UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-17651
HIGH CASH PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3347257
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o CB Commercial Real Estate
Group, Inc.
5190 Neil Road, Suite 100
Reno, Nevada 89502-8500 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-399-9193
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of class)
Indicate by check mark whether Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that Registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not 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-K or any amendment to this
Form 10-K. [X]
PART I
Item 1. Business
High Cash Partners, L.P. (the "Partnership") is a Delaware
limited partnership formed in 1986 for the primary purpose of
investing in, holding, operating and otherwise acting with
respect to office buildings, shopping centers and other
commercial and industrial properties.
In 1989, the Partnership used all the net proceeds from its
public offering of units of limited partnership interest
("Units") to acquire Sierra Marketplace, a community retail
shopping center completed in October 1988 and situated on 18.67
acres in the southern portion of Reno, Nevada ("Sierra
Marketplace" or the "Property"). Sierra Marketplace consists of
two main buildings and three "out parcel" structures containing
approximately 233,000 square feet of net leasable area. Sierra
Marketplace has 35 tenants. Two tenants, Smith's Management
Corp., a large food and drug store, and Good Guys, Inc., a
consumer electronics store, accounted for approximately 21% and
22%, respectively, of the Partnership's total rental income
revenues in 1997. Smith's Management Corp. occupies 68,972
square feet and has a lease that extends through mid-2008; Good
Guys, Inc. occupies 16,961 square feet and has a lease that
extends through 2003. The Property is subject to a mortgage,
which is described in Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources" below.
Until November 1997, Levitz Furniture Corporation ("Levitz") had
occupied approximately 53,000 square feet at Sierra Marketplace
under a lease that extended through 2008. Levitz accounted for
approximately 16% of the Partnership's total rental income
revenues in 1997. During 1997, Levitz filed for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code.
In November 1997, Levitz vacated its premises, although it
continues to pay rent under the lease, although such payments are
expected to terminate as of April 2, 1998. See Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" below.
Locale and Competition
The Partnership believes there are approximately 8.44 million
square feet of retail space in the Reno area, including two
regional malls and 69 community, neighborhood and strip centers.
Sierra Marketplace is located in the southern section of Reno,
which is well developed commercially along major thoroughfares
with substantial residential development along secondary streets.
The primary trade area is considered affluent to middle class.
Although there is little room for significant new competing
development in the immediate geographical vicinity of the
Property, the competition for non-anchor tenants (including
existing tenants whose leases expire) is strong among existing
centers due to the overall market vacancy for this type of space.
In addition, a portion of the land available for development in
the immediate geographic vicinity of the Property has been
developed by centers predominantly occupied by large anchor
tenants. New leases being signed at Sierra Marketplace are at
equal or lower per-square-foot rentals than the expiring leases.
See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital
Resources" and "- Real Estate Market" below.
Employees
The Partnership does not have any employees. Services are
performed for the Partnership by Pembroke HCP, LLC, the
Partnership's Managing General Partner (the "Managing General
Partner"), and Pembroke Realty Management LLC ("Pembroke
Realty"), an affiliate of the Managing General Partner. Certain
services are performed for Pembroke Realty by CB Commercial Real
Estate Group, Inc., an unaffiliated management company ("CB
Commercial"). See Item 10, "Directors and Executive Officers of
Registrant", Item 11, "Executive Compensation", Item 12,
"Security Ownership of Certain Beneficial Owners and Management"
and Item 13, "Certain Relationships and Related Transactions"
below.
Item 2. Properties
See Item 1, "Business" above.
Item 3. Legal Proceedings
See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital
Resources" below with regard to Levitz.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during
the fourth quarter of 1997.
PART II
Item 5. Market for Registrant's Securities and Related Security
Holder Matters
There is no established public trading market for the Units, and
it is not anticipated that such a market will develop.
In 1987, the U.S. Congress adopted certain rules concerning
"publicly traded partnerships". Beginning in 1998, the effect of
being classified as a publicly traded partnership would be that
the Partnership would be taxed as a corporation. On November 29,
1995, the Internal Revenue Service adopted final regulations
("Final Regulations") describing when interests in partnerships
will be considered to be publicly traded. The Final Regulations
do not take effect with respect to existing partnerships until
the year 2006. During 1997, the rules concerning publicly traded
partnerships were again amended for years beginning in 1998. Due
to the nature of the Partnership's income and to the low volume
of transfers of Units in the past, it is not anticipated that the
Partnership will be treated as a publicly traded partnership
under currently applicable rules and interpretations or under the
Final Regulations.
There are certain restrictions in the Partnership's Partnership
Agreement that may limit the ability of a limited partner to
transfer Units. Such restrictions could impair the ability of a
limited partner to liquidate its investment in the event of an
emergency or for any other reason.
As of March 1, 1998, there were approximately 1,460 holders of
Units, owning an aggregate of 96,472 Units.
Quarterly distributions per Unit during 1997 and 1996 were as
follows:
Distribution with
Respect to Quarter Ended Amount of Distribution Per Unit
1997 1996
____ ____
March 31 $ -0- $ 3.13
June 30 $ -0- $ 3.13
September 30 $ -0- $ 3.13
December 31 $ -0- $ 3.13
The source of distributions in 1996 was cash flow from
operations.
There are no material legal restrictions on distributions in the
Partnership's Partnership Agreement. See, however, Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" below
for a discussion of financial conditions affecting the
Partnership's ability to make distributions.
Item 6. Selected Financial Data
Year ended December 31,
______________________________________
1997 1996 1995
___________ ___________ ___________
Revenues $ 2,686,095 $ 2,637,022 $ 2,632,230
Net Loss(1) $(7,238,860) $ (640,184) $ (442,098)
Net (Loss) Per Unit(1)(2) $ (74.29) $ (6.57) $ (4.54)
Distributions Per Unit(2) $ - $ 12.52 $ 12.52
Long-term Obligations(3) $17,540,481 $15,691,865 $14,030,719
Total Assets $18,716,205 $24,485,903 $24,652,234
Year ended December 31,
________________________
1994 1993
___________ ___________
Revenues $ 2,477,410 $ 2,321,894
Net Loss(1) $ (357,863) $ (298,167)
Net (Loss) Per Unit(1)(2) $ (3.67) $ (3.06)
Distributions Per Unit(2) $ 12.50 $ 12.50
Long-term Obligations(3) $12,548,175 $11,222,229
Total Assets $24,814,694 $25,186,722
_____________
(1) The 1997 amount includes a write-down for impairment of
$6,475,500, or $(66.45) per Unit.
