UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
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 1-8820
Banyan Short Term Income Trust
(Exact name of Registrant as specified in its charter)
Massachusetts 36-6801275
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 553-9800
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 .
Shares of beneficial interest outstanding as of August 9, 1995: 6,667,410.
Transitional Small Business Disclosure Format. YES . NO X .
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
1995 1994
ASSETS
Cash and Cash Equivalents $ 11,518,815 $ 2,687,908
Investment Securities 1,012,582 4,638,553
Interest Receivable 248,903 64,556
Foreclosed Real Estate
Held for Sale 11,558,043 11,558,043
Net Investment in Real
Estate Ventures 2,895,694 4,229,540
Note Receivable --- 3,500,000
Other Assets 215,395 211,004
------------ ------------
Total Assets $ 27,449,432 $ 26,889,604
============ ============
LIABILITIES AND SHARE-
HOLDERS' EQUITY
Liabilities
Accounts Payable and
Accrued Expenses $ 426,714 $ 306,273
------------ ------------
Shareholders' Equity
Shares of Beneficial Interest,
No Par, 7,500,000 Shares
Authorized, 6,917,510 Shares
Issued 61,870,851 61,870,851
Accumulated Deficit (34,566,770) (34,881,537)
Unrealized Losses on
Investment Securities --- (124,620)
Treasury Stock, at Cost,
for 250,100 Shares of
Beneficial Interest (281,363) (281,363)
------------ ------------
Total Shareholders' Equity 27,022,718 26,583,331
------------ ------------
Total Liabilities and
Shareholders' Equity $ 27,449,432 $ 26,889,604
============ ============
Book Value Per Share of
Beneficial Interest
(6,667,410 Shares Issued
and Outstanding) $ 4.05 $ 3.99
============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
INCOME 1995 1994
Interest Income on Cash
and Cash Equivalents $ 111,655 $ 37,991
Interest Income on Investment
Securities 136,194 108,079
Other Interest Income 24,757 ---
----------- -----------
Total Income 272,606 146,070
----------- -----------
EXPENSES (RECOVERIES)
Shareholder Expenses 59,258 69,347
Directors' Fees, Expenses
and Insurance 108,490 102,723
Other Professional Fees 83,465 138,634
General and Administrative 247,691 164,389
Recovery of Losses On Loans
Notes, and Interest Re-
ceivable and Class Action
Settlement Costs and Expenses (336,374) (519,943)
------------ ------------
Total Expenses (Recoveries) 162,530 (44,850)
----------- -----------
Operating Income 110,076 190,920
Net Income From Real
Estate Ventures 243,670 422,792
Net Loss From Foreclosed
Real Estate Held for Sale (38,979) ---
----------- -----------
Net Income $ 314,767 $ 613,712
=========== ===========
Net Income Per Share
of Beneficial Interest (Based
on Shares Outstanding of
6,667,410) $ 0.05 $ 0.09
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
INCOME 1995 1994
Interest Income on Cash
and Cash Equivalents $ 61,179 $ 5,890
Interest Income on Investment
Securities 54,801 77,727
----------- -----------
Total Income 115,980 83,617
----------- -----------
EXPENSES
Shareholder Expenses 33,498 24,900
Directors' Fees, Expenses
and Insurance 54,318 53,173
Other Professional Fees 44,465 55,190
General and Administrative 106,923 84,693
----------- -----------
Total Expenses 239,204 217,956
----------- -----------
Operating Loss (123,224) (134,339)
Net Income From Real Estate
Ventures 163,724 175,074
Net Loss From Foreclosed Real
Estate Held for Sale (14,484) ---
----------- -----------
Net Income $ 26,016 $ 40,735
=========== ===========
Net Income Per Share
of Beneficial Interest (Based
on Shares Outstanding of
6,667,410) $ 0.00 $ 0.01
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
Shares of Unrealized
Beneficial Interest Losses on
Investment
Shares Amount Securities
Shareholders'
Equity, December 31,
1994 6,917,510 $61,870,851 $ (124,620)
Net Income --- --- ---
Unrealized Gains
for the Period
Ended June 30,
1995 --- --- 124,620
--------- ----------- ----------
Shareholders'
Equity,
June 30, 1995 6,917,510 $61,870,851 $ ---
========= =========== ==========
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (CONTINUED)
(UNAUDITED)
Accumulated Treasury
Deficit Stock Total
Shareholders' Equity
December 31, 1994
$(34,881,537) $(281,363) $26,583,331
Net Income 314,767 --- 314,767
Unrealized Gains
for the Period
