UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1998, Commission file number: 33-2121
-------------------
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
ARIZONA 86-0540409
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2999 N. 44th Street, Suite 450, Phoenix, Arizona 85018
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(602) 955-4000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. ( X )yes ( )no
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
Balance Sheet
As of June 30, 1998
Unaudited
ASSETS
Current Assets
Cash $ 7,979.59
-----------------------
Total Current Assets 7,979.59
Land-Casa Grande 1,086,784.10
Land-Baseline & 24th St 1,009,594.35
Land-Peoria & 79th Ave 984,383.98
Land-Basleine off 24th St 766,108.94
Land-Baseline & 32nd St 1,139,148.04
Land-Pecos Rd/Chandler 1,259,018.40
Land-Central Ave/Avondale 125,472.02
Land-Van Buren & Central 1,302,319.75
Land Baseline off 24th St 254,714.10
-----------------------
Total Land 7,927,543.68
Other Assets 1,219,268.55
-----------------------
TOTAL ASSETS $ 9,154,791.82
=======================
LIABILITIES
Accounts Payable $ 203,425.34
Notes Payable 201,604.70
-----------------------
Total Liabilities 405,030.04
CAPITAL
Partners' Capital 8,749,761.78
-----------------------
TOTAL LIABILITIES & CAPITAL $ 9,154,791.82
=======================
2
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
Income Statement
for the Three Months' Ending June 30, 1998
Unaudited
Three
Months Ended
June 1998 Year to Date
INCOME
Rental Income $ 390.00 $ 390.00
Interest Income 111.74 279.70
Transfer Fees 565.00 530.00
Misc. Income 29.25 29.25
------------------- -----------------
Total Income $ 1,095.99 $ 1,228.95
EXPENSE
Insurance Expense 81.00 81.00
Interest Expense 7,509.78 15,019.56
Legal & Accounting 15,291.95 21,653.06
Management Fees 13,311.69 26,623.38
Office Expense 221.67 459.55
Outside Service 8,525.00 11,537.78
Printing 169.86 1,034.50
Postage 870.26 1,345.29
Property Tax 7,526.85 15,861.25
Telephone Expense 19.60 27.52
Trustee Fees 750.00 1,500.00
Utilities 237.50 237.50
------------------- -----------------
Total Expenses 54,515.16 95,380.39
------------------- -----------------
Profit/Loss $ (53,419.17) $ (94,151.44)
=================== =================
3
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
PART 1: FINANCIAL INFORMATION
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF PARTNERSHIP
TPI Land Development III Limited Partnership is a limited
partnership formed during 1986 under the laws of the State of
Arizona. The Partnership reached impound on May 27, 1986.
DURATION OF PARTNERSHIP
It has been the intention of the Partnership to acquire
property for investment appreciation purposes. The partnership
intends to sell a portion or all of the properties in the
future with a view towards liquidation of the Partnership. If
not terminated prior to December 31, 2001, the Partnership
shall cease to exist at that date.
OTHER ASSETS
Organizational costs represent costs incurred during the
formation period of the Partnership. Organizational costs
total $55,663.00. Organizational costs were amortized over 60
months, and are fully amortized. Syndication costs represent
commissions incurred on the sale of limited partnership
interests and the costs of preparing the prospectuses.
Syndication costs total $31,415.83. Syndication costs are not
amortized. Land purchase costs not previously allocated
represent commissions, legal expenses, and other expenses
incurred during the acquisition of the land. Current
unallocated land purchase costs total $1,187,852.72. The
allocation of land purchase costs to total costs of sale when
a parcel is sold is based on the parcel's original contract
price as a percentage of total contract prices of all
remaining parcels.
INCOME TAXES
No provision for income tax is made for the Partnership since
the reporting and payment of income tax is the responsibility
of the individual partners.
PARTNERS' PREFERRED RETURN ON CAPITAL CONTRIBUTIONS
The preferred return clause was deleted in the Amendments to
Agreement of Limited Partnership of TPI Land Development III
Limited Partnership, dated January 1998.
4
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ALLOCATION OF NET PROFITS, LOSSES, AND DISTRIBUTIONS TO
PARTNERS
Net profits/losses (prepared on an accrual basis), and
distributions are allocated to the limited and general
partners in accordance with their respective capital
percentages per Amendments to Agreement of Limited Partnership
of TPI Land Development III Limited Partnership, (paragraph
4.1.a), dated January 1998.
NOTE 2: LAND
Costs incurred by the Partnership for acquisition and holding
of land as of June 30, 1998 are as follows:
Casa Grande - Florence $ 1,086,784
24th St. & Baseline 2,030,417
79th Ave. & Peoria 984,384
32nd St. & Baseline 1,139,148
Central Ave./Avondale 125,472
Arizona Ave. & Pecos 1,259,.018
Van Buren & Central 1,302,320
---------
$ 7,927,544
One Triplex apartment building was sold 11/01/94 for $50,000.
