SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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 AUGUST 28, 1996 reported):
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HUDSON HOTELS CORPORATION
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(Exact Name of Registrant as Specified in Charter)
NEW YORK 33-26780-NY 16-1312167
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
ONE AIRPORT WAY, SUITE 200, ROCHESTER, NEW YORK 14624
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (716)-436-6000
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(Former Name or Founder Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Company, directly or through its various subsidiaries, is the owner
of varying equity interests in a number of general and limited partnerships that
own hotel real estate. In each case, the remaining partnership interests were
owned by a small group of investors, some of whom are affiliates of the Company,
most of whom are investors in more than one such property, and all of whom the
Company believes to be sophisticated investors.
On July 16, 1996, the Company offered to acquire from the investors in
five of those hotel partnerships their partnership interests, in exchange for
common stock in the Company. The terms of the offer were negotiated in part with
certain key partners in the partnerships. No partner was required to accept the
exchange; however, as of August 28, 1996, the Company had received responses
from all of the partners of the various partnerships accepting the offer, and
the Company declared the exchange to be closed. Pursuant to the Transfer
Agreement, the exchange was deemed to be effective as of July 31, 1996.
The Company determined the valuation of each partnership by applying an
11.5% capitalization rate to the average of the last three year's cash flow of
each property (less an asset replacement reserve), then subtracting the
outstanding principal balance of the mortgage or mortgages on the property. Each
partner's value was determined by multiplying the resulting property value by
his or her percentage interest in the partnership. The Company did not obtain
new appraisals or fairness opinions.
The Company shares to be exchanged therefor were valued at the average
closing price for the five trading days prior to the effective date of the
exchange, i.e., July 31, 1996. The share value was determined by that method to
be $6.325. A total of 1,170,103 shares was exchanged for the partnership
interests acquired. The Company utilized 657,292 treasury shares and 512,811
newly issued shares to satisfy its obligations. The Company has agreed to
register the shares so exchanged for sale pursuant to the Securities Act of
1933. In addition to the shares thus exchanged, the Company has agreed to
indemnify each exchanging partner for his or her continuing liability upon
guarantees of the outstanding mortgages on each property.
The following partnerships and properties were acquired:
DELRAY BEACH HOTEL PROPERTIES LIMITED - This limited partnership
operates a 70 room luxury suite hotel and private beach club under the name
Seagate Hotel and Beach Club. The partnership purchased the Seagate in 1990, and
has made significant improvements to the property since its purchase. The
property is located in Delray Beach, Florida. This all suite ocean-front
property (housed in one two-story and one three-story structure) is located on
an approximately 2.5 acre site at 400 South Ocean Boulevard along Florida's Gold
Coast, midway between West Palm Beach and Fort Lauderdale. Directly across the
street is the beach club, a one-story structure located on approximately 22,000
square feet of real estate including 400 feet of private beach front. The
property also consists of a one-story administration building which services the
hotel and club. Hotel amenities include 1,000 square feet of meeting facilities,
freshwater and salt water swimming pools, a gazebo, and outdoor deck. All 70
suites are also equipped with a kitchenette. Beach club amenities include a
lounge, kitchen, and dining room/restaurant as well as a bathhouse containing
locker rooms, cabanas and a small service area. The Company, through general and
limited partnership interests, had a 26.16% ownership interest in the
partnership prior to the exchange. The partnership has a first mortgage with a
balance of $5,353,673 at July 31, 1996, and an unsecured note with the principal
balance of $977,500 owed to Hudson Hotels Corporation.
BROOKWOOD HOTEL PROPERTIES - This general partnership operates a full
service 108 room hotel operating under the name Brookwood Inn in Pittsford, New
York. This five-story 108 room hotel is located on an approximately six acre
site along Route 96 in Pittsford, New York, just off Interstate 490. The complex
offers whirlpool and executive suites, as well as a full-service restaurant,
heated indoor pool, whirlpool and fitness center. The hotel also has meeting and
conference facilities available to accommodate 5 to 75 people. The property was
developed and opened by a Hudson partnership in May 1987 and has been managed by
Hudson Hotels since that time. The Company's ownership percentage totaled
27.75%. The partnership has a first and second mortgage on the property with
total outstanding balances of $6,636,137 at July 31, 1996.
