-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JA7xJ43VKQ0a2IJxvu4qufsUbxyZ99TFfnk4QVBRig4TcOjlhspxUrOASewJaJB1 UCtZjn9ATkbgtwA8G+eI1w== 0000786149-97-000002.txt : 19970328 0000786149-97-000002.hdr.sgml : 19970328 ACCESSION NUMBER: 0000786149-97-000002 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970327 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INLAND MORTGAGE INVESTORS FUND LP CENTRAL INDEX KEY: 0000786149 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 363436439 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-15759 FILM NUMBER: 97564643 BUSINESS ADDRESS: STREET 1: 2901 BUTTERFIELD RD CITY: OAK BROOK STATE: IL ZIP: 60521 BUSINESS PHONE: 7082188000 MAIL ADDRESS: STREET 1: 2901 BUTTERFIELD ROAD CITY: OAK BROOK STATE: IL ZIP: 60521 10-K405 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For The Fiscal Year Ended December 31, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File #0-15759 Inland Mortgage Investors Fund, L.P. (Exact name of registrant as specified in its charter) Delaware 36-3436439 (State of organization) (I.R.S. Employer Identification Number) 2901 Butterfield Road, Oak Brook, Illinois 60521 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: 630-218-8000 Securities registered pursuant to Section 12(b) of the Act: Title of each class: Name of each exchange on which registered: None None Securities registered pursuant to Section 12(g) of the Act: LIMITED PARTNERSHIP UNITS (Title of class) 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 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] State the aggregate market value of the voting stock held by nonaffiliates of the registrant. Not applicable. The Prospectus of the Registrant dated February 12, 1986, as supplemented and filed pursuant to Rule 424(b) and 424(c) under the Securities Act of 1933 is incorporated by reference in Parts I, II and III of this Annual Report on Form 10-K. -1- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) TABLE OF CONTENTS Part I Page ------ ---- Item 1. Business...................................................... 3 Item 2. Properties.................................................... 3 Item 3. Legal Proceedings............................................. 3 Item 4. Submission of Matters to a Vote of Security Holders........... 3 Part II ------- Item 5. Market for the Partnership's Limited Partnership Units and Related Security Holder Matters.......................... 4 Item 6. Selected Financial Data....................................... 5 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................... 6 Item 8. Financial Statements and Supplementary Data................... 8 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure....................... 20 Part III -------- Item 10. Directors and Executive Officers of the Registrant............ 20 Item 11. Executive Compensation........................................ 25 Item 12. Security Ownership of Certain Beneficial Owners and Management................................................... 26 Item 13. Certain Relationships and Related Transactions................ 26 Part IV ------- Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................................. 27 SIGNATURES............................................................. 28 -2- PART I Item 1. Business The Registrant, Inland Mortgage Investors Fund, L.P. (the "Partnership"), is a limited partnership formed on December 5, 1985 pursuant to the Delaware Revised Uniform Limited Partnership Act. On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited Partnership Units (the "Units") at $500 per Unit, pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on February 12, 1987, with total sales of 20,129.24 Units resulting in gross offering proceeds of $10,064,620, not including $500 which is the General Partner contribution. All of the holders of these Units were admitted to the Partnership. A majority of these proceeds were used to fund first mortgage loans. The Partnership funded fifteen loans between October 1986 and August 1988 utilizing $8,466,875 of offering proceeds collected, net of participations. As of December 31, 1996, $3,834,431 has been repaid, which includes principal amortization, payoffs on eight loans, prepayment penalties and proceeds from the sale of three properties. The Limited Partners of the Partnership share in the benefits of ownership of the Partnership's first mortgage receivable investments in proportion to the number of Units held. Inland Real Estate Investment Corporation is the General Partner. The Partnership is engaged in the business of making and acquiring loans collateralized by mortgages on improved, income producing multi-family residential properties in or near Chicago, Illinois. The loans are being serviced by Inland Mortgage Servicing Corporation, a subsidiary of the General Partner. The Partnership does not segregate revenues or assets by geographic region, and such a presentation would not be material to an understanding of the Partnership's business taken as a whole. The Partnership had no employees during 1996. The terms of transactions between the Partnership and Affiliates of the General Partner are set forth in Item 11 below and Note 3 of the Notes to Financial Statements (Item 8 of this Annual Report) to which reference is hereby made. Item 2. Properties The Partnership owns no real properties. Item 3. Legal Proceedings The Partnership is not subject to any material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during 1996. -3- PART II Item 5. Market for the Partnership's Limited Partnership Units and Related Security Holder Matters As of December 31, 1996, there were 743 holders of Units of the Partnership. There is no public market for Units nor is it anticipated that any public market for Units will develop. Reference is made to Item 6 below for a discussion of cash distributions made to the Limited Partners. The Partnership's Liquidity Plan is available to the Limited Partners. See "Liquidity Plan" and "Distribution Reinvestment Plan," page 18 and pages 37-38, respectively, of the Prospectus of the Partnership dated February 12, 1986, which is incorporated herein by reference. At this time, there are no Limited Partners participating in the DRP. -4- Item 6. Selected Financial Data INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) For the years ended December 31, 1996, 1995, 1994, 1993 and 1992 (not covered by the Report of Independent Accountants) 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Total assets......... $4,965,920 5,923,235 6,470,865 7,142,969 7,585,470 =========== =========== =========== =========== ========== Total income......... $ 434,350 596,496 635,063 794,889 907,811 =========== =========== =========== =========== ========== Income from operations......... 