UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
(Mark One) |
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[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2002 |
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OR |
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[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from __________ to __________ |
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Commission file number 0-17660 |
METRIC PARTNERS
GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
(Exact name of Registrant as specified in its charter)
CALIFORNIA | 94-3050708 | |
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(State or
other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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One California Street San Francisco, California |
94111-5415 |
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(Address of principal executive offices) |
(Zip Code) |
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Registrants telephone number, including area code: |
(415) 678-2000 (800) 347-6707 in all states |
Indicate by check mark whether the registrant (1) has filed all the 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 [ ]
Page 1
PART 1
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
BALANCE SHEETS (UNAUDITED)
September 30, | December 31, | ||||||||
2002 | 2001 | ||||||||
ASSETS |
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Cash and Cash Equivalents |
$ | 2,065,000 | $ | 2,302,000 | |||||
Restricted Cash |
5,000,000 | 5,000,000 | |||||||
TOTAL ASSETS |
$ | 7,065,000 | $ | 7,302,000 | |||||
LIABILITIES AND PARTNERS EQUITY |
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Other Liabilities |
8,000 | 31,000 | |||||||
TOTAL LIABILITIES |
8,000 | 31,000 | |||||||
PARTNERS EQUITY (DEFICIENCY): |
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General Partners |
(914,000 | ) | (914,000 | ) | |||||
Limited Partners (59,932 Units Outstanding) |
7,971,000 | 8,185,000 | |||||||
TOTAL PARTNERS EQUITY |
7,057,000 | 7,271,000 | |||||||
TOTAL LIABILITIES AND PARTNERS EQUITY |
$ | 7,065,000 | $ | 7,302,000 | |||||
See notes to financial statements (unaudited).
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METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
STATEMENTS OF INCOME (UNAUDITED)
For the Nine Months Ended | ||||||||
September 30, | ||||||||
2002 | 2001 | |||||||
REVENUES: |
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Interest and Other |
$ | 96,000 | $ | 249,000 | ||||
Total Revenues |
96,000 | 249,000 | ||||||
EXPENSES: |
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General and Administrative |
310,000 | 108,000 | ||||||
Total Expenses |
310,000 | 108,000 | ||||||
NET (LOSS) INCOME |
$ | (214,000 | ) | $ | 141,000 | |||
NET (LOSS) INCOME PER LIMITED PARTNERSHIP ASSIGNEE UNIT |
$ | (4 | ) | $ | 2 | |||
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METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended | ||||||||
September 30, | ||||||||
2002 | 2001 | |||||||
REVENUES: |
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Interest and Other |
$ | 30,000 | $ | 66,000 | ||||
Total Revenues |
30,000 | 66,000 | ||||||
EXPENSES: |
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General and Administrative |
107,000 | 35,000 | ||||||
Total Expenses |
107,000 | 35,000 | ||||||
NET (LOSS) INCOME |
$ | (77,000 | ) | $ | 31,000 | |||
NET (LOSS) INCOME PER LIMITED PARTNERSHIP ASSIGNEE UNIT |
$ | (1 | ) | $ | | |||
See notes to financial statements (unaudited).
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METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
STATEMENTS OF PARTNERS EQUITY (DEFICIENCY) UNAUDITED
For the Nine Months Ended September 30, 2002 and 2001
General | Limited | |||||||||||
Partners | Partners | Total | ||||||||||
Balance, January 1, 2002 |
$ | (914,000 | ) | $ | 8,185,000 | $ | 7,271,000 | |||||
Net Loss |
| (214,000 | ) | (214,000 | ) | |||||||
Balance, September 30, 2002 |
$ | (914,000 | ) | $ | 7,971,000 | $ | 7,057,000 | |||||
Balance, January 1, 2001 |
$ | (914,000 | ) | $ | 8,134,000 | $ | 7,220,000 | |||||
Net Income |
| 141,000 | 141,000 | |||||||||
Balance, September 30, 2001 |
$ | (914,000 | ) | $ | 8,275,000 | $ | 7,361,000 | |||||
See notes to financial statements (unaudited).
