UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________ to ____________
Commission File Number 0-17557
Brauvin High Yield Fund L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3569428
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 North LaSalle Street, Chicago, Illinois 60602
(Address of principal executive offices) (Zip Code)
(312) 759-7660
(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 .
INDEX
Page
PART I Financial Information
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . 3
Statements of Net Assets in Liquidation as of
June 30, 2002 and December 31, 2001
(Liquidation Basis). . . . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets in Liquidation
for the period January 1, 2002 to June 30, 2002
(Liquidation Basis). . . . . . . . . . . . . . . . . . . . 5
Statement of Changes in Net Assets in Liquidation
for the period January 1, 2001 to June 30, 2001
(Liquidation Basis). . . . . . . . . . . . . . . . . . . . 6
Statement of Operations for the six months
ended June 30, 2002 and June 30, 2001
(Liquidation Basis) . . . . . . . . . . . . . . . . . . 7
Statement of Operations for the three months
ended June 30, 2002 and June 30, 2001
(Liquidation Basis) . . . . . . . . . . . . . . . . . . 8
Notes to Financial Statements. . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . 18
Item 3. Quantitative and Qualitative Disclosures about
Market Risk. . . . . . . . . . . . . . . . . . . . . . . . 20
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 21
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . 21
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . 21
Item 4. Submissions of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . . . . 21
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . 21
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 21
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Except for the December 31, 2001 Statement of Net Assets in
Liquidation (Liquidation Basis), the following Statement of Net
Assets in Liquidation as of June 30, 2002, Statement of Changes in
Net Assets in Liquidation for the period January 1, 2002 to June
30, 2002 (Liquidation Basis), Statement of Changes in Net Assets
in Liquidation for the period January 1, 2001 to June 30, 2001
(Liquidation Basis), Statements of Operations for the six months
ended June 30, 2002 and June 30, 2001 (Liquidation Basis) and
Statements of Operations for the three months ended June 30, 2002
and June 30, 2001 (Liquidation Basis) for Brauvin High Yield Fund
L.P. (the "Partnership") are unaudited and have not been examined
by independent public accountants but reflect, in the opinion of
management, all adjustments necessary to present fairly the
information required. All such adjustments are of a normal
recurring nature.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the
Partnership's 2001 Annual Report on Form 10-K.
STATEMENTS OF NET ASSETS IN LIQUIDATION AS OF
JUNE 30, 2002 AND DECEMBER 31, 2001 (LIQUIDATION BASIS)
(Unaudited)
June 30, December 31,
2002 2001
ASSETS
Cash and cash equivalents $4,870,418 $4,880,855
Total Assets 4,870,418 4,880,855
LIABILITIES
Accounts payable and accrued
expenses 208,285 212,357
Reserve for estimated costs during
the period of liquidation 109,550 98,800
Due to affiliate 4,120 --
Total Liabilities 321,955 311,157
Net Assets in Liquidation $4,548,463 $4,569,698
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS IN
LIQUIDATION (LIQUIDATION BASIS) FOR THE PERIOD
JANUARY 1, 2002 TO JUNE 30, 2002
(Unaudited)
Net Assets in Liquidation at
January 1, 2002 $ 4,569,698
Net loss (21,235)
Net Assets in Liquidation at
June 30, 2002 $ 4,548,463
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS IN
LIQUIDATION (LIQUIDATION BASIS) FOR THE PERIOD
JANUARY 1, 2001 TO JUNE 30, 2001
(Unaudited)
Net Assets in Liquidation at
January 1, 2001 $ 4,689,924
Income from operations 56,172
Loss on sale of property (3,925)
Net Assets in Liquidation at
June 30, 2001 $ 4,742,171
See accompanying notes to financial statements.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(LIQUIDATION BASIS)
(Unaudited)
2002 2001
INCOME:
Rental $ -- $ 3,713
Interest 46,917 130,565
Total income 46,917 134,278
EXPENSES:
General and administrative 68,152 60,395
Transaction costs -- 17,711
Total expenses 68,152 78,106
(Loss) income before loss on sale
of property (21,235) 56,172
Loss on sale of property -- (3,925)
Net (loss) income $(21,235) $ 52,247
Net (loss) income allocated to:
General Partners $ (425) $ 1,045
Interest Holders $(20,810) $ 51,202
Net (loss) income per Unit
outstanding (2,627,503
Units outstanding) $ (0.01) $ 0.02
See accompanying notes to financial statements
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001
(LIQUIDATION BASIS)
(Unaudited)
2002 2001
INCOME:
Interest $ 23,221 $ 56,651
Total income 23,221 56,651
EXPENSES:
General and administrative 30,887 16,839
Transaction costs -- 3,478
