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RULE NO. 424(b)(3)
REGISTRATION NO. 33-71498
Prospectus Supplement
(To Prospectus Dated January 10, 1994)
FORUM RETIREMENT PARTNERS, L.P.
Up to 5,064,150 Preferred Depositary Units
Representing Preferred Limited Partners' Interests
The Prospectus dated January 10, 1994 (the "Prospectus") for Forum Retirement
Partners, L.P. (the "Partnership") is supplemented with the following
information. Except as indicated below under "Extension of Expiration Date and
Revocation Rights", all terms and conditions of the Subscription Offering
contained in the Prospectus remain in full force and effect. Terms used in this
Prospectus Supplement which are defined in the Prospectus are used herein as so
defined.
EXTENSION OF EXPIRATION DATE AND REVOCATION RIGHTS
The Expiration Date of the Subscription Offering has been extended to Tuesday,
February 15, 1994, at 5:00 P.M., New York City time.
Any Eligible Holder who exercised the right to purchase additional Units under
the Subscription Offering prior to the Expiration Date may revoke such exercise
by providing notice of revocation to the Subscription Agent on or prior to
Tuesday, February 15, 1994, at 5:00 P.M. New York City time. Any such
revocation must (i) be in writing signed by the Eligible Holder in exactly the
same manner in which the Notice of Exercise was previously signed, (ii) be
received by the Subscription Agent by the date and time specified above (the
Subscription Agent is American Stock Transfer & Trust Company, 40 Wall Street,
46th Floor, New York, New York 10005, Attention: Reorganization Department),
(iii) include the name, address, and telephone number of the Eligible Holder,
and (iv) specify whether the prior exercise of the Subscription Privilege is to
be revoked in whole or in part (and, if the revocation is partial, the exact
number of previously subscribed for Preferred Depositary Units as to which the
Subscription Privilege is being revoked). NO SUCH REVOCATION MAY BE WITHDRAWN
AND, UPON RECEIPT BY THE SUBSCRIPTION AGENT OF ANY SUCH REVOCATION, AN ELIGIBLE
HOLDER WILL BE DEEMED, WITHOUT FURTHER ACTION, TO HAVE IRREVOCABLY WAIVED ITS
RIGHT TO PARTICIPATE IN THE SUBSCRIPTION OFFERING (EXCEPT AS TO PARTIAL
REVOCATIONS, AND THEN ONLY AS TO THE NUMBER OF PREFERRED DEPOSITARY UNITS AS TO
WHICH THE REVOCATION DOES NOT APPLY).
See "Subscription Offering" in the accompanying Prospectus for a description
of the other terms of the Subscription Offering, all of which remain in full
force and effect except as set forth in this Prospectus Supplement.
RECENT DEVELOPMENTS
1993 FOURTH QUARTER AND FULL YEAR RESULTS OF OPERATIONS
On February 3, 1994, the Partnership issued a press release (the "Earnings
Release") announcing its results of operations for the quarter and year ended
December 31, 1993. The text of the Earnings Release is as follows:
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"February 3, 1994, Indianapolis, Indiana"
"FORUM RETIREMENT PARTNERS REPORTS OPERATIONS"
--------------------------------------------
"Forum Retirement Partners, L.P. (the "Partnership"), the Indianapolis-based
retirement community master limited partnership, today announced operating
results for the quarter and year ended December 31, 1993:
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, December 31,
1993 1992 1993 1992
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
(in thousands except per unit amounts)
Revenues:
Operating revenues $11,464 $10,697 $43,797 $ 41,648
Other income 142 31 379 302
------- ------- ------- --------
Total revenues 11,606 10,728 44,176 41,950
------- ------- ------- --------
Costs and expenses:
Operating expenses $ 8,425 8,505 32,969 33,873
Management fees (deferred) 927 858 3,516 3,337
to parent of general partner
Depreciation 850 793 3,356 3,391
Interest:
Parent of general partner 11 16 50 68
Other 1,362 1,601 6,056 7,442
------- ------- ------- --------
Total costs and expenses 11,575 11,773 45,947 48,111
------- ------- ------- --------
Income (loss) before general
partner's interest in income (loss)
of subsidiary partnerships and
extraordinary charge 31 (1,045) (1,771) (6,161)
General partner's interest in
income (loss) of subsidiary partnerships
2 (6) (9) (49)
------- ------- ------- --------
Income (loss) before extraordinary
charge 29 (1,039) (1,762) (6,112)
Extraordinary charge - early
extinguishment of debt (2,917) -0- (2,917) -0-
------- ------- ------- --------
Net loss (2,888) (1,039) (4,679) (6,112)
General partner's interest in net loss 29 10 47 61
------- ------- ------- --------
Limited partners' interest in net loss $(2,859) $(1,029) $(4,632) $ (6,051)
======= ======= ======= ========
Average number of units outstanding 14,861 8,785 10,317 8,785
Net income (loss) per unit:
Income (loss) before extraordinary
charge $ -0- $ (0.12) $ (0.17) $ (0.69)
Extraordinary charge (0.19) -0- (0.28) -0-
------- ------- ------- --------
Net loss $ (0.19) $ (0.12) $ (0.45) $ (0.69)"
======= ======= ======= ========
</TABLE>
S-2
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"A Partnership spokesperson said, `Results of operations for the full year
ended December 31, 1993 were above expectations. Combined occupancy at
December 31, 1993, was 94%, compared to 90% at December 31, 1992. Operating
income for 1993 (operating revenues less operating expenses) increased by
$3,053,000, or 39%, compared to operating income for 1992. Occupancy has
stabilized and operations continue to improve, the Partnership has been
recapitalized by the Partnership's previously announced sale of equity
interests and refinancing of its long-term debt, and the Partnership had cash
and cash equivalents of $4,700,000 at December 31, 1993.' The spokesperson
continued, `Excluding the effects of the sale of one of the Partnership's RCs
in the first quarter of 1992, the Partnership's operating revenues increased 7%
for the quarter ended December 31, 1993 and 11% for the year ended December 31,
1993, respectively, over operating revenues for the comparable periods in 1992,
and the Partnership's operating income for those periods in 1993 was 39% and
43%, respectively, higher than its operating income for comparable periods in
1992."