Ended June 30, 1995
--- --- 124,620
------------ --------- -----------
Shareholders' Equity
June 30, 1995 $(34,566,770) $(281,363) $27,022,718
============ ========= ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES:
NET INCOME $ 314,767 $ 613,712
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Amortization of Premium on
Investment Securities 2,673 13,533
Equity in Net Income from
Real Estate Ventures (243,670) (422,792)
Net Change In:
Interest Receivable on Cash and
Cash Equivalents and
Investment Securities (184,347) 244
Other Assets (4,391) (83,861)
Accounts Payable and Accrued
Expenses 120,441 (52,868)
----------- -----------
Net Cash Provided In Operating
Activities 5,473 67,968
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from the Sale and
Maturity of Investment
Securities 7,980,052 1,957,480
Purchase of Investment Securities (4,232,134) (5,835,601)
Collections of Notes Receivable 3,500,000 ---
Distributions from (Investment
in) Real Estate Ventures, Net 1,577,516 (143,891)
----------- -----------
Net Cash Provided By (Used In) 8,825,434 (4,022,012)
Investing Activities ----------- -----------
Net Increase (Decrease) in Cash
and Cash Equivalents 8,830,907 (3,954,044)
Cash and Cash Equivalents at
Beginning of Period 2,687,908 5,237,003
----------- -----------
Cash and Cash Equivalents at
End of Period $11,518,815 $ 1,282,959
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN SHORT TERM INCOME TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
Readers of this quarterly report should refer to Banyan Short Term
Income Trust's (the "Trust's") audited consolidated financial statements
for the year ended December 31, 1994, which are included in the Trust's
1994 Annual Report on Form 10-KSB, as certain footnote disclosures which
would substantially duplicate those contained in such audited financial
statements have been omitted from this report.
1. FINANCIAL STATEMENT PRESENTATION
The accompanying consolidated financial statements include the
accounts of the Trust, its wholly-owned subsidiaries, the Trust's 50%
interest in the Oakridge Joint Venture and 75% interest in the Dearborn
Park Townhome Partnership both of which are accounted for on the equity
method. In the opinion of management, all adjustments necessary for a
fair presentation have been made to the accompanying consolidated
financial statements as of June 30, 1995 and for the six months and
quarters ended June 30, 1995 and 1994. These adjustments made to the
financial statements, as presented, are all of a normal recurring nature
to the Trust unless otherwise indicated.
2. TRANSACTIONS WITH AFFILIATES
Administrative costs, primarily salaries and general and
administrative expenses are reimbursed by the Trust to Banyan Management
Corp. ("BMC"). These costs are allocated to the Trust and other entities
to which BMC provides administrative services based upon the actual number
of hours spent by BMC personnel on matters related to that Trust. The
Trust's costs for the six months ended June 30, 1995 and 1994 aggregated
$173,907 and $140,202, respectively. As one of its administrative
services, BMC serves as the paying agent for general and administrative
costs of the Trust. As part of providing this payment service, BMC
maintains a bank account on behalf of the Trust. As of June 30, 1995, the
Trust had a net receivable due from BMC of $166,030.
3. INVESTMENT SECURITIES
The Trust's investment securities portfolio at June 30, 1995 is as
follows:
Amortized Cost
Net of Principal
Paydowns Estimated
Title of Each Issue Received Market Value at
and Name of Issuer June 30, 1995 June 30, 1995
Federal Home Loan
Bank 8.70%,
03/27/95-07/06/95 $1,012,582 $1,012,582
4. FORECLOSED REAL ESTATE HELD FOR SALE, NOTE RECEIVABLE AND OTHER INCOME
The Trust had previously made three mortgage loans to the Boca Raton
Hotel and Club Limited Partnership (the "Borrower"). Those loans were
cross collateralized by the Boca Golf and Tennis Club and by a seven-acre
undeveloped parcel of land located near an existing marina adjacent to the
Boca Raton Hotel and Resort (the "Marina Parcel"). Both parcels are
located in Boca Raton, Florida. In March 1993, the Trust initiated
foreclosure proceedings against the Borrower, because its three mortgage
loans had become due and no payment was forthcoming.