RIDGE ROAD HOTEL PROPERTIES, L.P. - This limited partnership operates a
Comfort Inn, which is located in Greece, New York. This five-story 83 room
limited-service hotel is located on 1.9 acres of land along Route 104 West, off
Interstate 390 North, just outside the City of Rochester and 5 minutes from the
airport. Amenities include Jacuzzi suites and a breakfast room. This property
was developed by Hudson Hotels and opened in 1986. Hudson Hotels has managed the
property since that time. The Company's ownership percentage prior to the
exchange totaled 8.69%. The partnership has a first mortgage with a balance of
$2,009,009 at July 31, 1996.
JAMESTOWN HOTEL PROPERTIES, L.P. - This limited partnership operates a
Comfort Inn which is located in Jamestown, New York. This two-story 101 room
hotel is located on a five acre site adjacent to Interstate 17 in Jamestown,
New York. The hotel is only one mile from both Chautauqua County Airport and the
City of Jamestown. This limited-service facility provides specialty Jacuzzi
rooms and cocktail lounge. The property was developed by Hudson Hotels and
opened in February 1986. Hudson Hotels has managed the property since that time.
The Company's ownership percentage totaled 7.75%. The hotel was built in 1986
and is in very good condition. The partnership has a first mortgage with a
balance of $1,693,710 at July 31, 1996.
MUAR LAKES ASSOCIATES, L.P. - This limited partnership operates an Econo
Lodge, which is located in Canandaigua, New York. This two-story 65 room
limited-service hotel is located on 2.8 acres of land along Routes 5 & 20 near
the Bristol Mountain ski resort and the Finger Lakes wineries in Canandaigua,
New York. This property was purchased in June 1985. The Company's ownership
percentage totals 5.00%. The hotel was built in 1983 and is in very good
condition. The partnership has a first mortgage with a balance of $1,055,613 at
July 31, 1996.
As stated above, the Company owned varying percentage interests in each
of the partnerships acquired; for each partnership except Brookwood, a
subsidiary of the Company was the sole general partner of the limited
partnership prior to the exchange. In addition, the Company managed each of the
properties owned by partnerships. Following the acquisitions the Company will
own 100% of the ownership interest in each property and will continue to operate
and manage each property as a hotel.
The following officers, directors and affiliates exchanged their
interests in the partnerships for shares of the Company:
E. Anthony Wilson Chairman, President, Director 102,007 shares
Ralph L. Peek Director 102,007 shares
Alan S. Lockwood Secretary 8,131 shares
The shares attributed to E. Anthony Wilson and Ralph L. Peek were issued
to Wilson Enterprises, a New York limited partnership of which Mr. Wilson and
Mr. Peek are the general partners.
In addition, Richard E. Sands received 16,369 shares and L,R&R
Investment Company received 32,738 shares. Mr. Sands and L,R&R Investment
Company are related parties who have previously filed a Form 13D reflecting
ownership of more than 5% of the Company's common stock.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA, FINANCIAL INFORMATION AND
EXHIBITS.
a) Financial Statements of Businesses Acquired.
It is impracticable to provide the required financial statements for
the partnerships acquired at this time. The required financial
statements will be filed as soon as practicable, but not later than
sixty days after this report is filed.
b) Pro Forma Financial Information.
It is impracticable to provide the pro forma financial information
which is required with respect to the acquisitions described in Item 2
above. The required pro forma financial information will be filed as
soon as practicable, but not later than sixty days after this report is
filed.
c) Exhibits.
Exhibit 10. Material Contracts
Exhibit 10.29 Form of Offer Letter, Transfer Agreement and List of
Investors
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.
HUDSON HOTELS CORPORATION
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(Registrant)
Date: AUGUST 28, 1996 /S/ TARAS KOLCIO
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Taras Kolcio, Chief Financial Officer