UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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 0-14581
California Seven Associates Limited Partnership,
a California Limited Partnership
(Exact name of registrant as specified in its charter)
California 94-2970056
(State of Organization) (I.R.S. Employer Identification
No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices)
Telephone Number: (203) 726-6000
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
Part I - Financial Information
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Balance Sheets
March 31, December 31,
1995 1994
Assets (Unaudited) (Audited)
Property and improvements, at cost:
Land and land improvements $20,563,613 $20,562,073
Buildings 109,983,485 109,890,874
Furniture and fixtures 13,049,229 13,030,382
Machinery and equipment 775,859 765,087
144,372,186 144,248,416
Less accumulated depreciation 49,180,343 48,128,827
Net property and improvements 95,191,843 96,119,589
Cash and cash equivalents 2,510,034 1,191,015
Earthquake insurance - partial
settlement receivable 9,250,000 --
Accounts receivable 297,332 488,885
Prepaid expenses and other assets 471,150 599,166
Total $107,720,359 $98,398,655
Liabilities and Partners' Deficit
Liabilities:
Liabilities not subject to compromise:
Accounts payable and accrued expenses $614,322 $357,719
Tenant security deposits 465,252 472,898
Unearned income 73,403 79,046
Earthquake insurance - partial
settlement unapplied 9,250,000 --
10,402,977 909,663
Postpetition liabilities subject to compromise:
Fees and reimbursements payable to the General
Partner and its affiliates 191,088 102,832
Prepetition liabilities subject to compromise:
Note and mortgages payable 111,983,903 111,983,903
Accrued interest payable 2,560,559 2,560,559
Accounts payable and accrued expenses 935,240 923,957
Fees and reimbursements payable to the
general partner and its affiliates 4,078,563 4,078,563
119,558,265 119,546,982
Total liabilities 130,152,330 120,559,477
Partners' deficit:
General Partner (767,557) (764,846)
Limited partners (362 Class A Units
and 3 Class B Units): (21,664,414) (21,395,976)
Total partners' deficit (22,431,971) (22,160,822)
Total $107,720,359 $98,398,655
The Notes to Financial Statements are an integral part of these statements.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Statements of Operations
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
Property operating revenues:
Rental income $3,597,044 $3,694,079
Other 117,596 136,527
3,714,640 3,830,606
Property operating expenses:
Maintenance and repairs, furniture rental,
insurance, and other property operations 744,107 731,565
Real estate taxes 281,515 350,730
Management fees 128,802 143,185
Property administrative 743,398 711,877
1,897,822 1,937,357
Net property revenue 1,816,818 1,893,249
Other operating costs and expenses:
Depreciation 1,051,516 1,059,220
Management and administrative
fees to affiliates 74,548 75,634
Partnership administrative 19,752 43,443
Net cost (recovery) on business
interruption insurance 41,719 --
1,187,535 1,178,297
Net partnership operating income 629,283 714,952
Interest income 9,168 4,817
Interest expense (contractual interest
of $2,615,450 in 1995) (885,721) (2,615,450)
Net loss before reorganization items (247,270) (1,895,681)
Reorganization items:
Interest income 6,899 --
United States Trustee fees (5,000) --
Professional fees (25,778) --
Net loss $(271,149) $(1,895,681)
Net loss:
General Partner $(2,711) $(18,957)
Limited partners (268,438) (1,876,724)
$(271,149) $(1,895,681)
Net loss per Class A Unit: $(742) $ (5,184)
The Notes to Financial Statements are an integral part of these statements.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Statements of Cash Flows
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
Cash flows from operating activities:
Net loss $(271,149) $(1,895,681)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation 1,051,516 1,059,220
Accounts receivable 191,553 35,183
Accounts payable and accrued expenses 256,603 241,425
Other, net 114,727 92,746
Liabilities subject to compromise 99,539 --
Net cash provided by (used in)
operating activities 1,442,789 (467,107)
Cash flows from investing activities:
Purchase of property and improvements (123,770) (28,685)
Net increase (decrease) in cash and
cash equivalents 1,319,019 (495,792)
Cash and cash equivalents, beginning of year 1,191,015 1,440,476
Cash and cash equivalents, end of period $2,510,034 $944,684
Supplemental disclosure of cash information:
Interest paid during period $885,721 $2,150,000
Fees paid in connection with reorganization $21,408 $--
The Notes to Financial Statements are an integral part of these statements.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Notes to Financial Statements
(Unaudited)
Readers of this quarterly report should refer to the audited financial
statements for California Seven Associates Limited Partnership, a
California Limited Partnership ("the Partnership"), for the year ended
December 31, 1994 which are included in the Partnership's 1994 Annual
Report, as certain footnote disclosures which would substantially duplicate
those contained in such audited financial statements have been omitted from
this report.