(2) Based upon the weighted average number of Units outstanding.
(3) Consisting of the principal amount of the RAM 2 loan plus
deferred interest on that loan, which are described in Item
7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital
Resources" below.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Partnership uses working capital reserves set aside from the
proceeds of its public offering in 1989 and undistributed cash
flow from operations as its primary measure of liquidity. At
December 31, 1997, working capital reserves amounted to
approximately $2,981,000. Such reserves may be used to fund
capital expenditures, insurance, real estate taxes and loan
payments. All expenditures during 1997 were funded from cash
flow from operations.
At December 31, 1997, the total amount outstanding on the
Partnership's mortgage loan payable to Resources Accrued Mortgage
Investors 2 L.P. ("RAM 2") was $17,540,481, which included
deferred interest payable of $11,040,481. The mortgage does not
permit a prepayment before March 1, 1999, and, therefore, the
Partnership may not be able to refinance the mortgage before that
date. At March 1, 1999, the total amount outstanding on the
mortgage is expected to be approximately $20,000,000. If the
value of the Property does not exceed $20,000,000 at March 1,
1999, the Partnership may not be able to refinance the mortgage
at that time. The mortgage matures on February 28, 2001. At
that time, the total amount outstanding on the mortgage is
expected to be approximately $25,000,000. If the value of the
Property at that time does not exceed $25,000,000, the
Partnership may lose its entire investment in the Property. In
that connection, in the first quarter of 1997, the value of the
Property was written down to $15,875,000. See "Write-Down for
Impairment" below.
The mortgage further requires the Partnership to provide RAM 2
with a current appraisal of the Property upon RAM 2's request.
If it is determined, based upon the requested appraisal, that the
sum of (i) the principal balance of the mortgage loan plus all
other then outstanding indebtedness secured by the Property and
(ii) all accrued and unpaid interest on the mortgage at 6.22% per
annum, compounded monthly (that sum, the "Measurement Amount"),
exceeds 85% of the appraised value, an amount equal to such
excess would become immediately due and payable to RAM 2.
To date, the lender has not requested an appraisal. There can be
no assurance that, if the lender requests an appraisal, 85% of
the appraised value will equal the Measurement Amount. At
December 31, 1997, the Measurement Amount was approximately
$11,283,000, which was approximately $2,211,000 less than 85% of
the $15,875,000 value to which the Property was written down in
the first quarter of 1997. As interest on the mortgage accrues,
the Measurement Amount will increase, and, therefore, unless the
value of the Property increases sufficiently from the value to
which it was written down in the first quarter of 1997, the
Measurement Amount eventually will exceed 85% of the appraised
value of the Property.
Until November 1997, Levitz had occupied approximately 23% of the
space at the Property (i.e., approximately 1,000 out of
approximately 233,000 square feet of net leasable area). Rent
under the lease for each of 1997, 1996 and 1995 was approximately
$412,000, which was approximately 16% of the Partnership's total
rental income revenues in each such period. In November 1997,
Levitz, which had filed for protection under Chapter 11 of the
Bankruptcy Code, vacated its space. Levitz continues to pay rent
to the Partnership, although such payments are expected to
terminate as of April 2, 1998. The vacancy at the Levitz space
will result in a loss of income to the Partnership, and may
adversely affect the surrounding tenants, particulary in light of
the limited visibility those tenants have to the main
thoroughfare.
See "Real Estate Market" below. The Partnership is actively
seeking a substitute tenant. However, there can be no assurance
the Partnership will succeed in finding a substitute tenant
promptly or on terms comparable to those under the Levitz lease.
In addition, the Partnership expects to make substantial
expenditures in order to secure a substitute tenant and in
connection with a new lease.
The level of leasing activity cannot be predicted, particularly
in light of the Levitz situation, and, therefore, the amount of
further capital expenditures arising from leasing activity is
uncertain. There can be no assurance the Partnership will have
sufficient liquidity both to make such capital expenditures, and
to make the payments that may be required under the RAM 2 loan.
If there is a default on the RAM 2 loan, the Partnership would be
materially and adversely affected. Consequently, the Partnership
has declared no distribution payable for 1997 and will not
declare any distribution for the foreseeable future in order to
build up cash reserves.
Real Estate Market
A substantial decline in the market value of the Property
reflects real estate market conditions in the vicinity of Sierra
Marketplace. Recently built shopping centers in the vicinity
have increased competition for tenants. This competitive factor,
together with the fact that much of the unleased space at the
Property (including the Levitz space) has only limited visibility
to the main thoroughfare and the fact that the space occupied by
Levitz is expected to be vacant for at least some period, have
hindered the lease-up of new space. As a result, the
Partnership's investment in the Property is at risk.
Write-Down for Impairment
The value of the Property is reflected in the Partnership's
financial statements at the lower of depreciated cost or
estimated fair value. A write-down for impairment with respect
to the Property may be recorded from time to time based upon
quarterly reviews of the Property. In performing this review,
management considers the estimated fair value of the Property
based upon undiscounted future cash flows, as well as other
factors, such as the current occupancy situation in the region
where the Property is located. Because this determination of
estimated fair value is based upon future economic events, the
amounts ultimately realized upon a disposition of the Property
may differ materially from the value reflected in the
Partnership's financial statements.
A write-down for impairment is inherently subjective and is based
upon management's best estimate of current conditions and
assumptions about expected future conditions. The Partnership
may provide for additional write-downs in the future and such
write-downs could be material. In the first quarter of 1997,
prior management determined that the aggregate undiscounted
future cash flows from the Property over the anticipated holding
period were below the value of the Property reflected in the
Partnership's financial statements at March 31, 1997 and,
therefore, an impairment existed. Prior management performed an
internal analysis of the Property, which indicated an estimated
fair value of approximately $15,875,000. Consequently, a
write-down for impairment of $6,475,500 was recorded at March 31,
1997. No additional write-down for impairment was required
during 1997.
Results of Operations
1997 vs. 1996
Revenues increased for 1997 compared with 1996, primarily due to
an increase in base rentals in 1997 and an increase in interest
income and other income. Interest income increased principally
due to the build-up of cash reserves referred to in "Liquidity
and Capital Resources" above.
