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, 1997
or
[ ]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 0-15546
ANGELES PARTNERS XV
(Name of small business issuer in its charter)
California 95-4046025
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. 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 registrant'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. [X]
State issuer's revenues for its most recent fiscal year. N/A
State the aggregate market value of the voting partnership interests 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 a specified date within the past 60 days. Market value information for
Registrant's partnership interests is not available. Should a trading market
develop for these interests, it is the Managing General Partners belief that the
aggregate market value of the voting partnership interests would not exceed
$25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Angeles Partners XV (the "Partnership" or "Registrant") is a publicly-held
limited partnership organized under the California Uniform Limited Partnership
Act pursuant to the Certificate and Agreement of Limited Partnership (herein-
after referred to as "the Agreement") dated June 29, 1984. The Partnership's
Managing General Partner is Angeles Realty Corporation II, a California corpo-
ration (hereinafter referred to as the "Managing General Partner" or "ARCII").
The Managing General Partner was formerly a wholly owned subsidiary of Angeles
Real Estate Corporation, a wholly owned subsidiary of Angeles Corporation and is
engaged in providing similar services to other partnerships.
On November 24, 1992, the outstanding stock of the Managing General Partner was
effectively transferred to IAP GP Corporation, an affiliate of Insignia
Financial Group, Inc. ("Insignia"). Inasmuch as the information contained
herein relates to the operation of the Partnership for periods during which
neither IAP GP Corporation nor any of its affiliates managed the properties or
operations of the Partnership, such information has been provided by Angeles
Real Estate Corporation. The Managing General Partner is a wholly-owned
subsidiary of MAE GP Corporation ("MAE GP"). Effective February 25, 1998, MAE
GP was merged into Insignia Properties Trust ("IPT") which is an affiliate of
Insignia. Thus the Managing General Partner is now a wholly-owned subsidiary of
IPT. On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the General
Partner of the Partnership.
The Partnership, through its public offering of Limited Partnership Units, sold
17,321 units aggregating $17,321,000. The Managing General Partner contributed
capital in the amount of $1,000 for a 1% interest in the Partnership. The
Partnership was formed for the purpose of acquiring fee and other forms of
equity interests in various types of real property. The Partnership currently
owns two investment properties.
The Registrant has no employees. Administrative services are performed by the
Managing General Partner, an affiliate of Insignia.
ITEM 2. DESCRIPTION OF PROPERTIES
As of December 31, 1994, 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 the
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, 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.
ITEM 3. LEGAL PROCEEDINGS
The Registrant is unaware of any pending or outstanding litigation that is not
of a routine nature. The Managing General Partner of the Registrant believes
that all such pending or outstanding litigation will be resolved without a
material adverse effect upon the business, financial condition, or operations of
the Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The security holders of the Partnership did not vote on any matter during the
fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER
MATTERS
The Partnership, a publicly-held limited partnership, sold 17,321 Limited
Partnership Units during its offering period through April 1, 1987. The
Partnership currently has 17,149 Limited Partnership Units outstanding and
1,692 Limited Partners of record. There is no intention to sell additional
Limited Partnership Units nor is there an established market for these units.
The Partnership has discontinued making cash distributions from operations and
does not anticipate any cash available for distributions upon the liquidation of
the Partnership.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This item should be read in conjunction with the financial statements and other
items contained elsewhere in this report.
Results of Operations, Liquidity and Capital Resources
As of December 31, 1994, 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 the
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 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 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. 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 December 31, 1997 and December 31, 1996, with
monthly interest only payments at prime plus 2%. The indebtedness is currently
in default at December 31, 1997. Total interest charges for this loan were
approximately $168,000 and $163,000 for the years ended December 31, 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 their 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 December 31, 1997, was based on independent appraisals.
The statement of net liabilities in liquidation as of December 31, 1997,
includes approximately $816,000 of accrued 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 during the fourth quarter of 1998. These costs include anticipated
legal fees ($11,000) and administrative expenses ($893,000), less income from
property operations ($88,000). 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 year ended December 31, 1997, the Partnership recorded an increase in
the estimated costs during the period of liquidation of approximately $268,000.
This increase is primarily due to a decrease in estimated income from property
operation.
