UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: July 2, 1998
Mission Valley Comfort Suites Ltd., A California Limited Partnership
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(Exact Name of Registrant as specified in its charter)
California 33-11224-LA 33-0213497
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
1466 9th Avenue, San Diego, California 92101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (619) 699-6100
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Item 2. Acquisition or Disposition of Assets
(a) On July 2, 1998, the Registrant sold all of its investment property,
consisting of a 122-room motel on leased land and related furniture,
fixtures, and equipment, to Piyal, LLC for $5,000,000 in cash. The
buyer also assumed the Registrant's obligations under the land lease.
The sale was approved by limited partners holding a majority of the
Registrant's limited partnership interests pursuant to a Consent
Solicitation Statement dated June 18, 1998.
The Registrant received net proceeds from the sale of $4,647,699 as follows:
Sale price $ 5,000,000
Less payoff of first trust deed (190,392)
Less sales commission (150,000)
Less net pro rations and other closing costs (11,909)
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Net proceeds from the sale $ 4,647,699
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The Registrant had a gain from the sale of $2,804,199 for financial
reporting purposes as follows:
Sale price $ 5,000,000
Add elimination of deferred rent
liability associated with land
lease assumed by the buyer 1,439,082
Less net book value of assets sold (3,469,383)
Less sales commission and other
closing costs (165,500)
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Net gain from the sale for financial
reporting purposes $ 2,804,199
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Management plans to pay a liquidating distribution to the limited partners
of $4,446,371 ($753.62 per interest) and an operating distribution to all
partners of $115,301 ($17.59 per interest) in July 1998. The Registrant
will retain $300,000 of cash to cover its remaining liabilities and any
unexpected claims. Any amount not needed for this purpose will be
distributed to the partners when management determines that all liabilities
and potential claims have been paid or provided for at which time manage-
ment intends to cause the Registrant to be dissolved.
In connection with the sale, on July 2, 1998, the Registrant notified
Choice Hotels International (Choice) that it was electing to terminate
the franchise agreement between the Registrant and Choice. Under the
terms of the franchise agreement, the Registrant may be liable to Choice
for certain fees and other costs resulting from the sale of the motel
and the Registrant's election to terminate the franchise agreement. The
buyer is presently negotiating with Choice regarding a possible new
franchise agreement, and the buyer has agreed to indemnify the
Registrant for any and all claims made by Choice related to the sale
of the motel and the election to terminate the franchise agreement.
Item 7. Financial Statements and Exhibits
(b) Summarized pro forma balance sheet information (unaudited) for the
Registrant before and after the sale is as follows:
Before Effects of After
Sale Sale Sale
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Cash $280,622 $4,647,699 $4,928,321
Other current assets 50,263 (14,384) 35,879
Investment property, net 3,429,582 (3,429,582)
Franchise fees, net 25,417 (25,417)
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Total assets $3,785,884 $1,178,316 $4,964,200
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Current liabilities $77,237 $2,164 $79,401
Long-term debt 188,965 (188,965)
Deferred rent liability 1,439,082 (1,439,082)
Partners' capital 2,080,600 2,804,199 4,884,799
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Total liabilities and
partners' capital $3,785,884 $1,178,316 $4,964,200
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The above pro forma information does not include the effects of the
planned post-sale distributions to partners or the costs to administer
the affairs of the Registrant through the date of the final liquidation
and dissolution.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
(REGISTRANT) MISSION VALLEY COMFORT SUITES LTD.,
A California Limited Partnership
By: GHG Hospitality, Inc.
Corporate General Partner
By: (SIGNATURE) / s / Stephen D. Burchett
(NAME AND TITLE) Stephen D. Burchett, Vice President
(DATE) July 15, 1998
In accordance with 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 dates indicated.
By: (SIGNATURE) / s / Stephen D. Burchett
(NAME AND TITLE) Stephen D. Burchett, Vice President
GHG Hospitality, Inc.
Corporate General Partner
(DATE) July 15, 1998