United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1998
or
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Transition period from ______ to ______
Commission File Number: 1-9331
MIDWEST REAL ESTATE SHOPPING CENTER, L.P.
Exact Name of Registrant as Specified in its Charter
Delaware 13-3384643
State or Other Jurisdiction of
Incorporation or Organization I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson 10285
Address of Principal Executive Offices Zip Code
(212) 526-3237
Registrant's Telephone Number, Including Area Code
Indicate by check mark whether the 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 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 ____
Balance Sheets (unaudited)
At March 31, At December 31,
1998 1997
Assets
Cash and cash equivalents $ 4,166,507 $ 4,430,503
Due from affiliates, net 141,345 141,345
Prepaid expenses _ 13,530
Total Assets $ 4,307,852 $ 4,585,378
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued
expenses $ 114,060 $ 113,313
Total Liabilities 114,060 113,313
Partners' Capital:
General Partner 41,939 44,722
Limited Partners
(10,700,000 securities outstanding) 4,151,853 4,427,343
Total Partners' Capital 4,193,792 4,472,065
Total Liabilities and
Partners' Capital $ 4,307,852 $ 4,585,378
Statement of Partners' Capital (unaudited)
For the three months ended March 31, 1998
General Limited
Partner Partners Total
Balance at December 31, 1997 $ 44,722 $4,427,343 $4,472,065
Net loss (2,783) (275,490) (278,273)
Balance at March 31, 1998 $ 41,939 $4,151,853 $4,193,792
Statements of Operations (unaudited)
For the three months ended March 31, 1998 1997
Income
Interest income $ 26,390 $ 36,823
Total Income 26,390 36,823
Expenses
General and administrative 54,761 74,384
Professional fees 249,902 157,166
Total Expenses 304,663 231,550
Net Loss $ (278,273) $(194,727)
Net Loss Allocated:
To the General Partner $ (2,783) $ (1,947)
To the Limited Partners (275,490) (192,780)
$ (278,273) $(194,727)
Per limited partnership unit
(10,700,000 outstanding) $ (.03) $ (.02)
Statements of Cash Flows (unaudited)
For the three months ended March 31, 1998 1997
Cash Flows From Operating Activities:
Net loss $ (278,273) $ (194,727)
Adjustments to reconcile net loss to
net cash used for operating activities:
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Due from affiliates, net _ (61)
Prepaid expenses 13,530 _
Accounts payable and accrued expenses 747 (213,928)
Net cash used for operating activities (263,996) (408,716)
Net decrease in cash and cash equivalents (263,996) (408,716)
Cash and cash equivalents, beginning of period 4,430,503 5,812,917
Cash and cash equivalents, end of period $ 4,166,507 $ 5,404,201
Notes to the Financial Statements
The unaudited financial statements should be read in conjunction
with the Partnership's annual 1997 audited financial statements
within Form 10-K.
The unaudited financial statements include all normal and
reoccurring adjustments which are, in the opinion of management,
necessary to present a fair statement of financial position as of
March 31, 1998 and the results of operations and cash flows for
the three months ended March 31, 1998 and 1997 and the statement
of partners' capital for the three months ended March 31, 1998.
Results of operations for the periods are not necessarily
indicative of the results to be expected for the full year.
Certain prior year amounts have been reclassified in order to
conform to the current year's presentation.
No significant events have occurred subsequent to fiscal year
1997, and no material contingencies exist, which would require
disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
In October 1997, the Partnership entered into a stipulation and
agreement of settlement (the "Settlement") of the class action
litigation originally brought against it and other parties in
1994. The General Partner decided to settle the actions solely
to avoid further expense and the burden of continued litigation,
and continues to deny the allegations asserted against it in the
complaint. Pursuant to the Settlement, which resolves all
matters among the parties, the Partnership contributed $500,000
toward a fund for the payment of all plaintiffs' claims. On
February 20, 1998, the Court issued and executed an order
approving the Settlement which included a full and final release
of the Unitholder claims against the Partnership, the General
Partner and the other defendants.
Now that the Settlement of Unitholder claims has been approved,
the General Partner intends to pay, with the concurrence of the
Bankruptcy Court, a cash distribution representing the
Partnership's cash, less reserves for current and contingent
liabilities during the second quarter of 1998. In addition, the
Partnership has negotiated a settlement with Hennepin County,
Minnesota regarding a property tax appeal on its former property,
Brookdale Center, in order to avoid a costly and time-consuming
trial. The distribution of the rebated taxes is subject to future
determinations. In accordance with the Partnership's bankruptcy
plan, any settlement the Partnership finalizes with respect to
this property assessment must be approved by the Bankruptcy
Court, which has retained jurisdiction over this matter.
Upon Court approval of the Brookdale Center tax appeal
settlement, which is expected to occur during the second quarter,
the General Partner will distribute the Partnership's remaining
cash reserves (after payment of, or provision for, the
Partnership's liabilities and expenses) and proceed with the
dissolution of the Partnership.
At March 31, 1998, the Partnership had cash and cash equivalents
totaling $4,166,507 compared with $4,430,503 at
December 31, 1997. The decrease is primarily due to the payment
of Partnership administrative and professional fees.
Results of Operations
Net cash used for operating activities totaled $263,996 for the
three months ended March 31, 1998 compared to $408,716 for the
same period in 1997. The reduced cash flow deficit is primarily
due to differences in the timing of payments of professional fees
between the two periods.
Interest income totaled $26,390 for the three months ended March
31, 1998, compared with $36,823 for the corresponding period in
1997. The decrease is due to the Partnership's lower cash
balance in the 1998 period and a reduction in interest rates.
General and administrative expenses totaled $54,761 for the three
months ended March 31, 1998, compared with $74,384 for the
corresponding period in 1997. The decrease reflects a reduction
in certain administrative expenses associated with the
Partnership's bankruptcy filing.
Professional fees totaled $249,902 for the three months ended
March 31, 1998, compared with $157,166 for the corresponding
period in 1997. The increase is primarily due to legal expenses
associated with the Partnership's bankruptcy filing and tax
appeal regarding Brookdale Center.
Part II Other Information
Item 1 Legal Proceedings
In a Final Order and Judgment dated February 20, 1998, a
stipulation and agreement of settlement of the civil actions
listed below was approved by the United States District Court for
the Southern District of New York.
(i) Donato J. Carone et al. v. Midwest Centers, Inc. et al.,
94 Civ. 9293;
(ii) Barry Tannenbaum v. Midwest Centers, Inc. et al., 95
Civ. 3123
(iii)Vernon Lindbloom v. Midwest Centers, Inc. et al., 95
Civ. 3051
(iv) Norman D. Rom v. Paul L. Abbott et al., 95 Civ. 5202;
and
(v) Norman D. Rom v. Paul L. Abbott et al., 95 Civ. 8006.
Pursuant to the settlement agreement, which resolves all matters
among the parties, Midwest contributed $500,000 toward a fund for
the payment of all plaintiff's claims. Midwest decided to settle
the actions solely to avoid further expense, inconvenience and
the burden of continued litigation, and continues to deny all the
allegations asserted against it in the Complaint.
Items 2-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) On March 6, 1998, the Partnership filed a Form 8-K
reporting the approval and execution of the settlement
of certain unitholder actions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MIDWEST REAL ESTATE SHOPPING CENTER,L.P.
BY: MIDWEST CENTERS INC.
General Partner
Date: May 13, 1998 BY: /s/ Robert J. Hellman
President, Director and
Chairman of the Board
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<PERIOD-END> Mar-31-1998
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