FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from.........to.........
Commission file number 0-15546
ANGELES PARTNERS XV
(Exact name of small business issuer as specified in its charter)
California 95-4046025
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone 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) ANGELES PARTNERS XV
STATEMENT OF NET LIABILITIES IN LIQUIDATION
(Unaudited)
(in thousands)
September 30, 1997
Assets
Cash $ 356
Other assets 14
Investment properties 5,400
5,770
Liabilities
Property taxes $ 207
Interest 2,684
Notes payable, including $1,500,000
in default 6,967
Estimated costs during the period
of liquidation 203
10,061
Net liabilities in liquidation $(4,291)
See Accompanying Notes to Financial Statements
b) ANGELES PARTNERS XV
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(Unaudited)
(in thousands)
September 30, 1997
Net liabilities in liquidation at December 31, 1996 $ (4,025)
Changes in net liabilities in liquidation
attributed to:
Decrease in cash (14)
Increase in other assets --
Increase in accrued taxes (96)
Increase in accrued interest (501)
Decrease in estimated costs during the period
of liquidation 345
Net liabilities in liquidation at September 30, 1997 $ (4,291)
See Accompanying Notes To Financial Statements
b) ANGELES PARTNERS XV
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(Unaudited)
(in thousands)
September 30, 1996
Net liabilities in liquidation at December 31, 1995 $ (3,209)
Changes in net liabilities in liquidation
attributed to:
Increase in unrestricted cash 158
Decrease in restricted cash (11)
Increase in accounts receivable 20
Decrease in escrows for taxes (8)
Increase in other assets 53
Increase in accrued taxes (30)
Increase in accrued interest (506)
Decrease in other liabilities 12
Increase in estimated costs during the period
of liquidation (273)
Net liabilities in liquidation at September 30, 1996 $ (3,794)
See Accompanying Notes to Financial Statements
e) ANGELES PARTNERS XV
NOTES TO FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
As of December 31, 1994, Angeles Partnership XV (the "Partnership") adopted the
liquidation basis of accounting. The Partnership had experienced significant
recurring operating losses. In March 1995, the lender on the non-recourse debt
secured by Marina Plaza notified the Partnership that this debt was in default
and initiated foreclosure proceedings. Marina Plaza was placed in receivership
in June 1995, and was foreclosed upon on August 1, 1995. In addition, the
Partnership was in default on recourse indebtedness totaling $3,500,000 due to
Angeles Mortgage Investment Trust ("AMIT"). Of this debt, $1,500,000 was
secured by one of the remaining Cleveland Industrial Complex ("Cleveland")
buildings and AMIT placed the property in receivership in January 1995, and
foreclosed on the property on September 6, 1995. AMIT also foreclosed on
another of the Cleveland buildings on August 23, 1995. The remaining
$2,000,000 was recourse to the Partnership and AMIT received a default judgment
against the Partnership on January 18, 1995. As a result of the foreclosure on
the Cleveland building on August 23, 1995, this judgment was reduced by
$500,000. At this time, Angeles Realty Corporation II (the "Managing General
Partner") believes the equity in the remaining three Cleveland buildings is not
sufficient to retire the AMIT debt, therefore, the Managing General Partner
expects to transfer the Partnership's interest in the remaining Cleveland
buildings to AMIT. In July of 1996, AMIT entered a complaint for foreclosure
and other relief against the Partnership. On July 26, 1996, the remaining
Cleveland Properties were placed in receivership. The receiver is authorized
to collect the rents, profits and all income derived from the properties, to
maintain the premises, and otherwise preserve, manage, maintain and protect
such properties. The Partnership does not intend nor does it have the ability
to purchase any additional properties and the Managing General Partner has
decided to liquidate the Partnership upon foreclosure of the final property.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements at December 31,
1994, from the going concern basis of accounting to the liquidation basis of
accounting. Consequently, assets have been valued at estimated net realizable
value and liabilities are presented at their estimated settlement amounts,
including estimated costs associated with carrying out the liquidation. The
valuation of assets and liabilities necessarily requires many estimates and
assumptions and there are substantial uncertainties in carrying out the
liquidation. The actual realization of assets and settlement of liabilities
could be higher or lower than amounts indicated and is based upon the Managing
General Partner's estimates as of the date of the financial statements.