Costs and expenses increased for 1997 compared with 1996,
primarily due to the $6,475,500 write-down for impairment in the
first quarter of 1997 and an increase in mortgage interest
expense, partially offset by a decrease in general and
administrative expenses. Mortgage interest increased by $187,470
due to the compounding effect from the deferral of the interest
on the zero coupon mortgage.
As a result of the foregoing, the net loss increased for 1997
compared with 1996. For 1997, the net loss was $7,238,860,
compared with $640,184 for 1996.
1996 vs. 1995
Revenues increased slightly for 1996 compared with 1995,
primarily due to an increase in rental income partially offset by
a decrease in other income. Rental income increased due to an
increase in insurance escalations at the Property. Other income
decreased due to less transfer fee income.
Costs and expenses increased for 1996 compared with 1995,
primarily due to an increase in mortgage loan interest expense.
Mortgage loan interest expense increased due to the compounding
effect from the deferral of the interest on the zero coupon
mortgage.
As a result of the foregoing, the net loss increased for 1996
compared with 1995. For 1996, the net loss was $640,184,
compared with $442,098 for 1995.
Inflation
Inflation has not had a material impact on the Partnership's
operations or financial condition during the last three years and
is not expected to have a material impact in the future.
Year 2000
Costs associated with the year 2000 conversion are not expected
to have a material effect on the Partnership.
Item 8. Financial Statements and Supplementary Data
HIGH CASH PARTNERS, L.P.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,1997,1996 AND 1995
INDEX
_____
Page
Number
______
Independent Auditor's Report F-1
Financial statements - years ended
December 31, 1997, 1996 and 1995
Balance sheets F-2
Statements of operations F-3
Statement of partners' equity F-4
Statements of cash flows F-5
Notes to financial statements F-6
Schedule II:
Valuation and qualifying accounts F-15
Schedule III:
Real estate and accumulated depreciation F-16
All other financial statement schedules are omitted because they
are not applicable or the required information is presented in
the financial statements or notes thereto.
Item 9.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
To the Partners of
High Cash Partners, L.P.
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of High Cash
Partners, L.P. (a limited partnership) as of December 31, 1997
and 1996, and the related statements of operations, partners'
equity and cash flows for each of the three years in the period
ended December 31, 1997. Our audits also included the financial
statement schedules listed in the Index at Item 14(a)2. These
financial statements and the financial statement schedules are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial
statements and financial statement schedules 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 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 financial position
of High Cash Partners, L.P. as of December 31, 1997 and 1996, and
the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1997 in conformity
with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in
relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth
therein.
Hays & Company
February 28, 1998
New York, New York
HIGH CASH PARTNERS, L.P.
BALANCE SHEETS
December 31,
_______________________________
1997 1996
_____________ _____________
ASSETS
Real estate, net $ 15,551,179 $ 22,465,506
Cash and cash equivalents 3,052,039 1,774,565
Other assets 53,739 93,509
Tenant receivables, net 29,737 78,929
Prepaid insurance premiums 29,511 73,394
_____________ _____________
$ 18,716,205 $ 24,485,903
============= =============
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Mortgage loan payable $ 6,500,000 $ 6,500,000
Deferred interest payable 11,040,481 9,191,865
Distributions payable - 305,007
Accounts payable and accrued
expenses 127,680 125,520
Due to affiliates 2,890 78,817
Tenants' security deposits
payable 54,579 55,259
_____________ _____________
Total liabilities 17,725,630 16,256,468
______________ _____________
Commitments and contingencies
(Notes 3, 4, 5 and 9)
Partners' equity
Limited partners' equity
(as restated)(96,472
units issued and
outstanding) 980,669 8,147,140
General partners' equity
(as restated) 9,906 82,295
_____________ _____________
Total partners' equity 990,575 8,229,435
_____________ _____________
$ 18,716,205 $ 24,485,903
============= =============
See notes to financial statements.
HIGH CASH PARTNERS, L.P.
STATEMENTS OF OPERATIONS
Year ended December 31,
________________________________________
1997 1996 1995
____________ ____________ ___________
Revenues
Rental income $ 2,573,611 $ 2,562,666 $ 2,556,124
Other income 5,966 1,640 4,900
Interest income 106,518 72,716 71,206
____________ ____________ ___________
2,686,095 2,637,022 2,632,230
____________ ____________ ___________
Cost and expenses
Mortgage loan interest 1,848,616 1,661,146 1,482,544
Operating 617,589 604,082 595,487
Depreciation and
amortization 495,094 478,846 476,282
Partnership management
fees 301,475 301,475 301,175
Administrative 109,507 152,073 141,545
Property management
fee 77,174 79,584 76,995
Write-down for
impairment 6,475,500 - -
____________ _____________ ___________
9,924,955 3,277,206 3,074,328
____________ _____________ ___________
Net loss $ (7,238,860) $ (640,184) $ (44,209)
============ ============= ===========
Net loss attributable
to
Limited partners $ (7,166,471) $ (633,782) $ (437,677)
General partners (72,389) (6,402) (4,421)
____________ _____________ ___________
$ (7,238,860) $ (640,184) $ (442,098)
============ ============= ===========
Net loss per unit of
limited partnership
interest (96,472
units outstanding) $ (74.29) $ (6.57) $ (4.54)
============ ============= ===========
See notes to financial statements.
HIGH CASH PARTNERS, L.P.
STATEMENT OF PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
General Limited Total
Partners' Partners' Partners'
Equity Equity Equity
___________ ____________ ____________
Balance,
January 1, 1995 $ (122,664) $ 11,874,441 $ 11,751,777
Reallocation of
partners' equity
(Note 10) 240,182 (240,182) -
__________ ____________ ____________
Balance,
January 1, 1995
(as restated) 117,518 11,634,259 11,751,777
Net loss - 1995 (4,421) (437,677) (442,098)
Distributions to
partners($12.52
per limited partner
unit) (12,200) (1,207,830) (1,220,030)
__________ ____________ ____________
Balance,
December 31, 1995
(as restated) 100,897 9,988,752 10,089,649
Net loss - 1996 (6,402) (633,782) (640,184)
Distributions to
partners ($12.52 per
limited unit) (12,200) (1,207,830) (1,220,030)
__________ ____________ ____________
Balance,
December 31, 1996
(as restated) 82,295 8,147,140 8,229,435
Net loss - 1997 (72,389) (7,166,471) (7,238,860)
__________ ____________ ____________
Balance,
December 31, 1997 $ 9,906 $ 980,669 $ 990,575
========== ============ ============
See notes to financial statements.