Two Triplex apartment buildings were sold on 1/23/95 for
$100,000. Rental Property was sold on 5/23/95 for $44, 900. A
corner pad (40,000 square feet) at 24th Street and Baseline,
in Phoenix, AZ, was sold December 16, 1996 for $400,000.
NOTE 3: PARTNERS' CAPITAL
Partners' capital contributions received and subscribed as of
June 30, 1998 are as follows:
Limited partners' contribution $ 9,939,500
Prior years' profit (loss) (1,095,586)
Current year's profit (loss) ( 94,152)
-------------
Partners' Capital $ 8,749,762
==========
5
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 3: PARTNERS' CAPITAL (CONTINUED)
A prior period adjustment was made in 1996 to the prior year's
profit (loss) for $24,381. The previous general partner's
original contribution of $100,399 was in the form of a note
payable. The note was written off with the removal of the
general partner and all of his interests. Limited partners'
original contributions were adjusted accordingly. The accounts
receivable balance of $2,079 due to the general partner was
written off and the current year's loss adjusted. The note and
the receivable netted in effect and the capital account was
corrected.
NOTE 4: The partnership is obligated under a Promissory Note dated May
3, 1993, with West Financial Corp. for $285,000. Interest of
14.9% per annum is paid in monthly installments of $3,538.75
with the remaining principal and interest due and payable on
July 1, 1996. West Financial Corp. assigned all rights, title
and interest in the Promissory Note and beneficial interest
under the Deed of Trust to Bolco Limited Partnership, in an
agreement dated February 12, 1996. The agreement extends the
remaining interest due and payable to June 1, 1997. A $70,000
principal payment was made with proceeds from the December 16,
1996 sale of a corner pad of the 24th Street and Baseline,
Phoenix, AZ, parcel. In addition, interest was paid in the
amount of $16,202.20. Further, an additional sum of $9,895.28
was erroneously impounded by the title company. Both parties
agreed to apply $8,395.28 to principal of the note, and to
apply $1,500 towards attorney's fees per the following
stipulation: The United States Bankruptcy Court in the
District of Arizona, Chapter 11 issued an "Order Approving
Stipulation Regarding Secured Claim of Bolco Ltd. Partnership"
dated January 15, 1997. The Order extended the maturity date
on the Promissory Note through and including February 2, 1998,
provided a plan of reorganization was filed with the Court on
or before August 1, 1997. All other terms of the original
agreement are upheld.
6
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 5: The tri-plex rental property was readied for a pending sale. A
short term loan from TPI Secured Income 89B was needed in
addition to existing cash reserves to prepare the property for
sale. The loan was repaid on 02/01/95.
NOTE 6: The Partnership has loaned the sum of $39,500 to an unrelated
entity under a Promissory Note dated August 31, 1993. Interest
of 15% per annum is due monthly and accrues to principal if
unpaid monthly. The Note was foreclosed upon on 07/13/94 and
the property was converted to an asset to be prepared for
sale.
NOTE 7: The Partnership has loaned $25,000 to an unrelated party on
October 8, 1993. Interest of 15% accrues to the principal with
the balance all due and payable October 4, 1994. The loan was
repaid on 10/18/94.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
The partnership offering period ended December 31, 1987. From that date forward
the Partnership entered the operating stage which either held the properties for
appreciation or prepared the properties for disposition.
Also during this period, the final acquisitions were made.
As of June 30, 1998 the Partnership had $7,979.59 in cash and money market
instruments. The sources of revenue during the operating period were interest on
the money market account and transfer fees.
PART 2: OTHER INFORMATION
LEGAL PROCEEDINGS
A petition was filed on July 6, 1995 in the United States Bankruptcy Court for
the District of Arizona, Case No. 95-05828-PHX-CGC, for Chapter 11 Bankruptcy
protection. All parcels of real property are listed for sale, and are being
actively marketed. A plan of reorganization has been prepared and filed.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The general partners, Herve Tessier and TPI Asset Management, Inc., resigned and
have been replaced by the Investors Recovery Group, LLC, which was organized by
existing partners in TPI Land Development III Limited Partnership. The members
of the Investors Recovery Group, LLC are Lawrie Porter, Carl Harwood, Robert
Long, Elizabeth Kowoser, Donald Thomas, and Craig Stevenson. On May 10 and 11,
1996 a Notice of Settlement Agreement regarding the Resignation of General
Partners of TPI III; Notice of Hearing on Approval of settlement Agreement
regarding Resignation of General Partners of TPI III; and Notice of Selection of
Successor General Partner of TPI III were mailed to all Limited Partners. The
settlement agreement was approved by a court order in the United States
Bankruptcy Court District of Arizona, Chapter 11, Case No. 95-5828-PHX-CGC on
May 24, 1996.
7
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
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 thereunto duly authorized.
TPI LAND DEVELOPMENT III LIMITED PARTNERSHIP
By:
----------------------------------------
Lawrie Porter, Managing Member
Date:
----------------------------------------
8