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 September 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
September 30, 2002 and December 31, 2001
(Liquidation Basis). . . . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets in Liquidation
for the period January 1, 2002 to September 30,
2002 (Liquidation Basis) . . . . . . . . . . . . . . . . . 5
Statement of Changes in Net Assets in Liquidation
for the period January 1, 2001 to September 30,
2001 (Liquidation Basis) . . . . . . . . . . . . . . . . . 6
Statement of Operations for the nine months
ended September 30, 2002 and September 30, 2001
(Liquidation Basis) . . . . . . . . . . . . . . . . . . 7
Statement of Operations for the three months
ended September 30, 2002 and September 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
Item 4. Controls and Procedures . . . . . . . . . . . . . . . . . 21
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 22
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . 22
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . 22
Item 4. Submissions of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . . . . 22
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . 22
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 22
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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 September 30, 2002, Statement of
Changes in Net Assets in Liquidation for the period January 1, 2002
to September 30, 2002 (Liquidation Basis), Statement of Changes in
Net Assets in Liquidation for the period January 1, 2001 to
September 30, 2001 (Liquidation Basis), Statements of Operations
for the nine months ended September 30, 2002 and September 30, 2001
(Liquidation Basis) and Statements of Operations for the three
months ended September 30, 2002 and September 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
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 (LIQUIDATION BASIS)
(Unaudited)
September 30, December 31,
2002 2001
ASSETS
Cash and cash equivalents $4,651,681 $4,880,855
Total Assets 4,651,681 4,880,855
LIABILITIES
Accounts payable and accrued
expenses 22,372 212,357
Reserve for estimated costs during
the period of liquidation 117,677 98,800
Total Liabilities 140,049 311,157
Net Assets in Liquidation $4,511,632 $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 SEPTEMBER 30, 2002
(Unaudited)
Net Assets in Liquidation at
January 1, 2002 $ 4,569,698
Net loss (58,066)
Net Assets in Liquidation at
September 30, 2002 $ 4,511,632
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS IN
LIQUIDATION (LIQUIDATION BASIS) FOR THE PERIOD
JANUARY 1, 2001 TO SEPTEMBER 30, 2001
(Unaudited)
Net Assets in Liquidation at
January 1, 2001 $ 4,689,924
Loss from operations (130,048)
Loss on sale of property (3,925)
Net Assets in Liquidation at
September 30, 2001 $ 4,555,951
See accompanying notes to financial statements.
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(LIQUIDATION BASIS)
(Unaudited)
2002 2001
INCOME:
Rental $ -- $ 3,713
Interest 69,424 177,459
Total income 69,424 181,172
EXPENSES:
General and administrative 127,490 102,224
Transaction costs -- 208,996
Total expenses 127,490 311,220
Loss before loss on sale
of property (58,066) (130,048)
Loss on sale of property -- (3,925)
Net loss $(58,066) $(133,973)
Net loss allocated to:
General Partners $ (1,161) $ (2,679)
Interest Holders $(56,905) $(131,294)
Net loss per Unit
outstanding (2,627,503
Units outstanding) $ (0.02) $ (0.05)
See accompanying notes to financial statements
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(LIQUIDATION BASIS)
(Unaudited)
2002 2001
INCOME:
Interest $ 22,507 $ 46,894
Total income 22,507 46,894
EXPENSES:
General and administrative 59,338 41,829
Transaction costs -- 191,285
Total expenses 59,338 233,114
Net loss $(36,831) $(186,220)
Net loss allocated to:
General Partners $ (737) $ (3,724)
Interest Holders $(36,094) $(182,496)
Net loss per Unit
outstanding (2,627,503
Units outstanding) $ (0.01) $ (0.07)
See accompanying notes to financial statements
BRAUVIN HIGH YIELD FUND L.P.
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
For the nine months ended September 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 September 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 September 30, 2002. As of September 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 September 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 has 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 nine months ended
September 30, 2002 and 2001 were as follows:
2002 2001
Reimbursable operating
expenses $64,633 $61,125
As of September 30, 2002, the Partnership made all payments to
affiliates.
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 September 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. 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 appealed this ruling. On September 24, 2002, the
plaintiff's attorneys filed a Stipulation of Dismissal of their
appeal in the District Court for the Northern District of Illinois.
The Partnership paid total plaintiff's attorney fees and costs of
$191,978 on September 24, 2002.
(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.
(7) SUBSEQUENT EVENT
On November 1, 2002, the Partnership made a distribution to the
Interest Holders in the amount of $729,295.
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 1, 2002, the Partnership made a distribution to the
Interest Holders in the amount of $729,295.
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. 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 appealed this ruling. On September 24, 2002, the
plaintiff's attorneys filed a Stipulation of Dismissal of their
appeal in the District Court for the Northern District of Illinois.