361,529 521,719 555,677 541,702 527,464 Gain on sale of investment property - - - 44,434 123,476 ----------- ----------- ----------- ----------- ---------- Net income........... $ 361,529 521,719 555,677 586,136 650,940 =========== =========== =========== =========== ========== Income from operations allocated to the one General Partner Unit$ 17,786 26,480 26,766 28,394 23,960 =========== =========== =========== =========== ========== Net income per Unit allocated to Limited Partners from (b): Operations........... 17.08 24.60 26.28 25.50 25.01 Gain on sale of investment property - - - 2.21 6.14 ----------- ----------- ----------- ----------- ---------- $ 17.08 24.60 26.28 27.71 31.15 =========== =========== =========== =========== ========== Distributions to Limited Partners from: Operations........... 391,806 509,563 520,964 542,105 455,310 Repayment proceeds... 900,900 530,920 671,989 326,388 44,231 ----------- ----------- ----------- ----------- ---------- $1,292,706 1,040,483 1,192,953 868,493 499,541 =========== =========== =========== =========== ========== Distributions per Unit to Limited Partners from (b): Operations........... 19.46 25.31 25.88 26.93 22.62 Repayment proceeds... 44.76 26.38 33.38 16.22 2.20 ----------- ----------- ----------- ----------- ---------- $ 64.22 51.69 59.26 43.15 24.82 =========== =========== =========== =========== ========== (a) The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report. (b) The net income and distributions per Limited Partnership Unit data are based upon the weighted average number of Units outstanding of 20,129.24. -5- Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this annual report on Form 10-K constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward- looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; inability of borrower to meet financial obligations; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General Partner. On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on February 12, 1987, with a total of 20,129 Units being sold to the public at $500 per Unit resulting in $10,064,620 of gross offering proceeds which were received by the Partnership, not including $500 which is the General Partner's contribution. The Partnership funded fifteen loans between October 1986 and August 1988 utilizing $8,466,875 of capital proceeds collected, net of participations. As of December 31, 1996, cumulative distributions to Limited Partners totaled $9,734,857, of which $3,834,431 represents principal amortization, payoffs on eight loans, prepayment penalties and proceeds from the sale of three properties. At December 31, 1996, the Partnership had cash and cash equivalents aggregating $1,226,087 which will be utilized for future distributions to partners and working capital requirements. The sources of future liquidity and distributions to the Limited and General Partners are expected to be from the collection of interest and repayment of principal of the Partnership's mortgage loan investments. To the extent that these sources are insufficient to meet the Partnership's needs, the Partnership may rely on advances from Affiliates of the General Partner, other short-term financing, or may liquidate certain mortgage loans or other assets. Results of Operations Interest income on mortgage loans receivable decreased for the year ended December 31, 1996, as compared to the year ended December 31, 1995, due to the prepayments of four of the Partnership's mortgage loans receivable (2659 South Austin prepaid on May 23, 1995, 5420 North Kenmore prepaid on April 2, 1996, 712-720 West Grace prepaid on June 18, 1996 and 7434-7442 North Hermitage prepaid on June 27, 1996). In addition to the loan prepayments, interest income decreased due to the Partnership discontinuing accruing interest on the mortgage loan receivable collateralized by the property located at Indian Trail Road, Aurora, Illinois. As of December 31, 1996, the Partnership is owed interest of $49,404 for the period from July to December 1996. The loan on this property, previously recorded as a mortgage loan receivable, is being recorded as a mortgage loan in substantive foreclosure as of September 30, 1996. These decreases in interest income were partially offset by an increase in the adjustable interest rate (6.747% to 6.975%) in the mortgage loan receivable collateralized by the property located at 7428 West Washington in April 1996. -6- Interest income on mortgage loans receivable decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to a number of factors. On July 28, 1994 and May 23, 1995, the loans collateralized by the properties located at 2906-10 Eastwood and 2659 South Austin, respectively, were prepaid by the borrowers. Additionally, the loan collateralized by the property located at 7434-42 North Hermitage was modified in March 1995 to extend the loan for five years at an interest of 10.5% (a decrease from 11%.) These decreases in interest income were partially offset by an increase in the adjustable interest rate (5.687% to 6.747%) in the mortgage loan receivable collateralized by the property located at 7428 West Washington in April 1995. Interest on investments increased for the years ended December 31, 1996 and 1995, as compared to the year ended December 31, 1994, due to an increase in interest rates and the Partnership investing repayment proceeds before being distributed to the Limited Partners. The other income recorded by the Partnership for the year ended December 31, 1996, is primarily the prepayment penalty received for the payoff of the loan collateralized by the property located at 7434-7442 North Hermitage on June 27, 1996 and late charges received on the Partnership's other mortgage loans receivable. The other income recorded by the Partnership for the year ended December 31, 1995, is primarily the prepayment penalty received for the payoff of the loan collateralized by the property located at 2659 South Austin on May 23, 1995. The other income recorded by the Partnership for the year ended December 31, 1994, is primarily the prepayment penalty received from the payoff of the loan collateralized by the property located at 2906-10 Eastwood on July 28, 1994. Professional services to Affiliates decreased for the year ended December 31, 1996, as compared to the years ended December 31, 1995 and 1994, due primarily to a decrease in accounting services required by the Partnership. General and administrative expenses to Affiliates decreased for the years ended December 31, 1996 and 1995, as compared to the year ended December 31, 1994, due primarily to a decrease in mortgage servicing fees on the Partnership's mortgage loans receivable as they are