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 (Date of earliest event reported): May 31, 2000
Ridgewood Hotels, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-14019 58-1656330
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1106 Highway 124, Hoschton, Georgia 30548
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 867-9497
Item 2. Acquisition or Disposition of Assets.
(a)(1) Ridgewood Georgia, Inc., a Georgia corporation ("Ridgewood Georgia")
and a wholly-owned subsidiary of Ridgewood Hotels, Inc. (the "Company"), has
entered into that certain Assignment and Assumption Agreement (the "Assignment
Agreement") dated as of April, 2001 with RW Hotel Investment Associates, L.L.C.,
a Delaware limited liability company ("Transferee") pursuant to which Transferee
assigned to Ridgewood Georgia, Transferee's 99% membership interest in RW
Louisville Hotel Investors, L.L.C., a Delaware limited liability company ("RW
Hotel Investors"). As a result, Ridgewood Georgia, which previously owned the
remaining 1% membership interest in RW Hotel Investors, owns 100% of the
membership interests in RW Hotel Investors (the "Membership Interests").
RW Hotel Investors, in turn, owns 99% of RW Louisville Hotel Associates,
LLC, a Delaware limited liability company ("Associates") which owns a Holiday
Inn hotel property in Hurstbourne, Kentucky (the "Hurstbourne Hotel"). The
remaining 1% interest in Associates is owned by RW Hurstbourne Hotel, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Company. Therefore, as
a result of the Assignment Agreement, the Company became the indirect owner of
100% of the membership interests of Associates.
The Membership Interests are pledged as security for a $3,623,690 loan made
by Louisville Hotel, LLC, a Delaware limited liability company, to Ridgewood
Georgia and the Transferee in June of 1998 (the loan from Louisville Hotel, LLC
and related transactions are described in the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1998). The loan, which is evidenced by
a secured promissory note jointly made by Ridgewood Georgia and Transferee (the
"Louisville Note"), is non-recourse. Pursuant to the Assignment Agreement, the
Company assumed Transferee's obligations under the Louisville Note and the
Membership Interests remain pledged as security for the Louisville Note. In
addition, the Membership Interests are subject to an option pursuant to which
Louisville Hotel, LLC has the right to acquire the Membership Interests for
nominal value.
Pursuant to the terms of the Louisville Note, all revenues (after payment
of expenses including a management fee to the Company) of the Hurstbourne Hotel
(whether from operations or upon the sale of the property) are required to be
paid to Louisville Hotel, LLC until the principal and interest due on the note
are paid in full as set forth in the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 2000 and the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1998.
The Assignment Agreement was entered into to provide the Company with
ownership of Associates in connection with Associates application for a new
franchise agreement for its Holiday Inn franchise. The Assignment Agreement is
being reported herein because, as a result of the acquisition by Associates,
Associates will be included in the Company's consolidated financial statements
on a going forward basis.
The description contained herein of the Assignment Agreement is qualified
in its entirety by reference to the full text of the Assignment Agreement which
has been filed as Exhibit 2.1 to this Report.
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(a)(2) As previously reported in the Company's Annual Report on Form 10-K
for the period ended March 31, 2000 and the Company's Quarterly Report on Form
10-Q for the period ended June 30, 2000, on May 31, 2000, the Company sold its
hotel property in Longwood, Florida (the "Longwood Property") for $5,350,000 to
Fulgent Street Motel & Hotel, Inc. ("Buyer") pursuant to the terms of that
certain contract for the Purchase and Sale of Property dated June, 1999 as
amended by the Reinstatement of and second Amendment to Contract for the
Purchase and Sale of Property dated January 24, 2000 between the Company,
Ridgewood Orlando, Inc., Buyer and Brokers Title, L.L.C., (collectively the
"Longwood Purchase Agreement"). Approximately $3,500,000 of the sales proceeds
were used to pay off the first mortgage on the property and a defeasance penalty
incurred as a result of prepaying the mortgage. The Company recognized
approximately $2,856,000 in profit on the sale before tax and received cash
proceeds after payment of the mortgage, defeasance fee and other expenses of
approximately $1,295,000.
The description contained herein of the Longwood Purchase Agreement is
qualified in its entirety be referenced to the full text of the Longwood
Purchase Agreement which has been filed as Exhibits 2.2 and 2.3 to this Report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
7(a) Financial Statements. All required financial statements with respect
to the acquisition of the Membership Interests of RW Hotel Investors, L.L.C.
will be filed by amendment to this Report no later than July 16, 2001.
7(b) Pro Forma Financial Information.
7(b)(i) All required pro forma financial information relating to the
acquisition of the Membership Interests of RW Hotel Investors, L.L.C. will
be filed by amendment to this Report within the time period set forth in
Item 7(a).
7(b)(ii) Included in this Report are the following unaudited pro forma
financial statements relating to the disposition of the Longwood Property.
(A) Unaudited pro forma condensed balance sheet as of March 31, 2000
(B) Unaudited pro forma condensed statement of income for the seven
months ended March 31, 2000
-3-
SIGNATURE
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.
RIDGEWOOD HOTELS, INC.
By: /s/ Peter Conboy
--------------------------------
Peter Conboy
Director of Finance
Dated as of July 2, 2001
-4-
Item 7 (b)(ii)
Unaudited Pro Forma Financial Statements Relating to the Disposition of the
Longwood Property
On May 31, 2000, the Company sold its hotel in Longwood, Florida for $5,350,000.
Approximately $3,500,000 of the sales proceeds were used to pay off the mortgage
and defeasance penalty on the hotel. The Company recognized approximately
$2,856,000 in profit on the sale before tax. The effect on the Company's
financial statements for the seven months ended March 31, 2000 are shown and
compared below as if the hotel had sold prior to September 1, 1999.
Income Statement For The Seven Months Ended
------------------------------------------------
March 31, 2000 March 31, 2000
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Including the Pro Forma Excluding the
Hotel Adjustments Hotel
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Revenues from wholly-owned
hotel operations $1,696 $(1,434) $ 262
Expenses of wholly-owned real
estate properties 1,566 (1,289) 277
Depreciation and amortization 218 (78) 140
Interest expense 348 (192) 156
Net loss applicable to common
shareholders 2,026 (125) 1,901
Basic and diluted loss per
common share $ 1.07 $ (0.07) $ 1.00
Balance Sheet As Of
------------------------------------------------
March 31, 2000 March 31, 2000
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Including the Pro Forma Excluding the
Hotel Adjustments Hotel
------------------------------------------------
Total assets $8,243 $(1,651) $6,592
Total liabilities 6,503 (2,829) 3,674
Shareholder's investment $1,740 $ 1,178 $2,918
EXHIBITS INDEX
2.1 Assignment and Assumption Agreement dated as of April, 2001 between RW
Hotel Investment Associates, L.L.C. and Ridgewood Georgia, Inc.
2.2 Contract for the Purchase and Sale of Property dated June, 1999 between the
Company, Ridgewood Orlando, Inc., Fulgent Street Motel & Hotel, Inc. and
Brokers Title, L.L.C.
2.3 Reinstatement of and Second Amendment to Contract for the Purchase and Sale
of Property Dated January 24th, 2000.