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METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended | ||||||||||
September 30, | ||||||||||
2002 | 2001 | |||||||||
OPERATING ACTIVITIES |
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Net (Loss) Income |
$ | (214,000 | ) | $ | 141,000 | |||||
Adjustments to reconcile Net (Loss) Income to net cash (used)
provided by operating activities: |
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Changes in operating assets and liabilities: |
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Accounts Receivable |
| 134,000 | ||||||||
Accounts Payable, accrued expenses, and other liabilities |
(23,000 | ) | (35,000 | ) | ||||||
Net cash (used) provided by operating activities |
(237,000 | ) | 240,000 | |||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
(237,000 | ) | 240,000 | |||||||
Cash and cash equivalents at beginning of period |
2,302,000 | 2,067,000 | ||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 2,065,000 | $ | 2,307,000 | ||||||
See notes to financial statements (unaudited).
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METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. | Reference to the 2001 Audited Financial Statements | |
These unaudited financial statements should be read in conjunction with the Notes to Financial Statements included in the 2001 audited financial statements. | ||
The financial information contained herein reflects all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation. | ||
2. | Transactions with the Managing General Partner and Affiliates | |
In accordance with the Partnership agreement, the Partnership is charged by the Managing General Partner and affiliates for services provided to the Partnership. The Partnership was charged $16,000 for the reimbursement of administrative expenses in each of the nine-month periods ended September 30, 2002 and 2001. | ||
As discussed in Note 2 to the 2001 audited financial statements, pursuant to the Partnership agreement, immediately prior to liquidation and if certain distribution levels to the limited partners are not met, the general partners may be obligated to return all or a portion of the cumulative amounts received in distributions. At September 30, 2002 such amount is approximately $914,000 and the Partnership believes circumstances will be such that the general partners will be required to re-contribute this amount. | ||
3. | Net Income (Loss) Per Limited Partnership Assignee Unit | |
The net income (loss) per limited partnership assignee Unit is computed by dividing the net income (loss) allocated to the limited partners by 59,932 assignee Units outstanding. | ||
4. | Restricted Cash | |
The $5,000,000 restricted cash balance represents the amount, which (as discussed in Part II, Item 1) the Court enjoined the Partnership from conveying, transferring, or otherwise disposing of. | ||
5. | Legal Proceedings | |
The Partnership is a plaintiff and counterclaim defendant in legal proceedings relating to the management agreement at the Residence Inn Ontario, a defendant in legal proceedings seeking damages for alleged failure to consummate a settlement of the Residence Inn Ontario case, and a plaintiff and defendant in other legal proceedings; see Part II, Item 1, Legal Proceedings, for a detailed description of these matters. |
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
This Item should be read in conjunction with financial statements and other items contained elsewhere in this report.
Results of Operations
During the nine months ended September 30, 2002 and 2001, the Partnership had net (loss) income of $(214,000) and $141,000, respectively. Income for both periods consisted solely of interest income. As the partnership ceased hotel operations in 1999, expenses for both periods reflect legal fees and administrative expenses.
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Partnership Liquidity and Capital Resources
Third Quarter of 2002
As stated in the Statement of Cash Flows for the nine months ended September 30, 2002, cash was generated from interest income on cash and cash equivalents as well as restricted cash balances. Cash was used to pay for legal fees, investor services expenses associated with certain tender offers and administrative expenses of the Partnership.
Third Quarter of 2001
As stated in the Statement of Cash Flows for the nine months ended September 30, 2001, cash was generated from interest income on cash and cash equivalents as well as restricted cash balances. Cash was used to pay for legal and administrative expenses of the Partnership.
Conclusion
As discussed in Note 6 of the 2001 audited financial statements, there is substantial doubt regarding the Partnerships ability to continue as a going concern.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Metric Partners Growth Suite Investors, L.P. vs. Kenneth E. Nelson, The Nelson Group, et al., San Francisco County Superior Court, Case No. 928065 (the SF Lawsuit). [The lawsuits described below are related. Terms defined in the description of one case may be used in the description of the other cases.]
This lawsuit related to disputes in connection with management of the Partnerships Residence Inn Ontario by an entity controlled by Kenneth E. Nelson (Nelson) from April 1988 to February 1991. In March 1993, the Partnership and Nelson verbally agreed to settle the SF Lawsuit at a settlement conference (the SF Settlement), whereby the Partnership would purchase, at a discount, the land (the Land) underlying the Hotel then leased by the Partnership from Nashville Lodging Company (NLC), an entity controlled by Nelson. Various disagreements between the Partnership and Nelson regarding the SF Settlement arose after March 1993, and documents to effectuate the SF Settlement were never executed. While the Court maintains jurisdiction to supervise the SF Settlement, this action is no longer active.
Nashville Lodging Company vs. Metric Partners Growth Suite Investors, L.P. et al., Circuit Court, State of Wisconsin, Case No. 94CV001212.