The investment properties were adjusted to their estimated net realizable
values. The net realizable values were based on certified appraisals.
The statement of net liabilities in liquidation as of September 30, 1997,
includes approximately $203,000 of costs, net of income, that the Managing
General Partner estimates will be incurred during the period of liquidation,
based on the assumption that the liquidation process will be completed by
December 31, 1997. These costs include anticipated legal fees, administrative
expenses, and are net of estimated income from property operations. Because the
realization of assets and the settlement of liabilities is based on the Managing
General Partner's best estimates, the liquidation period may be shorter than
projected or it may be extended beyond the projected period.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
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 payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The day to day management of the
remaining investment properties are managed by a third party receiver, which was
court appointed.
The following amounts were paid to the Managing General Partner and affiliates
during the nine months ended September 30, 1997 and 1996:
1997 1996
(in thousands)
Property management fees $ -- $ 29
Reimbursement for services of affiliates 28 54
For the period of January 1, 1996 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing General Partner
acquired, in the acquisition of a business, certain financial obligations from
an insurance agency which was later acquired by the agent who placed the master
policy. The agent assumed the financial obligations to the affiliate of the
Managing General Partner, who received payments on these obligations from the
agent. The amount of the Partnership's insurance premiums accruing to the
benefit of the affiliate of the Managing General Partner by virtue of the
agent's obligations is not significant.
In November 1992, Angeles Acceptance Pool ("AAP"), a Delaware limited
partnership was organized to acquire and hold the obligations evidencing the
working capital loan previously provided by Angeles Capital Investment, Inc.
("ACII"). Angeles Corporation ("Angeles") is the 99% limited partner of AAP and
Angeles Acceptance Directives, Inc.("AAD"), an affiliate of the Managing General
Partner, was, until April 14, 1995, the 1% General Partner of AAP. On April 14,
1995, as part of a settlement of claims between affiliates of the Managing
General Partner and Angeles, AAD resigned as generalpartner of AAP and
simultaneously received a 1/2% limited partner interest in AAP. An affiliate of
Angeles now serves as the general partner of AAP.
AAP's working capital loan funded the Partnership's operating deficits in prior
years. Total indebtedness, which is included as a note payable, was
approximately $1,582,000 at September 30, 1997, with monthly interest only
payments at prime plus 2%. Principal is to be paid the earlier of i) the
availability of funds, ii) the sale of one or more properties owned by the
Partnership, or iii) November 25, 1997. Total interest charges for this loan
were approximately $125,000 and $122,000 for the nine months ended September 30,
1997 and 1996, respectively.
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, has
provided secondary financing to the Partnership secured by the Partnership's
investment properties known as Cleveland Industrial and Marina Plaza. One of
the notes in the amount of $600,000 secured by one of the Cleveland Industrial
buildings was assumed by the purchaser of the building during 1994. Total AMIT
indebtedness at September 30, 1997, is $1,500,000, plus accrued interest of
approximately $1,923,000. Total interest charges were approximately $382,000
and $319,000 for the nine months ended September 30, 1997 and 1996,
respectively.
MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns
1,675,113 Class B Shares of AMIT. The terms of the Class B Shares provide that
they are convertible, in whole or in part, into Class A Shares on the basis of 1
Class A Share for every 49 Class B Shares (however, in connection with the
settlement agreement described in the following paragraph, MAE GP has agreed not
to convert the Class B Shares so long as AMIT's option is outstanding). These
Class B Shares entitle MAE GP to receive 1% of the distributions of net cash
distributed by AMIT (however, in connection with the settlement agreement
described in the following paragraph, MAE GP has agreed to waive its right to
receive dividends and distributions so long as AMIT's option is outstanding).