HIGH CASH PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
Year ended December 31,
_____________________________________
1997 1996 1995
___________ ___________ ___________
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
Cash flows from operating
activities
Net loss $(7,238,860) $ (640,184) $ (442,098)
Adjustments to
reconcile net loss
to net cash provided
by operating
activities
Write-down for
impairment 6,475,500 - -
Deferred interest
expense 1,848,616 1,661,146 1,482,544
Depreciation and
amortization 495,094 478,846 476,282
Other assets - 10,346 13,180
Changes in assets and
liabilities
Tenant receivables 49,192 77,679 (127,933)
Other assets (7,330) (13,048) (20,912)
Prepaid real estate
taxes - 59,393 (611)
Prepaid insurance
premiums 43,883 (31,037) 3,857
Accounts payable and
accrued expenses 2,160 35,190 18,817
Due to affiliates (75,927) (2,053) (5,625)
Tenant's security
deposits payables (680) (400) 1,983
___________ ___________ ___________
Net cash pro-
vided by
operating
activities 1,591,648 1,635,878 1,399,424
___________ ___________ ___________
Cash flows from investing
activities
Additions to real
estate (9,167) (48,559) (17,000)
___________ ___________ ___________
Cash flows from financing
activities
Distributions to
partners (305,007) (1,220,030) (1,218,081)
___________ ___________ ___________
Net increase in cash and
cash equivalents 1,277,474 367,289 164,343
Cash and cash equivalents,
beginning of year 1,774,565 1,407,276 1,242,933
___________ ___________ ___________
Cash and cash equivalents,
end of year $ 3,052,039 $ 1,774,565 $ 1,407,276
=========== =========== ===========
See notes to financial statements
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1 ORGANIZATION
High Cash Partners, L.P. (formerly High Income Partners L.P.
- Series 87) (the "Partnership") was formed in May 1986
pursuant to the Delaware Revised Uniform Limited Partnership
Act for the purpose of acquiring and operating real estate.
The Partnership will terminate on December 31, 2030 or
sooner, in accordance with its Amended and Restated
Agreement of Limited Partnership (the "Limited Partnership
Agreement"). The Partnership filed a Form S-11 registration
statement with the Securities and Exchange Commission, which
became effective on June 29, 1988, covering an offering of
400,000 limited partnership units (subject to increase, if
the Underwriter exercised its right to sell an additional
200,000 units) at $250 per unit.
The Partnership's public offering terminated on June 29,
1990, at which time the Partnership had accepted
subscriptions for 77,901 limited partnership units
(including those units sold to the initial limited partner)
for aggregate net proceeds of $17,284,566 (gross proceeds of
$19,475,250, less organization and offering costs
aggregating $2,190,684). The Partnership received $2,500
and $1,000 for contributions to the Partnership from the
initial limited partner and the general partners,
respectively. The Partnership had committed 100% of its net
proceeds available for investment to the Sierra Marketplace
acquisition, a retail shopping center.
The Partnership sold 18,571 unregistered limited partnership
units to Integrated Resources, Inc. ("Integrated"), the
former parent of the original Managing General Partner of
the Partnership, for aggregate net proceeds of $4,120,441
(gross proceeds of $4,642,750, less organization and
offering costs aggregating $522,309). Simultaneously,
Integrated sold these units to the Partnership's three bank
creditors. The sale of the aforementioned units, effective
January 1, 1991, was part of a transaction that enabled the
Partnership to repay its unsecured loans on December 19,
1990.
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Leases
The Partnership accounts for its leases under the operating
method. Under this method, revenue is recognized as rentals
become due, except for stepped leases, where revenue is
recognized on a straight-line basis over the life of the
lease.
Depreciation
Depreciation is computed using the straight-line method over
the estimated useful life of the property, which is
approximately 40 years. The cost of the property
represents the initial cost of the property to the
Partnership plus acquisition and closing costs. Repairs and
maintenance are charged to operations as incurred.
Write-down for impairment
A write-down for impairment is recorded based upon a
quarterly review of the property in the Partnership's
portfolio. Real estate property is carried at the lower of
depreciated cost or estimated fair value. In performing
this review, management considers the estimated fair value
of the property based upon undiscounted future cash flows,
as well as other factors, such as the current occupancy, the
prospects for the property and the economic situation in the
region where the property is located. Because this
determination of estimated fair value is based upon future
economic events, the amounts ultimately realized upon a
disposition may differ materially from the carrying value.
A write-down is inherently subjective and is based upon
management's best estimate of current conditions and
assumptions about expected future conditions. The
Partnership may provide for write-downs in the future and
such write-downs could be material.
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Financial statements
The financial statements include only those assets,
liabilities and results of operations that relate to
the business of the Partnership.
Cash and cash equivalents
For the purpose of the statements of cash flows, the
Partnership considers all short-term investments that have
original maturities of three months or less to be cash
equivalents.
Substantially all the Partnership's cash and cash
equivalents are held at one financial institution.
Fair value of financial instruments
The fair value of financial instruments is determined by
reference to market data and other valuation techniques as
appropriate. The Partnership's financial instruments
include cash and cash equivalents and a mortgage loan
payable. Unless otherwise disclosed, the fair value of
financial instruments approximates their recorded values.
Net loss and distributions per unit of limited partnership
interest
Net loss and distributions per unit of limited partnership
interest are computed based upon the number of units
outstanding (96,472) during the years ended December 31,
1997, 1996 and 1995.
Income taxes
No provisions have been made for federal, state and local
income taxes, since they are the personal responsibility of
the partners.
The income tax returns of the Partnership are subject to
examination by federal, state and local taxing authorities.
Such examinations could result in adjustments to Partnership
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
losses, which could affect the income tax liability of the
individual partners.
Recently issued accounting pronouncements
The Financial Accounting Standards Board has recently issued
several new accounting pronouncements. Statement No. 128,
"Earnings per Share", established standards for computing
and presenting earnings per share, and became effective for
financial statements for both interim and annual periods
ending after December 15, 1997. Statement No. 129,
"Disclosure of Information about Capital Structure",
established standards for disclosing information about an
entity's capital structure, and became effective for
financial statements for periods ending after December 15,
1997. Statement No. 130, "Reporting Comprehensive Income",
establishes standards for reporting and display of
comprehensive income and its components, and is effective
for fiscal years beginning after December 15, 1997.