prepaid. General and administrative expenses to non-affiliates increased for the year ended December 31, 1996, as compared to the year ended December 31, 1995, due to increases in supplies and filing fees. General and administrative expenses to non-affiliates decreased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to decreases in supplies and printing expenses. Inflation The Partnership's right to additional interest in connection with certain mortgage notes as described in Note 4 of the Notes to Financial Statements, appearing in Item 8 of this Annual Report, is intended to provide a hedge against the impact of inflation. Sharing in the increases in rent and appreciation of the value of the property collateralizing the mortgage notes should result in an increase in the total yield of the notes, thereby offsetting the effects of inflation. To date, the operations of the Partnership have not been significantly affected by inflation. -7- Item 8. Financial Statements and Supplementary Data INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Index ----- Page ---- Report of Independent Accountants........................................ 9 Financial Statements: Balance Sheets, December 31, 1996 and 1995............................. 10 Statements of Operations, for the years ended December 31, 1996, 1995 and 1994............................... 11 Statements of Partners' Capital, for the years ended December 31, 1996, 1995 and 1994............................... 12 Statements of Cash Flows, for the years ended December 31, 1996, 1995 and 1994..................................... 13 Notes to Financial Statements.......................................... 14 Schedules not filed: All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. -8- REPORT OF INDEPENDENT ACCOUNTANTS The Partners of Inland Mortgage Investors Fund, L.P. We have audited the financial statements of Inland Mortgage Investors Fund, L.P. listed in the index on page 8 of this Form 10-K. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Inland Mortgage Investors Fund, L.P. as of December 31, 1996 and 1995 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Chicago, Illinois March 17, 1997 -9- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Balance Sheets December 31, 1996 and 1995 Assets ------ 1996 1995 ---- ---- Cash and cash equivalents (Note 1)................ $ 1,226,087 250,761 Accrued interest and other receivables............ 26,667 47,500 Investment in mortgage loans receivable: Mortgage loans receivable (Note 4).............. 2,712,445 5,624,974 Mortgage loans in substantive foreclosure (Note 1, 4 and 5)............................. 1,000,721 - ------------ ------------ 3,713,166 5,624,974 ------------ ------------ Total assets...................................... $ 4,965,920 5,923,235 ============ ============ Liabilities and Partners' Capital --------------------------------- Liabilities: Accounts payable................................ $ 52 858 Due to Affiliates (Note 3)...................... 2,429 3,740 Unearned income (Note 1)........................ 3,843 7,243 ------------ ------------ Total liabilities............................. 6,324 11,841 ------------ ------------ Partners' capital (Notes 1, 2 and 3): General Partner: Capital contribution.......................... 500 500 Cumulative net income......................... 275,321 257,535 Cumulative cash distributions................. (269,940) (249,319) ------------ ------------ 5,881 8,716 Limited Partners: ------------ ------------ Units of $500. Authorized 40,000 Units, 20,129.24 Units outstanding at 1996 and 1995 (net of offering costs of $1,082,660, of which $219,526 was paid to Affiliates)... 8,981,960 8,981,960 Cumulative net income......................... 5,706,612 5,362,869 Cumulative cash distributions................. (9,734,857) (8,442,151) ------------ ------------ 4,953,715 5,902,678 ------------ ------------ Total Partners' capital....................... 4,959,596 5,911,394 ------------ ------------ Total liabilities and Partners' capital........... $ 4,965,920 5,923,235 ============ ============ See accompanying notes to financial statements. -10- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Statements of Operations For the years ended December 31, 1996, 1995 and 1994 Income: 1996 1995 1994 Interest and fees on mortgage loans ---- ---- ---- receivable (Note 4)............. $ 371,225 549,635 604,059 Interest on investments........... 53,615 36,270 25,975 Other income...................... 9,510 10,591 5,029 ------------ ------------ ------------ 434,350 596,496 635,063 Expenses: ------------ ------------ ------------ Professional services to Affiliates...................... 13,455 17,030 17,890 Professional services to non-affiliates.................. 18,946 18,690 17,967 General and administrative expenses to Affiliates.......... 32,173 32,367 34,537 General and administrative expenses to non-affiliates...... 8,247 6,690 8,992 ------------ ------------ ------------ 72,821 74,777 79,386 ------------ ------------ ------------ Net income.......................... $ 361,529 521,719 555,677 ============ ============ ============ Net income allocated to (Note 2): General Partner................... 17,786 26,480 26,766 Limited Partners.................. 343,743 495,239 528,911 ------------ ------------ ------------ Net income.......................... $ 361,529 521,719 555,677 ============ ============ ============ Net income from operations allocated to the one General Partner Unit... $ 17,786 26,480 26,766 ============ ============ ============ Net income allocated to Limited Partners per Limited Partnership Units of 20,129.24................ $ 17.08 24.60 26.28 ============ ============ ============ See accompanying notes to financial statements. -11- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Statements of Partners' Capital For the years ended December 31, 1996, 1995 and 1994 General Limited Partner Partners Total ------------ ------------ ------------ Balance at January 1, 1994.......... $ 9,708 7,111,964 7,121,672 Net income.......................... 26,766 528,911 555,677 Distributions to Partners ($59.26 per Limited Partnership Unit based on Units of 20,129.24)(Note 2)....... (27,419) (1,192,953) (1,220,372) ------------ ------------ ------------ Balance at December 31, 1994........ 9,055 6,447,922 6,456,977 Net income.......................... 26,480 495,239 521,719 Distributions to Partners ($51.69 per Limited Partnership Unit based on Units of 20,129.24)(Note 2)....... (26,819) (1,040,483) (1,067,302) ------------ ------------ ------------ Balance at December 31, 1995........ 8,716 5,902,678 5,911,394 Net income.......................... 