In February 1994, NLC served this lawsuit on the Partnership. NLC alleges fraud, breach of settlement contract and breach of good faith and fair dealing and seeks compensatory, punitive and exemplary damages in an unspecified amount for the Partnerships failure to consummate the SF Settlement. In February 1994, the Partnership filed an answer and requested that the Court stay the action pending resolution of the SF Lawsuit including all appeals. The Court refused to stay the action and discovery commenced. In February 1995, the Court determined that the Partnership could be sued in Wisconsin but stayed the case until the settlement of the SF Lawsuit has been finalized.
Orlando Residence Ltd. vs. 2300 Elm Hill Pike, Inc. and Nashville Lodging Company vs. Metric Partners Growth Suite Investors, L.P., Chancery Court for Davidson County, in Nashville, Tennessee, Case No. 94-1911-I (Nashville Case I).
Orlando Residence Inn Ltd. (Orlando) filed this action against 2300 Elm Hill Pike, Inc. (2300) and NLC in the Davidson County Chancery Court to attempt to execute a judgment against Nelson, NLC and 2300 in another action in Chancery Court by subjecting the Land to sale. In May 1995, 2300 and NLC (TP Plaintiffs) filed a third-party complaint against the Partnership, alleging it had refused to purchase the Land as required by the SF Settlement. TP Plaintiffs demanded payment by the Partnership of 2300 and NLCs costs of defending the case in which the
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judgment that Orlando was attempting to enforce had been obtained and indemnification for any loss resulting from the claims of Orlando, among other claims of damage.
In February 1996, the Court granted a motion filed by TP Plaintiffs for partial summary judgment, ruling that the Partnership had breached the SF Settlement. The Partnership does not believe it breached the SF Settlement.
In late October 1997, TP Plaintiffs filed a motion for an injunction to prohibit the Partnership from distributing proceeds from the sale of the Residence Inns owned by the Partnership, pending a final judgment in this case. A hearing on this motion was held in February 1998 and the Court enjoined the Partnership from conveying, transferring, distributing or otherwise disposing of its cash to any extent which would leave less than $5 million available for payment of any judgment obtained by TP Plaintiffs.
TP Plaintiffs filed an amended complaint against the Partnership in April 1998, asserting, among other things, a bad faith breach of contract by the Partnership. In May 1998, the Court granted a motion by the Partnership to dismiss these bad faith allegations and to dismiss certain claims for specific damages made by TP Plaintiffs, including attorneys fees and the value of Nelsons time relating to efforts to enforce the SF Settlement.
In late October 1998, TP Plaintiffs filed a second amended complaint, asserting that a certain 1989 three-party agreement among NLC, the Partnership and the holder of a mortgage on the Hotel and the Land entitles TP Plaintiffs to obtain judgment for, among other things, the cost, including attorneys fees, of this action and of Nelsons time and efforts on behalf of NLC in this action. In November 1998, the Court granted a motion filed by the Partnership, dismissing the claim of TP Plaintiffs to recover for the value of Nelsons time and efforts on behalf of NLC in this and related litigation.
In December 1998, the Court granted a motion for partial summary judgment filed by the Partnership, dismissing most of the remaining damage claims of TP Plaintiffs, including claims for indemnification for any loss resulting from the claims of Orlando. After these claims were dismissed, TP Plaintiffs amended their damage claim to seek to recover the alleged differential between the price that the Partnership agreed to pay for the Land and its alleged fair market value. The amount of this claim is approximately $1.6 million. In addition, TP Plaintiffs sought to recover attorneys fees to enforce the SF Settlement.
In November 1999, the Partnership filed a motion for summary judgment seeking dismissal of TP Plaintiffs claim for attorneys fees. This motion was granted by the Court on February 25, 2000.
The Partnership filed a motion in February 2000 to disqualify the law firm representing the TP Plaintiffs based on a conflict of interest that arose when a partner of the Partnerships counsel with knowledge of this case left that firm and joined the law firm representing TP Plaintiffs. As a result of the motion, counsel for TP Plaintiffs filed a motion to withdraw as counsel in March 2000, which motion was subsequently granted by the Court. New counsel for TP Plaintiffs has been selected. On December 21, 2000, the TP Plaintiffs filed a motion requesting that the Court reconsider its order of December 1998, granting partial summary judgment to the Partnership. This motion was denied by the Court on January 26, 2001.