Total expenses 30,887 20,317
Net (loss) income $ (7,666) $ 36,334
Net (loss) income allocated to:
General Partners $ (153) $ 727
Interest Holders $ (7,513) $ 35,607
Net (loss) income per Unit
outstanding (2,627,503
Units outstanding) $ (0.00) $ 0.01
See accompanying notes to financial statements
BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 2002 and 2001
(Unaudited)
(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
BRAUVIN HIGH YIELD FUND L.P. (the "Partnership") is a Delaware
limited partnership organized for the purpose of acquiring debt-
free ownership of existing, free-standing, income-producing retail,
office and industrial real estate properties predominantly subject
to "triple-net" leases. The General Partners of the Partnership
are Brauvin Realty Advisors, Inc. and Jerome J. Brault. Brauvin
Realty Advisors, Inc. is owned primarily by Messrs. Brault
(beneficially) (44%) and Cezar M. Froelich (44%). Mr. Froelich
resigned as a director of the Corporate General Partner in December
1994 and as an individual General Partner effective as of September
17, 1996. Brauvin Securities, Inc., an affiliate of the General
Partners, was the selling agent of the Partnership. The
Partnership is managed by an affiliate of the General Partners.
The Partnership was formed on January 6, 1987 and filed a
Registration Statement on Form S-11 with the Securities and
Exchange Commission which became effective on September 4, 1987.
The sale of the minimum of $1,200,000 of depository units
representing beneficial assignments of limited partnership
interests of the Partnership (the "Units") necessary for the
Partnership to commence operations was achieved on November 18,
1987. The Partnership's offering closed on May 19, 1988. A total
of $25,000,000 of Units were subscribed for and issued between
September 4, 1987 and May 19, 1988, pursuant to the Partnership's
public offering. Through June 30, 2002 the Partnership had sold
$27,922,102 of Units. This total includes $2,922,102 of Units
purchased by Interest Holders who utilized their distributions of
Operating Cash Flow to purchase additional Units through the
distribution reinvestment plan (the "Plan"). Units valued at
$1,647,070 have been repurchased by the Partnership from Interest
Holders liquidating their investment in the Partnership and have
been retired as of June 30, 2002. As of June 30, 2002, the Plan
participants have acquired Units under the Plan which approximate
10% of total Units outstanding.
The Partnership acquired the land and buildings underlying 20
Taco Bell restaurants, 11 Ponderosa restaurants and two Children's
World Learning Centers. The Partnership also acquired 1%, 49%,
23.4% and 16% equity interests in four joint ventures with three
entities affiliated with the Partnership. These ventures owned the
land and buildings underlying six Ponderosa restaurants, a
Scandinavian Health Spa, a CompUSA store and a Blockbuster Video
store, respectively.
Prior to 1999, the Partnership sold its interest in one Ponderosa
owned through a Joint Venture. In 1999, the Partnership sold one
of its Taco Bell units. In addition, two Ponderosa restaurants
were sold in 1999 by the Partnership, and the Partnership also sold
its joint venture interests in the CompUSA store and the
Blockbuster Video Store.
Pursuant to the approval of the Special Master and the United
States District Court, on August 7, 2000, an affiliated entity
purchased all but one of the Partnership's remaining properties
resulting in net proceeds to the Partnership of approximately
$11,681,000. The Partnership sold its sole remaining property to
an affiliate in January 2001 for a contract price of $175,000.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Management's Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
Basis of Accounting
As a result of the settlement agreement (see Note 5), which was
approved by the United States District Court for the Northern
District of Illinois on June 18, 1999, the Partnership began the
liquidation process and, in accordance with generally accepted
accounting principles, the Partnership's financial statements for
periods subsequent to June 18, 1999 have been prepared on the
liquidation basis of accounting. Accordingly, the carrying values
of assets are presented at estimated net realizable amounts and
liabilities are presented at estimated settlement amounts,
including estimated costs associated with carrying out the
liquidation. Preparation of the financial statements on a
liquidation basis requires significant assumptions by management,
including the estimate of liquidation costs and the resolution of
any contingent liabilities. There may be differences between the
assumptions and the actual results because events and circumstances
frequently do not occur as expected. Those differences, if any,
could result in a change in the net assets recorded in the
statement of net assets as of June 30, 2002.
