<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000
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 0-17557
Brauvin High Yield Fund L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3569428
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 North LaSalle Street, Chicago, Illinois 60602
(Address of principal executive offices) (Zip Code)
(312) 759-7660
(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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BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
INDEX
Page
PART I Financial Information
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . 3
Statements of Net Assets in Liquidation as of
March 31, 2000 and December 31, 1999 (Liquidation
Basis) . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets in Liquidation
for the period January 1, 2000 to March 31, 2000
(Liquidation Basis). . . . . . . . . . . . . . . . . . . . 5
Statement of Operations for the three months ended
March 31, 2000 (Liquidation Basis) and the three
months ended March 31, 1999 (Going Concern Basis) ....... 6
Statement of Cash Flows for the three months
ended March 31, 1999 (Going Concern Basis) . . . . . . . . 7
Notes to Financial Statements. . . . . . . . . . . . . . . 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . 26
Item 3. Quantitative and Qualitative Disclosures about
Market Risk. . . . . . . . . . . . . . . . . . . . . . . . 36
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 37
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . 37
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . 37
Item 4. Submissions of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . . . . 37
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . 37
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 37
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Except for the December 31, 1999 Statement of Net Assets in
Liquidation (Liquidation Basis), the following Statement of Net
Assets in Liquidation as of March 31, 2000, Statements of
Operations for the three months ended March 31, 2000 (Liquidation
Basis) and the three months ended March 31, 1999(Going Concern
Basis), and the Statement of Cash Flows for the three months ended
March 31, 1999 (Going Concern Basis) for Brauvin High Yield Fund
L.P. (the "Partnership") are unaudited and have not been examined
by independent public accountants but reflect, in the opinion of
the management, all adjustments necessary to present fairly the
information required. All such adjustments are of a normal
recurring nature.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the
Partnership's 1999 Annual Report on Form 10-K.
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BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
STATEMENTS OF NET ASSETS IN LIQUIDATION AS OF
MARCH 31, 2000 AND DECEMBER 31, 1999 (LIQUIDATION BASIS)
March 31, December 31,
2000 1999
ASSETS
Real estate held for sale $ 9,175,634 $10,998,886
Investment in Joint Ventures (Note 7):
Brauvin High Yield Venture 11,515 15,543
Brauvin Funds Joint Venture 2,140,915 2,177,679
Cash and cash equivalents 657,312 1,681,705
Restricted cash 228,840 226,799
Other assets 68 1,396
Total Assets $12,214,284 $15,102,008
LIABILITIES:
Accounts payable and accrued
expenses $ 295,035 $ 322,472
Environmental remediation accrual 80,000 80,000
Rent received in advance 39,078 25,105
Deferred gain of sale of real estate 245,979 453,247
Reserve for estimated costs during
the period of liquidation 130,000 130,000
Tenant security deposits 47,604 47,604
Due to affiliates 1,924 1,561
Total Liabilities 839,620 1,059,989
Net Assets in Liquidation $11,374,664 $14,042,019
See accompanying notes to financial statements.
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BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN
LIQUIDATION (LIQUIDATION BASIS) FOR THE PERIOD
JANUARY 1, 2000 TO MARCH 31, 2000
(Unaudited)
Net Assets in Liquidation at
January 1, 2000 (Liquidation Basis) $14,042,019
Income from operations 447,421
Equity interest in Joint Venture's
net income 83,208
Operating distribution to
Interest Holders (a) (601,998)
Return of capital distribution
to Interest Holders (b) (980,002)
Adjustment to liquidation basis (1,615,984)
Net Assets in Liquidation at
March 31, 2000 $11,374,664
(a) Operating distributions are approximatel $0.2291 per Unit.
(b) Return of capital distributions are approximately $0.3730 per Unit.
See accompanying notes to financial statements.
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BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31,
(Liquidation (Going Concern
Basis) Basis)
2000 1999
INCOME:
Rental $ 543,876 $597,173
Interest 19,913 16,332
Other 25,456 3,915
Total income 589,245 617,420
EXPENSES:
General and administrative 54,527 42,630
Management fees (Note 4) 5,592 6,210
Transaction costs (Note 8) 81,705 71,527
Depreciation -- 88,536
Total expenses 141,824 208,903
Income before equity interest in
joint ventures 447,421 408,517
Equity Interest in Joint Venture's
net income (loss):
Brauvin High Yield Venture (2,528) 1,216
Brauvin Funds Joint Venture 85,736 72,755
Brauvin Gwinnett County Venture -- 11,853
Brauvin Bay County Venture -- 3,442
Total Joint Venture net income 83,208 89,266
Income before adjustment to
liquidation basis 530,629 497,783
Adjustment to liquidation basis (1,615,984) --
Net (loss) income $(1,085,355) $497,783
Net (loss) income allocated to:
General Partners $ (21,707) $ 9,956
Interest Holders $(1,063,648) $487,827
Net (loss)income per Unit outstanding
(2,627,503 Units outstanding) $ (0.40) $ 0.19
See accompanying notes to financial statements
<PAGE>
BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(GOING CONCERN BASIS)
Cash flows from operating activities:
Net income $ 497,783
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 88,536
Equity interest in net income from:
Brauvin High Yield Venture (1,216)
Brauvin Funds Joint Venture (72,755)
Brauvin Gwinnett County Venture (11,853)
Brauvin Bay County Venture (3,442)
Changes in:
Other assets (3,153)
Accounts payable
and accrued expenses 51,689
Rents received in advance 12,024
Due to affiliates 151
Net cash provided by operating activities 557,764
Cash flows from investing activities:
Distributions from:
Brauvin High Yield Venture 1,500
Brauvin Funds Joint Venture 83,300
Brauvin Gwinnett County Venture 18,720
Brauvin Bay County Venture 3,200
Cash provided by investing activities 106,720
Cash flows from financing activities:
Cash distributions to General Partners (15,569)
Cash distributions to Interest Holders (761,660)
Cash used in financing activities (777,229)
Net decrease in cash and cash equivalents (112,745)
Cash and cash equivalents at beginning
of period 1,478,616
Cash and cash equivalents at end of period $1,365,871
See accompanying notes to financial statements.
