SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[x] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from September 1, 1999 to March 31, 2000
Commission file number 0-14019
Ridgewood Hotels, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 58-1656330
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2859 Paces Ferry Road, Suite 700
Atlanta, Georgia 30339
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 434-3670
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
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(Title of Class)
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 _____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. X
Aggregate market value of voting stock held by non-affiliates on May 31,
2000 - $1,519,000; Common shares outstanding on May 31, 2000 - 2,513,480
shares
(1) Portions of the registrant's Annual Report to Shareholders for the
seven months ended March 31, 2000 (the "2000 Annual Report to
Shareholders") are incorporated by reference in Parts I and II of
this Report.
PART I
Item 1. Business
General
Ridgewood Hotels, Inc. (the "Company") is primarily
engaged in the hotel management business. The Company
currently manages eighteen mid to luxury hotels containing
3,229 rooms located in six states, including the Chateau Elan
Winery & Resort in Braselton, Georgia ("Chateau Elan Georgia").
The Company also has an ownership interest in one hotel and
owns undeveloped land which it holds for sale.
Fountainhead Transactions
Fountainhead Development Corp. ("Fountainhead") is
primarily engaged in the business of developing, owning and
operating luxury resort properties, including Chateau Elan
Georgia. In January 2000, the Company entered into a
management agreement with Fountainhead to perform management
services at Chateau Elan Georgia for five years. Chateau Elan
Georgia is a 306 room luxury resort located in Braselton,
Georgia which includes an inn, conference center and winery and
luxury amenities such as a spa and golf club. In consideration
for the management agreement, the Company issued to
Fountainhead 1,000,000 shares of its common stock. Pursuant to
the Fountainhead management agreement, the Company will receive
a base management fee equal to 2% of the gross revenues of the
properties being managed, plus an annual incentive management
fee to be determined each year based on the profitability of
the properties being managed during that year.
Also in January 2000, Fountainhead purchased 650,000
shares of common stock from N. Russell Walden (a principal
stockholder and then President of the Company). Fountainhead
also purchased 450,000 shares of the Company's convertible
preferred stock from ADT Security Services, Inc. After the
transactions, Fountainhead has beneficial ownership of
approximately 79% of the Company.
As a result of the Fountainhead transactions, the
Company's management team has changed significantly. The Board
of Directors was expanded from three directors to seven
directors, with the four vacancies filled by Fountainhead
designees. In addition, Mr. Walden resigned as President and
was replaced by Henk Evers, who previously served as the
President and Chief Executive Officer of Fountainhead and
general manager of Chateau Elan Georgia.
The Company's new management continues to seek new hotel
management opportunities, including possible opportunities to
manage other properties being developed by Fountainhead.
In addition to Chateau Elan Georgia, the Company manages the
Chateau Elan Sebring which is a Fountainhead property located
in Sebring, Florida. While the Company intends to seek
management opportunities with other Fountainhead properties,
Fountainhead has no obligation to enter into further management
relationships with the Company, and there can be no assurance
that the Company will manage any Fountainhead properties in the
future. The Company's new management also intends to seek to
acquire ownership interests in hotels to be managed by the
Company.
Management Agreements
In addition to the management agreement with Chateau Elan
Georgia, the Company presently manages seventeen other hotel
properties pursuant to management agreements that generally
provide the Company with a fee calculated as a percentage of
gross revenues of the hotel property and generally include an
incentive management fee based on a percentage of gross
revenues exceeding a negotiated amount. The contract terms
governing management fees vary depending on the size and
location of the hotel and other factors relative to such hotel
property. The hotel properties managed by the Company are
located in Georgia, Florida, Texas, Virginia, Indiana and
Kentucky, and are generally affiliated with nationally
recognized hospitality franchises including Holiday Inn,
Ramada, Sheraton and Hampton Inns. Under the terms of
franchise agreements on certain properties, the Company is
required to comply with standards established by the
franchisers, including property upgrades and renovations.
Under the terms of the management agreements, the owners of the
hotels are responsible for all operating expenses, including
property upgrades and renovations. The hotel properties
managed by the Company are primarily full service properties
which offer food and beverage services and meeting and banquet
facilities. The Company's current management agreements
generally have initial terms of one to five years. Currently
the Company has several agreements that may be terminated with
sixty days notice, including four properties owned by the same
third party which, if terminated, would result in a significant
reduction of management fees to the Company.
During the seven months ended March 31, 2000, the Company
entered into four new management agreements. During the same
period, three management agreements were terminated by property
owners.
Ownership Interests
During the period ending March 31, 2000, the Company had
ownership interests in two hotel properties, a Ramada hotel in
Longwood, Florida (the "Longwood Hotel") and a Holiday Inn
hotel in Louisville, Kentucky (the "Louisville Hotel"). In May
2000, the Company sold the Longwood Hotel for $5,350,000. The
Company received net proceeds from the sale of approximately
$1,300,000 and a $250,000 note payable in installments through
June 1, 2005. The Company also entered into a management
agreement in connection with the sale.
On September 30, 1999, the Company, which already owned a
10% interest in the Louisville Hotel, acquired an additional
interest in the Louisvlle Hotel for $2,500,000. As a result of
the transaction, the Company has an 80% economic interest in
the Louisville Hotel. The $2,500,000 consideration included
$124,000 in cash, the transfer of the Company's 10% ownership
interest in a hotel property in Houston, Texas and promissory
notes in the aggregate amount of $1,933,000 secured by the
Company's economic interest in the Louisville Hotel and other
property of the Company. The Company also entered into a new
management agreement with the Louisville Hotel pursuant to
which the Company manages the Louisville Hotel in return for a
management fee equal to 3% of gross revenues plus incentive
fees for above budget revenues.