The trial of the claim of the TP Plaintiffs remaining in this case, scheduled for December 17, 2001, was postponed to February 11, 2002. Trial did start on this date, but on February 13, 2002, the Judge declared a mistrial as a result of events unrelated to this action. A new trial was scheduled for September 16, 2002.
On April 5, 2002, TP Plaintiffs filed a motion for leave to amend their complaint to allege damages resulting from alleged interference by the Partnership with NLCs efforts to sell the Land and to compute NLCs benefit of bargain damages as of the date of the trial, rather than the date of the breach of the SF Settlement. On May 3, 2002 the Partnership filed a response to the motion denying the allegations of the proposed amendment and seeking a ruling barring the filing of the amended complaint. The Court denied the motion on May 29, 2002.
On September 3, 2002, the TP Plaintiffs and the Partnership signed and the Court entered an agreed final order under which the TP Plaintiffs waived their sole remaining damage claims. All other damage claims asserted by the TP Plaintiffs in the case had been dismissed by prior orders of the Court. The effect of the order is a final judgment of no damages for the TP Plaintiffs, which judgment is now appealable. The agreed final order was proposed by the TP Plaintiffs, who have filed a notice of appeal of the final judgment with the Tennessee Court of Appeals. In connection with this appeal, the Partnership will seek to have the judgment upheld, but if the Court of Appeals should determine to overturn any of the lower Court rulings in favor of the Partnership and remand the case to the lower Court, the Partnership will also seek reversal of the lower court ruling that the Partnership breached the SF Settlement.
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Metric Partners Growth Suite Investors, L.P., vs. Nashville Lodging Co., 2300 Elm Hill Pike, Inc., Orlando Residence Ltd., and LaSalle National Bank, as trustee under that certain pooling and servicing agreement, dated July 11, 1995 for the holders of the WHP Commercial Mortgage Pass Through Certificates, Series 1995C1 and Robert Holland, Trustee, Chancery Court for Davidson County, in Nashville, Tennessee, Case No. 96-1405-III (Nashville Case II).
The Partnership filed this action on May 3, 1996 to obtain, among other things, a judicial determination of the rights and obligations of the Partnership and NLC under the senior mortgage on the Hotel (Senior Mortgage), a note held by NLC wrapped around the Senior Mortgage (the Wrap Note) and the Lease as a consequence of the Partnerships cure of certain defaults by NLC under the Senior Mortgage. The Partnership believed that as a result of such a cure, it became the direct obligor to the lender under the Senior Mortgage and that the Wrap Note had been satisfied and the payments due under Lease reduced by $50,000 per year.
NLC and 2300 filed an answer in June, together with a counterclaim against the Partnership. NLC and 2300 claimed damages from the Partnership and asked the Court to permit acceleration of the Wrap Note and termination of the Lease. In July 1996, the Partnership filed a motion for summary judgment in this case, asking that the Court award the relief sought by it and that the Court dismiss the counterclaim of NLC and 2300. At a hearing on this motion held in August 1996 the Court granted the Partnerships motion. The defendants appealed all judgments for the Partnership in this case. The Partnership and the defendants agreed on an attorneys fee award to the Partnership of $60,000, but no payment was expected until the defendants appeal is resolved. Oral arguments regarding this appeal were held in July 1998, and in September 1998 the appellate court affirmed the judgments for the Partnership. Defendants moved for rehearing, which was denied in early October 1998. Defendants then filed an application with the Tennessee Supreme Court for permission to appeal the appellate court decision. This application was denied by the Tennessee Supreme Court in early March 1999. Subsequently, Defendants petitioned the Tennessee Supreme Court to reconsider its denial. This petition was denied by the Tennessee Supreme Court on May 10, 1999. The Partnerships $60,000 attorneys fee award is now due and owing by the defendants.
Kenneth E. Nelson and Nashville Lodging Co. vs. Metric Realty et al., Chancery Court for Davidson County in Nashville, Tennessee, Case No. 97-2189-III (the Inducement Action).
In the second quarter of 1997, Nelson alleged that Metric Realty and GHI Associates II, L.P., the Managing and Associate General Partners, respectively, of the Partnership, and certain of Metric Realtys affiliates (the Affiliates) and certain former and current employees of Metric Realty or its affiliates (the Employees) had improperly induced the Partnership to breach the SF Settlement. In June 1997, Nelson and NLC filed the Inducement Action in the Chancery Court for Davidson County in Nashville, Tennessee (the Chancery Court) against Metric Realty, GHI Associates II, L.P., the Affiliates and certain of the Employees (the Inducement Action Defendants), seeking unspecified compensatory, treble and punitive damages for the alleged improper inducement of breach of contract.