The Partnership paid total plaintiff's attorney fees and costs of
$191,978 on September 24, 2002.
During the nine months ended September 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) - Nine months ended
September 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 $58,000 for the nine months
ended September 30, 2002 compared to a net loss of $134,000 for the
nine months ended September 30, 2001, a decrease in net loss of
$76,000. The decrease in net loss is primarily the result of the
change in operating income and expenses as discussed in the
following paragraphs.
Total income was $69,000 for the nine months ended September
30, 2002 compared to $181,000 for the nine months ended September
30, 2001, a decline of $112,000. The decline in total income
relates primarily to interest income. Interest income declined by
$108,000 which is associated with a decline in interest rates on
the Partnership's investments and a decline in the total amount
invested. The decline in rental income relates to the
Partnership's January 2001 property sale.
Total expenses were $127,000 for the nine months ended
September 30, 2002 compared to $311,000 for the nine months ended
September 30, 2001, a decrease of $184,000. The reason for the
change in expenses relates to a decline in transaction costs of
$209,000 partially offset by an increase in general and
administrative expenses of $25,000. 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. General and administrative expenses increased as a
result of an increase in the Partnership's reserve for estimated
liquidation costs.
Results of Operations (Liquidation Basis) - Three months ended
September 30, 2002 and 2001
The Partnership had a net loss of $37,000 for the three months
ended September 30, 2002 compared to net loss of $186,000 for the
three months ended September 30, 2001, a decrease in net loss of
$149,000.
Total income was $23,000 for the three months ended September
30, 2002 compared to $47,000 for the three months ended September
30, 2001, a decline of $24,000. The decline in total income relates
to interest income. Interest income declined by $24,000, which is
associated with a decline in interest rates on the Partnership's
investments and a decline in the total amount invested.
Total expenses were $59,000 for the three months ended
September 30, 2002 compared to $233,000 for the three months ended
September 30, 2001, a decrease of $174,000. The reason for the
change in expenses relates to a decline in transaction costs of
$191,000 partially offset by an increase in general and
administrative expenses of $17,000. 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. General and administrative expenses increased as a
result of an increase in the Partnership's reserve for estimated
liquidation costs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Partnership does not engage in any hedge transactions or
derivative financial instruments.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer have
reviewed and evaluated the effectiveness of the Company's
disclosure controls and procedures (as defined in Exchange Act
Rules 240.13a-14(c) and 15d-14(c)) as of a date within 90 days
before the filing date of this quarterly report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer
have concluded that the Company's current disclosure controls and
procedures are effective and timely, providing all material
information relating to the Company required to be disclosed in
reports filed or submitted under the Exchange Act.
Changes in Internal Controls
There have not been any significant changes in the Company's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.
We are not aware of any significant deficiencies or material
weaknesses, therefore no corrective actions were taken.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
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: November 14, 2002
BY: /s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and Treasurer
DATE: November 14, 2002
CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER
OF
BRAUVIN REALTY ADVISORS, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN HIGH YIELD FUND L.P.
I, Jerome J. Brault, Chief Executive Officer of the Company,
certify that:
1. I have reviewed this quarterly report on Form 10-Q of Brauvin
High Yield Fund L.P.;
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the consolidated
financial condition, results of operations and statement of
changes in net assets in liquidation of the registrant as of,
and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could aversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any
material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
BY:/s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of Directors,
President and Chief Executive Officer
DATE: November 14, 2002
CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
OF
BRAUVIN REALTY ADVISORS, INC.
CORPORATE GENERAL PARTNER
OF
BRAUVIN HIGH YIELD FUND L.P.
I, Thomas E. Murphy, Chief Financial Officer of the Company,
certify that:
1. I have reviewed this quarterly report on Form 10-Q of Brauvin
High Yield Fund L.P.;
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report,
fairly present in all material respects the consolidated
financial condition, results of operations and statement of
changes in net assets in liquidation of the registrant as of,
and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could aversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any
material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
BY:/s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and Treasurer
DATE: November 14, 2002
Exhibit 99
SECTION 906 CERTIFICATION
The following statement is provided by the undersigned to
accompany the Quarterly Report on Form 10-Q for the quarter ended
September 30, 2002, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 and shall not be deemed filed pursuant to any
provisions of the Securities Exchange Act of 1934 or any other
securities law:
Each of the undersigned certifies that the foregoing Report
on Form 10-Q fully complies with the requirements of Section 13(a)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and that the
information contained in the Form 10-Q fairly presents, in all
material respects, the financial condition and results of
operations of Brauvin High Yield Fund L.P.
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: November 14, 2002
BY:/s/ Thomas E. Murphy
Thomas E. Murphy
Chief Financial Officer and Treasurer
DATE: November 14, 2002