17,786 343,743 361,529 Distributions to Partners ($64.22 per Limited Partnership Unit based on Units of 20,129.24)(Note 2)....... (20,621) (1,292,706) (1,313,327) ------------ ------------ ------------ Balance at December 31, 1996........ $ 5,881 4,953,715 4,959,596 ============ ============ ============ See accompanying notes to financial statements. -12- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Statements of Cash Flows For the years ended December 31, 1996, 1995 and 1994 1996 1995 1994 Cash flows from operating activities: ---- ---- ---- Net income........................ $ 361,529 521,719 555,677 Adjustments to reconcile net income to net cash provided by operating activities: Unearned income................. (3,400) (5,599) (6,809) Changes in assets and liabilities: Accrued interest and other receivables................ 20,833 11,742 5,092 Accounts payable............. (806) 235 (704) Due to Affiliates............ (1,311) 3,317 104 Net cash provided by operating ------------ ------------ ------------ activities........................ 376,845 531,414 553,360 ------------ ------------ ------------ Cash flows from investing activities: Principal payments collected (net) 1,911,808 520,990 418,382 Net cash provided by investing ------------ ------------ ------------ activities........................ 1,911,808 520,990 418,382 ------------ ------------ ------------ Cash flows from financing activities: Distributions paid................ (1,313,327) (1,067,302) (1,220,372) Net cash used in financing ------------ ------------ ------------ activities........................ (1,313,327) (1,067,302) (1,220,372) Net increase (decrease) in cash and ------------ ------------ ------------ cash equivalents.................. 975,326 (14,898) (248,630) Cash and cash equivalents at beginning of year................. 250,761 265,659 514,289 Cash and cash equivalents at ------------ ------------ ------------ end of year....................... $ 1,226,087 250,761 265,659 ============ ============ ============ See accompanying notes to financial statements. -13- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements For the years ended December 31, 1996, 1995 and 1994 (1) Organization and Basis of Accounting Inland Mortgage Investors Fund, L.P. (the "Partnership") was organized on December 5, 1985, pursuant to the Delaware Revised Uniform Limited Partnership Act, to make or acquire loans collateralized by mortgages on improved, income- producing multi-family residential properties in or near the Chicago metropolitan area. On February 12, 1986, the Partnership commenced an Offering of 40,000 Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on February 12, 1987, with total sales of 20,129.24 Units at $500 per Unit resulting in $10,064,620 of gross offering proceeds, not including the General Partner's contribution of $500. Inland Real Estate Investment Corporation is the General Partner. 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 periods. Actual results could differ from those estimates. Offering costs have been offset against the Limited Partners' capital accounts. Loan assumption fees received are deferred as unearned income and amortized over the remaining life of the related loan. The Partnership considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Interest income on mortgage loans receivable is accrued when earned. The accrual of interest, on loans that are in default, is discontinued when, in the opinion of the General Partner, the borrower has not complied with loan work- out arrangements. Once a loan has been placed on a non-accrual status, all cash received is applied against the outstanding loan balance until such time as the borrower has demonstrated an ability to make payments under the terms of the original or renegotiated loan agreement. The General Partner evaluates the collectibility of the mortgage loans on a quarterly basis. This evaluation includes determining the valuation of the underlying operating property subject to the mortgage. Should a portion of the principal of the mortgage loan be considered unrecoverable either through collection or foreclosure, a provision would be made to reduce the carrying amount of the mortgage loans. The Partnership intends to pursue collection of all amounts currently due from the borrowers. -14- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) Loans are classified in substantive foreclosure when a determination has been made that the borrower meets the following criteria: 1) The borrower has little or no equity in the collateral, considering the current fair value of the collateral; and 2) Proceeds for repayment of the loan can be expected to come only from the operation or sale of the collateral; and 3) The borrower has either: a) Formally or effectively abandoned control of the collateral to the creditors; or b) Retained control of the collateral but, because of the current financial condition of the borrower or the economic prospects for the borrower and/or the collateral in the foreseeable future, it is doubtful that the borrower will be able to rebuild equity in the collateral or otherwise repay the loan in the foreseeable future. No provision for Federal income taxes has been made as the liability for such taxes is that of the Partners rather than the Partnership. The Partnership records are maintained on the accrual basis of accounting in accordance with generally accepted accounting principles ("GAAP"). The Federal income tax return has been prepared from such records after making appropriate adjustments to reflect the Partnership's accounts as adjusted for Federal income tax reporting purposes. Such adjustments are not recorded on the records of the Partnership. The net effect of these items is summarized as follows: 1996 1995 ------------------------- ----------------------- GAAP Tax GAAP Tax Basis Basis Basis Basis ----------- ----------- ----------- ----------- Total assets................ $4,965,920 4,965,920 5,923,235 5,923,235 Partners' capital: General Partner........... 5,881 1,614 8,716 1,614 Limited Partners.......... 4,953,715 4,957,981 5,902,678 5,909,780 Net income: General Partner........... 17,786 20,621 26,480 26,819 Limited Partners.......... 