1. Organization and Basis of Accounting
a) Organization: On September 16, 1994, the Partnership filed a
voluntary petition for bankruptcy protection under Chapter 11 of Title
11, United States Code. The Partnership's Chapter 11 bankruptcy
reorganization case is currently pending in the United States
Bankruptcy Court for the Central District of California. The
Partnership's goal is to maximize recovery by creditors and partners
by preserving the Partnership as a viable entity with a going concern
value. The financial statements do not include any adjustments
relating to the recoverability of reported asset amounts or the
amounts of liabilities that might result from the outcome of this
uncertainty.
b) Basis of Presentation: The accompanying financial statements were
prepared in accordance with generally accepted accounting principles.
It is the opinion of management that the financial statements
presented reflect all the adjustments necessary for a fair
presentation of the financial condition and results of operations.
Certain amounts in the 1994 financial statements have been
reclassified to conform to the 1995 presentation.
c) Cash and Cash Equivalents: Short-term investments with a maturity of
three months or less at the time of purchase are reported as cash
equivalents. At March 31, 1995 the Partnership had cash and cash
equivalents classified as cash collateral used for operations of the
properties totalling $613,691. In addition, at March 31, 1995, cash
and cash equivalents include amounts the Partnership is required to
maintain in segregated cash collateral accounts for security deposits,
taxes and insurance and the Sherman Oaks deductible. The balances of
these accounts at March 31, 1995 were $475,989, $750,115 and $501,302,
respectively. The Partnership had unencumbered cash and cash
equivalents at March 31, 1995 of $168,937
2. Petition for Relief Under Chapter 11
On September 16, 1994, the Partnership filed a petition for relief under
Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy
Court for the Central District of California. Under Chapter 11, certain
claims against the Debtor in existence prior to the filing of the petitions
for relief under the Federal bankruptcy laws are stayed while the Debtor
continues business operations as Debtor in Possession. These claims are
reflected in the accompanying balance sheets as "prepetition liabilities
subject to compromise."
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Notes to Financial Statements - Continued
(Unaudited)
Additional claims may arise subsequent to the filing date resulting from
the rejection of executory contracts and from the determination by the
Court of allowed claims for contingencies and other disputed amounts.
Claims secured against the Partnership's assets are stayed, although the
holders of such claims have the right to move the court for relief from the
stay. Secured claims are secured by liens on the Partnership's property
and improvements.
On September 22, 1994, the Partnership entered into a Letter Agreement
with the first mortgage lender which defines and authorizes the use of cash
collateral. The Partnership was granted use of collateral pursuant to the
Letter Agreement until June 30, 1995. All excess cash flow from property
operations after payment of property operating expenses, allowed capital
expenditures, and funding of agreed upon segregated cash collateral
accounts, is remitted to the first mortgage lender monthly.
As part of the Partnership's Motion for Use of Cash Collateral, the
Partnership requested all use of property that may be cash collateral in
the form of rental revenues and insurance proceeds to repair the Sherman
Oaks property. On February 1, 1995, the Court held a hearing on the use of
cash collateral to repair Sherman Oaks and denied the Partnership's Motion
without prejudice after determining that the issue should be decided in the
context of the confirmation of the Partnership's plan of reorganization.