Accounting Method
The accompanying financial statements have been prepared using
the accrual method of accounting.
Federal Income Taxes
Under the provisions of the Internal Revenue Code, the
Partnership's income and losses are reportable by the partners on
their respective income tax returns. Accordingly, no provision is
made for Federal income taxes in the financial statements.
However, in certain instances, the Partnership has been required
under applicable state law to remit directly to the tax authorities
amounts representing withholding from distributions paid to
partners.
Investment in Real Estate
Prior to the conversion to the liquidation basis of accounting,
the operating properties acquired by the Partnership were stated at
cost including acquisition costs, net of impairment adjustments.
Depreciation expense was computed on a straight-line basis over
approximately 35 years.
The Partnership records an impairment change to reduce the cost
basis of real estate to its estimated fair value when the real
estate is judged to have suffered an impairment that is other than
temporary.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid debt
instruments with an original maturity within three months of
purchase.
Restricted Cash
Per the terms of the settlement agreement (see Note 5) the
Partnership was required to establish a cash reserve that was
restricted for the payment of the General Partners' legal fees and
costs. The release of these funds to the General Partners was
subject to the certification by the Special Master that the General
Partners have been cooperative, did not breach their fiduciary
duties to the Interest Holders, did not breach the settlement
agreement or the Partnership Agreement and used their best efforts
to manage the affairs of the Partnership in such a manner as to
maximize the value and marketability of the Partnership's assets in
accordance with their obligations under the Partnership Agreement.
In November 2000, the General Partners received certification
from the Special Master and subsequently in January 2001 the
restricted cash was released to the General Partners.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133"), which requires that all derivatives be recognized as
assets and liabilities in the balance sheet and be measured at fair
value. SFAS 133 also requires changes in fair value of derivatives
to be recorded each period in current earnings or comprehensive
income depending on the intended use of the derivatives. In June,
2000, the FASB issued SFAS 138, which amends the accounting and
reporting standards of SFAS 133 for certain derivatives and certain
hedging activities. SFAS 133 and SFAS 138 were required to be
adopted by the Partnership effective January 1, 2001. The adoption
of SFAS 133 and SFAS 138 did not have an impact on the financial
position, results of operations and cash flows of the Partnership.
In July 2001, the FASB issued Statement of Financial Accounting
Standards No. 141, "Business Combinations" ("SFAS 141"). SFAS 141
requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. In July 2001, the FASB issued
Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets" ("SFAS 142"), which was effective January
1, 2002. SFAS 142 requires, among other things, the discontinuance
of goodwill amortization. In addition, the standard includes
provisions for the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of
existing recognized intangibles, reclassification of certain
intangibles out of previously reported goodwill and the
identification of reporting units for purposes of assessing
potential future impairments of goodwill.
In June 2001, the FASB issued Statement of Financial Accounting
Standards No. 143, "Accounting for Asset Retirement Obligations"
("SFAS 143"), which was effective for years beginning after June
15, 2002. SFAS 143 requires recognition of a liability and
associated asset for the fair value of costs arising from legal
obligations associated with the retirement of tangible long-lived
assets. The asset is to be allocated to expense over its estimated
useful life.
In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"), which was effective for fiscal
years beginning after December 15, 2001. SFAS 144 supersedes FASB
Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to Be Disposed Of" ("SFAS 121"). SFAS
144 retains the recognition and measurement requirements of SFAS
121, but resolves significant SFAS 121 implementation issues. In
addition, it applies to a segment of a business accounted for as a
discontinued operation (which was formerly covered by portions of
Accounting Principles Board Opinion No. 30).
The Partnership does not believe that the adoption of SFAS 141,
142, 143 and 144 will have a significant impact on its financial
statements.
(2) PARTNERSHIP AGREEMENT
Distributions
All Operating Cash Flow, as defined in the Partnership Agreement
(the "Agreement"), shall be distributed: (a) first, to the
Interest Holders until the Interest Holders receive an amount equal
to their 10% Current Preferred Return, as such term is defined in
the Agreement; and (b) thereafter, any remaining amounts will be
distributed 98% to the Interest Holders and 2% to the General
Partners. The net proceeds of a sale or refinancing of a
Partnership property shall be distributed as follows:
* first, to the Interest Holders until each Interest Holder has
been paid an amount equal to the 10% Cumulative Preferred
Return, as defined in the Agreement;
* second, to the Interest Holders until each Interest Holder has
been paid an amount equal to his Adjusted Investment, as
defined in the Agreement;
* third, to the General Partners until they have been paid an
amount equal to a 2% preferred return; and
* fourth, 95% of any remaining Net Sale or Refinancing Proceeds,
as such term is defined in the Agreement, to the Interest
Holders and the remaining 5% to the General Partners.