Competition and Seasonality
The hotel business is highly competitive. The demand for
accommodations and the resulting cash flow vary seasonally.
Levels of demand are dependent upon many factors, including
general and local economic conditions and changes in the number
of leisure and business related travelers. Generally, the
hotels the Company manages are located in developed areas that
include other hotel properties that compete with the hotels
managed by the Company. The hotels managed by the Company
compete with other hotels on various bases including room
prices, quality, service, location and amenities. An increase
in the number of competitive hotel properties in a particular
area could have an adverse effect on the revenues of a Company
managed hotel in the same area which would reduce the fees paid
to the Company with respect to such property.
Undeveloped Land
The Company also owns six parcels of undeveloped land for
sale, two of which are located in Florida, and one each in
Georgia, Texas, Ohio and Arizona. The Company has no plans to
develop these properties. The Company intends to sell these
properties at such time as the Company is able to negotiate
sales on terms acceptable to the Company. During the seven
month period ending March 31, 2000, the Company sold three
parcels of undeveloped land for a gain of approximately
$335,000. In May 2000, the Company sold a parcel of
undeveloped land in Phoenix, Arizona for a gain of
approximately $12,000. There can be no assurance that the
Company will be able to sell its undeveloped land on terms
favorable to the Company. These undeveloped properties are
more fully described on pages 25 to 27 of the 2000 Annual
Report to Shareholders and on Schedule III, Real Estate and
Accumulated Depreciation included therein.
Principal Office/Employees
The Company was incorporated under the laws of the State
of Delaware on October 29, 1985. In January 1997, the Company
changed its name from Ridgewood Properties, Inc. to Ridgewood
Hotels, Inc. Prior to December 31, 1985, the Company operated
under the name CMEI, Inc.
The Company's principal office is located at 2859 Paces
Ferry Road, Suite 700, Atlanta, Georgia 30339 (telephone number
(770) 434-3670). The Company employed approximately 1,779
persons, of which 1,700 were located at the hotels owned by
third parties and managed by the Company, 60 were located at
the Company's owned hotel and 19 of which were located at its
principal office as of March 31, 2000. Payroll costs
associated with employees located at the third party hotels are
funded by the owners of such hotels. The Company considers its
relations with its employees to be good.
Item 2. Properties
The Company does not own any real property material to
conducting the administrative aspects of its business
operations. Its principal office in Atlanta, Georgia is leased
until June 2002 and consists of approximately 6,200 square
feet. As a result of its operations, the Company is the owner
of various other properties, including developed and
undeveloped real estate.
As of March 31, 2000, the Company had ownership interests
in two operating properties are as follows:
Name of Hotel Location # of Rooms Ownership Interest
Ramada Inn Longwood, FL 192 Wholly-Owned (a)
Holiday Inn Louisville, KY 267 (b)
(a) The hotel served as collateral for the Company's
$2,657,000 term loan with a commercial lender. The
hotel was sold in May 2000. The term loan was transferred
in conjunction with the sale and is no longer an
obligation of the Company. See Subsequent Events in the
Notes to Consolidated Financial Statements in the 2000
Annual Report.
(b) The Company has a 1% ownership interest in this hotel as a
member of RW Louisville Hotel Associates, LLC which owns the
hotel. The hotel serves as collateral for an $18,060,000
term loan with a commercial lender. Through its ownership
in Louisville Hotel, LLC, the Company has an 80% economic
interest in the hotel.
The Company also owns six undeveloped properties for sale,
two of which are located in Florida, one in Georgia and one each
in Texas, Ohio and Arizona. The Company does not expect to
develop these properties. For further information on such
properties, see Note 2 in the consolidated financial statements
in the 2000 Annual Report and see Schedule III, Real Estate and
Accumulated Depreciation, contained elsewhere herein.
Item 3. Legal Proceedings
On May 2, 1995 a complaint was filed in the Court of
Chancery of the State of Delaware (New Castle County) entitled
William N. Strassburger v. Michael M. Early, Luther A. Henderson,
John C. Stiska, N. Russell Walden, and Triton Group, Ltd.,
defendants, and Ridgewood Hotels, Inc., nominal defendant, C.A.
No. 14267 (the "Complaint"). The plaintiff is an individual
shareholder of the Company who purports to file the Complaint
individually, representatively on behalf of all similarly
situated shareholders, and derivatively on behalf of the Company.
The Complaint challenges the actions of the Company and its
directors in consummating the Company's August 1994 repurchases
of its common stock held by Triton Group, Ltd. and Hesperus
Partners Ltd. in five counts, denominated Waste of Corporate
Assets, Breach of Duty of Loyalty to Ridgewood, Breach of Duty of
Good Faith, Intentional Misconduct, and Breach of Duty of Loyalty
and Good Faith to Class. On July 5, 1995, the Company filed a
timely answer generally denying the material allegations of the
complaint and asserting several affirmative defenses. Discovery
has been concluded, and on March 19, 1998, the Court dismissed
all class claims, with only the derivative claims remaining for
trial. The case was tried to Vice Chancellor Jacobs during the
period February 1 through February 3, 1999.