343,743 340,908 495,239 494,900 Net income per Limited Partnership Unit.......... 17.08 16.94 24.60 24.59 -15- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) (2) Partnership Agreement The Partnership Agreement defines the distribution of Operating Cash Flow. Such Operating Cash Flow will be distributed 90% to the Limited Partners and 10% to the General Partner. Of the 10% of Operating Cash Flow allocated to the General Partner, one-half shall be subordinated to the Limited Partners' receipt of a Cumulative Preferred Return of 14% per annum. Distributions of Loan Repayment Proceeds will be distributed first to Limited Partners in proportion to their participating percentages until they have received an amount equal to their Invested Capital plus any deficiency in the Cumulative Preferred Return. Thereafter, any remaining Repayment Proceeds which are available for distribution will be distributed 90% to the Limited Partners and 10% to the General Partner. The General Partner will be allocated net operating profits of the Partnership in an amount equal to the greater of 1% of net operating profits or the amount of the General Partner's distributive share of Operating Cash Flow, with the balance of such net operating profits allocated to the Limited Partners. The General Partner will be allocated net operating profits from repayments in an amount equal to the General Partner's distributive share of Repayment Proceeds, with the balance of such net operating profits allocated to the Limited Partners. Net operating losses will be allocated 1% to the General Partner and 99% to the Limited Partners. (3) Transactions with Affiliates The General Partner and its Affiliates are entitled to reimbursement for salaries and expenses of employees of the General Partner and its Affiliates relating to the administration of the Partnership. Such costs are included in professional services to Affiliates and general and administrative expenses to Affiliates, of which $2,429 and $3,740 was unpaid as of December 31, 1996 and 1995, respectively. Inland Mortgage Servicing Corporation, a subsidiary of the General Partner, services the Partnership's mortgage loans receivable. Its services include processing mortgage loan collections and escrow deposits and maintaining related records. For these services, the Partnership is obligated to pay fees at an annual rate equal to 1/4 of 1% of the outstanding mortgage loans receivable balance of the Partnership. Such fees of $11,444 in 1996, $14,838 in 1995 and $16,040 in 1994 have been incurred and paid to the subsidiary and are included in the Partnership's general and administrative expenses to Affiliates. In connection with the sales of 6910 North Sheridan, 5420 North Kenmore and 712-720 West Grace, sales commissions of $18,125, $27,500 and $14,553, respectively, that have not been included in the costs of sale, may be payable to an Affiliate of the General Partner to the extent that the Limited Partners have received their Original Capital plus a return thereon as specified in the Partnership Agreement. -16- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) (4) Investments in Mortgage Loans Receivable Mortgage loans receivable and mortgage loans in substantive foreclosure are collateralized by first mortgages and wrap mortgages on multi-family residential properties located in Chicago, Illinois or its surrounding metropolitan area. As additional collateral, the Partnership holds assignments of rents and leases or personal guarantees of the borrowers. Generally, the mortgage notes are payable in equal monthly installments based on 20 or 30 year amortization periods. Mortgage loans receivable and mortgage loans in substantive foreclosure consist of the following:
Balance at Interest Balloon Monthly December 31, Rate at Maturity at P & I -------------------------- Property Location 12/31/96 Date Maturity Prepayment Payments 1996 1995 - ----------------------- -------- --------- ---------- ------------- --------- ----------- ------------ Penn./Kenilworth, (A,F) 8.9% January $ 958,742 No Prepayment $ 8,564 $ 960,185 976,695 Glen Ellyn 1997 5830 W. 87th Street, (A,F) 8.9% January 430,612 No Prepayment 3,847 431,260 438,675 Burbank 1997 7428 W. Washington, 6.975% March 823,803 At any time 6,375 828,508 846,712 Forest Park 1997 without penalty 7434-42 N. Hermitage, (C) - - - - - - 585,029 Chicago Indian Trail Road, (A,G) 9.9% August 971,567 No Prepayment 9,311 1,000,721 1,008,854 Aurora 1998 6910 N. Sheridan, (B) 9.75% August 477,099 60 days notice 4,425 492,492 497,312 Chicago 1999 & 3% penalty 5420 N. Kenmore, (B,D) - - - - - - 834,842 Chicago 712-20 W. Grace, (B,E) - - - - - - 436,855 Chicago ----------- ----------- $3,713,166 5,624,974 =========== ===========
-17- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) (A) These notes include provisions that entitle the Partnership to additional interest based on percentages (25-55%) of the excess of gross operating income of the properties over specified base rental income amounts plus percentages (25-50%) of the appreciated value of the property at maturity, defined as the difference between the market value of the properties at maturity and specified amounts. During 1996 and 1995, the Partnership received $19,350 and $14,808, respectively, in such additional interest based on percentages of operating income from the properties. (B) These mortgage loans are collateralized by properties which the Partnership, or an Affiliate of the General Partner, previously owned through foreclosure. The properties were sold to unaffiliated third parties and financing was provided by the Partnership. (C) Effective March 1, 1995, the Partnership and the borrower have agreed to extend the loan collateralized by the property located at 7434-42 North Hermitage, Chicago, for an additional five years. On June 27, 1996, the loan was prepaid by the borrower. The total proceeds received from the prepayment were $591,906, which represented the current loan balance, accrued interest and 1% prepayment penalty. The proceeds were distributed to the Limited Partners in January 1997. (D) On April 2, 1996, the loan collateralized by the property located at 5420 North Kenmore, Chicago was prepaid by the borrower. The total proceeds received from the prepayment were $840,077, which represented the current loan balance and accrued interest. The proceeds were distributed to the Limited Partners in April 1996. (E) On June 18, 1996, the loan collateralized by the property located at 712- 720 West Grace, Chicago was prepaid by the borrower. The Partnership received its share of the proceeds received from the prepayment of $435,834, which represented the current loan balance and accrued interest. The proceeds were distributed to the Limited Partners in January 1997. (F) This mortgage loan was paid in 1997. See Note 6. (G) This mortgage loan is in substantive foreclosure. See Note 5. -18- INLAND MORTGAGE INVESTORS FUND, L.P. (a limited partnership) Notes to Financial Statements (continued) (5) Mortgage Loans in Substantive Foreclosure As of September 30, 1996, with consent of the borrower, an Affiliate of the General Partner began management of the property located at Indian Trail Road, Aurora, Illinois. The Partnership has begun foreclosure proceedings to gain title to the property. (6) Subsequent