On or about December 6, 1994, the first mortgage lender commenced a
declaratory action against the Partnership, claiming that the second lien
holder is an insider as defined under 11 U.S.C. Sec. 101. The Partnership
filed an answer to the Complaint denying that the second lien holder is an
insider as that term is defined in the Bankruptcy Code. A status hearing
was held on February 21, 1995, and after arguments by counsel, the Court
set the discovery deadline and scheduled the continued status conference
both for May 22, 1995.
On or about January 30, 1995, the first mortgage lender filed a Motion
for Relief from the Automatic Stay. The Partnership filed an Opposition to
the Motion. A hearing was held on February 21, 1995. After hearing
arguments by counsel, the court set a date for a final evidentiary hearing
on the Motion for Relief from Stay for April 18, 1995.
On April 18, 1995, the Court held a final evidentiary hearing on the
Motion for Relief from the Automatic Stay. After hearing arguments and
representations of counsel, the Court continued the hearing until July 12,
1995.
On March 17, 1995, the Partnership filed its proposed Plan of
Reorganization under Chapter 11 of the Bankruptcy Code dated March 16,
1995, together with a Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code. On March 17, 1995, the Court set the hearing on the
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Notes to Financial Statements - Continued
(Unaudited)
Partnership's Disclosure Statement for April 18, 1995. The Partnership's
period for soliciting acceptances to the plan expires on June 7, 1995,
unless otherwise extended by the Court.
On April 17, 1995, the Partnership filed with the Bankruptcy Court
certain Non-material Amendments to the Disclosure Statement. On April 18,
1995, the Bankruptcy Court held a hearing and acted upon the approval of
the Partnership's Disclosure Statement together with the Non-material
Amendments. After considering the Disclosure Statement and the Non-
material Amendments thereto, the Court ruled that certain additional
information should be included in the Partnership's Disclosure Statement.
The Court required the Partnership to file an Amended Disclosure Statement
which the Court, after considering objections, would act upon without
further hearing.
The Partnership subsequently filed its Amended Disclosure Statement and
Amended Plan of Reorganization on May 4, 1995. Also, in accordance with
the Court's ruling at the hearing on April 18, 1995, the Court set a
confirmation hearing on the Partnership's Amended Plan for July 12, 1995.
3. Property and Improvements and Note and Mortgages Payable
At March 31, 1995, the Partnership owned five operating apartment
properties located in California totaling 1,763 units with leases generally
for a term of one year or less. The Partnership owns a sixth property with
372 apartment units which was not operating and was unoccupied at March 31,
1995. All properties are pledged as security for the long-term debt.
Although the first and second mortgages payable represent secured claims
under the bankruptcy proceedings, there is uncertainty as to whether the
claims are undersecured or will be impaired under a plan of reorganization.
The mortgages payable, therefore, are classified as liabilities subject to
compromise in the accompanying balance sheet. Interest expense will be
recorded postpetition to the extent paid during the proceeding. The
Partnership has entered into a cash collateral agreement with the first
mortgage lender which calls for the payment of cash flow from operations,
rents less operating expenses and capital, on a monthly basis.
The Sherman Oaks property was severely damaged by the January 17, 1994
Southern California earthquake. The property is not operating and is
currently unoccupied. The Partnership's properties are covered by
insurance, including earthquake and business interruption; although the
policy carries a 5% deductible.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Notes to Financial Statements - Continued
(Unaudited)
On April 28, 1994, the Partnership received a $750,000 advance on the
business interruption policy for the earthquake damaged property. The
Partnership recorded the advance as income, "Net recovery on business
interruption insurance", for the year ended December 31, 1994. "Net cost
(recovery) on business interruption insurance" for the three months ended
March 31, 1995 were costs specifically associated with the earthquake. All
other income statement lines relating to the Sherman Oaks property include
only the activity related to the period from January 1, 1994 to January 16,
1994, or fixed operating expenses unrelated to the earthquake, if
applicable.
On March 9, 1995, the Partnership submitted a report, prepared as of
January 11, 1995, representing the Partnership's business interruption
claim, in the amount of $4,913,748 (prior to netting out the $750,000
advance the Partnership has already received for business interruption).
The income statement does not include any amounts relating to the pending
claim with the insurance company.