Statement No. 131, "Disclosures about Segments of an
Enterprise and Related Information", establishes standards
for the way that public business enterprises report
information about operating segments in annual financial
statements and requires that those enterprises report
selected information about operating segments in interim
financial reports issued to shareholders. It also
established standards for related disclosures about products
and services, geographic areas and major customers, and is
effective for financial statements for periods beginning
after December 15, 1997.
Management of the Partnership does not believe these new
standards have, or will have, a material effect on the
Partnership's reported operating results, per unit amounts,
financial position or cash flows.
Reclassifications
Certain reclassifications have been made to the financial
statements shown for the prior years in order to conform to
the current year's classifications.
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
3 CHANGE IN GENERAL PARTNER OWNERSHIP, CONFLICTS OF INTEREST
AND TRANSACTIONS WITH RELATED PARTIES
Until June 13, 1997, the Managing General Partner of the
Partnership was Resources High Cash, Inc. ("RHC"). RHC was,
until November 3, 1994, a wholly-owned subsidiary of
Integrated, at which time, pursuant to the consummation of
Integrated's Plan of Reorganization, substantially all the
assets of Integrated, but not the stock of RHC, were sold to
Presidio Capital Corp. ("Presidio"). RHC is a wholly-owned
subsidiary of XRC Corp. ("XRC"), which is a subsidiary of
Presidio. The other general partner of the Partnership was,
until June 13, 1997, Presidio AGP Corp. ("AGP"), a Delaware
Corporation that is a wholly-owned subsidiary of Presidio.
Presidio also is the parent of other entities that were, or
may have been, engaged in businesses that may have been in
competition with the Partnership. Accordingly, conflicts of
interest may have arisen between the Partnership and such
other businesses.
A partnership affiliated with the predecessor General
Partners, Resources Accrued Mortgage Investors 2 L.P. ("RAM
2"), whose managing general partner is owned by Presidio,
made a zero coupon first mortgage loan to the Partnership
(Note 5).
Effective April 1, 1991, Integrated purchased, in an
arms-length transaction from an unaffiliated third party,
8,361 limited partnership units ("Units"). Effective January
1, 1995, pursuant to the consummation of Integrated's Plan
of Reorganization, these units were transferred to XRC. For
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
the years ended December 31, 1996 and 1995, XRC earned
quarterly distributions from those Units of $104,680. No
distributions were declared during 1997.
On June 13, 1997, RHC and AGP sold their general partnership
interests to Pembroke HCP LLC ("Pembroke HCP") and Pembroke
AGP Corp. ("Pembroke AGP"), respectively. In the same
transaction, XRC sold its 8,361 Units to Pembroke Capital
II, LLC, an affiliate of Pembroke HCP and Pembroke AGP.
Subsequently, Pembroke Capital II LLC acquired beneficial
ownership of an aggregate of an additional 1,640 Units in
the secondary market.
Prior to the sale of the general partnership interest in the
Partnership to Pembroke HCP and Pembroke AGP, Wexford
Management LLC ("Wexford") had performed management and
administrative services for Presidio, XRC and XRC's direct
and indirect subsidiaries, as well as for the Partnership.
During the years ended December 31, 1997 and 1996,
reimbursable payroll expenses paid to Wexford by the
Partnership amounted to $17,822 and $46,226 respectively.
The Partnership had been a party to a supervisory management
agreement with Resources Supervisory Management Corp.
("Resources Supervisory"), an affiliate of RHC and AGP,
pursuant to which Resources Supervisory performed certain
property management functions. Resources Supervisory
performed such services through June 13, 1997. Effective
June 13, 1997, the Partnership terminated this agreement and
entered into a similar agreement with Pembroke Realty
Management LLC ("Pembroke Realty"), an affiliate of Pembroke
HCP and Pembroke AGP. A portion of the property management
fees payable to Resources Supervisory and Pembroke Realty
were paid to an unaffiliated management company, which had
been engaged for the purpose of performing the property
management functions that were the subject of the
supervisory management agreement. For the years ended
December 31, 1996 and 1995, Resources Supervisory was
entitled to receive $79,584 and $76,995, respectively, of
which $65,364 and $56,666, respectively, was payable to the
unaffiliated management company. For the year ended
December 31, 1997, Resources Supervisory and Pembroke Realty
were entitled to receive $35,245 and $41,929, respectively;
of these amounts, which aggregated $77,174, $64,312 was
payable to the unaffiliated management company. No leasing
activity compensation was paid to Resources Supervisory or
Pembroke Realty for the years ended December 31, 1997, 1996
and 1995. Current fees of $2,890 were payable to Pembroke
Realty at December 31, 1997, which were paid in the
subsequent quarter.
For managing the affairs of the Partnership, the Managing
General Partner is entitled to receive a partnership
management fee in an annual amount equal to $301,475. For
each of the years ended December 31, 1996 and 1995, the
former Managing General Partner was entitled to this fee;
for the year ended December 31, 1997, this fee was paid to
the former and current Managing General Partners in their
pro-rata shares.
The General Partners are allocated 1% of the net income or
losses of the Partnership and are also entitled to receive
1% of distributions.
4 REAL ESTATE
Real estate assets represent the Partnership's sole asset.
Sierra Marketplace, a community marketplace located in Reno,
Nevada, was purchased by the Partnership on February 10,
1989, and is summarized as follows:
December 31,
_____________________________
1997 1996
____________ ___________
Land $ 6,667,189 $ 8,868,859
Building and improvements 12,800,714 17,065,377
19,467,903 25,934,236
Less accumulated
depreciation 3,916,724 3,468,730
$15,551,179 $22,465,506
The land, building and improvements are collateralized by
the mortgage payable.
In performing its quarterly impairment review of the
Property, prior management determined that the aggregate
undiscounted cash flows from the Property over the
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
anticipated holding period were below its net carrying value
as of March 31, 1997 and, therefore, an impairment existed.
At that time, prior management estimated the fair value of
the Property to be approximately$15,875,000. Consequently,
a write-down for impairment of $6,475,500 was recorded as of
March 31, 1997, of which $2,201,670 was allocated to land
and $4,273,830 was allocated to building and improvements.
Depreciation expense for the years ended December 31, 1997,
1996 and 1995 amounted to $447,994, $452,070 and $449,1138,
respectively. Included in depreciation expense for the year
ended December 31, 1997 is $87,190, which represents the net
book value of improvements to the space formerly occupied by
Levitz Furniture Store, which vacated its space in November
1997.
