Casa Munras Hotel Partners L P 10QSB 2006 Q1 Quarterly report (small business)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

þ Quarterly report under Section 13 of 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2006

o Transition report under Section 13 of 15(d) of the Exchange Act

For the transition period from                    to                    

Commission file number 0-8901

CASA MUNRAS HOTEL PARTNERS, L.P.

(Exact name of small business issuer as specified in its charter)

California	95-3235634
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

8885 Rio San Diego Drive, Suite 220, San Diego, California 92108
(Address of principal executive offices)

(619) 297-4040
(Issuer’s telephone number, including Area Code)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yesþ Noo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act.). Yeso Noþ

Transitional Small Business Disclosure Format: Yeso Noþ

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Controls and Procedures
PART II — OTHER INFORMATION
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBIT 31
EXHIBIT 32

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

     The accompanying unaudited financial statements of Casa Munras Hotel Partners, L.P. (the “Partnership”) have been prepared on a liquidation basis in accordance with accounting principles of the Public Company Accounting Oversight Board generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB. Accordingly, these statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the General Partner of the Registrant, all adjustments necessary for a fair presentation have been included. The financial statements presented herein have been prepared in accordance with the accounting policies described in the Registrant’s Annual Report on Form 10-KSB for the year ended December 31, 2005 and should be read in connection therewith. The results of operations for the three month period ended March 31, 2006 have been prepared on a liquidation basis as the Registrant is expected to be liquidated in calendar 2006. The three months ended March 31, 2006 results of operations have been charged against the accrued estimated costs during the period of liquidation.

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CASA MUNRAS HOTEL PARTNERS, L.P.
(A Limited Partnership)

STATEMENT OF NET ASSETS (LIQUIDATION BASIS) AS OF
MARCH 31, 2006 AND DECEMBER 31, 2005

	March 31,
	2006		December 31,
	(Unaudited)		2005
ASSETS
CURRENT ASSETS:
Cash	$	3,266,120	$	6,710,516
Accounts receivable — trade, less allowance for doubtful accounts of $10,000 in 2006 and 2005		67,000		117,962
Accounts receivable — other		101		101,993
Accounts receivable — workers compensation		57,124		22,405
TOTAL		3,390,345		6,952,876
LIABILITIES AND NET ASSETS IN LIQUIDATION
CURRENT LIABILITIES:
Accounts payable — trade		11,050		66,080
Accounts payable — related parties		18,982		226,591
Accrued incentive management fees — related parties		19,173		99,173
Accrued estimated costs during period of liquidation		123,115		125,000
Total liabilities		172,320		516,844
NET ASSETS IN LIQUIDATION	$	3,218,025	$	6,436,032

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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)

STATEMENT OF OPERATIONS AND STATEMENT OF CHANGES IN NET ASSETS
(LIQUIDATION BASIS) FOR THE THREE MONTHS ENDED MARCH 31, 2006
AND STATEMENT OF OPERATIONS AND STATEMENT OF CHANGES IN
PARTNERS’ DEFICIT (GOING CONCERN BASIS-HISTORICAL COST)
FOR THE THREE MONTHS ENDED MARCH 31, 2005

	2006			2005
REVENUES:
Room	$			$	555,756
Food and beverage					117,625
Lease					29,103
Telephone					2,824
Other					2,356
Total		—			707,664
OPERATING EXPENSES:
Rooms					236,871
Interest					119,509
Food and beverage					108,435
Administrative and general					84,747
Marketing					73,295
Repairs and maintenance					70,673
Depreciation and amortization					64,659
Energy cost					47,972
Partnership administration and professional fees					46,994
Management fees					28,977
Insurance					24,940
Property taxes					19,540
Telephone					2,615
Total (including reimbursed costs and payments for services to related parties of $276,853 for the three months ended March 31, 2005)		—			929,227
NET LOSS		—			(221,563	)
DISTRIBUTIONS (including special allocation to General Partner of net sale proceeds totaling $836,157)		(3,218,007	)		—
PARTNERS’ DEFICIT, January 1, 2005					(2,533,861	)
NET ASSETS, January 1, 2006		6,436,032
PARTNERS’ DEFICIT, March 31, 2005				$	(2,755,424	)
NET ASSETS IN LIQUIDATION, March 31, 2006	$	3,218,025
ALLOCATION OF NET LOSS:
General Partner (45 units outstanding)	$	—		$	(2,216	)
Limited Partners (4,455 units outstanding)					(219,347	)
Total	$	—		$	(221,563	)
PER UNIT INFORMATION: (based upon 4,500 units outstanding)
Net loss (based upon 4,500 total units outstanding)	$	—		$	(49.24	)
Distribution (excludes special allocation to General Partner of net sale proceeds totaling $836,157)	$	529.30		$	—

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CASA MUNRAS HOTEL PARTNERS, L.P.
(A LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
(Unaudited)

	2006			2005
OPERATING ACTIVITIES:
Net loss	$	—		$	(221,563	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		—			64,659
Change in assets and liabilities:
Accounts receivable		118,135			15,082
Food and beverage inventories		—			393
Prepaid expenses		—			(89,170	)
Accounts payable and accrued expenses		(344,524	)		349,977
Net cash (used in) provided by operating activities		(226,389	)		119,378
INVESTING ACTIVITIES:
Acquisition of property and equipment		—			(36,769	)
Decrease in impound escrow accounts		—			50,953
Net cash provided by investing activities		—			14,184
FINANCING ACTIVITIES:
Distribution paid to partners		(3,218,007	)
Payment of long-term debt		—			(38,421	)
Net cash used in financing activities		(3,218,007	)		(38,421	)
NET INCREASE (DECREASE) IN CASH		(3,444,396	)		95,141
CASH AT BEGINNING OF PERIOD		6,710,516			14,385
CASH AT END OF PERIOD	$	3,266,120		$	109,526
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION—
Cash paid during the period for interest	$	—		$	119,509
Cash paid during the period for taxes	$	—		$	1,600

