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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 (Date of earliest event reported) September 26, 1996
WESTIN HOTELS LIMITED PARTNERSHIP
(Exact name of Registrant as specified in its charter)
Delaware 0-15097 91-1328985
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.
2001 Sixth Avenue
Seattle, Washington 98121
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (206)443-5000
N/A
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(Former name or former address, if changed since last report)
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WESTIN HOTELS LIMITED PARTNERSHIP
AND SUBSIDIARIES
REPORT ON FORM 8-K
ITEM 5. OTHER EVENTS.
On September 26, 1996, in response to two separate offers to the
limited partners to purchase units at $185 and $230 per unit, respectively, the
General Partner distributed a letter to its limited partners providing certain
unit sales price information. The letter indicates that (1) the average price
recently reported for units that are being transferred through certain secondary
markets that specialize in trading limited partnership interests ("Limited
Partnership Exchanges") exceeds the purchase prices of the recent offers and (2)
these trading prices have been increasing. The average unit price computed on a
per transaction basis for units traded during the second quarter of 1996 was
$225. During the third quarter of 1996, the average price computed to date on a
per unit basis has increased to $259 per unit. The average unit price computed
to date on a per transaction basis during the third quarter of 1996 is $289. The
range of unit prices for the third quarter of 1996 is $210 per unit to $340 per
unit.
The General Partner also reported that in May 1996 it received reports
estimating the market value for each of the Hotels. Based on the estimated
values and after consideration of Partnership liabilities, the calculated value
of limited partners' equity is in excess of $300 per unit. Such valuation,
however, does not necessarily reflect fair market value of the units or what a
limited partner would realize on liquidation of the Partnership.
In addition, the General Partner indicated that, as a result of the
increased cash flow from operations previously reported, it anticipates, barring
unforeseen circumstances, that the Partnership will be in a position to resume
significant cash distributions to the limited partners.
A complete copy of this General Partner's letter to the limited
partners is included as an exhibit to this report.
On October 11, 1996, the General Partner distributed another letter to
its limited partners addressing certain tax issues and the potential effect on
unit transfers. In the letter, the General Partner stated it had determined,
based on the advice of tax counsel, that it is in the best interest of the
Partnership to implement a unit transfer policy that relies on the protections
of the 5% safe harbor, promulgated by the Internal Revenue Service, to prevent
the Partnership from being deemed a "publicly traded partnership" ("PTP"),
taxable as a corporation, for federal income tax purposes, pursuant to Section
7704 of the Internal Revenue Code.
Section 7704 states that a PTP includes a partnership in which
interests are "readily tradable on a secondary market or the substantial
equivalent thereof." Notice 88-75, issued by the Internal Revenue Service
provides partnerships with assurance, through compliance with certain safe
harbor definitions, that a partnership will not be deemed a PTP taxable as a
corporation. The most lenient of the safe harbors available is the 5% safe
harbor, which applies if the sum of the percentage interests in partnership
capital or profits represented by units traded during any calendar year does not
exceed 5% of the total Partnership interests.
To comply with the 5% safe harbor, for the 1996 fourth quarter the
General Partner will suspend its approval of any unit sales transfer request
that would exceed aggregate 1996 unit sales of 6,848 units, unless it receives
the advice of counsel to the Partnership that such transfer would not pose a
significant risk that the Partnership would be deemed a PTP.
At the end of the 1996 third quarter, the Partnership had processed
4,485 unit sales. For the 1996 fourth quarter, the Partnership had received as
of October 11, 1996, 257 unit sales transfer requests. Any transaction received
that cannot be processed in the 1996 calendar quarter due to the 5% safe harbor
will be returned to the person submitting the request.
A complete copy of this General Partner's letter to the limited
partners is included as an exhibit to this report.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS
20.1 Letter to Limited Partners dated September 26, 1996.
20.2 Letter to Limited Partners dated October 11, 1996.
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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 hereunto duly authorized.
WESTIN HOTELS LIMITED PARTNERSHIP
(a Delaware limited partnership)
By: WESTIN REALTY CORP.,
Its sole General Partner
By: /s/ Richard Mahoney
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Richard Mahoney, Director,
Vice President, Chief Financial
Officer and Treasurer
DATE: September 26, 1996
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