These Class B Shares also entitle MAE GP to vote on the same basis as Class A
Shares, providing MAE GP with approximately 39% of the total voting power of
AMIT (unless and until converted to Class A Shares, in which case the percentage
of the vote controlled represented by the shares held by MAE GP would
approximate 1.3% of the vote). Between the date of acquisition of these shares
(November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares.
Since that date, MAE GP voted its shares at the 1995 and 1996 annual meetings in
connection with the election of trustees and other matters. MAE GP has not
exerted and continues to decline to exert any management control over or
participate in the management of AMIT. Subject to the terms of the proxy
described below, MAE GP may choose to vote these shares as it deems appropriate
in the future. In addition, Liquidity Assistance L.L.C., an affiliate of the
Managing General Partner and an affiliate of Insignia Financial Group, Inc.
("Insignia"), which provides property management and partnership administration
services to the Partnership, owns 96,800 Class A Shares of AMIT at September 30,
1997. These Class A Shares represent approximately 2.2% of the total voting
power of AMIT.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an
option to acquire the Class B shares owned by it. This option can be exercised
at the end of 10 years or when all loans made by AMIT to partnerships affiliated
with MAE GP as of November 9, 1994 (which is the date of execution of a
definitive Settlement Agreement) have been paid in full, but in no event prior
to November 9, 1997. In connection with such settlement, AMIT delivered to MAE
GP cash in the sum of $250,000 at closing (which occurred April 14, 1995) as
payment for the option. If and when the option is exercised, AMIT will be
required to remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option and as part of the settlement,
MAE GP executed an irrevocable proxy in favor of AMIT, the result of which is
that MAE GP is permitted to vote the Class B Shares on all matters except those
involving transactions between AMIT and MAE GP affiliated borrowers or the
election of any MAE GP affiliate as an officer or trustee of AMIT. On those
matters, MAE GP is obligated to deliver to the AMIT trustees, in their capacity
as trustees of AMIT, proxies with regard to the Class B Shares instructing such
trustees to vote said Class B Shares in accordance with the vote of the majority
of the Class A Shares voting to be determined without consideration of the votes
of "Excess Class A Shares" (as defined in Section 6.13 of the Declaration of
Trust of AMIT).
On April 3, 1997, Insignia and AMIT entered into a non-binding agreement in
principle contemplating, among other things, a business combination of AMIT and
Insignia Properties Trust, an entity owned 98% by Insignia and its affiliates
("IPT"). On July 18, 1997, IPT, Insignia and MAE GP entered into a definitive
merger agreement pursuant to which (subject to shareholder approval and certain
other conditions, including the receipt by AMIT of a fairness opinion from its
investment bankers) AMIT would be merged with and into IPT, with each Class A
Share and Class B Share being converted into 1.625 and 0.0332 common shares of
IPT, respectively. The foregoing exchange ratios are subject to adjustment to
account for dividends paid by AMIT from January 1, 1997 and dividends paid by
IPT from February 1, 1997. It is anticipated that Insignia (and its affiliates)
and MAE GP (and its affiliates) would own approximately 53.1% and 2.3%,
respectively, of post-merger IPT when this transaction is consummated.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OR OPERATION
Results of Operations, Liquidity and Capital Resources
As of December 31, 1994, the Partnership adopted the liquidation basis of
accounting. The Partnership has experienced significant recurring operating
losses. In March 1995, the lender on the non-recourse debt secured by Marina
Plaza notified the Partnership that this debt was in default and initiated
foreclosure proceedings. Marina Plaza was placed in receivership in June 1995,
and was foreclosed upon on August 1, 1995. The Partnership was in default on
recourse indebtedness totaling $3,500,000 due to AMIT. Of this debt, $1,500,000
was secured by one of the remaining Cleveland buildings and AMIT placed the
property in receivership in January 1995, and foreclosed on it September 6,
1995. AMIT also foreclosed on another of the Cleveland buildings on August 23,
1995. The remaining $2,000,000 is recourse to the Partnership and AMIT received
a default judgment against the Partnership on January 18, 1995. As a result of
the foreclosure on the Cleveland building on August 23, 1995, this judgment was
reduced by $500,000. At this time, the Managing General Partner believes the
equity in the remaining three Cleveland buildings is not sufficient to retire
the AMIT debt, therefore, the Managing General Partner expects to transfer the
Partnership's interest in the remaining Cleveland buildings to AMIT as full
satisfaction of the debt. In July of 1996, AMIT entered a complaint for
foreclosure and other relief against the Partnership. On July 26, 1996, the
remaining Cleveland Properties were placed in receivership. The receiver is
authorized to collect the rents, profits and all income derived from the
properties, to maintain the premises, and otherwise preserve, manage, maintain
and protect such properties. The Managing General Partner intends to terminate
the Partnership upon foreclosure of the final property.