Events In January 1997, the Partnership paid a distribution of $1,104,329 to the Partners of which $1,100,822 was distributed to the Limited Partners and $3,507 was distributed to the General Partner. Of the $1,100,822 distributed to the Limited Partners, $1,034,190 was repayment proceeds and the remainder was net interest income. In January 1997, the loan collateralized by the property located at 5830 West 87th Street, Burbank, Illinois, with an original maturity of January 1997, was extended for three months until March 1997, with an option to extend to June 1999. The interest rate of 8.9% remains the same. On January 28, 1997, the loan collateralized by the property located at 288, 294-298 Pennsylvania/Kenilworth, Glen Ellyn, Illinois matured. The total proceeds received at maturity were $1,023,078, which represented the loan balance, accrued interest, accrued additional interest and 50% of the appreciated value of the property at maturity. On February 13, 1997, the loan collateralized by the property located at 5830 West 87th Street, Burbank, Illinois prepaid. The total proceeds received at maturity were $447,191, which represented the loan balance, accrued interest, accrued additional interest and 50% of the appreciated value of the property at maturity. -19- Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There were no disagreements on accounting or financial disclosure during 1996. PART III Item 10. Directors and Executive Officers of the Registrant The General Partner of the Partnership, Inland Real Estate Investment Corporation, was organized in 1984 for the purpose of acting as general partner of limited partnerships formed to acquire, own and operate real property, and make and acquire loans collateralized by mortgages on improved, income producing multi-family residential properties. The General Partner is a wholly-owned subsidiary of The Inland Group, Inc. In 1990, Inland Real Estate Investment Corporation became the replacement General Partner for an additional 301 privately-offered real estate limited partnerships syndicated by Affiliates. The General Partner has responsibility for all aspects of the Partnership's operations. The relationship of the General Partner to its Affiliates is described under the caption "Conflicts of Interest" at pages 10 and 11 of the Prospectus, incorporated herein by reference. Officers and Directors The officers, directors and key employees of The Inland Group, Inc. and its Affiliates ("Inland") that are likely to provide services to the Partnership are as follows: Functional Title ---------------- Daniel L. Goodwin.......... Chairman and Chief Executive Officer Robert H. Baum............. Executive Vice President-General Counsel G. Joseph Cosenza.......... Senior Vice President-Acquisitions Robert D. Parks............ Senior Vice President-Investments Catherine L. Lynch......... Treasurer Roberta S. Matlin.......... Assistant Vice President-Investments Mark Zalatoris............. Assistant Vice President-Due Diligence Patricia A. Challenger..... Vice President-Asset Management Frances C. Panico.......... Vice President-Mortgage Corporation Raymond E. Petersen........ Vice President-Mortgage Corporation Paul J. Wheeler............ Vice President-Personal Financial Services Group Kelly Tucek................ Assistant Vice President-Partnership Accounting Cynthia M. Hassett......... Assistant Vice President-Partnership Accounting Venton J. Carlston......... Assistant Controller -20- DANIEL L. GOODWIN (age 53) is Chairman of the Board of Directors of The Inland Group, Inc., a billion-dollar real estate and financial organization located in Oak Brook, Illinois. Among Inland's subsidiaries is the largest property management firm in Illinois and one of the largest commercial real estate and mortgage banking firms in the Midwest. Mr. Goodwin has served as Director of the Avenue Bank of Oak Park and as a Director of the Continental Bank of Oakbrook Terrace. He was Chairman of the Bank Holding Company of American National Bank of DuPage. Currently he is the Chairman of the Board of Inland Mortgage Investment Corporation. Mr. Goodwin has been in the housing industry for more than 28 years, and has demonstrated a lifelong interest in housing-related issues. He is a licensed real estate broker and a member of the National Association of Realtors. He has developed thousands of housing units in the Midwest, New England, Florida, and the Southwest. He is also the author of a nationally recognized real estate reference book for the management of residential properties. Mr. Goodwin has served on the Board of the Illinois State Affordable Housing Trust Fund for the past 6 years. He is an advisor for the Office of Housing Coordination Services of the State of Illinois, and a member of the Seniors Housing Committee of the National Multi-Housing Council. Recently, Governor Edgar appointed him Chairman of the Housing Production Committee for the Illinois State Affordable Housing Conference. He also served as a member of the Cook County Commissioner's Economic Housing Development Committee, and he was the Chairman of the DuPage County Affordable Housing Task Force. The 1992 Catholic Charities Award was presented to Mr. Goodwin for his work in addressing affordable housing needs. The City of Hope designated him as the 1980's Man of the Year for the Illinois construction industry. In 1989, the Chicago Metropolitan Coalition on Aging presented Mr. Goodwin with an award in recognition of his efforts in making housing more affordable to Chicago's Senior Citizens. On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter) presented Mr. Goodwin with an award, recognizing The Inland Group as the leading corporate provider of transitional housing for the homeless people of DuPage County. Also, Mr. Goodwin serves as Chairman of New Directions Housing Corporation, a leading provider of affordable housing in northern Illinois. Mr. Goodwin is a product of Chicago-area schools, and obtained his Bachelor's and Master's Degrees from Illinois Universities. Following graduation, he taught for five years in Chicago Public Schools. His commitment to education has continued through his work with the Better Boys Foundation's Pilot Elementary School in Chicago, and the development of the Inland Vocational Training Center for the Handicapped located at Little City in Palatine, Illinois. He personally established an endowment which funds a perpetual scholarship program for inner-city disadvantaged youth. In 1990 he received the Northeastern Illinois University President's Meritorious Service Award. Mr. Goodwin holds a Master's Degree in Education from Northern Illinois University, and in 1986, he was awarded an Honorary Doctorate from Northeastern