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(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
BRAUVIN HIGH YIELD FUND L.P. (the "Partnership") is a Delaware
limited partnership organized for the purpose of acquiring debt-
free ownership of existing, free-standing, income-producing retail,
office and industrial real estate properties predominantly subject
to "triple-net" leases. The General Partners of the Partnership
are Brauvin Realty Advisors, Inc. and Jerome J. Brault. Brauvin
Realty Advisors, Inc. is owned primarily by Messrs. Brault
(beneficially) (44%) and Cezar M. Froelich (44%). Mr. Froelich
resigned as a director of the Corporate General Partner in December
1994 and as an individual General Partner effective as of September
17, 1996. Brauvin Securities, Inc., an affiliate of the General
Partners, was the selling agent of the Partnership. The
Partnership is managed by an affiliate of the General Partners.
The Partnership was formed on January 6, 1987 and filed a
Registration Statement on Form S-11 with the Securities and
Exchange Commission which became effective on September 4, 1987.
The sale of the minimum of $1,200,000 of depository units
representing beneficial assignments of limited partnership
interests of the Partnership (the "Units") necessary for the
Partnership to commence operations was achieved on November 18,
1987. The Partnership's offering closed on May 19, 1988. A total
of $25,000,000 of Units were subscribed for and issued between
September 4, 1987 and May 19, 1988, pursuant to the Partnership's
public offering. Through March 31, 2000 the Partnership had sold
$27,922,102 of Units. This total includes $2,922,102 of Units
purchased by Interest Holders who utilized their distributions of
Operating Cash Flow to purchase additional Units through the
distribution reinvestment plan (the "Plan"). Units valued at
$1,647,070 have been repurchased by the Partnership from Interest
Holders liquidating their investment in the Partnership and have
been retired as of March 31, 2000. As of March 31, 2000, the Plan
participants have acquired Units under the Plan which approximate
10% of total Units outstanding.
The Partnership has acquired the land and buildings underlying
20 Taco Bell restaurants, 11 Ponderosa restaurants and two
Children's World Learning Centers. The Partnership also acquired
1%, 49%, 23.4% and 16% equity interests in four joint ventures
with three entities affiliated with the Partnership. These
ventures own the land and buildings underlying six Ponderosa
restaurants, a Scandinavian Health Spa, a CompUSA store and a
Blockbuster Video store, respectively.
In 1999, the Partnership sold one of its Taco Bell units. In
addition, a Ponderosa restaurant was sold in 1999 by the joint
venture partnership. The Partnership also sold in 1999 its joint
venture interest in the CompUSA store and the Blockbuster Video
Store.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Management's Use of 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 these estimates.
Basis of Presentation
As a result of the settlement agreement (see Note 8) which was
approved by the United States District Court for the Northern
District of Illinois on June 18, 1999 the Partnership has begun the
liquidation process and, in accordance with generally accepted
accounting principles, the Partnership's financial statements for
periods subsequent to June 18, 1999 have been prepared on a
liquidation basis. Accordingly, the carrying value of the assets
is presented at estimated net realizable amounts and all
liabilities are presented at estimated settlement amounts,
including estimated costs associated with carrying out the
liquidation. Preparation of the financial statements on a
liquidation basis requires significant assumptions by management,
including the estimate of liquidation costs and the resolution of
any contingent liabilities. There may be differences between the
assumptions and the actual results because events and circumstances
frequently do not occur as expected. Those differences, if any,
could result in a change in the net assets recorded in the
statement of net assets as of March 31, 2000.
Accounting Method
The accompanying financial statements have been prepared using
the accrual method of accounting.
Federal Income Taxes
Under the provisions of the Internal Revenue Code, the
Partnership's income and losses are reportable by the partners on
their respective income tax returns. Accordingly, no provision is
made for Federal income taxes in the financial statements.
However, in certain instances, the Partnership has been required
under applicable state law to remit directly to the tax authorities
amounts representing withholding from distributions paid to
partners.
Investment in Real Estate
Prior to the conversion from the going concern basis of
accounting to the liquidation basis of accounting, the operating
properties acquired by the Partnership were stated at cost
including acquisition costs, net of impairment. Depreciation
expense was computed on a straight-line basis over approximately 35
years.
The Partnership recorded an impairment to reduce the cost basis
of real estate to its estimated fair value when the real estate was
judged to have suffered an impairment that is other than temporary.
The Partnership has performed an analysis of its long-lived assets,
and the Partnership's management determined that there were no
events or changes in circumstances that indicated that the carrying
amount of the assets may not be recoverable at March 31, 2000,
except as described in Notes 2, 6 and 10.
Investment in Joint Ventures
The Partnership owns a 1% equity interest in Brauvin High Yield
Venture, which owns the land and building underlying six Ponderosa
restaurants and a 49% equity interest in Brauvin Funds Joint
Venture, which owns the land and building underlying a Scandinavian
Health Spa. On December 30, 1999, the Partnership sold its 23.4%
joint venture equity interest in Brauvin Gwinnett County Venture,
and its 16% equity interest in Brauvin Bay County Venture, which
owns the land and building underlying a CompUSA store and the land
and building underlying a Blockbuster Video store, respectively.
The accompanying financial statements include the investments in
Brauvin High Yield Venture, Brauvin Funds Joint Venture, Brauvin
Gwinnett County Venture and Brauvin Bay County Venture, using the
equity method of accounting.
Prepaid Offering Costs
Prepaid offering costs represent amounts in excess of the defined
percentages of the gross proceeds. Prior to the commencement of
the Partnership's proxy solicitation (see Note 8), gross proceeds
were expected to increase due to the purchase of additional Units
through the Plan and the prepaid offering costs would be
transferred to offering costs and treated as a reduction in
Partners' Capital. Upon the adoption of the liquidation basis of
accounting the remaining prepaid offering costs were written off
(see Note 2).
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid debt
instruments with an original maturity within three months of
purchase.
Restricted Cash
Per the terms of the settlement agreement (see Note 8) the
Partnership was required to establish a cash reserve that will be
restricted for the payment of the General Partners' legal fees and
costs. The release of these funds to the General Partners is
subject to the certification by the Special Master that the General
Partners have been cooperative, did not breach their fiduciary
duties to the Limited Partners, did not breach the settlement
agreement or the Partnership Agreement and used their best efforts
to manage the affairs of the Partnership in such a manner as to
maximize the value and marketability of the Partnership's assets in
accordance with their obligations under the Partnership Agreement.