On January 24, 2000, the Court rendered its Opinion. The
Court found in favor of the plaintiff and against three of the
four individual director-defendants (Messrs. Walden, Stiska and
Earley). The Court held that the repurchase transactions being
challenged were unlawful under Delaware law, for two primary
reasons: (1) the transactions were entered into for the improper
purpose of entrenching Mr. Walden in his then-current position of
President and Director, and thus constituted an unlawful
self-dealing transaction; and (2) the use of the Company's assets
to repurchase its common stock held by Triton Group, Ltd. and
Hesperus Partners Ltd. was not demonstrated to the Court's
satisfaction to be "entirely fair" to the minority shareholders
under the entire fairness doctrine as enunciated under Delaware
law. Having found that the challenged transactions were
unlawful, the Court determined that further proceedings would be
necessary to identify the precise form that the final decree in
this case should take. Although the Court's opinion contemplates
further proceedings, no further hearing date has yet been
scheduled to address the remaining remedy issues.
On May 15, 2000, the plaintiff filed a Memorandum in support
of Judgment after Trial requesting that the Court enter an order
rescinding the Company's issuance of preferred stock in
connection with repurchase transactions and requesting that the
Court enter a judgment for damages against Messrs. Stiska, Earley
and Walden. The Company expects that the defendants will file
written responses to plaintiff's memorandum, but no scheduling
order has been entered. The Company does not believe that the
ultimate outcome of the Complaint will result in material adverse
effects on its financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security
holders during the seven months ended March 31, 2000.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Information regarding the market for the Company's common
stock, the Company's dividend policy and the approximate number
of holders of the common stock at March 31, 2000, is included
under the caption "Market for Registrant's Common Equity and
Related Stockholder Matters" on page 1 of the 2000 Annual Report
to Shareholders and is incorporated herein by reference. Other
than the issuance of 1,000,000 shares of the Company's common
stock to Fountainhead in connection with the Fountainhead
Management Agreement, the Company made no sales of unregistered
equity securities of the Company in the seven months ended March
31, 2000. The shares issued to Fountainhead were issued in
reliance on the registration exemption provided for by Section
4(2) of the Securities Act as a transaction not involving a
public offering.
Item 6. Selected Financial Data
A summary of selected financial data for the Company for the
seven months ended March 31, 2000 and for the fiscal years 1995
through 1999 is included under the caption entitled "Selected
Financial Data" on page 4 of the 2000 Annual Report to
Shareholders and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Information regarding the Company's financial condition,
changes in financial condition and results of operations is
included under the caption entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on
pages 5 through 14 of the 2000 Annual Report to Shareholders and
is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk
The Company has no material exposure to the market risks
covered by this Item.
Item 8. Financial Statements
The Company's consolidated financial statements and notes
thereto, which are included on pages 15 through 46 of the 2000
Annual Report to Shareholders under the following captions listed
below, are incorporated herein by reference.
Consolidated Balance Sheets at March 31,
2000 and August 31, 1999 and 1998.
Consolidated Statements of Operations for the
seven months ended March 31, 2000 and 1999
(unaudited) and for the years ended August 31,
1999, 1998 and 1997.
Consolidated Statements of Shareholders'
Investment for the seven months ended March 31,
2000 and for the years ended August 31, 1999,
1998 and 1997.
Consolidated Statements of Cash Flows for the
seven months ended March 31, 2000 and 1999
(unaudited) and for the years ended August 31,
1999, 1998 and 1997.
Notes to Consolidated Financial Statements.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
(a) Previous Independent Accountants
(i) On March 28, 2000, Ridgewood Hotels, Inc. dismissed
PricewaterhouseCoopers LLP as its independent accountants.
(ii) The reports of PricewaterhouseCoopers LLP on the
financial statements for the past two fiscal years contained no
adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting
principle.
(iii) The members of the Registrant's Board of Directors
were consulted and approved the decision to change independent
accountants.
(iv) In connection with its audits for the two most
recent fiscal years and through March 28, 2000, there have been
no disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements,
if not resolved to the satisfaction of PricewaterhouseCoopers
LLP, would have caused them to make reference thereto in their
report on the financial statements for such years.
(v) During the two most recent fiscal years and through
March 28, 2000, there have been no reportable events (as defined
in Regulation S-K Item 304(a)(1)(v)) with PricewaterhouseCoopers
LLP.
(vi) The Registrant has requested that
PricewaterhouseCoopers LLP furnish it with a letter addressed to
the SEC stating whether or not it agrees with the above
statements. A copy of such letter, dated March 31, 2000, is
filed as an Exhibit 16 to the Form 8-K.
(b) New Independent Accountants
(i) The Registrant engaged Arthur Andersen LLP as its new
independent accountants as of March 28, 2000. During the two
most recent fiscal years and through March 28, 2000, the
Registrant has not consulted with Arthur Andersen LLP regarding
(1) the application of accounting principles to a specific
transaction, either completed or proposed, or the type of audit
opinion that might be rendered; or (2) the matter of a
disagreement or reportable event with the former auditor (as
described in Regulation S-K Item 304(a)(2)).
PART III
Item 10. Directors and Executive Officers of the Registrant
Information required by this item with respect to directors and
with respect to Item 405 of Regulation S-K is incorporated by
reference to the Company's 2000 Definitive Proxy Statement to be
filed with the Securities and Exchange Commission within 120 days
after March 31, 2000 (the "2000 Proxy Statement").