During 1997 and 1996, each of three tenants accounted for
more than 10% of the Partnership's rental revenues. Such
tenants accounted for approximately 22%, 21% and 16% in 1997
and 21%, 20% and 17% in 1996, with leases expiring in the
years 2008, 2003 and 2008, respectively. One of the three
tenants referred to above, Levitz Furniture Store, which
accounted for 16% and 17% of the Partnership's rental
revenues in 1997 and 1996, respectively, filed for
bankruptcy protection under Chapter 11 of the United States
Bankruptcy Code in 1997 and vacated its space in November
1997. Levitz continues to pay rent to the Partnership,
although such payments are expected to terminate in early
1998.
Minimum future rental payments receivable, excluding
operating escalations and other charges, due from tenants
pursuant to the terms of existing noncancellable leases as
of December 31, 1997 are approximately as follows:
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
Year ending December 31,
1998 $1,797,000
1999 1,335,000
2000 1,172,000
2001 1,065,000
2002 1,044,000
Thereafter 3,540,000
__________
$9,953,000
==========
5 MORTGAGE LOAN PAYABLE
The mortgage loan payable represents a zero coupon first
mortgage loan held by RAM 2, a public limited partnership
sponsored by affiliates of the former General Partners. The
mortgage loan bears interest at the rate of 11.22% per
annum, compounded monthly. The principal balance, along
with deferred interest thereon, which is estimated to
aggregate approximately $25,000,000, is due on February 28,
2001. The mortgage loan may not be prepaid, except in the
event of condemnation or casualty, until after the
expiration of the tenth year of the mortgage loan (March 1,
1999) and then may be prepaid, in whole only, for the
remainder of the term without penalty or premium.
In accordance with the terms of the mortgage, additional
interest may be payable equal to 23.9% of the appreciation
in the value of the property after payment of a specified
return to the Partnership. The maximum annual rate of
interest, including the additional interest, is not to
exceed 16% compounded annually and is due on the earlier of
the maturity date or the date the mortgage loan is prepaid.
Additionally, the terms of the mortgage loan require the
Partnership to provide RAM 2 with a current appraisal of the
property upon RAM 2's request. If it is determined, based
upon the requested appraisals, that the sum of (i) the
principal balance of the mortgage loan plus all other then
outstanding indebtedness secured by the property and (ii)
all accrued and unpaid interest on the mortgage loan at
6.22% per annum, compounded monthly (that sum, the
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
"Measurement Amount"), exceeds 85% of the appraised value,
an amount equal to such excess shall become immediately due
and payable to RAM 2. In the event that RAM 2 insisted upon
such payment, the Partnership might not have the liquidity
to make such payment. In such event, the Partnership would
attempt to negotiate terms for such payment, but could be
forced to sell the property or seek other relief, including
protection under the bankruptcy laws, and in any event might
ultimately lose its investment in the property.
To date, RAM 2 has not requested an appraisal, and there can
be no assurance that, if the lender requests an appraisal,
85% of the appraised value at that time will equal the
Measurement Amount. At December 31, 1997, the Measurement
Amount was approximately $11,283,000, which was
approximately $2,211,000 less than 85% of the $15,875,000
value to which the property was written down in the first
quarter of 1997. As interest on the mortgage accrues, the
Measurement Amount will increase, and, therefore, unless the
property increases sufficiently from the value to which it
was written down in the first quarter of 1997, the
Measurement Amount eventually will exceed 85% of the
appraised value of the property.
6 DISTRIBUTIONS PAYABLE
Distributions payable are as follows:
December 31,
__________________
1997 1996
_______ ________
Limited partners $ - $301,957
General partners - 3,050
________ ________
$ - $305,007
======== ========
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
7 DUE TO AFFILIATES
The amounts due to affiliates are as follows:
December 31,
__________________
1997 1996
________ ________
Partnership Management Fee $ - $ 75,368
Supervisory Management Fee 2,899 3,449
________ ________
$ 2,890 $ 78,817
======== ========
Amounts due to affiliates were paid in the quarters
subsequent to December 31, 1997 and 1996, respectively.
8 RECONCILIATION OF NET LOSS AND NET ASSETS PER FINANCIAL
STATEMENTS TO TAX BASIS
The Partnership files its tax return on an accrual basis.
The Partnership has computed depreciation for tax purposes
using the Modified Accelerated Cost Recovery System, which
is not in accordance with generally accepted accounting
principles. A reconciliation of net loss per financial
statements to the tax basis of accounting is as follows:
Year ended December 31,
__________________________________
1997 1996 1995
___________ _________ _________
Net loss per financial
statements $(7,238,860) $(640,184) $(442,098)
Write-down for impairment 6,475,500 - -
Tax depreciation in excess
of financial statement
depreciation (76,908) (87,846) (89,976)
___________ _________ _________
Net loss per tax basis $(840,268) $(728,030) $(532,074)
=========== ========= =========
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
The differences between the Partnership's net assets per
financial statements and the tax basis of accounting are as
follows:
December 31,
_______________________
1997 1996
__________ __________
Net assets per financial
statements $990,575 $8,229,435
Cumulative tax depreciation
in excess of financial
statement depreciation (755,945) (679,037)
Write-down for impairment 6,475,500 -
Syndication costs 2,712,993 2,712,993
__________ ___________
Net assets per tax basis $9,423,123 $10,263,391
========== ===========
9 LEVITZ BANKRUPTCY
Until November 1997, Levitz Department Store ("Levitz") had
occupied approximately 23% of the space at the property
(i.e., approximately 53,000 out of approximately 233,000
square feet of net leasable area). Rent under the lease for
each of 1997, 1996 and 1995 was approximately $412,000,
which was approximately 16% of the Partnership's total
rental income revenues in each such period. In November
1997, Levitz, which had filed for protection under Chapter
11 of the Bankruptcy Code, vacated its space; Levitz
continues to pay rent under the lease, although such
payments are expected to terminate in early 1998.
The vacancy at the Levitz space will result in a loss of
income upon the cessation of rent payments by Levitz, which
is expected to occur during 1998. The vacancy may adversely
affect the surrounding tenants, particularly in light of the
limited visibility those tenants have to the main
thoroughfare. The Partnership is actively seeking a
substitute tenant. However, there can be no assurance that
the Partnership will succeed in finding a substitute tenant
promptly or on terms comparable to those under the Levitz
HIGH CASH PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
lease. In addition, if a substitute tenant is obtained,
the Partnership expects to make substantial expenditures in
order to secure the substitute tenant and in connection with
the new lease.
