital
Liabilities
Other liabilities $ 25
Partners (Deficit) Capital
General partner $ (106)
Limited partners (12,400 units issued and
outstanding) 906 800
$ 825
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
JACQUES-MILLER INCOME FUND L.P.-II
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1999 1998
Revenues:
Recovery of bad debt $ -- $ 98
Other income 31 32
Total revenues 31 130
Expenses:
General and administrative 55 82
Net (loss) income (Note A) $ (24) $ 48
Net (loss) income allocated to general partner -- --
(1%)
Net (loss) income allocated to limited partners (24) 48
(99%)
$ (24) $ 48
Net (loss) income per limited partnership unit $ (1.94) $ 3.87
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
JACQUES-MILLER INCOME FUND L.P.-II
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' (deficit) capital at
December 31, 1997 12,400 $ (106) $ 882 $ 776
Net income for the year ended
December 31, 1998 -- -- 48 48
Partners' (deficit) capital at
December 31, 1998 12,400 $ (106) $ 930 $ 824
Net loss for the year ended
December 31, 1999 -- -- (24) (24)
Partners' (deficit) capital at
December 31, 1999 12,400 $ (106) $ 906 $ 800
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
JACQUES-MILLER INCOME FUND L.P.-II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended
December 31,
1999 1998
Cash flows from operating activities:
Net (loss) income $ (24) $ 48
Adjustments to reconcile net (loss) income to net
cash provided by (used in) operating activities:
Change in accounts:
Interest receivable -- 1
Note receivable 70 (70)
Other liabilities 5 6
Net cash provided by (used in) operating 51 (15)
activities
Net increase (decrease) in cash and cash equivalents 51 (15)
Cash and cash equivalents at beginning of period 774 789
Cash and cash equivalents at end of period $ 825 $ 774
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
JACQUES-MILLER INCOME FUND L.P.-II
Notes to Consolidated Financial Statements
December 31, 1999
Note A - Organization and Significant Accounting Policies
Organization: Jacques-Miller Income Fund L.P.-II (the "Partnership") is a
Delaware limited partnership organized in July 1985 to make long-term junior
mortgage loans, including wraparound loans, and, to a lesser extent, other
mortgage loans including first mortgage loans primarily to affiliated public and
private real estate limited partnerships. The general partner of the Partnership
is Jacques-Miller, Inc. (the "Corporate General Partner"), a Tennessee
corporation. (See "Note B - Transfer of Control".) The Partnership currently
holds three notes receivable.
Principles of Consolidation: The consolidated financial statements include all
accounts of the Partnership and a 99% limited partnership interest in
Jacques-Miller Income Fund II Special Asset Partnership ("La Plaza") L.P. All
significant interpartnership balances have been eliminated.
Uses of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Allocations to Partners: Net income (loss) of the Partnership and taxable income
(loss) are allocated 99% to the limited partners and 1% to the Corporate General
Partner. Distributions of available cash, as defined by the partnership
agreement, are allocated among the limited partners and the Corporate General
Partner in accordance with the agreement of limited partnership.
Cash and Cash Equivalents: Includes cash on hand and in banks and money market
accounts. At certain times, the amount of cash deposited at a bank may exceed
the limit on insured deposits.
Deferred Revenue: Deferred revenue results from accrued but unpaid interest
receivable, realization of which is dependent upon appreciation of the property
which collateralizes the receivable. The net interest revenue is recognized when
collectibility is assured.
Fair Value of Financial Instruments: The Partnership believes that the carrying
amount of its financial instruments approximates their fair value due to the
short term maturity of these instruments. Management of the Partnership believes
that the carrying amount of the notes receivable approximates their fair value.
Segment Reporting: Statement of Financial Standards ("SFAS") No. 131, Disclosure
about Segments of an Enterprise and Related Information established standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports. It also establishes standards for related disclosures about products
and services, geographic areas, and major customers. As defined in SFAS No. 131,
the Partnership has only one reportable segment. Moreover, due to the very
nature of the Partnership's operations, the Corporate General Partner believes
that segment-based disclosures will not result in a more meaningful presentation
than the consolidated financial statements as presently presented.