Estimated Fair Value of Financial Instruments
Disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments." The estimated fair value amounts
have been determined by using available market information and
appropriate valuation methodologies. However, considerable
judgement is necessarily required in interpreting market data to
develop estimates of fair value.
The fair value estimates presented herein are based on
information available to management as of March 31, 2000 and
December 31, 1999, but may not necessarily be indicative of the
amounts that the Partnership could realize in a current market
exchange. The use of different assumptions and/or estimation
methodologies may have a material effect on the estimated fair
value amounts.
The carrying amounts of the following items are a reasonable
estimate of fair value: cash and cash equivalents; accounts
payable and accrued expenses; environmental remediation accrual;
rent received in advance; tenant security deposits and due to
affiliates.
(2) ADJUSTMENT TO LIQUIDATION BASIS
On June 18, 1999, in accordance with the liquidation basis of
accounting, assets were adjusted to estimated net realizable value
and liabilities were adjusted to estimated settlement amounts,
including estimated costs associated with carrying out the
liquidation. The net adjustment required to convert from the going
concern (historical cost) basis to the liquidation basis of
accounting was a decrease in assets of $2,133,527 which is included
in the December 31, 1999 statement of changes in net assets in
liquidation. Significant changes in the carrying value of assets
and liabilities are summarized as follows:
Increase in real estate held for sale (a) $ 453,247
Decrease in value of real estate (1,987,824)
Write-off prepaid offering costs (15,703)
Increase in deferred gain on sale
of real estate (453,247)
Estimated liquidation costs (130,000)
Total adjustment to liquidation basis $(2,133,527)
(a) Net of estimated closing costs.
On November 19, 1999, the United States District Court approved
a bid for the sale of the Partnership's Assets in an amount of
approximately $13,882,300. At the time that this offer was
approved the Partnership adjusted the real estate held for sale to
this contract price less all the estimated closing costs. This
offer was subsequently rescinded by the potential purchaser.
In 2000, an affiliated entity proposed purchasing all of the
Partnership's Assets for approximately $12,550,000 (inclusive of
all the joint venture interests). In May 2000, the Special Master
approved this proposal and recommended that the United States
District Court for the Northern District of Illinois approve this
bid. The United States District Court has not yet ruled on this
subject.
As of March 31, 2000, the Partnership adjusted its investment in
real estate to the offer that was presented to the Special Master
less all estimated closing costs. The effect of this adjustment
was a reduction in the real estate held for sale of $1,823,252, a
reduction in the deferred gain on the sale of real estate of
$207,268 and the recording of a further adjustment to the
liquidation basis of accounting of $1,615,984.
(3) PARTNERSHIP AGREEMENT
Distributions
All Operating Cash Flow, as defined in the Partnership Agreement
(the "Agreement"), shall be distributed: (a) first, to the
Interest Holders until the Interest Holders receive an amount equal
to their 10% Current Preferred Return, as such term is defined in
the Agreement; and (b) thereafter, any remaining amounts will be
distributed 98% to the Interest Holders and 2% to the General
Partners.
The net proceeds of a sale or refinancing of a Partnership
property shall be distributed as follows:
* first, to the Interest Holders until each Interest Holder has
been paid an amount equal to the 10% Cumulative Preferred
Return, as defined in the Agreement;
* second, to the Interest Holders until each Interest Holder has
been paid an amount equal to his Adjusted Investment, as
defined in the Agreement;
* third, to the General Partners until they have been paid an
amount equal to a 2% preferred return; and
* fourth, 95% of any remaining Net Sale or Refinancing Proceeds,
as such term is defined in the Agreement, to the Interest
Holders and the remaining 5% to the General Partners.
Profits and Losses
Net profits and losses from operations of the Partnership
(computed without regard to any allowance for depreciation or cost
recovery deductions under the Internal Revenue Code of 1986, as
amended (the "Code")) for each taxable year of the Partnership
shall be allocated 98% to the Interest Holders and 2% to the
General Partners. Notwithstanding the foregoing, all depreciation
and cost recovery deductions allowed under the Code shall be
allocated 2% to the General Partners and 98% to the Taxable
Interest Holders, as defined in the Agreement.
The net profit of the Partnership from any sale or other
disposition of a Partnership property shall be allocated (with
ordinary income being allocated first) as follows: (a) first, an
amount equal to the aggregate deficit balances of the Partners'
Capital Accounts, as such term is defined in the Agreement, shall
be allocated to each Partner who or which has a deficit Capital
Account balance in the same ratio as the deficit balance of such
Partner's Capital Account bears to the aggregate of the deficit
balances of all Partners' Capital Accounts; (b) second, to the
Interest Holders until the Interest Holders have been allocated
profits equal to their 10% Cumulative Preferred Return; (c) third,
to the Interest Holders until the Interest Holders have been
allocated an amount of profit equal to the amount of their Adjusted
Investment; (d) fourth, to the General Partners until such time as
they have been allocated profits equal to a 2% preferred return;
and (e) thereafter, 95% to the Interest Holders and 5% to the
General Partners. The net loss of the Partnership from any sale or
other disposition of a Partnership property shall be allocated as
follows: (a) first, an amount equal to the aggregate positive
balances in the Partners' Capital Accounts, to each Partner in the
same ratio as the positive balance in such Partner's Capital
Account bears to the aggregate of all Partners' positive Capital
Accounts balances; and (b) thereafter, 98% to the Interest Holders
and 2% to the General Partners.
(4) TRANSACTIONS WITH RELATED PARTIES
An affiliate of the General Partners manages the Partnership's
real estate properties for an annual management fee equal to up to
1% of gross revenues derived from the properties. The property
management fee is subordinated, annually, to receipt by the
Interest Holders of an annual 10% non-cumulative, non-compounded
return on Adjusted Investment (as defined).
The Partnership pays affiliates of the General Partners selling
commissions of 8-1/2% of the capital contributions received for
Units sold by the affiliates.
