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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
Date of Report (Date of earliest event reported) February 9, 1996
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Resort Income Investors, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-10084 36-3593298
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(State of or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
150 South Wacker Drive, Suite 2900, Chicago, Illinois 60606
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 683-3323
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Capitalized terms not otherwise defined herein shall have the same
meaning as in the prospectus of Resort Income Investors, Inc. (the "Company")
dated October 24, 1988 (the "Prospectus").
On February 9, 1996, the Company made an allowance of $1,600,000 for
impairment on one of the Company's loans secured by the Crooks Palace Casino
located in Blackhawk, Colorado. This allowance, which represents the full
reserve of the Company's $1,600,000 Crook Loan, was made subsequent to the
review by the Board of Directors of the Company of a recent valuation of the
collateral securing the Crook Loan. In addition, certain provisions of both
the Company's Crook and Hudspeth Loans have been modified such that the Company
is entitled to receive net revenues from the Crooks Palace Casino operations
after the funding of certain expenses and reserves. In addition, the Company
began receiving monthly payments of $15,000 pursuant to the recent modification
of the terms of its two Waikiki Loans, which loans now currently bear interest
at a rate of 11% per annum.
The Company received approximately $733,000 from the sale of two
residential properties located in Los Angeles, California owned by Christopher
B. Hemmeter. These properties were collateral for the Company's loan to Mr.
Hemmeter and his wife in the original principal amount of $15,000,000 (the "CBH
Loan"). The proceeds will be used by the Company for its ongoing working
capital needs. The amounts received from these sales is less than the
approximately $450,000 of the $1,250,000 previously reserved by the Company to
preserve the collateral underlying the Company's loans, including the CBH Loan.
There is a remaining balance of approximately $225,000 in the reserve account.
For the fourth quarter of 1995, the Company reserved the remaining $975,000 of
carrying value on the CBH Loan's remaining outstanding balance of $14,300,000,
as a result of the sales of these properties. The CBH Loan is now unsecured
but fully reserved.
Management of the Company is continuing to analyze its investment
portfolio and is monitoring the activities of its borrowers in an effort to
maximize the recovery on each of its remaining loans. An audit of the Company
is currently underway and there can be no assurances that additional reserves
will not be taken upon completion of the audit.
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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.
RESORT INCOME INVESTORS, INC.
(Registrant)
DATE: March 6, 1996 By: /s/ John R. Young
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Name: John R. Young
Title: Chairman of the
Board of Directors,
Chief Executive Officer,
President and
Chief Financial Officer
