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 June 30, 1999
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or
Transition Report Pursuant to Section 13 or 15(d) of
- ---------- the Securities Exchange Act of 1934
For the Transition period from to
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Commission File Number: 1-9331
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MIDWEST REAL ESTATE SHOPPING CENTER L.P.
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Exact Name of Registrant as Specified in its Charter
Delaware 13-3384643
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State or Other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn.: Andre Anderson 10285
- ------------------------------------ -----
Address of Principal Executive Offices Zip Code
(212) 526-3183
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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
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MIDWEST REAL ESTATE SHOPPING CENTER L.P.
<TABLE>
<CAPTION>
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BALANCE SHEETS
At June 30, At December 31,
1999 1998
(unaudited) (audited)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and cash equivalents $2,211,813 $2,409,947
Due from affiliates, net 4,216 4,216
Other assets 5,435 --
- --------------------------------------------------------------------------------------
Total Assets $2,221,464 $2,414,163
======================================================================================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 162,002 $ 237,954
Deferred credit 1,132,223 1,132,223
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Total Liabilities 1,294,225 1,370,177
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Partners' Capital:
General Partner 9,274 10,441
Limited Partners (10,700,000 securities outstanding) 917,965 1,033,545
----------------------------
Total Partners' Capital 927,239 1,043,986
- --------------------------------------------------------------------------------------
Total Liabilities and Partners' Capital $2,221,464 $2,414,163
======================================================================================
</TABLE>
<TABLE>
<CAPTION>
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STATEMENT OF PARTNERS' CAPITAL (UNAUDITED)
For the six months ended June 30, 1999
General Limited
Partner Partners Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1998 $10,441 $1,033,545 $1,043,986
Net loss (1,167) (115,580) (116,747)
- -------------------------------------------------------------------------------
Balance at June 30, 1999 $ 9,274 $ 917,965 $ 927,239
===============================================================================
</TABLE>
See accompanying notes to the financial statements.
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MIDWEST REAL ESTATE SHOPPING CENTER L.P.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended June 30, Six months ended June 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Income
Interest $ 11,256 $ 14,072 $ 22,836 $ 40,462
--------------------------------------------------
Total Income 11,256 14,072 22,836 40,462
- -----------------------------------------------------------------------------------------
Expenses
General and administrative 10,900 61,930 30,148 116,691
Professional fees 39,682 214,921 109,435 464,823
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Total Expenses 50,582 276,851 139,583 581,514
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Net Loss $(39,326) $(262,779) $(116,747) $(541,052)
=========================================================================================
Net Loss Allocated:
To the General Partner $ (393) $ (2,628) $ (1,167) $ (5,411)
To the Limited Partners (38,933) (260,151) (115,580) (535,641)
- -----------------------------------------------------------------------------------------
$(39,326) $(262,779) $(116,747) $(541,052)
=========================================================================================
Per limited partnership unit
(10,700,000 securities outstanding) $ -- $ (.02) $ (.01) $ (.05)
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
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STATEMENTS OF CASH FLOWS (UNAUDITED)
For the six months ended June 30,
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (116,747) $ (541,052)
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 -- 141,345
Prepaid expenses (5,435) 13,530
Accounts payable and accrued expenses (75,952) 174,326
----------------------------
Net cash used for operating activities (198,134) (211,851)
- -------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (198,134) (211,851)
Cash and cash equivalents, beginning of period 2,409,947 4,430,503
- -------------------------------------------------------------------------------
Cash and cash equivalents, end of period $2,211,813 $4,218,652
===============================================================================
</TABLE>
See accompanying notes to the financial statements.
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MIDWEST REAL ESTATE SHOPPING CENTER L.P.
NOTES TO THE FINANCIAL STATEMENTS
The unaudited financial statements should be read in conjunction with the
Partnership's annual 1998 audited financial statements within Form 10-K.
The unaudited interim financial statements include all adjustments consisting of
only normal recurring accruals which are, in the opinion of management,
necessary to present a fair statement of financial position as of June 30, 1999
and the results of operations for the three and six months ended June 30, 1999
and 1998, cash flows for the six months ended June 30, 1999 and 1998 and the
statement of partners' capital for the six months ended June 30, 1999. Results
of operations for the periods are not necessarily indicative of the results to
be expected for the full year.
No significant events have occurred subsequent to fiscal year 1998, and no
material contingencies exist which require disclosure in this interim report per
Regulation S-X, Rule 10-01, Paragraph (a)(5).
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MIDWEST REAL ESTATE SHOPPING CENTER L.P.
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 Bankruptcy Court (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.
The Partnership pursued a property tax assessment appeal with respect to
Brookdale Center for a portion of the time that the Partnership owned it. A
settlement was negotiated with Hennepin County, Minnesota (the "Tax
Settlement"), and at a hearing on July 16, 1998, the Tax Settlement was approved
by the Court. However, the allocation and distribution of the refunded taxes,
which total approximately $5.4 million, was challenged by certain former tenants
of Brookdale Center and the Partnership's former mortgage lender, the Equitable
Life Assurance Society of the United States ("Equitable"). On September 30, 1998
the Court issued an order approving the distribution of tax refunds to the
former tenants which totaled $3,994,133. The balance of the tax settlement is
classified on the Partnership's balance sheet as deferred credit, and will be
held by the Partnership pending resolution of the challenge by Equitable. The
Bankruptcy Court with jurisdiction over the Partnership's bankruptcy case heard
the argument on Equitable's challenge on September 16, 1998. The issue has been
fully briefed and the Partnership is expecting a decision from the Bankruptcy
Court in the third quarter of 1999.
On July 28, 1998, after receiving approval from the Court, the Partnership paid
a cash distribution in the amount of $0.2825 per Limited Partnership Unit. This
amount represents the Partnership's cash, less reserves for current and
contingent liabilities, which was paid out following the Settlement.
Upon resolution of the claim made by Equitable for a portion of the refunded
property taxes, the General Partner intends to distribute the Partnership's
share of the rebated taxes, if any, along with 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 June 30, 1999, the Partnership had cash and cash equivalents totaling
$2,211,813, compared with $2,409,947 at December 31, 1998. The decrease is
primarily due to payment of Partnership administrative expenses and professional
fees.
Accounts payable and accrued expenses totaled $162,002 at June 30, 1999,
compared with $237,954 at December 31, 1998. The decrease is primarily
attributable to a decrease in general and administrative expenses, and
professional fees.
Results of Operations
- ---------------------
Net cash used for operating activities totaled $198,134 for the six months ended
June 30, 1999, compared to net cash used for operating activities of $211,851
for the corresponding period in 1998. The decrease in cash flow is primarily due
to differences in the timing of payments of general and administrative expenses,
and professional fees between the two periods.
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6
MIDWEST REAL ESTATE SHOPPING CENTER L.P.
The Partnership reported a net loss for the three and six months ended June 30,
1999 of $39,326 and $116,747, compared to a net loss of $262,779 and $541,052
for the corresponding period in 1998. The decrease in net loss for the three and
six month periods is primarily due to a reduction in general and administrative
expenses, and professional fees.
General and administrative expenses totaled $10,900 and $30,148 for the three
and six months ended June 30, 1999, compared with $61,930 and $116,691 for the
corresponding periods in 1998. The decrease reflects lower travel, printing,
postage and administrative expenses.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K -
No reports on Form 8-K were filed during the quarter ended June
30, 1999.
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7
MIDWEST REAL ESTATE SHOPPING CENTER L.P.
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: August 13, 1999 BY: /s/Michael T. Marron
---------------------------------------------
Name: Michael T. Marron
Title: President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Jun-30-1999
<CASH> 2,211,813
<SECURITIES> 000
<RECEIVABLES> 9,651
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 2,221,464
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 2,221,464
<CURRENT-LIABILITIES> 1,294,225
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 927,239
<TOTAL-LIABILITY-AND-EQUITY> 2,221,464
<SALES> 000
<TOTAL-REVENUES> 22,836
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 139,583
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> (116,747)
<INCOME-TAX> 000
<INCOME-CONTINUING> (116,747)
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (116,747)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