Profits and Losses
Net profits and losses from operations of the Partnership
(computed without regard to any allowance for depreciation or cost
recovery deductions under the Internal Revenue Code of 1986, as
amended (the "Code")) for each taxable year of the Partnership
shall be allocated 98% to the Interest Holders and 2% to the
General Partners. Notwithstanding the foregoing, all depreciation
and cost recovery deductions allowed under the Code shall be
allocated 2% to the General Partners and 98% to the Taxable
Interest Holders, as defined in the Agreement.
The net profit of the Partnership from any sale or other
disposition of a Partnership property shall be allocated (with
ordinary income being allocated first) as follows: (a) first, an
amount equal to the aggregate deficit balances of the Partners'
Capital Accounts, as such term is defined in the Agreement, shall
be allocated to each Partner who or which has a deficit Capital
Account balance in the same ratio as the deficit balance of such
Partner's Capital Account bears to the aggregate of the deficit
balances of all Partners' Capital Accounts; (b) second, to the
Interest Holders until the Interest Holders have been allocated
profits equal to their 10% Cumulative Preferred Return; (c) third,
to the Interest Holders until the Interest Holders have been
allocated an amount of profit equal to the amount of their Adjusted
Investment; (d) fourth, to the General Partners until such time as
they have been allocated profits equal to a 2% preferred return;
and (e) thereafter, 95% to the Interest Holders and 5% to the
General Partners. The net loss of the Partnership from any sale or
other disposition of a Partnership property shall be allocated as
follows: (a) first, an amount equal to the aggregate positive
balances in the Partners' Capital Accounts, to each Partner in the
same ratio as the positive balance in such Partner's Capital
Account bears to the aggregate of all Partners' positive Capital
Accounts balances; and(b) thereafter, 98% to the Interest Holders
and 2% to the General Partners.
(3) TRANSACTIONS WITH RELATED PARTIES
An affiliate of the General Partners managed the Partnership's
real estate properties for an annual management fee equal to up to
1% of gross revenues derived from the properties. The property
management fee was subordinated, annually, to receipt by the
Interest Holders of an annual 10% non-cumulative, non-compounded
return on Adjusted Investment (as defined).
The Partnership paid affiliates of the General Partners selling
commissions of 8-1/2% of the capital contributions received for
Units sold by the affiliates.
An affiliate of one of the former General Partners provided
securities and real estate counsel to the Partnership.
The Partnership paid an affiliate of the General Partners an
acquisition fee in the amount of up to 4.5% of the gross proceeds
of the Partnership's offering for the services rendered in
connection with the process pertaining to the acquisition of
properties. Acquisition fees related to the properties not
ultimately purchased by the Partnership were expensed as incurred.
Fees, commissions and other expenses paid or payable to the
General Partners or their affiliates for the six months ended June
30, 2002 and 2001 were as follows:
2002 2001
Reimbursable operating
expenses $30,085 $23,825
As of June 30, 2002 the Partnership owed an affiliate $4,120
related to reimbursable operating expenses.
The Partnership sold its sole remaining property to an affiliate
in January 2001 for a contract sale price of $175,000.
(4) WORKING CAPITAL RESERVES
The Partnership had set aside 1% of the gross proceeds of its
public offering as a working capital reserve, which was
subsequently reduced to 1/2% ($125,000) which is included in cash
and cash equivalents at June 30, 2002 and 2001.
(5) LITIGATION
Two legal actions against the Partnership, the General Partners
and affiliates of such General Partners, in connection with a
proposed transaction that was not consummated, have been settled.
On April 13, 1999, all the parties to the litigation reached an
agreement to settle the litigation, subject to the approval by the
United States District Court for the Northern District of Illinois.
This approval was obtained on June 18, 1999. The terms of the
settlement agreement, along with a Notice to the Class, were
forwarded to the Interest Holders in the second quarter of 1999.
One additional legal action, which was dismissed on January 28,
1998 had also been brought against the General Partners and
affiliates of such General Partners, as well as the Partnership on
a nominal basis. The Partnership, the General Partners and their
named affiliates denied all allegations set forth in the
complaints.