On December 29, 1994, the Court before which the foreclosure was
pending approved a Settlement Stipulation (the "Settlement Agreement")
regarding the Trust's foreclosure litigation related to the Trust's three
mortgage loans to the Borrower. Under the Settlement Agreement, the Trust
received $1,000,000 in cash and a stipulated judgment providing for a
foreclosure sale of the Marina Parcel. The Settlement Agreement further
provided that anytime prior to March 31, 1995 the Borrower could obtain a
release of the Trust's lien against the Boca Golf and Tennis Club by
tendering to the Trust, the sum of $3,500,000 plus interest at 10% per
annum from the court approval date of the Settlement Agreement. On
February 7, 1995, the Trust acquired title to the Marina Parcel pursuant
to the consensual foreclosure sale. On February 22, 1995 the Trust
received the aforesaid $3,500,000 plus $24,757 in interest and released
its mortgage lien on the Boca Golf and Tennis Club. For the six months
ended June 30, 1995, the Trust recognized a net loss of $38,979 related to
the operation of the Marina Parcel.
On June 9, 1995 the Trust entered into a contract to sell its
interest in the Boca Marina Parcel to a local developer for a total
purchase price of approximately $14,000,000. Subsequent to June 30, 1995,
the Trust received nonrefundable earnest money deposits totaling
$3,000,000 regarding the June 9, 1995 contract. The Trust expects to
close the transaction near the end of the third calendar quarter of 1995.
5. INVESTMENT IN REAL ESTATE VENTURES
Equity in Income (Loss):
For the six months ended
June 30, 1995 1994
Dearborn Park Townhome
Partnership $ 334,386 $ 642,558
Oakridge Partnership (90,716) (219,766)
---------- ---------
Total $ 243,670 $ 422,792
========== =========
During the six months ended June 30, 1995, the Trust received
$1,514,868 as its share of a distribution from the Dearborn Park Townhome
Partnership. Also during the six months ended June 30, 1995, the Trust
funded $94,432 to the Oakridge Partnership. These fundings were offset by
the receipt of $157,080 of deposits related primarily to the sales
contract on 211 acres of the Oakridge property.
6. RECOVERY OF LOSSES ON LOANS, NOTES AND INTEREST RECEIVABLE AND CLASS
ACTION SETTLEMENT COSTS AND EXPENSES
On February 9, 1995, the Trust received a cash distribution of
$497,873 related to its interest in a liquidating trust established for
the benefit of the unsecured creditors of VMS Realty Partners and its
affiliates ("VMS"). For the six months ended June 30, 1995, the Trust has
recorded a $336,374 recovery of losses on mortgage loans, notes and
interest receivable on its consolidated statement of income and expenses
related to the distribution received from the liquidating trust. The
$336,374 net recovery in 1995 represents the $497,873 distribution
received net of an estimated $161,499 due to the Class Action Settlement
Fund representing the Trust's share of amounts due pursuant to the terms
of the previously settled VMS securities litigation. As of June 30, 1995,
the Trust has recorded $279,808 in distributions received from the
liquidating trust as a liability in accounts payable and accrued expenses
on its consolidated balance sheet per the terms of the Class Action
Settlement.
On January 25, 1994, the Trust received net proceeds of $519,943
relating to a recovery of payments previously made into an escrow
established as part of the Class Action Settlement of the VMS securities
litigation. The escrow was established to provide the trustees and
officers of the Trust with monies to fund the cost of any litigation in
which they may be named as defendants following settlement of the class
action. Subsequently, the trustees have released the proceeds from the
escrow, and the Trust has purchased an insurance policy to cover the
officers and trustees.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
Banyan Short Term Income Trust (the "Trust") was formed to make
short-term loans to affiliates of VMS Realty Partners. The Trust has been
adversely affected as a result of the non-payment of amounts due from
these borrowers on mortgage loans and notes receivable. As a result of
these defaults, the Trust suspended the making of new loans, except for
advances of additional funds under circumstances which it is deemed
necessary to preserve the value of existing collateral, including
instances where the Trust has foreclosed upon or taken title, directly or
indirectly, to the collateral. The Trust has also suspended distributions
to shareholders. In early 1990, the Trust implemented a plan designed to
preserve its assets and manage its properties acquired through foreclosure
or otherwise until they can be disposed of in an orderly manner (the
"Principal Recovery Plan"). In early January 1992, the Board affirmed
that the continued implementation of the Principal Recovery Plan,
consistent with property specific business plans adopted during 1991, is
the best way to maximize shareholder value over the long-term.