Item 11. Executive Compensation
Information regarding compensation of officers and directors of the
Company is set forth under the caption entitled "Executive Compensation"
in the Company's 2000 Proxy Statement and is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information regarding ownership of certain of the Company's
securities is set forth under the caption entitled "Beneficial Ownership
of the Company's Securities" in the Company's 2000 Proxy Statement and is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related transactions
with the Company is set forth under the caption entitled "Certain
Relationships and Related Transactions" in the Company's 2000 Proxy
Statement and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) The following financial statements, together with the
applicable reports of independent public accountants, are set forth on
pages 14 through 47 of the 2000 Annual Report to Shareholders and are
incorporated by reference at Item 8 herein:
Reports of Independent Public Accountants.
Consolidated Balance Sheets at March 31,
2000 and August 31, 1999 and 1998.
Consolidated Statements of Operations
for the seven months ended March 31,
2000 and 1999 (unaudited) and for the years
ended August 31, 1999, 1998 and 1997.
Consolidated Statements of Shareholders'
Investment for the seven months ended
March 31, 2000 and for the years ended
August 31, 1999, 1998 and 1997.
Consolidated Statements of Cash Flows for the
seven months ended March 31, 2000 and 1999
(unaudited) and for the years ended
August 31, 1999, 1998 and 1997.
Notes to Consolidated Financial Statements.
(a)(2) The following financial statement schedule, together with
the applicable report of independent public accountants, are filed as a
part of this Report:
Page Number(s)
in Form 10-K
Report of Independent Public Accountants
on Financial Statement Schedule S-1 thru S-2
III - Real Estate and Accumulated
Depreciation - March 31, 2000 S-3 thru S-4
All other schedules are omitted because they are not applicable or because
the required information is given in the financial statements or notes
thereto set forth on pages 14 through 45 of the 2000 Annual Report to
Shareholders incorporated herein by reference.
(a)(3) The exhibits filed herewith or incorporated by reference
herein are set forth on the Exhibit Index on pages
E-1 through E-9 hereof. Included in those exhibits
are the following Executive Compensation Plans and
Arrangements:
10(a) Employment Agreement between N. R. Walden and CMEI, Inc.,
dated March 28, 1985 (filed as an Exhibit to Registrant's
Registration Statement on Form 10 filed November 19, 1985
(Securities Exchange Act File No. 0-14019) and incorporated
herein by reference).
10(c) Ridgewood Properties, Inc. Supplemental Retirement and
Death Benefit Plan dated January 1, 1987 (filed as an
Exhibit to Registrant's Form 10-K for the fiscal year ended
August 31, 1988 and incorporated herein by reference).
10(d) Post-Employment Consulting Agreement between N. R. Walden
and Ridgewood Properties, Inc. dated September 4, 1991
(filed as an Exhibit to Registrant's Form 10-K for the
fiscal year ended August 31, 1991 and incorporated herein
by reference).
10(e) Post-Employment Consulting Agreement between Karen S.
Hughes and Ridgewood Properties, Inc. dated September 4,
1991 (filed as an Exhibit to Registrant's Form 10-K for the
fiscal year ended August 31, 1991 and incorporated herein
by reference).
10(f) Post-Employment Consulting Agreement between Byron T.
Cooper and Ridgewood Properties, Inc. dated September 4,
1991 (filed as an Exhibit to Registrant's Form 10-K for the
fiscal year ended August 31, 1991 and incorporated herein
by reference).
10(g) Post-Employment Consulting Agreement between M. M.
McCullough and Ridgewood Properties, Inc. dated
September 4, 1991 (filed as an Exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1991 and
incorporated herein by reference).
10(h) Ridgewood Properties, Inc. Stock Option Plan dated March
30, 1993 and as amended September 14, 1993 (filed as an
Exhibit to Registrant's Form 10-Q for the quarter ended
February 28, 1994, and incorporated herein by reference).
10(i) Stock Option Agreement between Byron T. Cooper and
Ridgewood Properties, Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed as an Exhibit to
Registrant's Form 10-Q for the quarter ended February 28,
1994, and incorporated herein by reference).
10(j) Stock Option Agreement between Luther A. Henderson and
Ridgewood Properties, Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed as an Exhibit to
Registrant's Form 10-Q for the quarter ended February 28,
1994, and incorporated herein by reference).
10(k) Stock Option Agreement between Karen S. Hughes and
Ridgewood Properties, Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed as an Exhibit to
Registrant's Form 10-Q for the quarter ended February 28,
1994, and incorporated herein by reference).
10(l) Stock Option Agreement between M. M. McCullough and
Ridgewood Properties, Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed as an Exhibit to
Registrant's Form 10-Q for the quarter ended February 28,
1994, and incorporated herein by reference).
10(m) Stock Option Agreement between N. R. Walden and Ridgewood
Properties, Inc. dated April 1, 1993 and as approved on
January 12, 1994 (filed as an Exhibit to Registrant's Form
10-Q for the quarter ended February 28, 1994, and
incorporated herein by reference).
10(n) Stock Option Agreement between Gregory T. Weigle and
Ridgewood Properties, Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed as an Exhibit to
Registrant's Form 10-Q for the quarter ended February 28,
1994, and incorporated herein by reference).
10(o) Stock Option Agreement between Karen S. Hughes and
Ridgewood Properties, Inc. dated January 31, 1994 (filed as
an Exhibit to Registrant's Form 10-Q for the quarter ended
February 28, 1994, and incorporated herein by reference).
