UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 9, 2000
TPI Land Development III Limited Partnership
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(Exact name of registrant as specified in its charter)
Arizona 33-2121 86-054040
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(State of incorporation) (Commission File Number) (IRS Employer ID No.)
2944 N. 44th Street, Suite 200, Phoenix, Arizona 85018
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(Address of principal executive offices) (Zip Code)
(602) 955-4000
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(Registrant's telephone number, including area code)
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ITEM 1: CHANGES IN CONTROL OF REGISTRANT - N/A
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS - N/A
ITEM 3: BANKRUPTCY OR RECEIVERSHIP
The Final Decree was filed on April 5, 2000, effective date of March 31,
2000, in the United States Bankruptcy Court in and for the District of Arizona,
Case No. B95-05828-PHX-CGC, Chapter 11. The number of units issued and
outstanding is 19,789 units.
ITEM 4: CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT - N/A
ITEM 5: OTHER EVENTS - N/A
ITEM 6: RESIGNATIONS OF REGISTRANT'S DIRECTORS - N/A
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
The accompanying audited balance sheet reflects the Partnership's assets
and liabilities at their reorganization values, which approximates fair values
at the reorganization date. Additionally, prior years deficit was eliminated as
a charge to Partner's Capital. See audited report.
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INDEPENDENT AUDITORS' REPORT
Board of Directors
TPI Land Development III Limited Partnership
Phoenix, Arizona 85018
We have audited the accompanying balance sheet of TPI Land Development III
Limited Partnership (the Partnership), as of March 31, 2000. This financial
statement is the responsibility of the Partnership's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the balance sheet provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of the Partnership as of March 31,
2000, in conformity with generally accepted accounting principles.
/s/ Clancy and Co., P.L.L.C.
Phoenix, Arizona
October 25, 2000
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TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
BALANCE SHEET
MARCH 31, 2000
ASSETS
Current Assets
Cash $ 281,133
Other Current Assets 1,174
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Total Current Assets 282,307
Land Held for Investment Purposes (Note 3) 5,734,276
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Total Assets $6,016,583
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LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Accounts Payable $ 51,768
Accrued Liabilities (Note 3) 56,303
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Total Current Liabilities 108,071
Partners' Capital 5,908,512
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Total Liabilities and Partners' Capital $6,016,583
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The accompanying notes are an integral part of this financial statement.
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TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
NOTES TO THE FINANCIAL STATEMENT
MARCH 31, 2000
NOTE 1 - ORGANIZATION
TPI Land Development III Limited Partnership (the Partnership) is a limited
partnership formed during 1986 under the laws of the State of Arizona for a
term of fifteen (15) years, expiring on December 31, 2001. The Partnership
reached impound on May 27, 1986. The offering period for the Partnership
ended December 31, 1987, after receiving and accepting $9,939,500, or
19,879 units from limited partners.
The Partnership was formed to acquire property for investment and
appreciation purposes. The Partnership intends to sell a portion or all of
the properties in the future for partnership liquidation purposes. If the
Partnership is not terminated prior to December 31, 2001, it shall cease to
exist on that date.
The Partnership filed petitions for relief under Chapter 11 of the federal
bankruptcy laws in the United States Bankruptcy Court for the District of
Arizona on July 6, 1995. Under Chapter 11, certain claims against the
Debtor in existence prior to the filing of petitions for relief under the
federal bankruptcy laws are stayed while the Debtor continues business
operations as Debtor-in-Possession. At the time of the filing, the
Partnership owned real property in Maricopa County and Pinal County,
Arizona, comprised of commercial, industrial, mid-rise office, and
multi-family acreage. After the purchase of said real property, both
counties suffered significant declines in values of real property for a
number of years.
On May 20, 1997, the Partnership executed Amendment No. 1 to its
partnership agreement for the purpose of listing a new general partner,
Investors Recovery Group L.L.C., which was filed with the State of Arizona
on June 18, 1997.
On July 29, 1997, the Partnership filed Chapter 11 Plan of Reorganization
for the purpose of classification of creditors and provisions for treatment
of claims of creditors. The funds necessary to execute and implement this
Plan of Reorganization were derived from the sale of real property owned by
the Partnership, and cash in bank. The assets cannot be sold without court
approval and notice.