The Trust's largest asset is a seven acre parcel of undeveloped land
located near an existing marina adjacent to the Boca Raton Hotel and
Resort (the "Boca Marina Parcel"). The Trust took title to this property
on February 7, 1995 and has agreed to a one year triple net lease with the
property's former owner which provides for net rent of $100,000 for the
year. The parcel will be utilized by the lessee solely as a parking lot
for its employees. On June 9, 1995, the Trust entered into a contract to
sell the Boca Marina Parcel for a purchase price of approximately
$14,000,000. The Trust currently anticipates completion of the sale of
the Boca Marina Parcel near the end of the third calendar quarter of 1995.
The Trust's other assets consist of a 50% interest in a partnership (the
"Oakridge Partnership") which owns a 215 acre parcel in Hollywood and
Dania, Florida ("Oakridge") and a 75% interest in the Dearborn Park
Townhome Partnership ("Dearborn Park") which owns the Federal Square at
Dearborn Park townhome development in Chicago (the "Federal Square
Project"). The Trust's joint venture interests in these two assets have a
combined book value of $2,895,674 as of June 30, 1995.
With the February 1995 completion of the Boca Settlement Agreement,
the Trust anticipates that substantially all of the Trust's remaining
assets will be liquidated in the next twelve to fifteen months. During
1995, it is the Trust's intention to complete the sale of the Boca Marina
Parcel and finish the development and sales of townhome units in the
Federal Square Project. The Trust also expects that the Oakridge
Partnership will and sell the remaining residential parcels and retail
site at Oakridge within the next year. The Trust will continue to
concentrate its efforts toward maximizing the value and marketability of
its assets as well as continuing its efforts to reduce the ongoing
operating expenses of the Trust. Management of the Trust expects to
present the Board of Trustees with various alternatives to the Trust's
current business plan during the third quarter of 1995. The Trust's
management will evaluate and present various alternatives to the Board of
Trustees including, but not limited to, liquidating the Trust or merging
with another entity. It is currently anticipated that an alternative plan
will be presented regarding the future operations of the Trust to the
shareholders at the annual meeting based on the Board of Trustees review
of management's recommendations as discussed above. The Trust anticipates
scheduling its 1994 Annual Meeting during the fourth quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents consist of cash and short-term
investments. The Trust's cash and cash equivalents balance at June 30,
1995 and December 31, 1994 was $11,518,815 and $2,687,908, respectively.
The increase in cash and cash equivalents is primarily due to the Trust's
receipt of $3,500,000 due pursuant to the Boca Golf and Tennis Club Note,
the net proceeds from the sale of approximately $3,626,000 of the Trust's
investment securities, a $497,873 distribution from the liquidating trust,
a $1,514,868 distribution from Dearborn Park and receipts of $157,080
related primarily to the sales contract on the Oakridge property. These
receipts were partially offset by the Trust's payment of operating
expenses and expenditures related to its real estate ventures.
The Trust's current balance of cash and cash equivalents and
investment securities is expected to be sufficient to meet its reasonably
anticipated needs for liquidity and capital resources in the near future.
However, cash reserves may be expended by the Trust to maintain, operate
and dispose of its property and interests in its real estate ventures.
The Trust will seek to balance its activities in this regard, consistent
with available resources. Ultimately, the cash proceeds derived from the
sale of the Trust's remaining property interests will further contribute
to the Trust's liquidity position.
On February 9, 1995, the Trust received a cash distribution of
$497,873 related to its interest in a liquidating trust established for
the benefit of the previously unsecured creditors of VMS Realty Partners
and its affiliates ("VMS"). For the six months ended June 30, 1995, the
Trust has recorded a $336,374 recovery of losses on mortgage loans, notes
and interest receivable on its consolidated statement of income and
expenses related to the distribution received from the liquidating trust.
The $336,374 net recovery in 1995 represents the $497,873 distribution
received net of an estimated $161,499 due to the Class Action Settlement
Fund representing the Trust's share of amounts due per the terms of the
previously settled VMS securities litigation.