Year 2000
The Partnership is dependent upon the Managing General Partner and Insignia for
management and administrative services. Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue"). The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems. The Managing General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems.
Other
Certain items discussed in this annual report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date
of this annual report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates of revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
ITEM 7. FINANCIAL STATEMENTS
ANGELES PARTNERS XV
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Statement of Net Liabilities in Liquidation - December 31, 1997
Statement of Changes in Net Liabilities in Liquidation - Year ended December
31, 1997
Statement of Changes in Net Liabilities in Liquidation - Year ended December
31, 1996
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Partners XV
We have audited the statement of net liabilities in liquidation of Angeles
Partners XV as of December 31, 1997 and the related statements of changes in net
liabilities in liquidation for each of the two years in the period ended
December 31, 1997. 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 generally accepted auditing
standards. 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 net liabilities in liquidation of Angeles Partners XV
at December 31, 1997 and the changes in net liabilities in liquidation for each
of the two years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles applied on the basis of accounting
described in Note A to the financial statements.
/S/ERNST & YOUNG LLP
Greenville, South Carolina
February 25, 1998,
except for Note E, as to which the date is
March 17, 1998
ANGELES PARTNERS XV
Statement of Net Liabilities in Liquidation
(in thousands)
December 31, 1997
Assets
Cash $ 355
Other assets 4
Investment properties 4,128
4,487
Liabilities
Property taxes 111
Interest 2,866
Notes payable, including $3,082
in default 6,967
Estimated costs during the period
of liquidation 816
10,760
Net liabilities in liquidation $(6,273)
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XV
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(in thousands)
Year Ended December 31, 1997
Net liabilities in liquidation
at December 31, 1996 $(4,025)
Changes in net liabilities in liquidation
attributed to:
Decrease in cash (15)
Decrease in other assets (10)
Decrease in investment properties (1,272)
Increase in accrued interest (683)
Increase in estimated costs during the
period of liquidation (268)
Net liabilities in liquidation at
December 31, 1997 $(6,273)
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XV
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(in thousands)
Year Ended December 31, 1996
Net liabilities in liquidation
at December 31, 1995 $(3,209)
Changes in net liabilities in liquidation
attributed to:
Increase in unrestricted cash 139
Decrease in restricted cash (11)
Decrease in escrows for taxes (8)
Decrease in other assets (28)
Increase in accrued taxes (58)
Decrease in tenant security deposit liabilities 2
Increase in accrued interest (623)
Decrease in other liabilities 12
Increase in estimated costs during
the period of liquidation (241)
Net liabilities in liquidation at
December 31, 1996 $(4,025)
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XV
(A Limited Partnership)
Notes to Financial Statements
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
As of December 31, 1994, Angeles Partners 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 the 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 ("ARC II" or 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 Angeles Partners XV. 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 their 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 appraisals.
The statement of net liabilities in liquidation as of December 31, 1997,
includes approximately $816,000 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, 1998. These costs include anticipated legal fees and
administrative expenses, 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.
ORGANIZATION: The Partnership is a California limited partnership organized on
June 29, 1984, to acquire and operate commercial properties. The Partnership's
Managing General Partner is an affiliate of Insignia Financial Group, Inc.
("Insignia"). The Managing General Partner is a wholly-owned subsidiary of MAE
GP Corporation ("MAE GP"). Effective February 25, 1998, MAE GP was merged into
Insignia Properties Trust ("IPT") which is an affiliate of Insignia. Thus the
Managing General Partner is now a wholly-owned subsidiary of IPT. As of
December 31, 1997, the Partnership operates three commercial properties in
Cleveland, Ohio.
ALLOCATIONS TO PARTNERS: Net income and losses (excluding those arising from
the occurrence of sales or dispositions) of the Partnership will be allocated 1%
to the Managing General Partner and 99% to the Limited Partners on an annual
basis.