10 PARTNERS EQUITY
The General Partners hold a 1% equity interest in the
Partnership. However, at the inception of the Partnership,
the General Partners' equity account was credited with only
the actual capital contributed in cash, $1,000. The
Partnership's management determined that this accounting
does not appropriately reflect the Limited Partners' and the
General Partners' relative participations in the
Partnership's net assets, since it does not reflect the
General Partners' 1% equity interest in the Partnership.
Thus, the Partnership has restated its financial statements
to reallocate $240,182 (1% of the gross proceeds raised at
the Partnership's formation) of the partners' equity to the
General Partners' equity account. This reallocation was
made as of the inception of the Partnership and all periods
presented in the financial statements have been restated to
reflect the reallocation. The reallocation has no impact on
the Partnership's financial position, results of operations,
cash flows, distributions to partners, or the partners' tax
basis capital accounts.
<TABLE>
HIGH CASH PARTNERS, L.P.
Schedule II - VALUATION AND QUALIFYING ACCOUNTS
ADDITIONS
_________
Balance at Charges to Charged to Balance at
Beginning of Cost and Other End of
Description Period Expenses Accounts Deductions Period
___________ ____________ _________ __________ __________ _________
<S> <C> <C> <C> <C> <C>
Year ended
December 31,
1997
Sierra
Marketplace
Reno,
Nevada $ - $ 6,475,500(A) $ - $ - $6,475,500
========== ============== ========= ======== ==========
(A)Represents an allowance for impairment provided on the Sierra
Marketplace property during 1997.
HIGH CASH PARTNERS, L.P.
Schedule III - REAL ESTATE AND ACCUMULATED DEPRECIATION
Initial Cost (1) Costs Capitalized
Building
Encum- and Improve- Carrying
Description brances Land Improvements ments Cost
<S> <C> <C> <C> <C> <C>
Sierra Market-
place Retail
Shopping Center
Reno, Nevada $17,540,481 $8,868,859 $16,494,467 $580,077 $ -
___________ __________ ___________ ________ ________
Year ended December 31,
1995 1996 1997
(A) RECONCILIATION OF REAL
ESTATE OWNED
<S> <C> <C> <C>
Balance at beginning of year $25,868,677 $25,885,677 $25,934,236
Subtractions during year - - 6,475,500
Write-down for impairment
___________ ___________ ___________
25,868,677 25,885,677 19,458,736
Additions during year
improvements 17,000 48,559 9,167
___________ ___________ ___________
Balance at end of year $25,885,677 $25,934,236 $19,467,903
___________ ___________ ___________
Year ended December 31,
1995 1996 1997
(B) RECONCILIATION OF ACCUMU-
LATED DEPRECIATION
<S> <C> <C> <C>
Balance at beginning of year $2,567,522 $3,016,660 $3,468,730
Additions during the year
Depreciation 449,138 452,070 447,994
___________ ___________ ___________
Balance at end of year $3,016,660 $3,468,730 $3,916,724
___________ ___________ ___________
(1) The aggregate cost for income tax purposes is $25,943,405 at December
31, 1997
</TABLE>
Gross Amount at Which Carried At
Accumu-
Building lated Date of
and Improve- Depreci- Construc-
Land ments Total ation tion
$6,667,189 $12,800,714 $19,467,903 $3,916,724 10/88
__________ ___________ ___________ ___________ ________
Life on which
Depreciation in
Latest Income
Date Statement is
Acquired Computed
Straight-line method
2/89 40 years
_________ ____________________
PART III
Item 10. Directors and Executive Officers of Registrant
The Partnership has no officers or directors. Pembroke HCP, LLC,
the Managing General Partner, manages and controls substantially
all the Partnership's affairs and has general responsibility and
ultimate authority in all matters affecting its business.
Pembroke AGP Corp., the Associate General Partner, in its
capacity as such, does not devote a material amount of time or
attention to the Partnership's affairs.
Based on a review of the filings under Section 16(a) of
Securities Exchange Act of 1934 (the 'Act'), none of the Managing
General Partner, the sole member or the officers of the Managing
General Partner or beneficial owners of more than 10% of the
Units failed to file on a timely basis reports required by
Section 16(a) of the Act during 1997 or prior years.
Lawrence J. Cohen, age 42, is, and for more than five years has
been, the sole shareholder and director of Pembroke Companies,
Inc., which is the sole member and the manager of each of the
Managing General Partner and the Associate General Partner.
Pembroke Companies, Inc. is a privately-held investment
management company, which makes investments in, and provides
management services to, a variety of real estate-related
businesses.
Item 11. Executive Compensation
The Partnership is not required to pay, and has not paid, the
officers, the manager or the sole member of the Managing General
Partner or the Associate General Partner, or the officers or
directors of the sole member of the Managing General Partner or
the Assistant General Partner. Certain officers and directors of
the former managing general partner of the Partnership received
compensation from the former managing general partner or its
affiliates (but not from the Partnership) for services performed
for various affiliated entities, which may have included services
performed for the Partnership; in addition, certain individuals
affiliated with the Managing General Partner receive compensation
from the Managing General Partner or its affiliates (but not from
the Partnership) for services performed for various affiliated
entities, which may have included services for the Partnership.
See Item 13, "Certain Relationships and Related Transactions"
below.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Pembroke Capital II, LLC ("PC") and Equity Resources Fund XIV
Limited Partnership ("ERF") are the only persons known by the
Partnership to be the beneficial owners of more than 5% of the
Units. According to Schedule 13Ds PC and ERF have filed with the
Securities and Exchange Commission, PC and ERF beneficially own
8,433 Units and 8,998 Units, respectively, which are 8.7% and
9.3%, respectively, of the outstanding Units. Lawrence J. Cohen
has advised the Partnership that PC subsequently acquired
beneficial ownership of an aggregate of an additional 1,568 Units
in the secondary market. Mr. Cohen is the sole member of PC,
and, therefore, he may be deemed to be the beneficial owner of
PC's 10,001 Units (i.e., 10.4% of the outstanding Units). See
Item 10, 'Directors and Executive Officers of Registrant' above.
The address of each of PC and Mr. Cohen is Pembroke Companies,
Inc., 1325 Avenue of the Americas, Suite 1200, New York, New York
10019. The address of ERF is 14 Story Street, Cambridge,
Massachusetts 02138.