Illinois University College of Education. More than 12 years ago, under Mr. Goodwin's direction, Inland instituted a program to train disabled students in the workplace. Most of these students are still employed at Inland today, and Inland has become one of the largest employers of the disabled in DuPage County. He has served as a member of the Board of Governors of Illinois State Colleges and Universities, and he is currently a trustee of Benedictine University. He was elected Chairman of Northeastern Illinois University Board of Trustees in January 1996. -21- Mr. Goodwin served as a member of Governor Jim Edgar's Transition Team. In 1988 he received the Outstanding Business Leader Award from the Oak Brook Jaycees and has been the General Chairman of the National Football League Players Association Mackey Awards for the benefit of inner-city youth. He served as the recent Chairman of the Speakers Club of the Illinois House of Representatives. In March 1994, he won the Excellence in Business Award from the DuPage Area Association of Business and Industry. Additionally, he was honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped Infant Program when they lost their lease. He was the recipient of the 1995 March of Dimes Life Achievement Award and was recently recognized as the 1997 Corporate Leader of the Year by the Oak Brook Area Association of Commerce and Industry. ROBERT H. BAUM (age 53) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Baum is Vice Chairman and Executive Vice President-General Counsel of The Inland Group, Inc. In his capacity as General Counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group, Inc. and its affiliates. This responsibility includes the supervision of The Inland Law Department and serving as liaison with all outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the Secretary of State of Illinois. He is a member of the American Corporation Counsel Association and has also been a guest lecturer for the Illinois State Bar Association. Mr. Baum has been admitted to practice before the Supreme Court of the United States, as well as the bars of several federal courts of appeals and federal district courts and the State of Illinois. He received his B.S. Degree from the University of Wisconsin and his J.D. Degree from Northwestern University School of Law. Mr. Baum has served as a director of American National Bank of DuPage. Currently, he serves as a director of Westbank, and is a member of the Governing Council of Wellness House, a charitable organization that provides emotional support for cancer patients and their families. G. JOSEPH COSENZA (age 53) is a Director and Vice Chairman of The Inland Group, Inc. Mr. Cosenza oversees, coordinates and directs Inland's many enterprises and, in addition, immediately supervises a staff of eight persons who engage in property acquisition. Mr. Cosenza has been a consultant to other real estate entities and lending institutions on property appraisal methods. Mr. Cosenza received his B.A. Degree from Northeastern Illinois University and his M.S. Degree from Northern Illinois University. From 1967 to 1968, he taught at the LaGrange School District in Hodgkins, Illinois and from 1968 to 1972, he served as Assistant Principal and taught in the Wheeling, Illinois School District. Mr. Cosenza has been a licensed real estate broker since 1968 and an active member of various national and local real estate associations, including the National Association of Realtors and the Urban Land Institute. Mr. Cosenza has also been Chairman of the Board of American National Bank of DuPage, and has served on the Board of Directors of Continental Bank of Oakbrook Terrace. He is presently Chairman of the Board of Westbank in Westchester, Illinois. -22- ROBERT D. PARKS (age 53) is Director of The Inland Group, Inc., President, Chairman and Chief Executive Officer of Inland Real Estate Investment Corporation and President, Chief Executive Officer, Chief Operating Officer and Affiliated Director of Inland Real Estate Corporation. Mr. Parks is responsible for the ongoing administration of existing investment programs, corporate budgeting and administration for Inland Real Estate Investment Corporation. He oversees and coordinates the marketing of all investments and investor relations. Prior to joining Inland, Mr. Parks was a school teacher in Chicago's public schools. He received his B.A. degree from Northeastern Illinois University and his M.A. degree from the University of Chicago. He is a registered Direct Participation Program Principal with the National Association of Securities Dealers, Inc., and he is a member of the Real Estate Investment Association and a member of NAREIT. CATHERINE L. LYNCH (age 38) joined Inland in 1989 and is the Treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the Corporate Accounting Department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG Peat Marwick since 1980. She received her B.S. degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. She is registered with the National Association of Securities Dealers as a Financial Operations Principal. ROBERTA S. MATLIN (age 52) joined Inland in 1984 as Director of Investor Administration and currently serves as Senior Vice President-Investments. Prior to that, Ms. Matlin spent 11 years with the Chicago Region of the Social Security Administration of the United States Department of Health and Human Services. As Senior Vice President-Investments, she directs the day-to-day internal operations of the General Partner. Ms. Matlin received her B.A. degree from the University of Illinois. She is registered with the National Association of Securities Dealers, Inc. as a General Securities Principal. MARK ZALATORIS (age 39) joined Inland in 1985 and currently serves as Vice President of Inland Real Estate Investment Corporation. His responsibilities include the coordination of due diligence activities by selling broker/dealers and is also involved with limited partnership asset management including the mortgage funds. Mr. Zalatoris is a graduate of the University of Illinois where he received a Bachelors degree in Finance and a Masters degree in Accounting and Taxation. He is a Certified Public Accountant and holds a General Securities License with Inland Securities Corporation. PATRICIA A. CHALLENGER (age 44) joined Inland in 1985. Ms. Challenger serves as Senior Vice President of Inland Real Estate Investment Corporation in the area of Asset Management. As head of the Asset Management Department, she develops operating and disposition strategies for all investment-owned properties. Ms. Challenger received her bachelor's degree from George Washington University and her master's from Virginia Tech University. Ms. Challenger