Of February 3, 1995, the insurance company carrying the first
$10,000,000 layer of earthquake insurance coverage offered to settle a
portion of the loss resulting from the earthquake. The appropriate
documents were executed in the second quarter of 1995 and on April 26,
1995, the Partnership received a partial insurance settlement of
$9,250,000. The application of the insurance proceeds to the outstanding
first mortgage payable or repair of the Sherman Oaks property will be
decided by the Court as part of the Plan confirmation process.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Notes to Financial Statements - Continued
(Unaudited)
4. Transactions with Affiliates
Fees and other expenses incurred by the Partnership related to the
General Partner or its affiliates are as follows:
Three Months Ended Unpaid at
March 31, March 31,
1995 1994 1995
Interest on assignment note(a) $-- $ 22,000 $502,334
Asset management fee 37,048 38,134 2,502,125
Administration and management fee -- -- 260,050
General partner's salary 37,500 37,500 937,500
Real Estate Advisory fee -- -- 518,750
Reimbursement (at cost) for
out of pocket expenses 9,338 6,545 46,856
Reorganization item:
Professional fees 4,370 -- 4,370
$ 88,256 $104,179 $4,771,985
(a) Postpetition interest is recorded to the extent it is paid.
Contractual interest on assignment note was $22,000 for the three
months ended March 31, 1995.
5. Litigation
[Theodore D. Cohen, et al v. California Seven Associates, et al., No.
657925 (Orange County, CA, May 16, 1991)] Plaintiffs in suit brought
against the Partnership and its General Partner are members of the class
participating in a federal court action in Chicago [In re VMS Securities
Litigation, No. 90 c 2412, N.D. Ill.] which has concluded in a settlement,
of which plaintiffs have been notified. Defendant has filed a Motion for
Summary Judgment. The likelihood of an unfavorable outcome or the extent
of any possible liability cannot be assessed at this time.
6. Going Concern
The Partnership plans to pursue confirmation of the Plan of
Reorganization, which contemplates repairing the Sherman Oaks property.
The outcome of this effort is unknown at this time. The financial
statements do not include any adjustments that might result from the
outcome of these uncertainties. Although every effort is being made to
preserve the Partnership as a going concern, the possibility remains that
the Partnership will cease its operations causing the complete loss of the
ownership interest held by the partners.
If the Partnership's effort to reorganize is unsuccessful, the
Partnership will likely lose the properties and improvements through
foreclosure with no cash available to partners. As a result of a
foreclosure, the Partnership would record extraordinary income on relief of
indebtedness.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
On September 16, 1994, the Partnership filed a voluntary petition for
reorganization under Chapter 11 of the Federal bankruptcy laws in the
United States Bankruptcy Court for the District of California. Pursuant to
Section 1108 of the Bankruptcy Code, the Partnership is managing and
operating its business as a debtor in possession and will continue to do so
pursuant to Sections 1107 and 1108 of the Bankruptcy Code unless otherwise
ordered by the Court.
Of February 3, 1995, the insurance company carrying the first
$10,000,000 layer of earthquake insurance coverage, offered to settle a
portion of the loss resulting from the earthquake. The appropriate
documents were executed in the second quarter of 1995 and on April 26,
1995, the Partnership received a partial insurance settlement of
$9,250,000. The application of the insurance proceeds to the outstanding
first mortgage payable or repair of the Sherman Oaks property will be
decided by the Court as part of the Plan confirmation process.
On March 9, 1995, the Partnership submitted a report, prepared as of
January 11, 1995, representing the Partnership's business interruption
claim, in the amount of $4,913,748 (prior to netting out the $750,000
advance the Partnership has already received for business interruption).
On or about January 30, 1995, the first mortgage lender filed a Motion
for Relief from the Automatic Stay. The Partnership filed an Opposition to
the Motion. A hearing was held on February 21, 1995. After hearing
arguments by counsel, the court set a date for a final evidentiary hearing
on the Motion for Relief from Stay for April 18, 1995.
On April 18, 1995, the Court held a final evidentiary hearing on the
Motion for Relief from the Automatic Stay. After hearing arguments and
representations of counsel, the Court continued the hearing until July 12,
1995.