10(p) Stock Option Agreement between N. R. Walden and Ridgewood
Properties, Inc. dated January 31, 1994 (filed as an
Exhibit to Registrant's Form 10-Q for the quarter ended
February 28, 1994, and incorporated herein by reference).
10(q) Ridgewood Properties, Inc. 1993 Stock Option Plan, as
amended on October 26, 1994 (filed as an Exhibit to
Registrant's Registration Statement on Form S-8 filed
November 8, 1994 (No. 33-86084) and incorporated herein
by reference).
10(ff) Amendment No. 1 to Post-Employment Consulting Agreement
between Ridgewood Hotels, Inc. and N. Russell Walden dated
August 13, 1998 (filed as an Exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1998 and
incorporated herein by reference).
10(gg) Amendment No. 1 to Post-Employment Consulting Agreement
between Ridgewood Hotels, Inc. and Byron T. Cooper dated
August 18, 1998 (filed as an Exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1998 and
incorporated herein by reference).
10(hh) Amendment No. 1 to Post-Employment Consulting Agreement
between Ridgewood Hotels, Inc. and Karen S. Hughes dated
August 13, 1998 (filed as an Exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1998 and
incorporated herein by reference).
(b) One report on Form 8-K was filed during the last month
of the Company's transition period ended March 31, 2000. A Form
8-K was filed on March 28, 2000 to report the following: (i) a
change in the Company's Independent Public Accountants; and (ii) a
change in the fiscal year of the Company.
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.
RIDGEWOOD HOTELS, INC.
By: /s/ Henk H. Evers
Henk H. Evers,
President, Chief
Operating Officer
Dated: June 29, 2000
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the date indicated:
/s/ Henk H. Evers /s/ Donald E. Panoz
Henk H. Evers, President, Donald E. Panoz, Director
Chief Operating Officer and
Director
/s/ Michael M. Earley /s/ Nancy C. Panoz
Michael M. Earley, Director Nancy C. Panoz, Director
/s/ L. A.Henderson /s/ N. R. Walden
Luther A. Henderson, Director N. Russell Walden, Director
/s/ Sheldon E. Misher /s/ Gregory T. Weigle
Sheldon E. Misher, Director Gregory T. Weigle
Director of Finance and
Accounting
Dated: June 29, 2000
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To Ridgewood Hotels, Inc.:
We have audited in accordance with auditing standards generally
accepted in the United States the consolidated financial
statements as of March 31, 2000 and for the seven months then
ended included in RIDGEWOOD HOTELS, INC.'s annual report to
shareholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated May 26, 2000 except for the matter
discussed in Note 10, as to which the date is May 31, 2000. Our
audit was made for the purpose of forming an opinion on those
statements taken as a whole. The financial statement schedule
listed in Item 14(a) of this Form 10-K is the responsibility of
the Company's management, is presented for the purpose of
complying with the Securities and Exchange Commission's rules and
is not part of the basic financial statements. This schedule has
been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states
in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken
as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
May 26, 2000
Report of Independent Accountants on
Financial Statement Schedule
November 17, 1999
To the Board of Directors
of Ridgewood Hotels, Inc.
Our audits of the consolidated financial statements referred to in
our report dated November 17, 1999 appearing in the 1999 Annual
Report to Shareholders of Ridgewood Hotels, Inc. (which report and
consolidated financial statements are incorporated by reference in
this Annual Report on Form 10-K) also included an audit of the
Financial Statement Schedule listed in Item 14(a) of this Form
10-K. In our opinion, this Financial Statement Schedule presents
fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated
financial statements.
PRICEWATERHOUSECOOPERS LLP
Atlanta, Georgia
RIDGEWOOD HOTELS, INC. AND SUBSIDIARIES SCHEDULE III
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SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
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MARCH 31, 2000
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(000'S Omitted)
Cost Capitalized Gross Amount at Which
Initial Cost Subsequent to Carried at March 31, 2000
to Company Acquisition (A)(B)(D)
------------------ ---------------------- -------------------------------
Building Building Accumu-
and Carry- and lated Date of
Encum- Improve- Improve- ing Improve- Deprecia- Construc- Date
Description brances Land ments ments Costs Land ments Total tion (C) tion Acquired
- ----------- -------- ---- -------- -------- ------ ---- -------- ----- -------- -------- --------
LAND
- ----
Georgia $ -- $ 58 $ -- $ -- $ -- $ 35 $ -- $ 35 $ -- -- 12/75
Texas -- 5,338 -- 2 -- 3,582 2 3,584 -- -- 12/85
Florida -- 516 -- 10 -- 225 10 235 -- -- 3/85
Florida -- -- -- -- -- -- -- -- -- -- 7/88
Arizona -- 978 -- 110 -- 978 110 1,088 -- -- 3/85
Ohio -- 1,006 -- 180 -- 104 79 183 -- -- 12/77
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Non-
operating
properties -- 7,896 -- 302 -- 4,924 201 5,125 --
--------- --------- --------- --------- --------- --------- --------- -------- ---------
HOTEL
- --------------
Florida 2,742 439 1,921 1,183 -- 439 2,522 2,961 1,855 1973 9/74
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total
operating
properties 2,742 439 1,921 1,183 -- 439 2,522 2,961 1,855
-------- -------- -------- -------- -------- -------- -------- -------- --------
GRAND TOTAL $ 2,742 $ 8,335 $ 1,921 $ 1,485 $ -- $ 5,363 $ 2,723 $ 8,086 $ 1,855
======== ======== ========= ========= ========= ========= ========= ========= ========
Schedule III
Page 2 of 2
(A) Except as discussed in Note 1 to the "Notes to Consolidated
Financial Statements," real estate owned is carried at the lower
of cost or fair value less costs to sell. At March 31, 2000,
the amount of the allowance for possible losses was approximately
$3,319,000, which related to land held for sale.