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Disclosure Regarding Forward Looking Statements

          The Partnership may from time to time make written or oral “forward-looking statements”, including statements contained in the Partnership’s filings with the Securities and Exchange Commission (including this Quarterly Report on Form 10-QSB and the exhibits hereto and thereto), in its reports to Partners and in other communications by the Partnership, which are made in good faith by the Partnership pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

          These forward-looking statements include statements with respect to the Partnership’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond the Partnership’s control). The words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, and similar expressions are intended to identify forward-looking statements.

          Because the Partnership has sold the Hotel and is in the process of liquidating its business, many of the operational uncertainties related to the Partnership’s financial performance no longer exist. However, there are factors that could affect the timing and cost of liquidation of the Partnership’s business and, therefore, the estimated cash distributions to the Partners. The following factors, among others, could cause the Partnership’s plan of liquidation and proposed cash distributions to the Partners to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements:

• The ability of the Partnership to engage professionals to perform the accounting, legal and administrative functions required to effect a liquidation of the Partnership;

• The cost to the Partnership of professionals and support personnel required to complete the accounting, legal and administrative functions required to effect a liquidation of the Partnership;

• The time required to effect a liquidation of the Partnership;

• The impact of changes in laws and regulations (including laws concerning taxes and securities); and

• The success of the Partnership at managing the risks involved in the foregoing.

          The foregoing list of important factors is not exclusive. The Partnership does not undertake and expressly disclaims any intent or obligation, to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Partnership.

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Results of Operations for the Three Months Ended March 31, 2006 and 2005

          The Registrant completed the sale of the Casa Munras Garden Hotel (the “Hotel”) on November 18, 2005. Upon completion of the sale of the hotel, the Registrant has adopted the liquidation method of accounting under the Standards of the Public Company Accounting Oversight Board (United States). The Registrant, as of December 31, 2005, prepared an accrual for estimated costs during the period of liquidation totaling $125,000. The Registrant decreased the accrual by $1,885 during the three months ended March 31, 2006.

          Due to the sale of the Hotel, comparisons of revenue and expenses are not meaningful.

Recent Accounting Pronouncements

          In 2004 and 2005, the United States Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 151 — “Inventory Costs”, SFAS No. 152 — “Accounting for Real Estate Time Sharing Transactions”, SFAS No. 153 — “Exchange of Nonmonetary Assets”, and SFAS No. 154 — “Accounting Changes and Error Corrections”. Adoption of these SFAS’s in calendar 2005 did not have any impact on the Company’s financial condition, results of operations or cash flows.

Liquidity and Capital Resources

          In October 2005, the Limited and General Partners of the Registrant approved a plan of liquidation, as provided in the Partnership Agreement. It is expected that each Limited and General Partner will receive liquidating distributions totaling approximately $1,058 per $1,000 unit in two installments by June 30, 2006. In addition, it is expected the General Partner will receive a distribution totaling $1,672,314, or 25% of the net sale proceeds, as provided in the allocation provisions in the Partnership Agreement.

          The Partnership paid a portion (approximately 50%) of the distributions to the Limited and General Partners on March 9, 2006. The Limited and General Partners were paid $529.30 per $1,000 unit or a total of $2,381,850. The General Partner was paid $836,157 towards its share of the net sale proceeds, as provided in the allocation provisions in the Partnership Agreement.

          The General Partner intends to proceed with the liquidation of the Partnership in 2006 and to distribute remaining cash to the Partners.

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Item 3. Controls and Procedures

          The Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Partnership’s reports filed pursuant to the Securities Exchange Act of 1934 are recorded, processed, and summarized and reported within the time periods specified in the rules and forms promulgated under such Act, and that such information is accumulated and communicated to the Partnership’s management, including the Managing Member of the General Partner who performs the functions of the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

          During the 90-day period prior to the filing date of this report, the Managing Member of the General Partner who performs the functions of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based upon, and as of the date of that evaluation, the Managing Member of the General Partner who performs the functions of the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Registrant files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

          There have been no significant changes in the Registrant’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Registrant carried out its evaluation. There were no significant deficiencies or material weakness identified in the evaluation and therefore, no corrective actions were taken.

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PART II — OTHER INFORMATION

Item 5. Other Information

          The Managing Member of the General Partner who performs the functions of the Chief Executive Officer and Chief Financial Officer of the Registrant have certified that the Quarterly Report of the Registrant on Form 10-QSB for the quarterly period ended March 31, 2006 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. (ss) 78m or (ss) 78o(d)) and that information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

31 Certification pursuant to Rule 13a-14(a)

32 Certification pursuant to Rule 13a-14(b)

(b) Reports on Form 8-K:

None

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SIGNATURE

In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CASA MUNRAS HOTEL PARTNERS, L.P.
	By :	CASA MUNRAS GP, LLC
		General Partner
		By:	/s/ JOHN F. ROTHMAN
			John F. Rothman
			Managing Member
Dated: May 11, 2006

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