On November 8, 2001, the Magistrate Judge for the United States
district Court for the Northern District of Illinois ruled on the
plaintiff's legal fee petition. As a result of this ruling the
Partnership will be required to pay to plaintiff's attorneys
approximately $191,000. The plaintiff's attorneys subsequently
challenged this ruling. On July 19, 2002, the Assigned Judge for
the Northern District of Illinois affirmed the legal fee petition
ruling of the Magistrate Judge. The plaintiff's attorneys may also
challenge this ruling. In addition, the Partnership may cross
appeal the fee ruling. Therefore, it is uncertain whether this
amount (or a greater or lesser amount) will actually be paid by the
Partnership.
(6) SALE OF PARTNERSHIP ASSETS
Pursuant to the approval of the Special Master and the United
States District Court, on August 7, 2000, an affiliated entity
purchased all but one of the Partnership's properties. The
Partnership sold its sole remaining property to an affiliate in
January 2001 for a contract sale price of $175,000.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
General
Certain statements in this Quarterly Report that are not
historical fact constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Discussions containing forward-looking statements may be found in
this section and in the section entitled "Business." Without
limiting the foregoing, words such as "anticipates," "expects,"
"intends," "plans" and similar expressions are intended to identify
forward-looking statements. These statements are subject to a
number of risks and uncertainties. Actual results could differ
materially from those projected in the forward-looking statements.
The Partnership undertakes no obligation to update these forward-
looking statements to reflect future events or circumstances.
Liquidity and Capital Resources
Pursuant to the approval of the Special Master and the United
States District Court, on August 7, 2000, an affiliated entity
purchased all but one of the Partnership's properties resulting in
net proceeds to the Partnership of approximately $11,681,000. The
Partnership sold its sole remaining property to an affiliate in
January 2001 for a contract price of $175,000.
The Special Master approved total reserves for the Partnership
in the amount of $4.62 million or $1.758 per Unit. These reserves
will be held by the Partnership; and the length of the reserve
period and the amounts that will ultimately be distributed to
investors will depend on several factors not known at this time.
The Partnership intends to make a liquidating distribution to
Interest Holders from the net sale proceeds remaining from the
Partnership's properties after payment of all legal and operating
expenses. The Partnership may make partial distributions of the
proceeds prior to the final distribution. The timing of the
liquidating distribution has not yet been determined.
In the third quarter of 2000, the Partnership distributed
$7,061,000 (or $2.687 per Unit) from the sale of the assets.
On November 8, 2001, the Magistrate Judge for the United States
District Court for the Northern District of Illinois ruled on the
plaintiff's legal fee petition. As a result of this ruling the
Partnership will pay the plaintiff's attorneys approximately
$191,000. The plaintiff's attorneys subsequently challenged this
ruling. On July 19, 2002, the Assigned Judge for the Northern
District of Illinois affirmed the legal fee petition ruling of the
Magistrate Judge. The plaintiff's attorneys may also challenge
this ruling. In addition, the Partnership may cross appeal the fee
ruling. Therefore, it is uncertain whether this amount (or a
greater or lesser amount) will actually be paid by the Partnership.
During the six months ended June 30, 2002 and 2001, the General
Partners and their affiliates did not earn any management fees, and
did not receive any Operating Cash Flow distributions.
Results of Operations (Liquidation Basis) - Six months ended June
30, 2002 and 2001
As a result of the settlement agreement that was approved by
the United States District Court for the Northern District of
Illinois on June 18, 1999 the Partnership has begun the liquidation
process and, in accordance with accounting principles generally
accepted in the United States of America, the Partnership's
financial statements for periods subsequent to June 18, 1999 have
been prepared on a liquidation basis.
The Partnership had net loss of $21,000 for the six months
ended June 30, 2002 compared to a net income of $52,000 for the six
months ended June 30, 2001 a decrease in net income of $73,000.
The decrease in net income is primarily the result of the change
in operating income and expenses as discussed in the following
paragraphs.
Total income was $46,000 for the six months ended June 30, 2002
compared to $134,000 for the six months ended June 30, 2001, a
decline of $88,000. The decline in total income relates primarily
to interest income. Interest income declined by $84,000 which is
associated with a decline in interest rates on the Partnership's
investments. The decline in rental income relates to the
Partnership's January 2001 property sale.