(B) Reconciliation of real estate properties (000's omitted):
For the Seven
Months Ended For the Year Ended
3/31/00 8/31/99 8/31/98 8/31/97
------- ------- ------- -------
Balance, beginning of period $8,300 $ 8,735 $ 9,553 $12,612
Additions during the period:
Acquisitions -- -- -- --
Capitalized costs 13 65 88 78
Deductions during the period:
Real estate sold or assets
retired (on which financing
was provided by the Company
in certain cases) 227 500 906 3,137
------ ------- ------- -------
Balance, end of period $8,086 $ 8,300 $ 8,735 $ 9,553
====== ======= ======= =======
(C) Operating properties and any related improvements are being
depreciated by the "straight line" method over the estimated
useful lives of such assets, which are generally 30 years for
buildings and 5 years for furniture and fixtures.
Reconciliation of accumulated depreciation (000's omitted):
For the Seven
Months Ended For the Year Ended
3/31/00 8/31/99 8/31/98 8/31/97
------- ------- ------- -------
Balance, beginning of period $1,781 $1,679 $1,567 $1,460
Additions during the period 74 130 139 128
Depreciation associated with
assets sold or retired -- (28) (27) (21)
------ ------ ------ ------
Balance, end of period $1,855 $1,781 $1,679 $1,567
====== ====== ====== ======
(D) The aggregate cost for federal income tax purposes is approxi-
mately $8,261,000 at March 31, 2000.
EXHIBIT INDEX
Report on Form 10-K for the fiscal year ended March 31, 2000
Page Number
Exhibit in Manually
Number Description Signed Original
3(a) Certificate of Incorporation of
Registrant.*
3(b) By-Laws of Registrant.*
3(c) Certificate of Amendment to the
Certificate of Incorporation (filed
as an Exhibit to Registrant's Form
10-K for the fiscal year ended August
31, 1987 and incorporated herein by
reference).
3(d) Certificate of Amendment to the
Certificate of Incorporation of the
Registrant (filed as an Exhibit to
Registrant's Form 10-K for the
fiscal year ended August 31, 1989 and
incorporated herein by reference).
3(e) Certificate of Amendment of the
Certificate of Incorporation of
Ridgewood Properties, Inc. dated May
23, 1991 (filed as an Exhibit
to Registrant's Form 10-K for the
fiscal year ended August 31, 1991 and
incorporated herein by reference).
3(f) Certificate of Amendment of the
Certificate of Incorporation of
Ridgewood Properties, Inc.
dated March 30, 1993 (filed as
Exhibit 3 to Registrant's Form 10-Q
for the fiscal quarter ended February
28, 1993 and incorporated herein by
3(g) Certificate of Amendment of the
Certificate of Incorporation of
Ridgewood Properties, Inc. dated
January 26, 1994 (filed as Exhibit 3
to Registrant's Form 10-Q for the
fiscal quarter ended February 28,
1994 and incorporated herein by
reference).
3(h) Certificate of Amendment to
Certificate of Incorporation by
Ridgewood Hotels, Inc. (filed as an
Exhibit to Registrant's Form 8-K on
February 5, 1997, and incorporated
herein by reference).
4(a) Stock Purchase Agreement between
Ridgewood Properties, Inc. and Triton
Group Ltd., dated as of August 15,
1994 (filed as an Exhibit to
Registrant's Form 8-K on August 15,
1994, and incorporated herein by
reference).
4(b) August 15, 1994 Press Release issued
by Ridgewood Properties, Inc. (filed
as an Exhibit to Registrant's Form
8-K on August 15, 1994, and
incorporated herein by reference).
4(c) Certificate of Designation,
Preferences and Rights of Series A
Convertible Preferred Stock of the
Registrant (filed as an Exhibit to
Registrant's Registration Statement
on Form S-8 filed on November 8, 1994
(No. 33-866084) and incorporated
herein by reference).
4(d) Notice of Exercise by N. Rusell
Walden dated January 31, 1997 (filed
as an Exhibit to Registrant's Form
8-K on February 5, 1997, and
incorporated herein by reference).
4(e) Notice of Exercise by Karen S. Hughes
dated January 31, 1997 (filed as an
Exhibit to Registrant's Form 8-K on
February 5, 1997, and incorporated
herein by reference).
4(f) Share Security Agreement between N.
Russell Walden and Ridgewood
Properties, Inc. dated January 31,
1997 (filed as an Exhibit to
Registrant's Form 8-K on February 5,
1997, and incorporated herein by
reference).
4(g) Share Security Agreement between
Karen S. Hughes and Ridgewood
Properties, Inc. dated January 31,
1997 (filed as an Exhibit to
Registrant's Form 8-K on February 5,
1997, and incorporated herein by
reference).
10(a) Employment Agreement between N. R.
Walden and CMEI, Inc., dated March
28, 1985.*
10(b) Bill of Sale and Assumption of
Liabilities between CMEI, Inc. and
Ridgewood Properties, Inc. dated
December 9, 1985.*
10(c) Ridgewood Properties, Inc.