In June 1998 the Inducement Action Defendants filed a motion to dismiss the complaint against the Employees and one of the Affiliates named in the action based on lack of jurisdiction and against the remaining Affiliates based on failure to state a claim. The Chancery Court in September 1998 dismissed the complaint against all Affiliates but one and denied the remaining requests for dismissal.
A motion for summary judgment to dismiss the action on the basis of the statute of limitations was filed in January 1999 by the Inducement Action Defendants and was argued at a hearing held in February 1999. In April 1999, the Court denied the motion.
The Inducement Action Defendants filed a motion in February 2000 to disqualify the law firm representing Nelson and NLC (Nelsons Counsel) based on a conflict of interest that arose when a partner of the Inducement Action Defendants counsel with knowledge of issues related to this case left that firm and joined Nelsons Counsel. This motion was heard on March 6, 2000 and on April 15, 2000, the Court declined to rule on this motion to disqualify Nelsons Counsel and instead referred the entire case to the Tennessee Chancellor who is now presiding over Nashville Case I (see above). Subsequently, Nelsons Counsel withdrew from the case and new counsel for Nelson and NLC was substituted.
Nelson and NLC filed a summary judgment motion seeking to bar the affirmative defense of managers privilege asserted by the Inducement Action Defendants. In response to the motion, all of the remaining Inducement Action Defendants filed a cross-motion for summary judgment, seeking dismissal of all claims on the grounds that actions of the Inducement Action Defendants taken in connection with the SF Settlement were privileged by virtue of the managers privilege. On October 13, 2000, the Court held a hearing on the parties motions for summary judgment. At the conclusion of the hearing, the Court orally denied the motion of Nelson and NLC, and granted the cross-motion of the remaining Inducement Action Defendants, dismissing all remaining claims. On November 28, 2000,
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Nelson and NLC filed an appeal of the Courts action to the Tennessee Court of Appeals. Oral argument in this appeal was held on September 7, 2001.
On September 26, 2002, the Court of Appeals issued an opinion affirming the dismissal of the action on the grounds of the managers privilege, and further holding that the claims of Nelson and NLC were barred by the applicable statute of limitations. Nelson and NLC have sought a rehearing by the Court of Appeals. This request was denied on November 6, 2002. Nelson and NLC have 60 days from the date of the denial to seek permission from the Tennessee Supreme Court to appeal the decision by the Court of Appeals.
The legal and other expenses of the Inducement Action Defendants in the Inducement Action arising as a result of the allegations made by Nelson are being paid by the Partnership pursuant to the indemnification provisions of the Partnerships limited partnership agreement and subject to the conditions set forth in those provisions.
Metric Partners Growth Suite Investors, L.P. vs. James Reuben et al., San Francisco County Superior Court, Case No. 998214.
On September 30, 1998, the Partnership filed this lawsuit against James Reuben and several law corporations of which he is or has been a member (the Reuben Defendants), alleging breach of their professional obligations and fiduciary duty as attorneys for the Partnership to adequately and competently represent and advise the Partnership in connection with the SF Settlement. The Partnership seeks unspecified damages from the Reuben Defendants arising from such breach. The Reuben Defendants answered the complaint in January 1999. Discovery has commenced and a settlement conference is set for April 21, 2003. The trial date has been scheduled for May 12, 2003.
GP Credit Co., LLC vs. Metric Partners Growth Suite Investors, L.P., Metric Realty, SSR Realty Advisors, Inc. et al, San Francisco County Superior Court, Case No. CGC-02-403301.
GP Credit Co., LLC (GP) filed this purported class action against the Partnership and Metric Realty, SSR Realty Advisors, Inc. (SSR) and certain of SSRs affiliates and current and former employees (collectively, the SSR Parties) and a class of all limited partners of the Partnership (the LPs) alleging, among other things, that the SSR Parties fraudulently caused GSI to distribute $16.8 million to the LPs. GP, which claims to have purchased a claim owned by NLC, is demanding general and punitive damages from the Partnership and the SSR Parties and damages from the LPs with regard to the portion of this $16.8 million distribution received by each LP. Process was served on all non-LP defendants in March and April 2002, and answers have been filed on behalf of all such defendants. The court has set a case management conference for November 22, 2002.