An affiliate of one of the former General Partners provided
securities and real estate counsel to the Partnership.
The Partnership pays an affiliate of the General Partners an
acquisition fee in the amount of up to 4.5% of the gross proceeds
of the Partnership's offering for the services rendered in
connection with the process pertaining to the acquisition of a
property. Acquisition fees related to the properties not
ultimately purchased by the Partnership are expensed as incurred.
Fees, commissions and other expenses paid or payable to the
General Partners or its affiliates for the three months ended March
31, 2000 and 1999 were as follows:
2000 1999
Management fees $ 5,592 $ 6,210
Reimbursable operating
expenses 36,046 34,234
As of March 31, 2000 and December 31, 1999, the Partnership has
made all payments to affiliates except for $1,924, and $1,561,
respectively, related to management fees.
(5) WORKING CAPITAL RESERVES
The Partnership set aside 1% of the gross proceeds of its
Offering as a working capital reserve. At any time two years
subsequent to the termination of the Partnership's offering (May
19, 1990), it became permissible to reduce the working capital
reserve to an amount equal to not less than 1/2% of the proceeds of
the Offering ($125,000) if the General Partners believed such
reduction to be in the best interests of the Partnership and the
Interest Holders. As a result thereof, $125,000 was paid to an
affiliate of the General Partners in the fourth quarter of 1990 as
an additional Acquisition cost allocation Fee and $125,000 remains
in reserve.
(6) IMPAIRMENT
In 1998, the Partnership engaged LaSalle Partners, Inc. to
perform a valuation of the Partnership's properties. As a result
of this valuation, during the third quarter of 1998, an impairment
in the total amount of $1,145,000 was recorded in the financial
statements of the Partnership. This impairment has been recorded
as a reduction of the properties' cost, and allocated to land and
buildings based on the original acquisition cost allocation of
30%(land) and 70% (building).
(7) INVESTMENT IN JOINT VENTURES
The Partnership owns equity interests in the Brauvin High Yield
Venture and Brauvin Funds Joint Venture and reports its investments
on the equity method.
Prior to December 30, 1999, the Partnership also owned an equity
interest in Brauvin Gwinnett County Venture and Brauvin Bay County
Venture, which were also accounted for using the equity method. On
December 30, 1999, the Partnership sold to an affiliated party its
23.4% joint venture equity interest in Brauvin Gwinnett County
Venture for approximately $498,200, and its 16% equity interest in
Brauvin Bay County Venture for approximately $143,100, which owns
the land and building underlying a CompUSA store and the land and
building underlying a Blockbuster Video store, respectively.
The following are condensed financial statements for the Brauvin
High Yield Venture, Brauvin Funds Joint Venture, Brauvin Gwinnett
County Venture and Brauvin Bay County Venture:
<PAGE>
BRAUVIN HIGH YIELD VENTURE
March 31, December 31,
2000 1999
Real estate held for sale $2,984,488 $3,553,335
Other assets 4,663 17,391
2,989,151 3,570,726
Liabilities 32,468 32,873
Deferred gain on the sale
of real estate -- 178,351
Total liabilities 32,468 211,224
Net assets in liquidation $2,956,683 $3,359,502
For the three months ended March 31,
Liquidation Basis Going Concern Basis
2000 1999
Rental and other income $157,000 $149,516
Expenses:
Depreciation -- 22,924
Management fees 1,604 1,514
Operating and
administrative 17,720 3,523
19,324 27,961
Net income before adjustment
to liquidation basis 137,676 121,555
Adjustment to
liquidation basis (390,495) --
Net (loss) income $(252,819) $121,555
In 2000, an affiliated entity proposed purchasing all of the joint
venture's assets. In May 2000, the Special Master approved this
proposal and recommended that the United States District Court for the
Northern District of Illinois approve this bid. The United States
District Court has not yet ruled on this subject. However, the joint
venture partnership has adjusted its investment in real estate to this
offer.
<PAGE>
BRAUVIN FUNDS JOINT VENTURE
March 31, December 31,
2000 1999
Real estate held for sale $6,133,875 $4,423,306
Other assets 6,300 80,715
6,140,175 4,504,021
Deferred gain on sale
of real estate 1,710,569 --
Liabilities 7,144 6,532
Net assets in liquidation $4,422,462 $4,497,489
For the three months ended March 31,
Liquidation Basis Going Concern Basis
2000 1999
Rental and other income $180,358 $178,647
Expenses:
Depreciation -- 27,524
Management fees 1,844 1,781
Operating and
administrative 3,542 862
5,386 30,167
Net income $174,972 $148,480
In 2000, an affiliated entity proposed purchasing all of the joint
venture's assets. In May 2000, the Special Master approved this proposal
and recommended that the United States District Court for the Northern
District of Illinois approve this bid. The United States District Court
has not yet ruled on this subject. However, the joint venture partnership
has adjusted its investment in real estate to this offer.
<PAGE>
BRAUVIN GWINNETT COUNTY VENTURE
For the three months ended March 31, 1999
Going Concern Basis
Rental and other income $ 68,066
Expenses:
Depreciation 11,438
Management fees 658
Operating and
administrative 5,315
17,411
Net income $ 50,655
BRAUVIN BAY COUNTY VENTURE
For the three months ended March 31, 1999
Going Concern Basis
Rental and other income $ 27,313
Expenses:
Depreciation 4,412
Management fees 501
Operating and
administrative 887
5,800
Net income $ 21,513
<PAGE>
(8) MERGER AND LITIGATION
Merger
Pursuant to the terms of an agreement and plan of merger dated
as of June 14, 1996, as amended March 24, 1997, June 30, 1997 and
September 30, 1997, December 31, 1997, March 31, 1998 and June 30,
1998 (the "Merger Agreement"), the Partnership proposed to merge
with and into Brauvin Real Estate Funds L.L.C., a Delaware limited
liability company (the "Purchaser"), affiliated with certain of the
General Partners through a merger (the "Merger") of its Units.
Although the Merger will not be consummated, the following text
describes the transaction. Promptly upon consummation of the
Merger, the Partnership would have ceased to exist and the
Purchaser, as the surviving entity, would succeed to all of the
assets and liabilities of the Partnership. The Interest Holders
holding a majority of the Units voted on the Merger on November 8,
1996. The Interest Holders also voted on an amendment to the
Agreement allowing the Partnership to sell or lease property to
affiliates (this amendment, together with the Merger shall be
referred to herein as the "Transaction").
The redemption price to be paid to the Interest Holders in
connection with the Merger was based on the fair market value of
the properties of the Partnership (the "Assets"). Cushman &
Wakefield Valuation Advisory Services ("Cushman & Wakefield"), an
independent appraiser, the largest real estate valuation and
consulting organization in the United States, was engaged by the
Partnership to prepare an appraisal of the Assets, to satisfy the
Partnership's requirements under the Employee Retirement Income
Security Act of 1974, as amended. Cushman & Wakefield determined
the fair market value of the Assets to be $23,198,450, or $8.83 per
Unit, as of April 1, 1996. Subsequently, the Partnership purchased
a 16% interest in Brauvin Bay County Venture. Based on the terms
of the Merger Agreement, the fair market value of the Assets was to
be increased by the amount of the investment in Brauvin Bay County
Venture, and correspondingly, the Partnership's cash holdings were
reduced by the same amount and, therefore, the total redemption
amount would remain unchanged. The redemption price of $9.31 per
Unit also included all remaining cash of the Partnership, less net
earnings of the Partnership from and after August 1, 1996 through
December 31, 1996, less the Partnership's actual costs incurred and
accrued through the effective time at the filing of the certificate
of merger, including reasonable reserves in connection with: (i)
the proxy solicitation; (ii) the Transaction (as detailed in the
Merger Agreement); and (iii) the winding up of the Partnership,
including preparation of the final audit, tax return and K-1s
(collectively, the "Transaction Costs") and less all other
Partnership obligations. Of the original cash redemption amount,
approximately $0.48 was distributed to Interest Holders in the
December 31, 1997 distribution.
The General Partners were not to receive any payment in exchange
for the redemption of their general partnership interests nor would
they have received any fees from the Partnership in connection with
the Transaction. The Managing General Partner and his son, James
L. Brault, an executive officer of the Corporate General Partner,
were to have a minority ownership interest in the Purchaser.
The Merger was not completed primarily due to certain litigation,
as described below. The General Partners believe that these
lawsuits were without merit and, therefore, continued to vigorously
defend against them.
By agreement of the Partnership and the General Partners and
pursuant to a motion of the General Partners the District Court
entered an order preventing the Partnership and the General
Partners from completing the Merger or otherwise disposing of all
or substantially all of the Partnership's assets until further
order of the Court.
Because of the rulings of the District Court it is not possible
for the Merger to be consummated.
Litigation
Two legal actions, as hereinafter described, against the General
Partners of the Partnership and affiliates of such General
Partners, as well as against the Partnership on a nominal basis in
connection with the Merger, have been settled. On April 13, 1999,
all the parties to the litigation reached an agreement to settle
the litigation, subject to the approval by the United States
District Court for the Northern District of Illinois. This
approval was obtained on June 18, 1999. The terms of the
settlement agreement, along with a Notice to the Class, were
forwarded to the Interest Holders in the second quarter of 1999.
One additional legal action, which was dismissed on January 28,
1998 had also been brought against the General Partners of the
Partnership and affiliates of such General Partners, as well as the
Partnership on a nominal basis in connection with the Merger. With
respect to these actions the Partnership and the General Partners
and their named affiliates denied all allegations set forth in the
complaints and vigorously defended against such claims.
(9) RESERVE FOR ENVIRONMENTAL REMEDIATION
In connection with the Merger (see Note 8), the Partnership has
undertaken environmental studies of potentially affected
properties. One of the Partnership's properties has been
identified by the environmental study as having a potential
environmental issue. A remedial investigation and feasibility
study has been completed, and the results of that study have been
forwarded to the appropriate authorities. The study indicates a
range of viable remedial approaches, but agreement has not yet been
reached with the authorities on the final remediation approach.
The Partnership has accrued its best estimate of the costs that
will be incurred to complete the environmental remediation at this
property.
In connection with the purchase of the above property by the
Partnership, the Partnership was to be reimbursed by the former
owner for environmental clean-up. The Partnership will therefore
seek reimbursement of the costs from this former owner. No
estimate of the collectibility of this reimbursement can be made at
this time.
(10) SALE OF PARTNERSHIP ASSETS
On November 19, 1999, the United States District Court approved
a bid for the sale of the Partnership's Assets in an amount of
approximately $13,882,300. At the time that this offer was
approved the Partnership adjusted the real estate held for sale to
this contract price less all the estimated closing costs. This
offer was subsequently rescinded by the potential purchaser.
In 2000, an affiliated entity proposed purchasing all of the
Partnership's Assets for approximately $12,550,000 (inclusive of
all the joint venture interests). In May 2000, the Special Master
approved this proposal and recommended that the United States
District Court for the Northern District of Illinois approve this
bid. The United States District Court has not yet ruled on this
subject.
As of March 31, 2000, the Partnership adjusted its investment in
real estate to the offer that was presented to the Special Master
less all estimated closing costs. The effect of this adjustment
was a reduction in the real estate held for sale of $1,823,252, a
reduction in the deferred gain on the sale of real estate of
$207,268 and the recording of a further adjustment to the
liquidation basis of accounting of $1,615,984.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
General
Certain statements in this Quarterly Report that are not
historical fact constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Without limiting the foregoing, words such as "anticipates,"
"expects," "intends," "plans" and similar expressions are intended
to identify forward-looking statements. These statements are
subject to a number of risks and uncertainties. Actual results
could differ materially from those projected in the forward-looking
statements. The Partnership undertakes no obligation to update
these forward-looking statements to reflect future events or
circumstances.
Year 2000
The "Year 2000" problem concerns the inability of computer
technology systems to correctly identify and process date sensitive
information beyond December 31, 1999. Many computers
automatically add the "19" prefix to the last two digits the
computer reads for the year when date information is needed in
computer software programs. Thus when a date beginning on January
1, 2000 is entered into a computer, the computer may interpret this
date as the year "1900" rather than "2000".
The computer information technology systems which support the
Partnership consists of a network of personal computers linked to
a server built using hardware and software from mainstream
suppliers. These systems do not have equipment that contain
embedded microprocessors, which may also pose a potential Year 2000
problem. Additionally, there is no internally generated software
coding to correct as all of the software is purchased and licensed
from external providers.
The Partnership utilizes two main software packages that contain
date sensitive information, (i) accounting and (ii) investor
relations. In 1997, a program was initiated and completed to
convert from the existing accounting software to a new software
program that is Year 2000 compliant. In 1998, the investor
relations software was also updated to a new software program that
is Year 2000 compliant. Management has determined that the Year
2000 issue will not pose significant operational problems for its
remaining computer software systems. All costs associated with
these conversions were expensed by the Partnership as incurred, and
were not material. Management does not believe that any further
expenditures will be necessary for the systems to be Year 2000
compliant. However, additional personal computers may be purchased
from time to time to replace existing machines.
Also in 1997, management of the Partnership initiated formal
communications with all of its significant third party vendors,
service providers and financial institutions to determine the
extent to which the Partnership is vulnerable to those third
parties failure to remedy their own Year 2000 issue. There can be
no guarantee that the systems of these third parties will be timely
converted and would not have an adverse effect on the Partnership.
The most reasonably likely worst case scenario for the
Partnership with respect to the Year 2000 issue would be the
inability of certain tenants to timely make their rental payments
beginning in January 2000. This could result in the Partnership
temporarily suffering a depletion of the Partnership's cash
reserves as expenses will need to be paid while the cash flows from
revenues are delayed. The Partnership has no formal Year 2000
contingency plan.
The Partnership has not experienced any material adverse impact
on its operations or its relationships with tenants, vendors or
others.
Liquidity and Capital Resources
The Partnership commenced an offering to the public on September
4, 1987 of 1,500,000 Units which was subsequently increased to
2,500,000 Units. The offering closed on May 19, 1988 after
2,500,000 Units were sold. The Partnership purchased the land and
buildings underlying seven Taco Bell restaurants in 1987. In 1988,
the Partnership purchased 13 Taco Bell restaurants, nine Ponderosa
restaurants and an interest in a joint venture which purchased six
Ponderosa restaurants. In 1989, the Partnership purchased the land
and building underlying a Ponderosa restaurant, an interest in a
joint venture which purchased a Scandinavian Health Spa, the land
and buildings underlying two Children's World Learning Centers and
the land and building underlying an additional Ponderosa
restaurant.
On November 9, 1993, the Partnership purchased a 23.4% interest
in a joint venture with affiliated public real estate limited
partnerships (the "Venture"). The Venture acquired the land and
building underlying a 25,000 square foot CompUSA computer
superstore from an unaffiliated seller.
On October 31, 1996, the Partnership purchased a 16.0% interest
in a joint venture with affiliated public real estate limited
partnerships (the "Bay County Venture"). The Bay County Venture
purchased real property upon which a newly constructed Blockbuster
Video store is operated. The property contains a 6,466 square foot
building located on a 40,075 square foot parcel of land.
The Partnership raised $25,000,000 through its initial offering
and an additional $2,922,102, as of March 31, 2000, through Units
purchased by certain Interest Holders investing their distributions
of Operating Cash Flow in additional Units through the Plan, which
process continued until the proxy solicitation process began. As
of March 31, 2000, Units valued at $1,647,070 have been repurchased
by the Partnership from Interest Holders liquidating their original
investment and have been retired. The Partnership has no funds
available to purchase additional property, excluding those raised
through the Plan.
Below is a table summarizing the four year historical data for
distribution rates per unit:
Distribution
Date 2000(a) 1999(b) 1998 (c) 1997(d) 1996
February 15 $.2291 $.2898 $ -- $.2274 $.2500
May 15 .2074 .2490 .2473 .2013 .2500
August 15 -- .2398 .1920 .2745 --
November 15 -- .2626 .3088 .7245 --
(a) The February 15, 2000 distribution does not include a return of
capital of $0.3730 per Unit.
(b) The 1999 distributions were made on May 17, 1999, August 15,
1999, November 15, 1999 and February 15, 2000. In addition not
included above was a $0.6379 per Unit return of capital distribution
on November 15, 1999.
(c) The 1998 distributions were made on May 8, 1998, August 15,
1998, November 15, 1998, and February 15, 1999.
(d) The 1997 distributions were made on March 31, 1997, July 15,
1997, October 22, 1997, and December 31, 1997.
Per the terms of the cash out Merger, the Partnership's net
earnings from April 1996 through July 1996 were to be distributed
to the Interest Holders in conjunction with the closing of the
Merger. However, because of the lengthy delay and the uncertainty
of the ultimate closing date, the General Partners decided to make
a significant distribution on December 31, 1997 of the Partnership's
earnings. Included in the December 31, 1997 distribution was any
prior period earnings including amounts previously reserved for
anticipated closing costs.
During the three months ended March 31, 2000 and 1999, the
General Partners and their affiliates earned management fees of
$5,592 and $6,216, respectively, and received $0, $15,569 in
Operating Cash Flow distributions for the three months ended March
31, 2000 and 1999, respectively.
Future increases in the Partnership's distributions will largely
depend on increased sales at the Partnership's properties resulting
in additional percentage rent and, to a lesser extent on rental
increases, which will occur due to increases in receipts from
certain leases based upon increases in the Consumer Price Index or
scheduled increases of base rent.
Although the Merger Agreement will not be consummated, the
following text describes the Transaction. Pursuant to the terms of
the Merger Agreement the Interest Holders would have received
approximately $9.31 per Unit in cash (of this amount approximately
$0.48 has already been distributed to the Interest Holders).
Promptly upon consummation of the Merger, the Partnership would have
ceased to exist and the Purchaser, as the surviving entity, would
have succeeded to all of the assets and liabilities of the
Partnership.
The Partnership drafted a proxy statement, which required prior
review and comment by the Commission, to solicit proxies for use at
the Special Meeting originally scheduled to be held at the offices
of the Partnership on September 24, 1996. As a result of various
legal issues, as described in "Legal Proceedings", the Special
Meeting was adjourned to November 8, 1996 at 9:00 a.m. The purpose
of the Special Meeting was to vote upon the Merger and certain other
matters as described in the Proxy.
By approving the Merger, the Interest Holders also would have
approved an amendment to the Agreement allowing the Partnership to
sell or lease property to affiliates (this amendment, together with
the Merger shall be referred to herein as the "Transaction"). The
Delaware Revised Uniform Limited Partnership Act (the "Act")
provides that a merger must also be approved by the general partners
of a partnership, unless the limited partnership agreement provides
otherwise. Because the Agreement did not address this matter, at
the Special Meeting, Interest Holders holding a majority of the
Units were also asked to approve the adoption of an amendment to the
Agreement to allow the majority vote of the Interest Holders to
determine the outcome of the transaction with the Purchaser without
the vote of the General Partners. Neither the Act nor the Agreement
provides the Interest Holders not voting in favor of the Transaction
with dissenters' appraisal rights.
The redemption price to be paid to the Interest Holders in
connection with the Merger was based on the fair market value of the
Assets. Cushman & Wakefield, an independent appraiser, the largest
real estate valuation and consulting organization in the United
States, was engaged by the Partnership to prepare an appraisal of
the Assets, to satisfy the Partnership's requirements under the
Employee Retirement Income Security Act of 1974, as amended.
Cushman & Wakefield determined the fair market value of the Assets
to be $23,198,450, or $8.83 per Unit. The redemption price of $9.31
per Unit also included all remaining cash of the Partnership, less
net earnings of the Partnership from and after August 1, 1996
through December 31, 1996, less the Partnership's actual costs
incurred and accrued through the effective time of the filing of the
certificate of merger, including reasonable reserves in connection
with: (i) the proxy solicitation; (ii) the Transaction (as detailed
in the Merger Agreement); and (iii) the winding up of the
Partnership, including preparation of the final audit, tax return
and K-1s (collectively, the "Transaction Costs") and less all other
Partnership obligations. Of the total redemption price stated
above approximately $0.48 was distributed to Interest Holders in the
December 31, 1997 distribution.
Cushman & Wakefield subsequently provided an opinion as to the
fairness of the Transaction to the Interest Holders from a financial
point of view. In its opinion, Cushman & Wakefield advised that the
price per Unit reflected in the Transaction was fair, from a
financial point of view, to the Interest Holders. Cushman &
Wakefield's determination that a price was "fair" does not mean that
the price was the highest price which might be obtained in the
marketplace, but rather that based on the appraised values of the
Assets, the price reflected in the Transaction was believed by
Cushman & Wakefield to be reasonable.
Mr. Jerome J. Brault is the Managing General Partner of the
Partnership and Brauvin Realty Advisors, Inc. is the Corporate
General Partner. On April 23, 1997, Mr. David M. Strosberg resigned
as an Individual General Partner of the Partnership. Mr. Cezar M.
Froelich resigned his position as an Individual General Partner of
the Partnership effective as of September 17, 1996. The General
Partners were not to receive any payment in exchange for the
redemption of their general partnership interests nor were they to
receive any fees from the Partnership in connection with the
Transaction. The remaining General Partners do not believe that Mr.
Strosberg's or Mr. Froelich's lack of involvement has had an adverse
effect, and should not in the future have any adverse effect, on the
operations of the Partnership.
The Managing General Partner and his son, James L. Brault, an
executive officer of the Corporate General Partner, were to have a
minority ownership interest in the Purchaser. Therefore, the
Messrs. Brault had an indirect economic interest in consummating the
Transaction that was in conflict with the economic interests of the
Interest Holders. Messrs. Froelich and Strosberg have no
affiliation with the Purchaser.
On January 16, 1998, by agreement of the Partnership and the
General Partner and pursuant to a motion of the General Partner, the
District Court entered an order preventing the Partnership and the
General Partners from completing the Merger, or otherwise disposing
of all or substantially all of the Partnership's assets, until
further order from the Court.
On January 28, 1998, the District Court entered an Order of
Reference to Special Master, designating a Special Master and
vesting the Special Master with authority to resolve certain aspects
of the lawsuit subject to the District Court's review and
confirmation. The Special Master has been empowered to determine
how the assets of the Partnership should be sold or disposed of in
a manner which allows the Interest Holders to maximize their
financial return in the shortest practicable time frame. In
addition, early in the second quarter of 1998, the Special Master
retained a financial advisor (the "Financial Advisor"), at the
expense of the Partnership to assist the Special Master. The
Financial Advisor was engaged to perform a valuation of the
properties of the Partnership as well as a valuation of the
Affiliated Partnership's. The cost to the Partnership for the
services of the Financial Advisor was $135,000.
On August 4, 1998, the Special Master filed a Report and
Recommendation with the District Court expressing the Special
Master's recommendation that the Partnership's properties be
disposed of in an auction conducted by the Financial Advisor under
the direction of the Special Master. The District Court accepted
this Report and Recommendation. On November 4, 1998, the Special
Master filed an additional Report and Recommendation with the
District Court, requesting that the Court withdraw its Order of
Reference to Special Master on the grounds it would be impossible
to effect the sale of the Partnership's properties in a manner that
maximizes the financial return to Limited Partners in a short time
frame, unless certain litigation issues are resolved. The District
Court has accepted this Report and Recommendation.
Although the Special Meeting was held and an affirmative vote of
the majority of the Interest Holders was received, the District
Court in the Christman Litigation ruled on August 12, 1998 in favor
of the plaintiffs motion for summary judgement, holding that the
Agreement did not allow the Interest Holders to vote in favor or
against the Transaction by proxy.
Based on the August 12, 1998, ruling of the District Court in the
Christman litigation, it is not possible for the Merger to be
consummated.
On April 13, 1999, all the parties to the litigation reached an
agreement to settle the litigation, subject to the approval of the
United States District Court for the Northern District of Illinois.
This approval was obtained on June 18, 1999. The terms of the
settlement agreement, along with a Notice to the Class, were
forwarded to the Interest Holders in the second quarter of 1999.