On January 25, 1994, the Trust received net proceeds of $519,943
relating to a recovery of payments previously made into an escrow
established as part of the Class Action Settlement of the VMS securities
litigation. The escrow was established to provide the trustees and
officers of the Trust with monies to fund the cost of any litigation in
which they may be named as defendants following settlement of the class
action. Subsequently, the trustees have released the proceeds from the
escrow, and the Trust has purchased an insurance policy to cover the
officers and trustees.
On June 9, 1995 the Trust entered into a contract to sell its
interest in the Boca Marina Parcel to a local developer for a total
purchase price of approximately $14,000,000. The contract was subject to
a twenty-one-day investigation period which commenced on June 7, 1995.
During the investigation period, the purchaser was required to post a
$1,000,000 earnest money deposit. On June 29, 1995 the initial twenty-
one-day investigation period was extended to July 7, 1995. On July 7,
1995 the initial investigation period concluded and the purchaser waived
its right to unilaterally terminate the contract. Pursuant to the terms
of the contract, the purchaser was given a second investigation period
which ended on August 7, 1995 to confirm the marketability of title and to
ascertain that there were no "recognized environmental conditions" as
defined by the American Society for Testing and Materials, at which time
the purchaser was required to deposit an additional $2,000,000 to be added
to the $1,000,000 earnest money deposit already posted, with all earnest
money becoming non-refundable at that time. On August 7, 1995 the second
and final investigation period concluded and the purchaser determined that
title was acceptable and that no environmental conditions existed. On the
same date, the purchaser deposited the additional $2,000,000 of earnest
money as required. All earnest money is now nonrefundable in the event of
a termination by the purchaser. The Trust expects to close the
transaction near the end of the third calendar quarter of 1995.
Management reviews each investment property interest held by the
Trust on a quarterly basis utilizing current market information, including
appraisals, market studies, financial projections and sales comparisons.
When it has been determined in management's opinion that a permanent
impairment in the value of a given property interest has occurred, the
carrying value of that interest is written down to its fair market value.
Management has determined that no write-down is required at this time.
The Trust's ability to make distributions to its shareholders is
dependent upon, among other things: (i) changes in the eventual sales
price of properties to which the Trust has taken title; (ii) cash
distributions derived from the Trust's investments in the Federal Square
Project and the Oakridge property; (iii) the Trust's ability to control
its expenses; (iv) recovery on and potential distribution of cash proceeds
from the assets of the liquidating trust in which the Trust holds an
interest; and (v) the general improvement of conditions in the real estate
markets where the Trust's properties are located.
RESULTS OF OPERATIONS
For the six months ended June 30, 1995 and 1994, the Trust recorded
total income of $272,606 and $146,070, respectively. For the quarters
ended June 30, 1995 and 1994 the Trust recorded total income of $115,980
and $83,617, respectively. The increases for the six months and quarter
ended June 30, 1995 when compared to the same periods in 1994 are
primarily due to increases in income on cash and cash equivalents and
investment securities which are attributable to the increase in cash
available for investment and the higher interest rates available on such
investments. Also contributing to this increase is the $24,757 of
interest income received from the Boca Golf and Tennis Club Note as
discussed above. Interest income on investment securities for the quarter
ended June 30, 1995 declined by approximately $23,000 from the $77,727
reported for the same period in 1994 due to a higher average balance of
investment securities during the quarter ended June 30, 1994.
Net income from real estate ventures totalled $243,670 and $422,792
for the six months ended June 30, 1995 and 1994, respectively, including
$334,386 and $642,558, respectively, from income related to Dearborn Park.
The Dearborn Park income represents the Trust's 75% share of the Dearborn
Park's net income from the sale of 24 and 36 townhomes during the first
six months of 1995 and 1994, respectively. Development of Dearborn Park's
Federal Square Project, consisting of a total of 117 townhomes, is
substantially complete with 110 units sold or under contract as of August
1, 1995. During the first six months of 1995, Dearborn Park received net
sales proceeds of approximately $426,000 in connection with the sale of
the townhomes. The Trust recorded $90,716 and $219,766 as its share of
the Oakridge Partnership operating loss for the six months ended June 30,
1995 and 1994, respectively. The decrease in the loss between 1995 and
1994 is primarily due to the completion of the zoning and entitlement work
during 1994. For the quarters ended June 30, 1995 and 1994, net income
from real estate ventures totalled $163,724 and $175,074, respectively.