Note B - Transfer of Control
On December 10, 1998, Apartment Investment and Management Company ("AIMCO")
entered into an agreement with the sole shareholder of the Corporate General
Partner pursuant to which AIMCO was granted the right to elect the directors of
the Corporate General Partner. In connection with this transaction, the then
current officer and director of the Corporate General Partner resigned and AIMCO
appointed a new director who, in turn, appointed new officers of the Corporate
General Partner. The Corporate General Partner does not believe that this
transaction has had or will have a material effect on the affairs and operations
of the Partnership.
Note C - Notes Receivable from Affiliated Parties
Notes receivable consist of the following (in thousands):
December 31,
1999
Notes receivable $ 937
Accrued interest receivable 1,350
2,287
Provision for uncollectibles
(including approximately $157,000
of deferred interest revenue) (2,287)
$ --
The Partnership holds three notes receivable at December 31, 1999, totaling
approximately $937,000 with approximately $1,350,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,157,000 of deferred interest revenue.
Additionally, all three notes are due from related partnerships. These three
promissory notes bear interest at rates ranging from 12% to 12.5%, are unsecured
by the related partnerships and are subordinated to the underlying mortgages of
the respective partnerships.
During 1998 the Partnership agreed to accept a payment of approximately $70,000
in full satisfaction of the note receivable from Woodlawn Village. The
outstanding balance of this note receivable totaled approximately $501,000,
including accrued interest, and was fully reserved. The Partnership received
this payment in April 1999. Additionally in 1998, the Partnership agreed to
accept a payment of approximately $28,000 in full settlement of the Tall Oaks
note receivable. The outstanding balance for this note receivable totaled
approximately $682,000, including accrued interest, and was fully reserved.
Income was recorded as a result of the reduction in the allowance on the notes
and is recorded as recovery of bad debt on the 1998 consolidated statement of
operations.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $370,000, the "Catawba Club Note" matured on
November 1, 1997. A second note in the amount of approximately $454,000 with
accrued interest due in the amount of approximately $415,000, the "Quail Run
Note," matured June 1, 1997. A third note in the amount of $70,000 with accrued
interest due in the amount of approximately $565,000, the "Highridge Note",
matured May 1, 1996. All of these notes were in default at December 31, 1999.
The Partnership is currently seeking to receive full payment on, and resolution
of, these notes. Payments on these notes are restricted to excess cash flow
after payment of the first and second mortgages of the affiliated partnerships
and are dependent on excess cash flow from the properties or sales proceeds. No
payments were received in 1999 or 1998 on these three notes. All three notes are
fully reserved.
Note D - Income Taxes
The Partnership has received a ruling from the Internal Revenue Service that it
is to be classified as a partnership for federal income tax purposes. Taxable
income or loss of the Partnership is reported in the income tax returns of its
partners. Accordingly, no provision for income taxes is made in the consolidated
financial statements of the Partnership. The following is a reconciliation of
reported net (loss) income and Federal taxable (loss) (in thousands):
1999 1998
Net (loss) income as reported $ (24) $ 48
Add (deduct):
Bad debt (178) (399)
Other 6 (57)
Federal taxable loss $ (196) $ (408)
Federal taxable loss per
limited partnership unit $(15.65) $(32.57)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net assets as reported $ 800
Allowance for doubtful accounts 1,130
Other 26
Net assets - Federal tax basis $ 1,956
Note E - Transactions with Affiliated Parties
Other than the notes receivable, as previously disclosed, the Partnership had
the following transactions:
On December 31, 1991, MAE GP Corporation ("MAE GP"), an affiliate of Insignia,
acquired substantially all of the assets of Jacques-Miller, Inc. (the general
partner interest of the Registrant) including Jacques-Miller's property
management organization. However, the general partner interest of the Registrant
was not acquired during this transaction. As a result of a separate Advisory
Agreement between the Registrant and IFGP Corporation (an affiliate of
Insignia), Insignia and its affiliates succeeded to those asset management and
property management duties previously performed by Jacques-Miller.