Supplemental Retirement and Death
Benefit Plan dated January 1, 1987
(filed as an Exhibit to Registrant's
Form 10-K for the fiscal year ended
August 31, 1988 and incorporated
herein by reference).
10(d) Post-Employment Consulting Agreement
between N. R. Walden and Ridgewood
Properties, Inc. dated September 4,
1991 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1991 and
incorporated herein by reference).
10(e) Post-Employment Consulting Agreement
between Karen S. Hughes and Ridgewood
Properties, Inc. dated September 4,
1991 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1991 and
incorporated herein by reference).
10(f) Post-Employment Consulting Agreement
between Byron T. Cooper and Ridgewood
Properties, Inc. dated September 4,
1991 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1991 and
incorporated herein by reference).
10(g) Post-Employment Consulting Agreement
between M. M. McCullough and
Ridgewood Properties, Inc. dated
September 4, 1991 (filed as an
Exhibit to Registrant's Form 10-K for
the fiscal year ended August 31, 1991
and incorporated herein by
reference).
10(h) Ridgewood Properties, Inc. Stock
Option Plan dated March 30, 1993 and
as amended September 14, 1993 (filed
as an Exhibit to Registrant's Form
10-Q for the quarter ended February
28, 1994, and incorporated herein by
reference).
10(i) Stock Option Agreement between Byron
T. Cooper and Ridgewood Properties,
Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed
as an Exhibit to Registrant's Form
10-Q for the quarter ended February
28, 1994, and incorporated herein by
reference).
10(j) Stock Option Agreement between Luther
A. Henderson and Ridgewood
Properties, Inc. dated April 1, 1993
and as approved on January 12, 1994
(filed as an Exhibit to Registrant's
Form 10-Q for the quarter ended
February 28, 1994, and incorporated
herein by reference).
10(k) Stock Option Agreement between Karen
S. Hughes and Ridgewood Properties,
Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed
as an Exhibit to Registrant's Form
10-Q for the quarter ended February
28, 1994, and incorporated herein by
reference).
10(l) Stock Option Agreement between M. M.
McCullough and Ridgewood Properties,
Inc. dated April 1, 1993 and as
approved on January 12, 1994 (filed
as an Exhibit to Registrant's Form
10-Q for the quarter ended February
28, 1994, and incorporated herein by
reference).
10(m) Stock Option Agreement between N. R.
Walden and Ridgewood Properties, Inc.
dated April 1, 1993 and as approved
on January 12, 1994 (filed as an
Exhibit to Registrant's Form 10-Q for
the quarter ended February 28, 1994,
and incorporated herein by
reference).
10(n) Stock Option Agreement between
Gregory T. Weigle and Ridgewood
Properties, Inc. dated April 1, 1993
and as approved on January 12, 1994
(filed as an Exhibit to Registrant's
Form 10-Q for the quarter ended
February 28, 1994, and incorporated
herein by reference).
10(o) Stock Option Agreement between Karen
S. Hughes and Ridgewood Properties,
Inc. dated January 31, 1994 (filed as
an Exhibit to Registrant's Form 10-Q
for the quarter ended February 28,
1994, and incorporated herein by
reference).
10(p) Stock Option Agreement between N. R.
Walden and Ridgewood Properties, Inc.
dated January 31, 1994 (filed as an
Exhibit to Registrant's Form 10-Q for
the quarter ended February 28, 1994,
and incorporated herein by
reference).
10(q) Ridgewood Properties, Inc. 1993 Stock
Option Plan, as amended on October
26, 1994 (filed as an Exhibit to
Registrant's Registration Statement
on Form S-8 filed on November 8, 1994
(No. 33-86084) and incorporated
herein by reference).
10(r) Amended and Restated Basic Agreement
between RW Hotel Investment Partners,
L.P. and Ridgewood Hotels, Inc. dated
August 14, 1995 (filed as an Exhibit
to Registrant's Form 10-K for the
fiscal year ended August 31, 1995,
and incorporated herein by
reference).
10(s) Amended and Restated Limited
Partnership Agreement of RW Hotel
Partners, L.P. dated September 8,
1995 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1995, and
incorporated herein by reference).
10(t) Management Agreement (Holiday Inn
Hurstbourne) between RW Hotel
Partners, L.P. and Ridgewood
Properties, Inc. dated August 16,
1995 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1995, and
incorporated herein by reference).
10(u) Mortgage, Assignment of Leases and
Rents and Security Agreement Between
Bloomfield Acceptance Company, L.L.C.
and Ridgewood Orlando, Inc. dated
June 30, 1995 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1995, and
incorporated herein by reference).
10(v) Security Agreement between Ridgewood
Orlando, Inc. and Bloomfield
Acceptance Company, L.L.C. dated June
30, 1995 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1995, and
incorporated herein by reference).
10(w) Mortgage Note between Bloomfield
Acceptance Company and Ridgewood
Orlando, Inc. dated June 30, 1995
(filed as an Exhibit to Registrant's
Form 10-K for the fiscal year ended
August 31, 1995, and incorporated
herein by reference).
10(x) Agreement and Plan of Merger between
and among Ridgewood Properties, Inc.,
Ridgewood Acquisition Corp., Wesley
Hotel Group, Inc., Wayne McAteer and
Samuel King dated December 7, 1995
(filed as an Exhibit to Registrant's
Form 10-Q for the quarter ended
November 30, 1995, and incorporated
herein by reference).