The Trust's Dearborn Park interest generated income for the quarters ended
June 30, 1995 and 1994 of $210,811 and $338,670, related to the sale of 16
and 24 townhomes, respectively. The Trust's share of the Oakridge
Partnership's operating loss for the quarter ended June 30, 1995 and 1994
was $47,087 and $163,596, respectively. The Trust has also recognized a
net loss of $38,979 and $14,484 for the six months and quarters ended June
30, 1995, respectively, related to the Boca Marina Parcel which the Trust
took title to on February 7, 1995.
Total expenses (recoveries) for the six months ended June 30, 1995
and 1994 were $162,530 and ($44,850), respectively. This change
represents a $207,380 increase in expenses for the first six months of
1995 when compared to the same period in 1994. Expenses in 1994 were
offset by the January 25, 1994 receipt of $519,943 representing net
proceeds from a recovery of payments previously made into an escrow
established as part of the class action settlement of the VMS securities
litigation. The 1994 recovery was partially matched in 1995 by a $336,374
recovery of losses on mortgage loans, notes and interest receivable which
the Trust recorded during the quarter ended March 31, 1995. The 1995
recovery related to the distribution received from the Trust's interest in
the liquidating trust as discussed above in Liquidity and Capital
Resources. Adding to the impact of the 1995 expenses are the decreases in
shareholder expenses, and other professional fees for the six months ended
June 30, 1995, when compared to the same period in 1994. Shareholder
expenses decreased due to the timing of the recognition of payments for
annual report and proxy related costs. Other professional fees decreased
as a result of reimbursements for legal fees related to the Boca
Settlement Agreement for expenditures made by the Trust in prior periods.
Partially offsetting these decreases in expenditures is the increase in
general and administrative expenses. General and administrative expenses
increased due primarily to an increase in Banyan Management Corp. ("BMC")
expenses which were allocated to the Trust. BMC expenses are based on the
actual number of hours spent by BMC personnel on Trust-related matters.
The finalization of the Boca Settlement Agreement, the foreclosure sale
and transfer of ownership of the Boca Marina Parcel.
Total expenses for the quarter ended June 30, 1995 and 1994 were
$239,204 and $217,956, respectively. Primarily contributing to this
increase for the quarter ended June 30, 1995 was the $22,230 increase in
general and administrative expenses due to additional BMC expenses
allocated to the Trust as discussed above for the first six months of
1995. Shareholder expenses for the three months ended June 30, 1995 also
increased by $8,598 when compared to the same period in 1994 due to
increased annual report and postage costs for 1995. Partially offsetting
the increased 1995 expenses, other professional fees for the quarter ended
June 30, 1995 decreased by $10,725 due to the reimbursement of fees
related to the Boca Settlement Agreement as discussed above.
The combination of the above changes resulted in net income of
$314,767 ($0.05 per share) and $613,712 ($0.09 per share) for the six
months ended June 30, 1995 and 1994, respectively. For the quarters ended
June 30, 1995 and 1994, the Trust recorded net income of $26,016 ($0.00
per share) and $40,735 ($0.01 per share), respectively.
OTHER INFORMATION
Due to the pending Boca Marina transaction and its significance to
the Trust, the Trust elected to defer the annual meeting of shareholders
pending the completion of all due diligence related to the sale of the
Boca Marina Parcel and the Board of Trustees' review of various strategies
including but not limited to liquidation of the Trust or merging with
another entity. Subsequent to the completion of the Trustees' review of
the various strategies as discussed above, it is currently anticipated
that an alternative plan regarding the future operation of the Trust will
be presented to the shareholders at the annual meeting. The Trust
anticipates scheduling its 1994 annual meeting during the fourth quarter
of 1995.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are included with this report.
(b) No reports on Form 8-K were filed during the quarter ended June 30,
1995 for which this report is filed.
SIGNATURES
PURSUANT to the requirements of Section 13 or 15(d) 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.
BANYAN SHORT TERM INCOME TRUST
By: /s/ Leonard G. Levine Date: August 9, 1995
Leonard G. Levine, President
By: /s/ Joel L. Teglia Date: August 9, 1995
Joel L. Teglia, Vice President
of Finance and Administration, and Chief
Financial and Accounting Officer