In November 1992, Angeles Acceptance Pool ("AAP"), a Delaware limited
partnership, was organized to acquire and hold the obligations evidencing the
working capital loan previously provided by Angeles Capital Investment, Inc.
("ACII"). Angeles Corporation ("Angeles") is the 99% limited partner of AAP and
Angeles Acceptance Directives, Inc.("AAD"), an affiliate of the Managing General
Partner, was, until April 14, 1995, the 1% General Partner of AAP. On April 14,
1995, as part of a settlement of claims between affiliates of the Managing
General Partner and Angeles, AAD resigned as general partner of AAP and
simultaneously received a 1/2% limited partner interest in AAP. An affiliate of
Angeles now serves as the general partner of AAP.
AAP's working capital loan funded the Partnership's operating deficits in prior
years. Total indebtedness, which is included as a note payable, was
approximately $1,582,000 at September 30, 1997 and 1996, with monthly interest
only payments at prime plus 2%. Principal is to be paid the earlier of i) the
availability of funds, ii) the sale of one or more properties owned by the
Partnership, or iii) November 25, 1997. Total interest charges for this loan
were approximately $125,000 and $122,000 for the nine month periods ended
September 30, 1997 and 1996, respectively.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements at December 31,
1994, from the going concern basis of accounting to the liquidation basis of
accounting. Consequently, assets have been valued at the estimated net
realizable value and liabilities are presented at their estimated settlement
amounts, including estimated costs associated with carrying out the liquidation.
The valuation of assets and liabilities necessarily requires many estimates and
assumptions and there are substantial uncertainties in carrying out the
liquidation. The actual realization of assets and settlement of liabilities
could be higher or lower than amounts indicated and is based upon the Managing
General Partner's estimates as of the date of the financial statements.
The investment properties were adjusted to their estimated net realizable value.
The estimated net realizable value for the three Cleveland buildings remaining
at September 30, 1997, was based on independent appraisals.
The statement of net liabilities in liquidation as of September 30, 1997,
includes approximately $203,000 of accrued costs that the Managing General
Partner estimates will be incurred during the period of liquidation, based on
the assumption that the liquidation process will be completed during the fourth
quarter of 1997. These costs include anticipated legal fees ($11,000) and
administrative expenses ($260,000), less income from property operations
($68,000). Because the success in realization of assets and the settlement of
liabilities is based on the Managing General Partner's best estimates, the
liquidation period may be shorter than projected or it may be extended beyond
the projected period.
For the nine months ended September 30, 1997, the Partnership recorded a
decrease in the estimated costs during the period of liquidation of
approximately $345,000. This decrease is primarily due to the payment of
liquidation charges.
PART II - OTHER INFORMATION
ITEM 6. 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 during the quarter ended September 30, 1997:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS XV
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President/CAO
Date: November 13, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XV 1997 Third Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000788331
<NAME> ANGELES PARTNERS XV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 356
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 5,400
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,770
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 6,967
0
0
<COMMON> 0
<OTHER-SE> (4,291)
<TOTAL-LIABILITY-AND-EQUITY> 5,770
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
</FN>
</TABLE>