An affiliate of the Corporate General Partner received reimbursements of
accountable administrative expenses amounting to approximately $9,000 and
$26,000 for the years ended December 31, 1999 and 1998, respectively.
Several tender offers were made by various parties, including affiliates of the
Corporate General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these tender offers, AIMCO and its affiliates currently own
3,881.01 limited partnership units in the Partnership representing 31.30% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters. When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of
their affiliation with the Corporate General Partner.
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act
The general partner of Jacques-Miller Income Fund L.P.-II (the "Partnership" or
the "Registrant") is Jacques-Miller, Inc., a Tennessee Corporation.
Jacques-Miller, Inc., (the "Corporate General Partner"), was formed under the
laws of the State of Tennessee in 1972.
The principal executive officer and director of the Corporate General Partner
is:
Name Age Position
Patrick J. Foye 42 President, Treasurer and Director
Patrick J. Foye has been Executive Vice President and Director of the Corporate
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Balanced Holding Partners, L.P. Transaction
In December of 1989, Balanced Holdings Partners, L.P., a Delaware limited
partnership ("BHP"), purchased from Jacques-Miller, Inc. and certain of its
subsidiaries ("Jacques-Miller") certain real estate assets, which included,
among other things, the Corporate General Partner's economic benefits and
economic rights in Jacques-Miller sponsored limited partnerships, including the
Registrant.
Jacques-Miller remained as the Corporate General Partner, but was indemnified by
BHP to the full extent of BHP's assets up to a maximum aggregate amount of
$2,000,000 of which approximately all has been utilized.
As the Corporate General Partner, Jacques-Miller itself remains liable for the
recourse obligations of the Registrant to the extent that the Registrant's cash
flow and assets become insufficient to meet the Registrant's obligations, and
could be required to make payments on behalf of the Registrant in such events.
As the Corporate General Partner, Jacques-Miller receives a residual interest in
the proceeds of the disposition of Registrant's assets, typically computed as a
percentage of net proceeds from the sale or refinancings of partnership assets
and subordinated to the recovery by the limited partners of their investments
plus a specified cumulative annual return. Jacques-Miller effectively sold all
of its residual interest to BHP in connection with this transaction.
Insignia Transaction
On December 31, 1991, MAE GP Corporation ("MAE GP"), an affiliate of Insignia
Financial Group, Inc. ("Insignia") acquired substantially all of the assets of
Jacques-Miller, Inc. (the general partner interest of the Registrant) including
Jacques-Miller's property management organization. However, the general partner
interest of the Registrant was not acquired during this transaction). As a
result of a separate Advisory Agreement between the Registrant and IFGP
Corporation (an affiliate of Insignia), Insignia and its affiliates succeeded to
those asset management and property management duties previously performed by
Jacques-Miller.
AIMCO Transaction
On October 1, 1998, Insignia merged into Apartment Investment and Management
Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). On December 10, 1998,
AIMCO entered into an agreement with the sole shareholder of the Corporate
General Partner pursuant to which AIMCO was granted the right to elect the
directors of the Corporate General Partner. In connection with this transaction,
the then current officer and director of the Corporate General Partner resigned
and AIMCO appointed a new director who, in turn, appointed new officers of the
Corporate General Partner. The Corporate General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Item 10. Executive Compensation
Neither the director nor officers of the Corporate General Partner received any
remuneration from the Registrant.
Item 11. Security Ownership of Certain Beneficial Owners and
Management
Except as notes below, no person or group is known by the Registrant to own
beneficially more than 5% of the outstanding interests of the Registrant, as of
December 31, 1999.
Entity Number of Units Percentage
AIMCO Properties LP 3,881.01 31.30%
(an affiliate of AIMCO)
AIMCO Properties LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Blvd., Denver, CO 80222.
No officer or director of the Corporate General Partner of the Registrant owns,
nor do the officers or directors as a group own, any of the Registrant's
interests as of December 31, 1999. No officer or directors of the Corporate
General Partner possesses a right to acquire beneficial ownership or interests
of the Registrant.