On August 31, 1999, the Partnership filed a First Amended Plan of
Reorganization for the purpose of distributing cash held by the Partnership
based on each partner's respective ownership interests. The distribution
took place immediately upon approval by the court, which was on October 21,
1999. The Partnership deemed abandoned any units of partners that did not
negotiate the distribution check by December 31, 1999, which totaled
$13,181, or 262 units. Subsequent to December 31, 1999, the Partnership
found $4,226, or 84 units, which were reinstated during 2000. The funds
necessary to execute and implement this Plan of Reorganization were derived
from the sale of real property owned by the Partnership, and an interest
bearing cash trust account.
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NOTE 1 - ORGANIZATION (CONTINUED)
On March 30, 2000, a Notice of Consummation of Plan of Reorganization and
Application for Final Decree was made. On April 5, 2000, the Partnership
emerged from bankruptcy pursuant to a confirmed Plan of Reorganization. In
accordance with Statement of Position (SOP) 90-7, "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code," once the Partnership
emerges from reorganization, the Partnership qualifies for "fresh start"
accounting and reporting. All assets and liabilities are restated to
reflect their reorganization values, which approximates fair values at the
reorganization date. In addition, the amount of prior retained earnings or
deficit is eliminated as a charge to partners' capital.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING
The Partnership's financial statements are prepared using the accrual
method of accounting. CASH AND CASH EQUIVALENTS The Partnership considers
all highly liquid debt instruments with a maturity of three months or less
when acquired to be cash and cash equivalents.
CONCENTRATION OF CREDIT RISK
The Partnership maintains cash balances in excess of $100,000 at a local
bank. The balance is insured by the Federal Deposit Insurance Corporation
up to $100,000.
REVENUE RECOGNITION
The Partnership accounts for real estate sales under the accrual method
when certain criteria are met. Under the accrual method, profit is recorded
when a sale has been consummated.
SYNDICATION COSTS
Syndication costs totaling $31,415 represent commissions incurred on the
sale of the limited partnership interest and the costs of preparing the
prospectuses, and have been charged against partners' capital. These costs
are not deductible for income tax purposes, and upon partnership
dissolution, will be allocated proportionately against the remaining
partnership interests.
LAND-RELATED COSTS
Land-Related Costs not previously allocated to specifically identifiable
properties represent commissions, legal expenses, and other expenses
incurred during the acquisition of the land. These costs are allocated when
a parcel is sold based on the parcel's original contract price as a
percentage of total contract prices of all remaining parcels and are
included in cost of sales.
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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
Preparing financial statements requires management to make estimates and
assumptions that effect the reported amounts of assets, liabilities,
revenue and expenses. Actual results may differ from these estimates.
INCOME TAXES
The Partnership is a limited partnership. As such, all taxable income or
losses and available income tax credits are passed from the partnership to
the individual partners. It is the responsibility of the individual
partners to report the taxable income or losses and tax credits, and to pay
any resulting income taxes. Consequently, there is no provision for income
taxes included in these financial statements.
The Partnership is required to file Internal Revenue Service Form 1065,
U.S. PARTNERSHIP RETURN OF Income, and to provide its partners with
Schedule K-1, PARTNERS' SHARE OF INCOME, CREDITS, DEDUCTIONS, ETC.
As an incentive to early investment and the purchase of larger numbers of
units, limited partners were given a preferred return on their investment.
The preferred return clause was deleted in the Amendments to Agreement of
Limited Partnership of TPI Land Development III Limited Partnership, dated
January 1998. Partners' share of income and loss is allocated to those
partners' in proportion to each partner's share of the basis in the
Partnership, calculated after special allocations of expenses have been
made. If any partner is not a partner for an entire fiscal year or if his
capital percentage changed during the year, the share of net profits, net
losses, distributions, credits and deductions of the Partnership allocable
to such partner is determined consistent with the portion of the year
during which he was a partner and by taking into account his varying
capital percentages. Any assignment or sale of units is recognized by the
Partnership not later than the last day of the calendar quarter following
receipt of written notice of such assignment or sale accompanied by copies
of all operative documents effecting such assignment or sale.
All distributions of cash available for distribution, until dissolution of
the Partnership, shall be allocated to the limited partners on a pro rata
basis in accordance with their respective ownership interests.
PENDING ACCOUNTING PRONOUNCEMENTS
It is anticipated that current pending accounting pronouncements will not
have an adverse impact on the financial statements of the Partnership.