In accordance with the Partnership Agreement, any gain from the sale or other
disposition of Partnership assets will be allocated first to the Managing
General Partner to the extent of the amount of any Incentive Interests (as
defined below) to which the Managing General Partner is entitled. Any gain
remaining after said allocation will be allocated to the Managing General
Partner and Limited Partners in proportion to their interests in the
Partnership, provided that the gain shall first be allocated to Partners with
negative account balances, in proportion to such balances, in an amount equal to
the sum of such negative capital account balances. Except as discussed below,
the Partnership will allocate distributions 1% to the Managing General Partner
and 99% to the Limited Partners.
Upon the sale or other disposition, or refinancing of any asset of the
Partnership, the Distributable Net Proceeds shall be distributed as follows: (i)
First, to the Partners in proportion to their interests until the Limited
Partners have received proceeds equal to their Original Capital Investment
applicable to the property; (ii) Second, to the Partners until the Limited
Partners have received distributions from all sources equal to their 6%
Cumulative Distribution; (iii) Third, to the Managing General Partner until it
has received an amount equal to 3% of the aggregate disposition price of all
properties ("Initial Incentive Interest") and (iv) Thereafter, 76% to the
Partners in proportion to their interests and 24% ("Final Incentive Interest")
to the Managing General Partner.
CASH: Includes cash on hand and in banks and money market funds. At certain
times the amount of cash deposited at a bank may exceed the limit on insured
deposits.
NOTE B - NOTES PAYABLE
The principle terms of notes payable are as follows (dollar amounts in
thousands):
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
1997 Interest(1) Rate Date Maturity
Cleveland Industrial
1st mortgage $1,775 $11 7.15% 09/98 $1,775
1st mortgage 2,090 12 7.15% 09/98 2,090
Angeles Partners
XV-AAP
Note payable in
default (Note D) (3) 1,582 (3) (5) 11/97 1,582
Note payable in
default(2)(3)(4) 1,500 (3) 12.50% 12/95 1,500
Note payable 20 -- 8.00% 07/04 20
$6,967 $6,967
(1) Interest only payments.
(2) The Partnership executed mortgages on previously owned properties to
secure this obligation. However, the holder of the first trust deeds,
whose loan documents prohibit subliens, required the second trust deeds to
be removed from record. Accordingly, this obligation is now unsecured.
(3) Debt is currently in default as debt service has been discontinued.
(4) Loan provided by AMIT (See "Note D").
(5) Interest calculated at prime plus 2% (currently 10.5%).
Mortgages are collateralized by the related property and improvements and by
pledge of revenues from the property and improvements of the Partnership.
As of December 31, 1997 approximately $3,082,000 of the mortgage notes are
currently in default. Subsequent to December 31, 1997, scheduled principal
payments of $3,865,000 and $20,000 are due in 1998 and 2004, respectively.
NOTE C - INCOME TAXES
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
financial statements of the Partnership.
For the year ended December 31, 1997, the Federal taxable loss was approximately
$341,000 or $19.69 per limited partnership unit. For the year ended December
31, 1996, the Federal taxable loss was approximately $818,000 or $47.23 per
limited partnership unit.
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net liabilities (in thousands):
Net liabilities in liquidation, as reported $(6,273)
Land and buildings 36
Accumulated depreciation (912)
Syndication and distribution costs 2,548
Other 1,493
Net liabilities - Federal tax basis $(3,108)
NOTE D - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the 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
in 1997 and 1996 (in thousands):
1997 1996
Property management fees $ -- $ 29
Reimbursement for services of affiliates 36 73
For the period of January 1, 1996 through 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 were 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 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 and is in default at December 31, 1997.
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 December 31,
1997, is $1,500,000, plus accrued interest of approximately $2,062,000. Total
interest charges were approximately $521,000 and $436,000 for the years ended
December 31, 1997 and 1996, respectively.
In November 1992, MAE GP acquired 1,675,113 Class B Common Shares of AMIT. The
terms of the Class B shares provide that they are convertible, in whole or in
part, into Class A Common Shares of AMIT 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 agreed not to convert the Class B
shares so long at AMIT's option is outstanding). These Class B Shares entitle
the holder 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 agreed to waive its right to receive dividends and
distributions so long as AMIT's option is outstanding). The holder of the Class
B shares is also entitled to vote on the same basis as the holders of Class A
shares, providing the holder 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 such shares would approximate 1.3% 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 which were
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. 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 grant of the option and as part of the settlement, MAE
GP also executed an irrevocable proxy in favor of AMIT, which provides that the
holder of the Class B shares is permitted to vote those 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. With
respect to such matters, the trustees of AMIT are required to vote (pursuant to
the irrevocable proxy) the Class B shares (as a single block) in the same manner
as a majority of the Class A shares are voted (to be determined without
consideration of the votes of "Excess Class A Shares" (as defined in Section
6.13 of AMIT's Declaration of Trust).
Between its acquisition of the Class B shares (in November 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. In February 1998, MAE GP was merged into IPT, and in
connection with that merger, MAE GP dividended all of the Class B shares to its
sole stockholder, Metropolitan Asset enhancement, L.P. ("MAE"). As a result,
MAE, as the holder of the Class B shares, is now subject to the terms of the
settlement agreement, option and irrevocable proxy described in the two
preceding paragraphs. Neither MAE GP nor MAE has exerted and intends to exert
any management control over or participate in the management of AMIT. However,
subject to the terms of the proxy described below, MAE may choose to vote the
Class B shares as it deems appropriate in the future.
Liquidity Assistance L.L.C., which is an affiliate of the General Partner, MAE
and Insignia (which provides property management and partnership administration
services to the Partnership), owned 96,800 Class A shares of AMIT at December
31, 1997. These Class A shares represent approximately 2.2% of the total voting
power 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
IPT, an entity then owned 98% by Insignia and its affiliates. 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 (including MAE) would
own approximately 57% of post-merger IPT when this transaction is consummated.
NOTE E - SUBSEQUENT EVENT
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the General
Partner of the Partnership.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Registrant does not have any directors or officers. The Managing General
Partner, Angeles Realty Corporation II is responsible for the management and
control of substantially all of the Registrant's operations and has general
responsibility and ultimate authority in all matters affecting the Registrant's
business. The Managing General Partner is a wholly-owned subsidiary of MAE GP
Corporation ("MAE GP"). Effective February 25, 1998, MAE GP was merged into
Insignia Properties Trust ("IPT") which is an affiliate of Insignia Financial
Group, Inc. ("Insignia"). Thus the Managing General Partner is now a wholly-
owned subsidiary of IPT.
The present officers of the Managing General Partner are listed below:
Name Age Position
Carroll D. Vinson 57 President and Director
Robert D. Long, Jr. 30 Vice President and Chief
Accounting Officer
William H. Jarrard, Jr. 51 Vice President
Daniel M. LeBey 32 Secretary
Kelley M. Buechler 40 Assistant Secretary
Carroll D. Vinson has been President and Director of the Managing General
Partner and President of Metropolitan Asset Enhancement, L.P. ("MAE"), and
subsidiaries since August 1994. He has acted as Chief Operating Officer of IPT,
an affiliate of the General Partner, since May 1997. During 1993 to August
1994, Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm) and
engaged in various other investment and consulting activities which included
portfolio acquisitions, asset dispositions, debt restructurings and financial
reporting. Briefly, in early 1993, Mr. Vinson served as President and Chief
Executive Officer of Angeles Corporation, a real estate investment firm. From
1991 to 1993, Mr. Vinson was employed by Insignia in various capacities
including Managing Director - President during 1991.
Robert D. Long, Jr. has been the Vice President and Chief Accounting Officer of
the Managing General Partner since August 1994. Mr. Long joined MAE, an
affiliate of Insignia, in September 1993. Since 1994 he has acted as Vice
President and Chief Accounting Officer of the MAE subsidiaries. Mr. Long was an
accountant for Insignia until joining MAE in 1993. Prior to joining Insignia,
Mr. Long was an auditor for the State of Tennessee and was associated with the
accounting firm of Harsman Lewis and Associates.
William H. Jarrard, Jr. has been Senior Vice President of IPT, parent of the
Managing General Partner since May 1997. Mr. Jarrard previously acted as
Managing Director - Partnership Administration of Insignia from January 1991
through September 1997 and served as Managing Director - Partnership
Administration and Asset Management of Insignia from July 1994 until January
1996.
Daniel M. LeBey has been Secretary of the Managing General Partner since January
29, 1998 and Insignia's Assistant Secretary since April 30, 1997. Since July
1996 he has also served as Insignia's Associate General Counsel. From September
1992 until June 1996, Mr. LeBey was an attorney with the law firm of Alston &
Bird LLP, Atlanta, Georgia.
Kelley M. Buechler has been Assistant Secretary of the Managing General Partner
since December 1993 and Assistant Secretary of Insignia since 1991.
ITEM 10. EXECUTIVE COMPENSATION
No direct form of compensation or remuneration was paid by the Partnership to
any officer or director of ARC II. The Partnership has no plan, nor does the
Partnership presently propose a plan, which will result in any remuneration
being paid to any officer or director upon termination of employment.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of January 1, 1998, no person owned of record more than 5% of Limited
Partnership Units of the Partnership nor was any person known by the Partnership
to own of record and beneficially, or beneficially only, more than 5% of such
securities.
The Partnership knows of no contractual arrangements, the operation of the terms
of which may at a subsequent date result in a change in control of the
Partnership, except as follows: Article 12.1 of the Agreement, which provides
that upon a vote of the Limited Partners holding more than 50% of the then
outstanding Limited Partnership Units the Managing General Partner may be
expelled from the Partnership upon 90 days written notice. In the event that a
successor general partner has been elected by Limited Partners holding more than
50% of the then outstanding Limited Partnership Units and if said Limited
Partners elect to continue the business of the Partnership, the Partnership is
required to pay in cash to the expelled Managing General Partner an amount equal
to the accrued and unpaid management fee described in Article 10 of the
Agreement and to purchase the Managing General Partner's interest in the
Partnership on the effective date of the expulsion, which shall be an amount
equal to the difference between (i) the balance of the Managing General
Partner's capital account and (ii) the fair market value of the share of
Distributable Net Proceeds to which the Managing General Partner would be
entitled. Determination of the fair market value of the share of Distributable
Net Proceeds is defined in Article 12.2(b) of the Agreement.
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the General
Partner of the Partnership.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No transactions have occurred between the Partnership and any officer or
director of ARC II.
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the 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
in 1997 and 1996 (in thousands):
1997 1996
Property management fees $ -- $ 29
Reimbursement for services of affiliates 36 73
For the period of January 1, 1996 through 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 were 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 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 and is in default at December 31, 1997.
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 December 31, 1997, is $1,500,000, plus accrued interest of
approximately $2,062,000. Total interest charges were approximately $521,000
and $436,000 for the years ended December 31, 1997 and 1996, respectively.
In November 1992, MAE GP Corporation ("MAE GP") acquired 1,675,113 Class B
Common Shares of AMIT. The terms of the Class B shares provide that they are
convertible, in whole or in part, into Class A Common Shares of AMIT 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
agreed not to convert the Class B shares so long as AMIT's option is
outstanding). These Class B Shares entitle the holder 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 agreed to
waive its right to receive dividends and distributions so long as AMIT's option
is outstanding). The holder of the Class B shares is also entitled to vote on
the same basis as the holders of Class A shares, providing the holder 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 such shares would approximate 1.3% 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 which were
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. 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 grant of the option and as part of the settlement, MAE
GP also executed an irrevocable proxy in favor of AMIT, which provides that the
holder of the Class B shares is permitted to vote those 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. With
respect to such matters, the trustees of AMIT are required to vote (pursuant to
the irrevocable proxy) the Class B shares (as a single block) in the same manner
as a majority of the Class A shares are voted (to be determined without
consideration of the votes of "Excess Class A Shares" (as defined in Section
6.13 of AMIT's Declaration of Trust).
Between its acquisition of the Class B shares (in November 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. In February 1998, MAE GP was merged into Insignia
Properties Trust ("IPT"), an affiliate of Insignia, and in connection with that
merger, MAE GP dividended all of the Class B shares to its sole stockholder,
Metropolitan Asset enhancement, L.P. ("MAE"). As a result, MAE, as the holder
of the Class B shares, is now subject to the terms of the settlement agreement,
option and irrevocable proxy described in the two preceding paragraphs. Neither
MAE GP nor MAE has exerted and intends to exert any management control over or
participate in the management of AMIT. However, subject to the terms of the
proxy described below, MAE may choose to vote the Class B shares as it deems
appropriate in the future.