Item 12. Certain Relationships and Related Transactions
The Partnership has outstanding notes receivable in the amount of approximately
$937,000 with affiliated partnerships at December 31, 1999. During 1998 the
Partnership agreed to accept a payment of approximately $70,000 in full
satisfaction of the Woodlawn Village Note. The outstanding balance of this note
receivable totaled approximately $501,000 including accrued interest, and was
fully reserved. The Partnership received this payment in April 1999.
<PAGE>
On December 31, 1991, MAE GP Corporation ("MAE GP"), an affiliate of Insignia
Financial Group, Inc. ("Insignia") acquired substantially all of the assets of
Jacques-Miller, Inc. (the general partner interest of the Registrant) including
Jacques-Miller's property management organization. However, the general partner
interest of the Registrant was not acquired during this transaction. As a result
of a separate Advisory Agreement between the Registrant and IFGP Corporation (an
affiliate of Insignia), Insignia and its affiliates succeeded to those asset
management and property management duties previously performed by
Jacques-Miller.
An affiliate of the Corporate General Partner received reimbursements of
accountable administrative expenses amounting to approximately $9,000 and
$26,000 for the years ended December 31, 1999 and 1998, respectively.
Several tender offers were made by various parties, including affiliates of the
Corporate General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these tender offers, AIMCO and its affiliates currently own
3,881.01 limited partnership units in the Partnership representing 31.30% of the
outstanding units. It is possible that AIMCO or its affiliates will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters. When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of
their affiliation with the Corporate General Partner.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
(b) Reports on Form 8-K filed in the fourth quarter of 1999:
None.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JACQUES-MILLER INCOME FUND L.P.-II
By: Jacques-Miller, Inc.
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
President and Treasurer
Date:
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Partnership and in the capacities and on the
dates indicated.
/s/Patrick J. Foye President, Treasurer and Date:
Patrick J. Foye Director
<PAGE>
EXHIBIT INDEX
Exhibit
3 Partnership Agreement is incorporated by reference to Exhibit A
of the Prospectus contained in the Registrant's Registration
Statement (2-99745) as filed with the Commission pursuant to Rule
424(b) under the Act.
4 Form of Certificate representing interests in the Registrant.
(Exhibit 4 to Registration Statement on Form S-ii dated October
16, 1985, Registration Number 2-99745 is incorporated herein by
reference.
10A Promissory Note dated July 20, 1990 in the amount of $476,000.00
payable to the Registrant executed by Balanced Holding Partners,
L.P. (Filed as Exhibit 10A to Form 10K for the year ended
December 30, 1990, and incorporated herein by reference.)
10B Settlement Agreement dated July 25, 1991 between Jacques-Miller
Income Fund L.P. II and Balanced Holdings Partners, L.P.,
Jacques-Miller, Inc., and Jacques-Miller Mortgage, Inc. of
Tennessee. (Filed as Exhibit 10B to Form 10K for the year ended
December 31, 1991, and incorporated herein by reference.)
10C Advisory Agreement, dated December 30, 1991, between
Jacque-Miller Income Fund L.P. II and Insignia GP Corporation.
(Filed as Exhibit 10C to Form 10K for the year ended December 31,
1991, and incorporated herein by reference.)
10D Contracts related to refinancing of debt:
(a) First Mortgage and Security Agreement dated
October 28, 1992 between Jacques-Miller Income
Fund II Special Asset Partnership (La Plaza), L.P.
and First Commonwealth Realty Credit Corporation,
a Virginia Corporation, securing La Plaza
Apartments.*
(b) First Deed of Trust and Security Agreement dated
October 28, 1992 between Jacques-Miller Income
Fund II Special Asset Partnership (Willow Oaks),
L.P. and First Commonwealth Realty Credit
Corporation, a Virginia Corporation, securing La
Plaza Apartments.*
(c) Second Mortgage and Security Agreement dated
October 28, 1992 between Jacques-Miller Income
Fund II Special Asset Partnership (La Plaza), L.P.