10(y) Shareholders' Agreement by and between
Samuel King and Ridgewood Properties,
Inc. dated December 1995 (filed as an
Exhibit to Registrant's Form 10-K for
the fiscal year ended August 31, 1996,
and incorporated herein by reference).
10(z) Warrants to Purchase Shares of Common
Stock of Ridgewood Properties, Inc.
issued to Hugh Jones on December 16,
1996 (filed as an Exhibit to
Registrant's Form 10-Q for the quarter
ended November 30, 1996, and
incorporated herein by reference).
10(aa) Promissory Note between N. Russell
Walden and Ridgewood Properties, Inc.
dated January 31, 1997 (filed as an
Exhibit to Registrant's Form 8-K on
February 5, 1997 and incorporated
herein by reference).
10(bb) Promissory Note between Karen S.
Hughes and Ridgewood Properties, Inc.
dated January 31, 1997 (filed as an
Exhibit to Registrant's Form 8-K on
February 5, 1997 and incorporated
herein by reference).
10(cc) Operating Agreement between Houston
Hotel, LLC and Ridgewood Hotels, Inc.
effective December 9, 1997 (filed as
an Exhibit to Registrant's Form 10-Q
for the quarter ended May 31, 1998).
10(dd) Operating Agreement between RW
Hurstbourne Hotel, Inc. and RW
Louisville Hotel Investors, LLC
effective May 13, 1998 (filed as an
Exhibit to Registrant's Form 10-Q for
the quarter ended May 31, 1998).
10(ee) Operating Agreement between Ridgewood
Hotels, Inc. and Louisville Hotel,
L.P. effective June 5, 1998 (filed as
an Exhibit to Registrant's Form 10-Q
for the quarter ended May 31, 1998).
10(ff) Amendment No. 1 to Post-Employment
Consulting Agreement between Ridgewood
Hotels, Inc. and N. Russell Walden
dated August 13, 1998 (filed as an
Exhibit to Registrant's Form 10-K for
the fiscal year ended August 31, 1998
and incorporated herein by reference).
10(gg) Amendment No. 1 to Post-Employment
Consulting Agreement between Ridgewood
Hotels, Inc. and Byron T. Cooper dated
August 18, 1998 (filed as an Exhibit
to Registrant's Form 10-K for the
fiscal year ended August 31, 1998 and
incorporated herein by reference).
10(hh) Amendment No. 1 to Post-Employment
Consulting Agreement between Ridgewood
Hotels, Inc. and Karen S. Hughes dated
August 13, 1998 (filed as an Exhibit
to Registrant's Form 10-K for the
fiscal year ended August 31, 1998 and
incorporated herein by reference).
10(ii) First Amendment to Operating Agreement
of Louisville, LLC dated September 30,
1999 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal
year ended August 31, 1999 and
incorporated herein by reference).
10(jj) Secured Promissory Note in the amount
of $1,333,000 by Ridgewood Hotels,
Inc. to Louisville Hotel, L.P. dated
September 30, 1999 (filed as an
Exhibit to Registrant's Form 10-K for
the fiscal year ended August 31, 1999
and incorporated herein by reference).
10(kk) Secured Promissory Note (Arizona) in
the amount of $300,000 by Ridgewood
Hotels, Inc. to Louisville Hotel, L.P.
dated September 30, 1999 (filed as an
Exhibit to Registrant's Form 10-K for
the fiscal year ended August 31, 1999
and incorporated herein by reference).
10(ll) Secured Promissory Note (Florida) in
the amount of $300,000 by Ridgewood
Hotels, Inc. to Louisville Hotel, L.P.
dated September 30, 1999 (filed as an
Exhibit to Registrant's Form 10-K for
the fiscal year ended August 31, 1999
and incorporated herein by reference).
10(mm) Management Agreement between
Fountainhead Development Corp., Inc.,
as Owner, and Ridgewood Hotels, Inc.,
as Manager, dated January 10, 2000
(filed as an Exhibit to Registrant's
Form 8K on January 11, 2000 and
incorporated herein by reference).
10(nn) Agreement between Fountainhead
Development Corp., Inc. and Ridgewood
Hotels, Inc. dated January 10, 2000
(filed as an Exhibit to Registrant's
Form 8K on January 11, 2000 and
incorporated herein by reference).
10(oo) Opinion of the Court of Chancery of
the State of Delaware, New Castle
County, in Strassburger v. Early, et
al., C.A. 1427 (filed as an Exhibit to
Registrant's Form 8K on January 24,
2000 and incorporated herein by
reference).
10(pp) Motion of Triton Defendants for a New
Trial in Strassburger v. Early, et al.
(filed as an Exhibit to Registrant's
Form 8K on January 24, 2000 and
incorporated herein by reference).
10(qq) Motion for a New Trial of, In the
Alternative, to Reopen the Record to
Allow for the Introduction of Newly
Discovered Evidence in Strassburger v.
Early, et al. (filed as an Exhibit to
Registrant's Form 8K on January 24,
2000 and incorporated herein by
reference).
19(rr) Letter to the Securities and Exchange
Commission from PricewaterhouseCoopers
LLP (filed as an Exhibit to
Registrant's Form 8K on March 28,
2000).
13 2000 Annual Report to Shareholders.
22 Subsidiaries of Registrant.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of PricewaterhouseCoopers, LLP
27 Financial Data Schedule.
_______________
* Previously filed as an Exhibit to Registrant's
Registration Statement on Form 10 filed on November 19,
1985 (Securities Exchange Act File No. 0-14019), and
incorporated herein by reference.