On March 17, 1995, the Partnership filed its proposed Plan of
Reorganization under Chapter 11 of the Bankruptcy Code dated March 16,
1995, together with a Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code. On March 17, 1995, the Court set the hearing on the
Partnership's Disclosure Statement for April 18, 1995. The Partnership's
period for soliciting acceptances to the plan expires on June 7, 1995,
unless otherwise extended by the Court.
On April 17, 1995, the Partnership filed with the Bankruptcy Court
certain Non-material Amendments to the Disclosure Statement. On April 18,
1995, the Bankruptcy Court held a hearing and acted upon the approval of
the Partnership's Disclosure Statement together with the Non-material
Amendments. After considering the Disclosure Statement and the Non-
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
material Amendments thereto, the Court ruled that certain additional
information should be included in the Partnership's Disclosure Statement.
The Court required the Partnership to file an Amended Disclosure Statement
which the Court, after considering objections, would act upon without
further hearing.
The Partnership subsequently filed its Amended Disclosure Statement and
Amended Plan of Reorganization on May 4, 1995. Also, in accordance with
the Court's ruling at the hearing on April 18, 1995, the Court set a
confirmation hearing on the Partnership's Amended Plan for July 12, 1995.
The Partnership plans to pursue confirmation of the Plan of
Reorganization. The outcome of this effort is unknown at this time.
Although every effort is being made to preserve the Partnership as a going
concern, the possibility remains that the Partnership will cease its
operations causing the complete loss of the ownership interests held by the
partners.
If the Partnership's effort to reorganize is unsuccessful, the
Partnership will likely lose the Project through foreclosure with no cash
available to Partners. A foreclosure would result in an income allocation
to the Partners; although, if a limited partner's ownership interest in the
Partnership is the partner's only passive activity and the limited partner
has been suspending passive loss allocations as required by the Tax Reform
Act of 1986, the suspended losses available are estimated to be more than
the potential foreclosure income allocation, resulting in an available net
loss. In a year in which the Project is disposed of and the Partnership
dissolved, any cumulative suspended loss will be available for use by a
limited partner to offset ordinary income.
Results of Operations
During 1994, the apartment submarkets in which the Partnership's
properties operate remained stable in terms of occupancy percentages and
new construction. Absorption of existing units continued and rental rates
began to increase slightly. Contributing to the Partnership's improved net
property revenue results (property level revenues less property level
operating expenses) for 1994, as compared with 1993, was a decrease in
OAKWOOD related costs due to the conversion of Mission Bay East from
OAKWOOD operations to conventional apartments effective January 1, 1994.
Net property revenues for the three months ended March 31, 1995, decreased
approximately 3% as compared with the fourth quarter of 1994, adjusted for
Sherman Oaks activity and other incomparable activity. Property revenues
remained flat in 1995 while property level expenses increased slightly in
total.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
The Sherman Oaks property was severely damaged by the Southern
California earthquake on January 17, 1994. The property was evacuated and
city inspectors classified the property as unsafe for use. The property is
not operating and is unoccupied. As a result, the property generated no
revenue in 1995, and only a nominal amount in 1994, and has incurred only
necessary operating expenses and expenses related to the earthquake since.
Sherman Oaks' results for the three months ended March 31, 1995, as
compared with the same period in 1994, were affected as follows: Rental
income decreased approximately $99,000, other income decreased
approximately $7,000, property operating expenses decreased approximately
$72,000, real estate taxes decreased approximately $37,000, management fees
decreased approximately $12,000 and property administrative expenses
decreased approximately $82,000. The following analytical comments have
been limited to the Partnership's five operating properties.
At Mission Bay East, average occupancy increased approximately 4% for
the three months ended March 31, 1995, as compared with the same period in
1994. Less corporate business in the first quarter of 1995, however,
decreased rental income slightly as corporate rates are higher than
conventional rates. Rental income at Arbor Park decreased nominally as a
slight increase in rates in 1994 partially offset the decrease in average
occupancy for 1995. These decreases were offset by increased rental income
at Amberway resulting from increased average occupancy.