Total expenses were $68,000 for the six months ended June 30,
2002 compared to $78,000 for the six months ended June 30, 2001,
an increase of $10,000. The reason for the change in expenses
relates to a decline in transaction costs of $18,000 partially
offset by an increase in general and administrative expenses of
$8,000. Transaction costs declined as a result of the limited
activity as a result of the settlement agreement and the judge's
ruling regarding the plaintiff's legal fee petition.
Results of Operations (Liquidation Basis) - Three months ended June
30, 2002 and 2001
The Partnership had a net loss of $8,000 for the three months
ended June 30, 2002 compared to net income of $36,000 for the three
months ended June 30, 2001 a decrease in net income of $44,000.
Total income was $23,000 for the three months ended June 30,
2002 compared to $57,000 for the three months ended June 30, 2001,
a decline of $34,000. The decline in total income relates primarily
to interest income. Interest income declined by $33,000 which is
associated with a decline in interest rates on the Partnership's
investments.
Total expenses were $31,000 for the three months ended June 30,
2002 compared to $20,000 for the three months ended June 30, 2001,
a increase of $11,000. The reason for the change in expenses
relates to an increase in general and administrative expenses of
$14,000 partially offset by a decline in transaction costs of
$3,000. General and administrative expenses increased as a result
of an increase in the Partnership's reserve for estimated
liquidation costs. Transaction costs declined as a result of the
limited activity as a result of the settlement agreement and the
judge's ruling regarding the plaintiff's legal fee petition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Partnership does not engage in any hedge transactions or
derivative financial instruments.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
Two legal actions, as hereinafter described,
against the General Partners of the Partnership and
affiliates of such General Partners, as well as against
the Partnership on a nominal basis in connection with a
proposed transaction that was not consummated, have been
settled. On April 13, 1999, all the parties to the
litigation reached an agreement to settle the litigation,
subject to the approval by the United States District
Court for the Northern District of Illinois. This
approval was obtained on June 18, 1999. The terms of the
settlement agreement, along with a Notice to the Class,
were forwarded to the Interest Holders in the second
quarter of 1999. One additional legal action, which was
dismissed on January 28, 1998 had also been brought
against the General Partners of the Partnership and
affiliates of such General Partners, as well as the
Partnership on a nominal basis in connection with the
Merger. With respect to these actions the Partnership
and the General Partners and their named affiliates
denied all allegations set forth in the complaints and
vigorously defended against such claims.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission Of Matters To a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports On Form 8-K.
Exhibit 99. Certification of Officers.
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.
BY: Brauvin Realty Advisors, Inc.
Corporate General Partner of
Brauvin High Yield Fund L.P.
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of Directors,
President and Chief Executive Officer
DATE: August 14, 2002
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and Treasurer
DATE: August 14, 2002
Exhibit 99
CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER
OF
BRAUVIN REALTY ADVISORS, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN HIGH YIELD FUND L.P.
The undersigned, being the duly elected Chief Executive Officer of
Brauvin Realty Advisors, Inc., an Illinois corporation, is
authorized to execute this Certificate on behalf of Brauvin High
Yield Fund L.P. (the "Partnership"), and further certifies that to
the best of his knowledge:
(1) The Form 10-Q for the quarter ended June 30,
2002 filed by Partnership and containing the
Partnership's financial statements for the
quarter then ended, fully complies with the
requirements of Section 13(a) and 15(d), as
applicable, of the Securities Exchange Act
of 1934, as amended; and
(2) The information contained in said Form 10-Q
fairly presents, in all material respects,
the financial condition and results of
operations of the Corporation.
IN WITNESS WHEREOF, I have set my hand this 14th day of August,
2002.
/s/ Jerome J. Brault
Jerome J. Brault
Chief Executive Officer
CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
OF
BRAUVIN REALTY ADVISORS, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN HIGH YIELD FUND L.P.
The undersigned, being the duly elected Chief Financial Officer of
Brauvin Realty Advisors, Inc., an Illinois corporation, is
authorized to execute this Certificate on behalf of Brauvin High
Yield Fund L.P. (the "Partnership"), and further certifies that to
the best of his knowledge:
(1) The Form 10-Q for the quarter ended June 30,
2002 filed by Partnership and containing the
Partnership's financial statements for the
quarter then ended, fully complies with the
requirements of Section 13(a) and 15(d), as
applicable, of the Securities Exchange Act
of 1934, as amended; and
(2) The information contained in said Form 10-Q
fairly presents, in all material respects,
the financial condition and results of
operations of the Corporation.
IN WITNESS WHEREOF, I have set my hand this 14th day of August,
2002.
/s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer