UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 25, 1997
(Date of report)
AMERICAN RESTAURANT PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
1-9606 48-1037438
(Commission File Number) (I.R.S. Employer
Identification No.)
555 North Woodlawn, Suite 3102
Wichita, Kansas 67208
(Address of principal executive offices) (Zip-Code)
Registrant's telephone number, including area code (316) 684-5119
ITEM 5. OTHER EVENTS
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The Registrant issued the following letter, including the attached
press releases, to its unitholders on November 21, 1997:
TO OUR PARTNERS:
As we have previously reported, the Revenue Act of 1987 added
Section 7704 to the Internal Revenue Code which requires that
publicly traded limited partnerships ("PTLPs") be taxed as
corporations beginning January 1, 1998. I.R.C. Section 7704 defines
a PTLP as any partnership in which interests of the partnership are
traded on "an established securities market" or "readily traded on a
secondary market (or the substantial equivalent thereof)". ARP is
considered a PTLP because it traded on the American Stock Exchange.
After January 1, 1998, any partnership classified as a PTLP under
I.R.C. Section 7704, including ARP, would pay income tax on its
income and its partners would also pay tax on distributions received
by them. This double taxation would substantially increase the
total taxation of ARP's distributed income.
For the past three years we have worked with a coalition of PTLP's
to lobby vigorously to have this January 1, 1998 deadline extended
indefinitely. Unfortunately, we were unsuccessful in our efforts.
For the past year, we have examined numerous alternatives that would
alleviate being classified as a PTLP and thereby avoid double
taxation. Ultimately, we faced a choice of either continuing having
a ready trading market for our units and being subject to the double
income tax or restructuring the trading market for the units and
preserving our partnership income taxation; we cannot have both.
Based on our research, we believe it is in the best interest of the
partners for ARP to remain taxed as a partnership.
As discussed above, there are two requirements ARP must satisfy in
order to avoid being classified as a PTLP and being taxed as a
corporation. First, ARP must delist from the American Stock
Exchange to avoid trading on "an established securities market".
Second, ARP must limit the trading of its units in a taxable year to
less than 5% of all of the interests in ARP not owned by the general
partners or their affiliates (approximately 53,000 units) so that
its units will not be considered "readily traded on a secondary
market".
As described in the accompanying press release, on November 12 we
filed an application with the American Stock Exchange ("AMEX") to
delist our units in late December. The AMEX asked us to release the
accompanying press release on November 13 and they suspended trading
of ARP's units for the day while the market digested the information
contained in the press release. The AMEX told us trading would
resume sometime on November 14. On November 14, the AMEX called to
inform us they were permanently suspending trading of our units on
the AMEX. We have yet to receive a satisfactory explanation from
AMEX as to the reason for this permanent suspension. We have also
attached a press release announcing this permanent suspension. We
have also applied to the Securities and Exchange Commission to
withdraw the listing of the units from the AMEX.
ARP will invoke a provision in its partnership agreement whereby we
will not recognize transfers of units that would cause ARP to be
taxed as a corporation. After December 31, ARP will recognize
transfers up to a maximum of 4.9% of the units not owned by the
general partners or their affiliates (approximately 52,200 units)
each taxable year. Effective November 20, 1997 through the
remainder of 1997, ARP's units will be quoted in the National
Quotation Bureau's Pink Sheets under the symbol ACNR. Your broker
will be able to obtain the latest quotes. We are consulting tax
counsel regarding the impact on the partnership's tax classification
of trading in the Pink Sheets after December 31, 1997.
Effective January 2, 1998 ARP will establish a "qualified matching
service" as provided in the Treasury Regulations as an additional
means for unitholders to exchange their units. This would permit
ARP to match requests by unitholders to sell units ("selling
partner") with requests by others to purchase units ("potential
buyers"). To comply with the Treasury Regulations, the selling
partner cannot enter into a binding agreement to sell units until
the 15th calendar day after the date information regarding the
offering of the units for sale is made available to potential
buyers. The closing of the sale cannot occur prior to the 45th
calendar day after the date information regarding the offering of
the units for sales is made available to potential buyers. Because
of the new restrictions on trading, we have discontinued our
dividend reinvestment plan effective immediately. Unitholders will
be able to participate in this matching service by calling ARP's
corporate office.
ARP will continue to furnish to the Unitholders annual reports
containing audited financial statements and quarterly reports
containing unaudited financial statements for each of the first
three quarters of each fiscal year for as long as the Partnership
remains a reporting company under the Securities Exchange Act of
1934. ARP will also continue to file Forms 10-Q and 10-K with the
Securities and Exchange Commission as required under the Securities
Exchange Act of 1934.
If you have any questions about your investment, you may contact
Terry Freund, our Chief Financial Officer at (316) 684-5119.
FINANCIAL NEWS RELEASE
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For Immediate Release Contact: Terry Freund
November 13, 1997 Chief Financial Officer
Wichita, Kansas (316) 684-5119
AMERICAN RESTAURANT PARTNERS, L.P. ANNOUNCES APPLICATION
TO WITHDRAW FROM LISTING ON AMERICAN STOCK EXCHANGE
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American Restaurant Partners, L.P. (ASE: RMC), a Delaware limited
partnership that operates 64 Pizza Hut restaurants, today announced
that it has filed an application with the American Stock Exchange
("Exchange") and intends to file an application with the Securities
and Exchange Commission to withdraw from listing on the Exchange the
Class A Units ("Units") of American Restaurant Partners, L.P.
("ARP"). ARP expects the last day of trading on the American Stock
Exchange to be in late December and will be disclosed as soon as
possible.
Prior to the adoption of the Revenue Act of 1987, ARP paid no income
tax on its income and the partners were taxed on their proportionate
share of the partnership's income allocable to them. As the
Partnership has previously reported, the Revenue Act of 1987 added
Section 7704 to the Internal Revenue Code which requires publicly
traded limited partnerships ("PTLPs"), including ARP, to be taxed as
corporations commencing with tax years beginning after December 31,
1997. As a result, by remaining a PTLP, beginning January 1, 1998,
ARP would pay income tax on its income and the partners would then
pay additional taxes on distributions received by them, thereby,
substantially increasing the total taxation of the partnership's
distributed income.
I.R.C. Section 7704 defines PTLPs as any limited partnership in
which interests of the partnership are traded on "an established
securities market" or "readily traded on a secondary market (or the
equivalent thereof)." ARP is considered a PTLP because it currently
trades on the American Stock Exchange. Accordingly, ARP must delist
from the American Stock Exchange before January 1, 1998, in order to
no longer be considered to be trading on "an established securities
market." To determine if ARP is trading on a secondary market (or
the equivalent thereof), after ARP delists, less than 5% of the
interests in the partnership (approximately 40,765 Units) can be
sold or otherwise disposed of during the taxable year. ARP will
establish a procedure for limiting transfers of Units in order to
comply with this 5% rule by invoking a provision in its partnership
agreement permitting it to refuse to recognize attempted transfers
of Units that would cause ARP to be taxed as a corporation.
On January 2, 1998, ARP intends to establish a "qualified matching
service" as provided in the Treasury Regulations as an additional
means for Unitholders to exchange their Units. This would permit
ARP to match requests by Unitholders to sell Units with requests by
Unitholders to purchase Units. The "qualified matching service"
must meet the time and volume parameters provided for in the
Treasury Regulations. Unitholders will be able to participate in
this matching service by calling ARP's corporate office.
Management has requested from the Internal Revenue Service a private
letter ruling to the effect that ARP will not be a "publicly traded
limited partnership" for purposes of Section 7704 of the Internal
Revenue Code and therefore will continue to be taxed as a
partnership.
ARP will continue to furnish to the Unitholders annual reports
containing audited financial statements and quarterly reports
containing unaudited financial statements for each of the first
three quarters of each fiscal year for as long as the Partnership
remains a reporting company under the Securities Exchange Act of
1934. ARP will also continue to file Forms 10-Q and 10-K with the
Securities and Exchange Commission as required under the Securities
Exchange Act of 1934.
Hal W. McCoy, Chairman of the managing general partner, commented,
"We have considered various alternative ways to avoid the harsh
effects of Section 7704. Based on ARP's current operating results
we have decided that by delisting and limiting transfers of the
Units is in the best interests of the holders of the Units. This
will allow the holders of the Units to avoid double taxation."
FINANCIAL NEWS RELEASE
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For Immediate Release Contact: Terry Freund
November 14, 1997 Chief Financial Officer
Wichita, Kansas (316) 684-5119
AMERICAN RESTAURANT PARTNERS, L.P. ANNOUNCES
PERMANENT SUSPENSION OF TRADING OF UNITS ON AMERICAN STOCK EXCHANGE
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American Restaurant Partners, L.P. (ASE: RMC), a Delaware limited
partnership that operates 64 Pizza Hut restaurants, today announced
that the American Stock Exchange ("Exchange") has informed ARP that
because of ARP's application to delist from the Exchange, the
Exchange has permanently suspended trading of ARP's Units. ARP's
management is contacting secondary market makers for the purpose of
establishing an over-the-counter market of the Units through
December 31, 1997.
SIGNATURE
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 hereunto duly authorized.
AMERICAN RESTAURANT PARTNERS, L.P.
(Registrant)
By: RMC AMERICAN MANAGEMENT, INC.
Managing General Partner
Date: 11/25/97 By: /s/Terry Freund
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Terry Freund
Chief Financial Officer