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NOTE 3 - LAND HELD FOR INVESTMENT PURPOSES
Land Held For Investment Purposes represents costs incurred by the
Partnership for the acquisition and holding of land. The following is a
summary of real properties:
(1) 22.1 acres of commercial real property at Baseline and 24th
Street, Phoenix, Arizona
(2) 11.3 acres of commercial real property at Peoria and 79th Avenue,
Peoria, Arizona
(3) 10.22 acres of commercial real property at Baseline Road and 32nd
Street, Phoenix, Arizona
(4) 1.03 acres of commercial real property at Central Avenue and
Ludlow, Avondale, Arizona
(5) 8.5 acres of commercial real property at Van Buren and Central
Avenue, Goodyear, Arizona
<TABLE>
<CAPTION>
Land-
Cost or Related Fair Market
Basis Costs Total Value Write Down Adjusted Basis
----- ------- ----- ----- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
(1) $ 2,030,417 $ 300,787 $ 2,331,204 $ 2,467,000 -- $2,331,204
(2) 832,592 123,340 955,932 1,011,746 -- 955,932
(3) 1,139,148 168,754 1,307,902 1,000,000 307,902 1,000,000
(4) 125,472 18,587 144,059 75,000 69,059 75,000
(5) 1,302,320 194,126 1,496,446 1,372,140 124,306 1,372,140
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$ 5,429,949 $ 805,594 $ 6,235,543 $ 501,267 $5,734,276
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</TABLE>
The reorganization values of the Partnership's properties were determined
in consideration of several factors, such as population and demographic
data derived from the 1990 U.S. Census data bank, and by reliance on
available market information and appropriate valuation methodologies.
Considerable judgment is necessarily required in interpreting market data
to develop the estimates of fair value, and, accordingly, the estimates are
not necessarily indicative of the amounts that the Partnership could
realize in current market exchange.
Additionally, known losses on the sale of property (3) in the amount of
$56,303 were accrued and charged to partners' capital so that no loss is
recognized on property sales subsequent to the reorganization date. See
Note 5.
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NOTE 4 - COMMITMENTS
MANAGEMENT FEES. The general partner, Investors Recovery Group L.L.C., has
entered into an agreement with Horizon Real Estate Group, Inc., and certain
of its affiliates dated September 1996, to provide broker/manager and
accounting services for the Partnership. The broker/manager receives the
following fees and commissions:
(1) a monthly asset management fee equal to one twelfth of .75% times
the total values of the real property on hand,
(2) a brokerage services fee equal to five percent (5%) of (a) the
selling price of each parcel of the property sold; (b) of the
amount of damages actually collected by suit or otherwise if
completion of a sale is prevented by the default of the buyer
under a purchase and sale agreement; and (c) of the list price of
any parcel of property for which the broker/manager has procured
a buyer who is ready, willing and able to purchase such parcel at
the listed price and upon the listed terms upon Partnership's
refusal to sell such parcel,
(3) a disposition fee of one percent (1%) of the selling price upon
the closing of each sale of a portion of the property which
occurs while this agreement remains in effect,
(4) an accounting fee equal to the reasonable hourly charges for the
time of its employees spent in performing the accounting services
required, not to exceed $10,000 per year. In addition, a tax
return preparation fee equal to the reasonable hourly charges for
the time of its employees spent in the preparation of the annual
income tax returns, not to exceed $7,000 per year, and
(5) if the broker/manager is required to administer more than one
distribution to the partners during a single calendar year,
compensation shall be at $35 per hour for its clerical employees.
In addition, if any extraordinary professional services are
required from the broker/manager beyond the services required by
this agreement, compensation shall be at $150 per hour, provided
that the broker/manager obtains the Partnership's approval in
writing.
The agreement is dated September 1996 and continues until terminated at any
time by written consent of either party.
NOTE 5 - SUBSEQUENT EVENTS
PROPERTY SALES. As of the date of issuance of these financial statements,
the Partnership sold the 10.22 acres of property located at Baseline Road
and 32nd Street, Phoenix, Arizona, for $1,000,000, on May 30, 2000. Under
the "fresh start" accounting rules, the property was written down in
reorganization by $307,902 to its fair market value of $1,000,000.
Additionally, known expenses of $56,303 were accrued at reorganization, and
no loss was recognized on the sale of the property for book purposes.
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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.
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
By: /s/ Lawrie Porter
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Lawrie Porter, Managing Member
Date: November 16, 2000
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