The legal and other expenses of Metric Realty, SSR and the SSR Parties in this action will be paid by the Partnership pursuant to the indemnification provisions of the Partnerships limited partnership agreement and subject to the conditions set forth in the provisions.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. The Chief Executive Officer and Chief Financial Officer of SSR Realty Advisors, Inc., in its capacity as Managing General Partner of Metric Partners Growth Suite Investors, L.P., (the Partnership), have evaluated the effectiveness of the Partnerships disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of a date within 90 days prior to the filing date of this quarterly report on Form 10-Q (the Evaluation Date). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Partnerships disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Partnership required to be included in the Partnerships reports filed or submitted under the Exchange Act.
(b) Changes in Internal Controls. Since the Evaluation Date, there have not been any significant changes in the Partnerships internal controls or in other factors that could significantly affect such controls.
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Item 5. Other Information
In connection with certain offers made to purchase Limited Partnership Assignee Units (Units) of the Partnership, the Partnership advised holders of the Units that in order to comply with Section 12.3 of the Limited Partnership Agreement of the Partnership (the Limited Partnership Agreement) the Partnership could not transfer any Units, which when combined with prior transfers during any one calendar year would exceed in the aggregate five percent of the number of Units then outstanding, as the Limited Partnership Agreement prohibited transfers which could cause the Partnership to be classified as a publicly traded partnership for federal income tax purposes (which could occur if five percent or more of the Units were transferred in any calendar year). The Partnership further advised the holders of Units that Section 12.3 of the Limited Partnership Agreement also prohibited any transfer of Units that could result in a termination of the Partnership for tax purposes (which would occur if a majority of the Units were tendered to any offeror). At the time of such communications, the Managing General Partner advised the holders of Units that there might not be any material adverse tax consequences if the Partnership were to be classified as a publicly traded partnership or were to be terminated for tax purposes. The Managing General Partner advised the holders of Units that it would review the costs, risks and benefits of amending the Limited Partnership Agreement to remove either or both of those restrictions from Section 12.3 of the Limited Partnership Agreement.
The Managing General Partner recently determined, following a review of the costs, risks and benefits of amending the Limited Partnership Agreement, with the requisite approval of the holders of the Units, and the process of solicitation of such approval, that it would be in the best interests of the holders of Units if the Limited Partnership Agreement was amended to remove the prohibitions described above. The Managing General Partner presently expects to solicit approval of amendments to the Limited Partnership Agreement from the holders of Units in early 2003.
Item 6. Exhibits and Reports on Form 8-K
(a) | Exhibits |
99.1 | Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
(b) | Reports on Form 8-K | |
The Partnership filed a Form 8-K on September 16, 2002 making an Item 5 disclosure to disclose that the Partnership, as required by Rule 14e-2 as promulgated under the Securities Exchange Act of 1934, as amended, had advised holders of Units that the Partnership was not making a recommendation and was expressing no opinion and remaining neutral with respect to an offer to purchase Units made by Peachtree Partners. | ||
The Partnership filed a Form 8-K on September 27, 2002 making an Item 5 disclosure to disclose that the Partnership had advised the holders of Units as to a proposal made to the Partnership to make a tender offer for a majority of the Units under certain conditions and the response of the Partnership to such proposal. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P., a California Limited Partnership |
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By: | Metric Realty an Illinois general partnership its Managing General Partner |
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By: | SSR Realty Advisors, Inc., a Delaware corporation its Managing General Partner |
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By: | /s/ William A. Finelli | |||
William A. Finelli Managing Director, Chief Financial Officer (Principal Financial and Accounting Officer) of SSR Realty Advisors, Inc. |
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Date: | November 14, 2002 | |||
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Certifications
I, Thomas P. Lydon, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Metric Partners Growth Suite Investors, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a 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 financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrants 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 registrants 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 registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants 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 registrants internal controls; and |
6. The registrants 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.
Date: November 14, 2002
/s/ Thomas P. Lydon, Jr.
Thomas P. Lydon, Jr.,
President and Chief Executive Officer
SSR Realty Advisors, Inc.
As Managing Partner of Metric Realty,
Managing General Partner of Registrant
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Certifications
I, William A. Finelli, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Metric Partners Growth Suite Investors, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a 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 financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrants 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 registrants 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 registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants 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 registrants internal controls; and |
6. The registrants 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.
Date: November 14, 2002
/s/ William A. Finelli
William A. Finelli,
Managing Director and Chief Financial Officer
SSR Realty Advisors, Inc.
As Managing Partner of Metric Realty,
Managing General Partner of Registrant
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