Item 13. Certain Relationships and Related Transactions
During 1997, the General Partners, their predecessors and their
respective affiliates received compensation or payments for
services from or with respect to the Partnership as follows:
Name Capacity in Which Served Compensation
Resources High Cash, Inc. Managing General Partner $135,830(1)
Resources Supervisory Affiliated Supervisory
Management Corp. Management Company $ 35,245(2)
Presidio AGP Corp. Associate General Partner $ -(3)
Pembroke HCP, LLC Managing General Partner $165,645(4)
Pembroke AGP, LLC Associate General Partner $ -(3)
Pembroke Realty Supervisory Property
Management LLC Manager $ 41,929(5)
(1) Represents a partnership management fee earned by Resources
High Cash, Inc. Under the Partnership's Partnership
Agreement, .99% of the net income and net loss of the
Partnership is allocated to the Managing General Partner.
For 1997, $3,818 of the Partnership's tax loss was allocated
to Resources High Cash, Inc.
(2) This amount was earned pursuant to a supervisory management
agreement with the Partnership for performance of certain
functions related to property management. Of this amount,
$29,660 was paid to CB Commercial, an unaffiliated property
management company that performed services for Resources
Supervisory Management Corp.
(3) Under the Partnership Agreement, .01 % of the Partnership's
net income or net loss is allocated to the Associate General
Partner. For 1997, $39 of the Partnership's tax loss was
allocated to Presidio AGP Corp.
(4) Represents a partnership management fee earned by the
Managing General Partner. Under the Partnership's
Partnership- Agreement, .99% of the net income and net loss
of the Partnership is allocated to the Managing General
Partner. For 1997, $3,818 of the Partnership's tax loss was
allocated to the Managing General Partner.
(5) This amount was earned pursuant to a supervisory management
agreement with the Partnership for performance of certain
functions related to property management. Of this amount,
$34,649 was paid to CB Commercial, an unaffiliated property
management company that performed services for Pembroke
Realty Management LLC.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a)(1) Financial Statements: See "Index to Financial
Statements" in Item 8 above.
(a)(2) Financial Statement Schedules: See "Index to Financial
Statements" in Item 8 above.
(a)(3) Exhibits:
3. (a) Second Amended and Restated Partnership Agreement
("Partnership Agreement") of Registrant, incorporated
by reference to Exhibit 3D to Amendment No. 2 to
Registrant's Registration Statement on Form S-11 filed
on June 24, 1988 (Reg. No. 33-6412) (hereinafter the
"Form S-11").
(b) Amended and Restated Certificate of Limited Partnership
of Registrant, incorporated by reference to Exhibit 3C
to the Form S-11.
(c) Amendment to Partnership Agreement, incorporated by
reference to Supplement No. I dated August 19, 1988 to
Registrant's Prospectus filed pursuant to Rules 424(b)
and 424(c) (Reg. No. 33-6412).
10. (a) Management Services Agreement between Registrant and
Resources Property Management Corp., incorporated by
reference to Exhibit 1 OB to Amendment No. 2 to the
Form S-1 1.
(b) Acquisition and Disposition Services Agreement among
Registrant, Realty Resources Inc., and Resources High
Cash, Inc., incorporated by reference to Exhibit 10.(b)
of Registrant's Report on Form 10-K for the year ended
December 31, 1988 (hereinafter the " 1988 10-K").
(c) Agreement among Resources High Cash, Inc., Integrated
Resources, Inc. and Fourth Group Partners, incorporated
by reference to Exhibit 1 0.(c) of the 1988 10-K.
(d) Agreement of Purchase and Sale between Sierra Virginia,
Inc. and Nevada Corp., incorporated by reference to
Exhibit 10A to Registrant's Form 8 with respect to
Registrant's current report on Form 8-K dated February
10, 1989.
(e) Registered Note by Registrant to RAM 2 in connection
with the purchase of Sierra Marketplace, incorporated
by reference to Exhibit I0B to Registrant's Form 8 with
respect to Registrant's current report on Form 8-K
dated February 10, 1989, incorporated by reference to
Exhibit 10(f) of Registrant's Report on Form 10-K for
the year ended December 31, 1989 (hereinafter the " 1
989 10-K").
(f) Settlement Agreement, dated October 17, 1990 among
Registrant, Integrated, First Interstate Bank of Denver
N.A., First Interstate Bank of Washington, N.A. and
First American National Bank, Incorporated,
incorporated by reference to Exhibit 10(a) to
Registrant's Current Report on Form 8-K dated December
19, 1990.
(g) Supervisory Management Agreement dated as of November
1, 1991 between Registrant and Resources Supervisory
Management Corporation incorporated by reference to
Exhibit 10 (g) to Registrant's Report on Form 1 O-K for
the year ended December 31, 199 1.
(h) Management Agreement dated as of November 1, 1991 among
Registrant, Resources Supervisory Management Corp. and
CB Commercial Real Estate Group, Inc., incorporated by
reference to Exhibit 10(h) to Registrant's Report on
Form 10-K for the year ended December 31, 1991.
(i) Exclusive Leasing Listing Agreement dated as of January
1, 1993 between Resources Supervisory Management Corp.
and CB Commercial Real Estate Group, Inc., incorporated
by reference to Exhibit 10(i) to Registrant's Report on
Form 10-K for the year ended December 31, 1993.
(j) First Amendment to Exclusive Leasing Listing Agreement
dated as of January 1, 1994 between Resources
Supervisory Management Corp. and CB Commercial Real
Estate Group, Inc., incorporated by reference to
Exhibit 100) to Registrant's Report on Form 10-K for
the year ended December 31, 1993.
(k) Second Amendment to Management Agreement dated as of
January 1, 1994 between Resources Supervisory
Management Corp. and CB Commercial Real Estate Group,
Inc., incorporated by reference to Exhibit 10(k) to
Registrant's Report on Form 10-K for the year ended
December 31, 1993.
(b) Report on Form 8-K:
Registrant filed the following reports on Form 8-K
during the last quarter of the fiscal year:
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
HIGH CASH PARTNERS, L.P.
By: Pembroke HCP, LLC
Managing General Partner
Dated: March 31, 1998 By: Pembroke Companies, Inc.
Managing Member
By: /s/ Lawrence J. Cohen
Lawrence J. Cohen
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of Registrant and in the capacities (with respect to
the Managing General Partner) and on the date indicated.
Dated: March 31, 1998 By: /s/ Lawrence J. Cohen
Lawrence J. Cohen
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