and First Commonwealth Realty Credit Corporation,
a Virginia Corporation, securing La Plaza
Apartments.*
<PAGE>
(d) Second Deed of Trust and Security Agreement dated
October 28, 1992 between Jacques-Miller Income
Fund II Special Asset Partnership (Willow Oaks),
L.P. and First Commonwealth Realty Credit
Corporation, a Virginia Corporation, securing La
Plaza Apartments.*
(e) First Assignment of Leases and Rents dated October
28, 1992 between Jacques-Miller Income Fund II
Special Asset Partnership (La Plaza), L.P. and
First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing La Plaza
Apartments.*
(f) First Assignment of Leases and Rents dated October
28, 1992 between Jacques-Miller Income Fund II
Special Asset Partnership (Willow Oaks), L.P. and
First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing Willow Oaks
Apartments.*
(g) Second Assignment of Leases and Rents dated
October 28, 1992 between Jacques-Miller Income
Fund II Special Asset Partnership (La Plaza), L.P.
and First Commonwealth Realty Credit Corporation,
a Virginia Corporation, securing La Plaza
Apartments.*
(h) Second Assignment of Leases and Rents dated
October 28, 1992 between Jacques-Miller Income
Fund II Special Asset Partnership (Willow Oaks),
L.P. and First Commonwealth Realty Credit
Corporation, a Virginia Corporation, securing
Willow Oaks Apartments.*
(i) First Mortgage Note dated October 28, 1992 between
Jacques-Miller Income Fund II Special Asset
Partnership (La Plaza), L.P. and First
Commonwealth Realty Credit Corporation, relating
to La Plaza Apartments.*
(j) First Deed of Trust Note dated October 28, 1992
between Jacques-Miller Income Fund II Special
Asset Partnership (Willow Oaks), L.P. and First
Commonwealth Realty Credit Corporation, relating
to Willow Oaks Apartments.*
(k) Second Mortgage Note dated October 28, 1992
between Jacques-Miller Income Fund II Special
Asset Partnership (La Plaza), L.P. and First
Commonwealth Realty Credit Corporation, relating
to La Plaza Apartments.*
(l) Second Deed of Trust Note dated October 28, 1992
between Jacques-Miller Income Fund II Special
Asset Partnership (Willow Oaks), L.P. and First
Commonwealth Realty Credit Corporation, relating
to Willow Oaks Apartments.*
*Filed as Exhibits 10D (a) through (l), respectively, to
Form 10KSB for the year ended December 31, 1992 and
incorporated herein by reference.
21 Subsidiaries of the Registrant
27 Financial Data Schedule.
99A Agreement of Limited Partnership for Jacques-Miller Income Fund
II Special Asset Partnership (La Plaza), L.P. between
Jacques-Miller, Inc. and Jacques-Miller Income Fund L.P.-II
entered into August 21, 1991. (Filed as Exhibit 28A to Form 10KSB
for the year ended December 31, 1992, and incorporated herein by
reference.)
99B Agreement of Limited Partnership for Jacques-Miller Income Fund
II Special Asset Partnership (Willow Oaks), L.P. between
Jacques-Miller, Inc. and Jacques-Miller Income Fund L.P.-II
entered into August 21, 1991. (Filed as Exhibit 28B to Form 10KSB
for the year ended December 31, 1992, and incorporated herein by
reference.)
99C Agreement of Limited Partnership for Jacques-Miller Income Fund
II Special Asset Partnership (Brighton Way), L.P. between
Jacques-Miller, Inc. and Jacques-Miller Income Fund L.P.-II
entered into August 21, 1991. (Filed as Exhibit 28C to Form 10KSB
for the year ended December 31, 1992, and incorporated herein by
reference.)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Jacques -
Miller Income Fund L.P. II 1999 Fourth Quarter 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000774655
<NAME> Jacques-Miller Income Fund, L.P. II
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 825
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 825
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 800
<TOTAL-LIABILITY-AND-EQUITY> 825
<SALES> 0
<TOTAL-REVENUES> 31
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 55
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24)
<EPS-BASIC> (1.94)<F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