"The Partnership's units are traded on the American Stock Exchange (ticker
symbol: FRL)."
For additional information relating to the Partnership's financial position and
results of operations, see "Available Information;" "Prospectus Summary;" "Risk
Factors;" and "Pro Forma Financial Information" in the accompanying Prospectus.
CERTAIN LEGAL PROCEEDINGS
On January 24, 1994, the Russell F. Knapp Revokable Trust, a substantial
Unitholder of the Partnership that purchased Preferred Depositary Units in 1992
(the "Plaintiff"), filed a complaint (the "Complaint") in the United States
District Court for the Northern District of Iowa against the Partnership's
General Partner alleging breach of the Partnership Agreement, breach of
fiduciary duty, fraud, and civil conspiracy. The Complaint alleges, among other
things, that the Board of Directors of the General Partner is not comprised of a
majority of Independent Directors, as required by the Partnership Agreement and
as allegedly represented in the 1986 Prospectus of the Partnership (the "1986
Prospectus"), and that the General Partner's Board of Directors has approved
and/or acquiesced in 8% management fees being charged by Forum Group under the
Management Agreement. The Complaint further alleges that the "industry
standard" for such fees is 4% thereby resulting in an "overcharge" to the
Partnership estimated by the Plaintiff at $1.8 million per annum, beginning in
1994. The Plaintiff is seeking the restoration of certain former directors to
the Board of Directors of the General Partner and the removal of certain other
directors from such Board, an injunction prohibiting the payment of 8%
management fees, and unspecified compensatory and punitive damages. For
additional information relating to this matter, see "Risk Factors -- Conflicts
of Interests" in the accompanying Prospectus.
The General Partner believes that the allegations in the Complaint are without
merit and intends vigorously to defend against this litigation.
Forum Group manages all of the Properties pursuant to a Management Agreement
under which Forum Group is entitled to management fees equal to 8% of the
Partnership's gross operating revenues. Pursuant to the Management Agreement,
management fees payable to Forum Group for periods from the formation of the
Partnership in 1986 to December 31, 1993 were deferred, and such deferred fees
are payable only if certain conditions occur. Under the terms of the Management
Agreement entered into in connection with the formation of the Partnership in
1986, and as disclosed in the 1986 Prospectus, Forum Group's management fees for
periods after December 31, 1993 will not be deferred. For additional
information relating to the Management Agreement and the Partnership Agreement,
see "Business and Properties of the Partnership -- Management Agreement" and
"Summary of the Partnership Agreement," respectively, in the accompanying
Prospectus.
The date of this Prospectus Supplement is February 3, 1994.
S-3
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR IN THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE PARTNERSHIP. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE PREFERRED DEPOSITARY UNITS OFFERED BY THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS, NOR DO THEY CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY THE PREFERRED DEPOSITARY UNITS BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
________________________________________
TABLE OF CONTENTS
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<CAPTION>
PAGE
PROSPECTUS SUPPLEMENT
<S> <C>
EXTENSION OF EXPIRATION DATE AND REVOCATION RIGHTS....................... S-1
RECENT DEVELOPMENTS...................................................... S-1
PROSPECTUS
AVAILABLE INFORMATION.................................................... 2
INFORMATION INCORPORATED BY REFERENCE.................................... 2
PROSPECTUS SUMMARY....................................................... 3
RISK FACTORS............................................................. 11
THE PARTNERSHIP.......................................................... 15
THE RECAPITALIZATION..................................................... 16
USE OF PROCEEDS.......................................................... 19
PRO FORMA FINANCIAL INFORMATION.......................................... 19
CASH DISTRIBUTION POLICY................................................. 23
THE SUBSCRIPTION OFFERING................................................ 24
BUSINESS AND PROPERTIES OF THE PARTNERSHIP............................... 27
DESCRIPTION OF PREFERRED DEPOSITARY UNITS................................ 35
SUMMARY OF PARTNERSHIP AGREEMENT......................................... 38
FEDERAL INCOME TAX CONSIDERATIONS........................................ 45
PLAN OF DISTRIBUTION..................................................... 62
SUBSCRIPTION AGENT....................................................... 62
EXPERTS.................................................................. 62
LEGAL OPINIONS........................................................... 63
</TABLE>
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5,064,150
PREFERRED DEPOSITARY UNITS
FORUM RETIREMENT
PARTNERS, L.P.
____________________
PROSPECTUS SUPPLEMENT
____________________
FEBRUARY 3, 1994
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