Pursuant to the settlement agreement, the Affiliated Partnership
retained a third-party commercial real estate firm which, under the
supervision of an independent special master (the "Special Master")
and with the cooperation of the General Partners, marketed the
Partnerships' properties in order to maximize the return to the
Interest Holders (the "Sale Process"). The Sale Process was
designed to result in an orderly liquidation of the Partnership,
through a sale of substantially all of the assets of the
Partnership, a merger or exchange involving the Partnership, or
through another liquidating transaction which the Special Master
determined was best suited to maximize value for the Interest
Holders. Consummation of such sale, merger, exchange, or other
transaction will be followed by the orderly distribution of net
liquidation proceeds to the Interest Holders.
The General Partners have agreed, as part of the settlement
agreement, to use their best efforts to continue to manage the
affairs of the Partnership in accordance with their obligations
under the Partnership Agreement, to cooperate fully with the Special
Master and to waive certain brokerage and other fees. In
consideration of this, the General Partners will be released from
the claims of the class action lawsuit and indemnified for the legal
expenses they incurred related to the two lawsuits. Part of this
indemnification and release will be contingent on the issuance of
a certification by the Special Master stating that the General
Partners fully cooperated with him and complied with certain other
conditions.
The 2000 and 1999 distributions were based on the net earnings of
the Partnership. These distributions were lower than prior
distributions because the Partnership incurred significant valuation
fees and legal costs to defend against the lawsuits and to comply
with the court orders. In addition, the remaining term of the
Partnership's properties' leases continue to shrink. This fact is
causing the Partnership to potentially face the risks and costs of
lease rollover. This heightened degree of risk may also have an
adverse effect on the ultimate value of the Assets.
On November 19, 1999, the United States District Court for the
Northern District of Illinois approved a bid for the sale of the
Partnership's Assets in an amount of approximately $13,882,300.
This bid was subsequently rescinded by the potential purchaser.
In 2000, an affiliated entity proposed purchasing all of the
Partnership's Assets for approximately $12,550,000 (inclusive of all
the joint venture interests). In May 2000, the Special Master
approved this proposal and recommended that the United States
District Court for the Northern District of Illinois approve this
bid. The United States District Court has not yet ruled on this
subject.
As of March 31, 2000, the Partnership adjusted its investment in
real estate to the offer that was presented to the Special Master
less all estimated closing costs. The effect of this adjustment was
a reduction in the real estate held for sale of $1,823,252, a
reduction in the deferred gain on the sale of real estate of
$207,268 and the recording of a further adjustment to the
liquidation basis of accounting of $1,615,984.
Results of Operations - Three months ended March 31, 2000
(Liquidation Basis) and the Three months ended March 31, 1999 (Going
Concern Basis)
Results of operations for the three months ended March 31, 2000
reflected net loss of $1,085,355 as compared to net income of
$497,783 for the three months ended March 31, 1999, a decrease of
approximately $1,583,100. The decrease in net income is primarily
do to the adjustment to liquidation basis, as explained above, that
was recorded in the first quarter of 2000.
Total income for the three months ended March 31, 2000 was
$589,245 as compared to $617,420 for the three months ended March
31, 1999, a decrease of approximately $28,200. The decrease in
total income was primarily a result of the loss of rental revenue
from two properties that were sold during the fourth quarter of
1999. Partially offsetting the decline in rental revenue is a
increase in other revenue which is associated with the termination
of the November 19, 1999 rescinded purchase offer.
Total expenses for the three months ended March 31, 2000 were
$141,824 as compared to $208,903 for the three months ended March
31, 1999, an decrease of approximately $67,100. The decrease in
expenses was primarily due to the Partnership's adoption of the
liquidation basis of accounting on June 18, 1999. Prior to the
adoption of the liquidation basis of accounting depreciation was
recorded on a straight line basis over the estimated economic lives
of the properties. Upon the adoption of the liquidation basis of
accounting, real estate held for sale was adjusted to estimated net
realizable value and no depreciation expense has been recorded.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Partnership does not engage in any hedge transactions or
derivative financial instruments.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
Two legal actions, as hereinafter described,
against the General Partners of the Partnership and
affiliates of such General Partners, as well as against
the Partnership on a nominal basis in connection with the
Merger, have been settled. On April 13, 1999, all the
parties to the litigation reached an agreement to settle
the litigation, subject to the approval by the United
States District Court for the Northern District of
Illinois. This approval was obtained on June 18, 1999.
The terms of the settlement agreement, along with a
Notice to the Class, were forwarded to the Interest
Holders in the second quarter of 1999. One additional
legal action, which was dismissed on January 28, 1998 had
also been brought against the General Partners of the
Partnership and affiliates of such General Partners, as
well as the Partnership on a nominal basis in connection
with the Merger. With respect to these actions the
Partnership and the General Partners and their named
affiliates denied all allegations set forth in the
complaints and vigorously defended against such claims.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission Of Matters To a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports On Form 8-K.
Exhibit 27. Financial Data Schedule
<PAGE>
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.
BY: Brauvin Realty Advisors, Inc.
Corporate General Partner of
Brauvin High Yield Fund L.P.
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of Directors,
President and Chief Executive Officer
DATE: May 19, 2000
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and Treasurer
DATE: May 19, 2000
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 657,312
<SECURITIES> 2,152,430 <F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 9,175,634 <F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,214,284
<CURRENT-LIABILITIES> 295,035
<BONDS> 0
0
0
<COMMON> 0 <F3>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 589,245 <F4>
<CGS> 0
<TOTAL-COSTS> 141,824 <F5>
<OTHER-EXPENSES> (83,208) <F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (1,168,563)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,805,355)
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1> "SECURITIES" REPRESENTS INVESTMENTS IN JOINT VENTURE
<F2> "PP&E" REPRESENTS INVESTMENT IN REAL ESTATE [LAND AND
BUILDING]
<F3> "COMMON" REPRESENTS TOTAL PARTNERS CAPITAL
<F4> "TOTAL REVENUES" REPRESENTS RENTAL, INTEREST, AND OTHER
INCOME
<F5> "TOTAL COSTS" REPRESENTS TOTAL EXPENSES
<F6> "OTHER EXPENSES" REPRESENTS EQUITY INTEREST IN JOINT
VENTURES' NET INCOME
</FN>
</TABLE>