Other income decreased for the three months ended March 31, 1995, as
compared with the same period in 1994, due primarily to decreased
laundry revenue and cleaning fees earned at Arbor Park.
Overall, property operating expenses increased for the three months
ended March 31, 1995, as compared to the same period of the previous year.
Insurance expense increased approximately $83,000 for the five properties
in total. In addition, Amberway and Arbor Park had increased non-routine
maintenance for carpet and vinyl replacements. Partially offsetting these
increases were decreased non-routine maintenance for carpet and vinyl
replacements at Mission Bay East and decreased furniture rental expense at
West Los Angeles.
Property taxes decreased for the three months ended March 31, 1995, as
compared with the same period in 1994, due to decreased assessed values for
fiscal year 1995 (July 1, 1994 to June 30, 1995) at all properties.
The increase in property administrative expense for the three months
ended March 31, 1995, as compared with the same period in 1994, was the
result of increased direct and indirect payroll related costs at West Los
Angeles, Mission Bay East and Arbor Park. In addition, advertising costs
increased for the three months at West Los Angeles and Arbor Park.
The decrease in partnership administrative expense for the three months
ended March 31, 1995, as compared with the same period in 1994, was due
primarily to a decrease in legal fees incurred.
The increase in interest income for the three months ended March 31,
1995, as compared with the same period in 1994, was due to the increase in
interest rates.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Occupancy
The following is a listing of approximate physical occupancy levels by
quarter for the Partnership's investment properties:
1994 1995
At 3/31 At 6/30 At 9/30 At 12/31 At 3/31
The Anaheim Property 83% 81% 89% 95% 92%
The Huntington Beach Property 95% 98% 99% 94% 94%
The West Los Angeles Property 87% 92% 87% 83% 91%
The San Diego Property 84% 93% 95% 92% 95%
The Sherman Oaks Property (a) N/A N/A N/A N/A N/A
The Upland Property 91% 90% 91% 95% 85%
(a) The property was severely damaged by the January 17, 1994 Southern
California earthquake. The property was evacuated and considered
unsafe for use. Therefore, occupancy is not applicable for 1994 and
1995.
Part II - Other Information
Item 1. Legal Proceedings
The information included in the "Notes to Financial Statements, Note 5.
Litigation" on page 6 of the Partnership's March 31, 1995 Financial
Statements, is incorporated by reference.
The information included in the "Notes to Financial Statements, Note 2.
Petition for Relief Under Chapter 11" on page 7 of the Partnership's March
31, 1995 Financial Statements, is incorporated by reference.
Item 2. Changes in the Rights of the Partnership Security Holders
(b) On September 16, 1994, the Partnership filed a petition for relief
under Chapter 11 of the Federal bankruptcy laws. The voluntary
reorganization action may provide for a reorganization of the debt and
equity structure of the Partnership business which may change the rights
and form of the equity interests of the Partnership.
Item 3. Defaults by the Partnership on its Senior Securities
On September 16, 1994, the Partnership filed a petition for relief under
Chapter 11 of the Federal bankruptcy laws. On the filing date, the
Partnership was in default on its second mortgage loan obligation.
Although the second mortgage holder had acknowledged the default, the
Partnership did not receive a notice of acceleration. Due to the Chapter
11 proceedings, claims secured against the Partnership assets are stayed.
The balance of the second mortgage note at March 31, 1995 was $14,000,000
plus $1,699,892 of accrued and unpaid interest.
California Seven Associates Limited Partnership,
a California Limited Partnership
(Debtor in Possession)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2.2 Amended Plan of Reorganization under Chapter 11 of the Bankruptcy
Code for California Seven Associates Limited Partnership, Debtor
and Debtor in Possession, Proposed by the Debtor, Dated April 25,
1995.
27 Financial Data Schedule
(b) No Form 8-Ks were filed during the three months ended March 31, 1995.
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.
California Seven Associates Limited Partnership,
a California Limited Partnership
By: CIGNA Realty Resources, Inc. - Seventh,
General Partner
Date: May 11, 1995 By: /s/ John D. Carey
John D. Carey, President and Controller
(Principal Executive Officer)
(Principal Accounting Officer)