Liquidity Assistance L.L.C., which is an affiliate of the General Partner, MAE
and Insignia (which provides property management and partnership administration
services to the Partnership), owned 96,800 Class A shares of AMIT at December
31, 1997. These Class A shares represent approximately 2.2% of the total voting
power 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
IPT, an entity then owned 98% by Insignia and its affiliates. 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 (including MAE) would
own approximately 57% of post-merger IPT when this transaction is consummated.
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 during the fourth quarter of 1997:
None.
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.
ANGELES PARTNERS XV
(A California Limited Partnership)
(Registrant)
By: Angeles Realty Corporation II
By: /s/Carroll D. Vinson
Carroll D. Vinson
President and Director
Date: March 25, 1998
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities on the date
indicated.
/s/Carroll D. Vinson President and Director March 25, 1998
Carroll D. Vinson
/s/Robert D. Long, Jr. Vice President and Chief March 25, 1998
Robert D. Long, Jr. Accounting Officer
EXHIBIT INDEX
EXHIBIT
3.1 Amended Certificate and Agreement of the Limited Partnership filed
as exhibit 3.1 in Form 10K dated October 31, 1979 and is
incorporated herein by reference.
10.1 Property Management Agreement between the Partnership and Angeles
Real Estate Management Company, filed as exhibit 10.1 in Form 10K
dated October 31, 1980 and is incorporated herein by reference.
10.2 First Trust Deed Mortgage - Bercado Shores, filed as an exhibit
10.8 in Form 10-K dated March 28, 1991 and is incorporated herein
by reference.
10.3 First Trust Deed Mortgage - Devonshire Apartments, filed as an
exhibit 10.9 in Form 10-K dated March 28, 1991 and is incorporated
herein by reference.
10.4 Promissory Note Secured by Mortgage and Other Security -
Breckenridge, filed as an exhibit 10.10 in Form 10-K dated March
28, 1991 and is incorporated herein by reference.
10.5 Promissory Note Secured by Mortgage and Other Security -
Devonshire, filed as an exhibit 10.11 in Form 10-K dated March 28,
1991 and is incorporated herein by reference.
10.6 Promissory Note Secured by Mortgage and Other Security - Brittany
Point, filed as an exhibit 10.12 in Form 10-K dated March 28, 1991
and is incorporated herein by reference.
10.7 Agreement to Purchase and Sale of Real Property between Angeles
Partners XV and New Plan Realty Trust, dated January 29, 1992 which
was filed as exhibit I to the Trust's Form 8-K filed February 28,
1992 and is incorporated herein by reference.
10.8 Stock Purchase Agreement dated November 24, 1992 showing the
purchase of 100% of the outstanding stock of Angeles Realty
Corporation by IAP GP Corporation, a subsidiary of MAE GP
Corporation, filed in Form 8-K dated December 31, 1992, which is
incorporated herein by reference.
10.9 Seller's Closing Statements for Cleveland Industrial buildings: 1)
Van Epps Road, Brooklyn Heights, 2) 4650 Spring Road, Brooklyn
Heights, 3) 211 Hayes Drive, Brooklyn Heights, 4) Hayes Drive,
Brooklyn Heights, 5) 100 Hayes Drive, Brooklyn Heights.
10.10 Seller's Closing Statement for Rancho Park (10301 West Pico
Boulevard, Los Angeles).
10.11 Agreement for Deed-in-Lieu Foreclosure on 4705 Van Epps
10.12 Agreement for Deed-in-Lieu Foreclosure on 4851 Van Epps
10.13 Motion for Foreclosure on Marina Plaza and Marina Harbor
16 Letter from the Registrant's former accountant regarding its
concurrence with the statements made by the Registrant is
incorporated by reference to the exhibit filed with Form 8-K dated
August 30, 1993.
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XV 1997 Year-End 10-KSB and is qualified in its entirety by
reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000788331
<NAME> ANGELES PARTNERS XV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 355
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 4,128
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,487
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 6,967
0
0
<COMMON> 0
<OTHER-SE> (6,273)
<TOTAL-LIABILITY-AND-EQUITY> 4,487
<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>