was selected and served from 1980-1984 as Presidential Management Intern, where she was part of a special government-wide task force to eliminate waste, fraud and abuse in government contracting and also served as Senior Contract Specialist responsible for capital improvements in 109 government properties. Ms. Challenger is a licensed real estate broker, NASD registered securities sales representative and is a member of the Urban Land Institute. -23- FRANCES C. PANICO (age 47) joined Inland in 1972 after earning a B.A. degree from Northern Illinois University in Business and Communication. She is currently President of Inland Mortgage Servicing Corporation, Sr. Vice President of Inland Mortgage Investment Corporation and Sr. Vice President of Inland Mortgage Corporation. Ms. Panico oversees the operation of loan services, which has a loan portfolio in excess of $430 million. She is a member of the loan committee which approves loans funded by IMIC and IMC. She monitors IMIC's assets, and is the business person in charge of loans in foreclosure. She previously served on the Board of Directos for Burbank State Bank and supervised the origination, processing and underwriting of single- family mortgages. Ms. Panico also packaged and sold loans to Freddie Mac. RAYMOND E. PETERSEN (age 57) joined The Inland Group in 1981 and is President of the Inland Mortgage Corporation and Senior Vice President of Inland Mortgage Investment Corporation and Inland Mortgage Servicing Corporation. Mr. Petersen is responsible for the selection and approval of all corporate and limited partnership financing, as well as for the daily supervision of the commercial lending activity of Inland Mortgage Corporation which has, over the last six years, made or arranged over $2 billion of financing. For the six years prior to joining The Inland Group, Inc., Mr. Petersen was affiliated with the mortgage banking firm of Downs, Mohl Mortgage Corporation, serving as President and Chief Executive Officer. Previously he was also associated with the mortgage banking houses of B.B. Cohen & Company and Percy Wilson Mortgage and Finance Corporation. Mr. Petersen's professional credentials include a B.A. degree from DePaul University, senior membership in the National Association of Review Appraisers, state licensed as a real estate broker and licensed securities representative. Mr. Petersen was also a Director and Chairman of the Asset and Liability Committee of American National Bank of Downers Grove and currently serves as a Director of Westbank of Westchester, Illinois. PAUL J. WHEELER (age 44) joined Inland in 1982 and is currently the President of Inland Property Sales, Inc., the entity responsible for all corporately owned real estate. Mr. Wheeler received his B.A. degree in Economics from DePauw University and an M.B.A. in Finance/Accounting from Northwestern University. Mr. Wheeler is a Certified Public Accountant and licensed real estate broker. For three years prior to joining Inland, Mr. Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan & Tyson, Inc. KELLY TUCEK (age 34) joined Inland in 1989 and is an Assistant Vice President of Inland Real Estate Investment Corporation. As of August 1996, Ms. Tucek is responsible for the Investment Accounting Department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers and Lybrand since 1984. She received her B.A. Degree in Accounting and Computer Science from North Central College. CYNTHIA M. HASSETT (age 37) joined Inland in 1983 and was a Vice President of Inland Real Estate Investment Corporation. Through August 1996, Ms. Hassett was responsible for the Investment Accounting Department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Hassett was on the audit staff of Altschuler, Melvoin and Glasser since 1980. She received her B.S. degree in Accounting from Illinois State University. Ms. Hassett is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants. -24- VENTON J. CARLSTON (age 39) joined Inland in 1985 and is the Assistant Controller of Inland Real Estate Investment Corporation where he supervises the corporate bookkeeping staff and is responsible for financial statement preparation and budgeting for Inland Real Estate Investment Corporation and its subsidiaries. Prior to joining Inland, Mr. Carlston was a partnership accountant with JMB Realty. He received his B.S. degree in Accounting from Southern Illinois University. Mr. Carlston is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. He is registered with the National Association of Securities Dealers, Inc. as a Financial Operations Principal. Item 11. Executive Compensation The General Partner is entitled to receive a share of cash distributions, when and as cash distributions are made to the Limited Partners, as described under the caption "Cash Distributions" and a share of profit and losses as described under the caption "Allocation of Profits or Losses" of the Prospectus. The Partnership is permitted to engage in various transactions involving Affiliates of the General Partner of the Partnership, as described under the captions "Compensation and Fees" at pages 8 and 9, "Conflicts of Interest" at pages 10 and 11 of the Prospectus and at pages A-9 through A-17 of the Partnership Agreement, which is incorporated herein by reference. The relationship of the General Partner (and its directors and officers) to its Affiliates is set forth above in Item 10. The General Partner may be reimbursed for salaries and direct expenses of employees of the General Partner and its Affiliates for the administration of the Partnership. In 1996, costs relating to such services were $34,184, of which $2,429 was unpaid as of December 31, 1996. A subsidiary of the General Partner earned mortgage servicing fees of $11,444 in 1996, in connection with servicing the Partnership's mortgage loans receivable. In connection with the sales of 6910 North Sheridan, 5420 North Kenmore and 712-720 West Grace, sales commissions of $18,125, $27,500 and $14,553, respectively, that have not been included in the costs of sale, may be payable to an Affiliate of the General Partner to the extent that the Limited Partners have received their Original Capital plus a return thereon as specified in the Partnership Agreement. -25- Item 12. Security Ownership of Certain Beneficial Owners and Management (a) The Liquidity Plan (page 18 of the Prospectus of the Partnership dated February 12, 1986, which is incorporated herein by reference) owns the following Units of the Partnership as of December 31, 1996: Amount and Nature of Beneficial Percent Title of Class Ownership of Class --------------- ----------------- -------- Limited Partnership 6,370.22 Units directly 31.65% Units (b) The officers and directors of the General Partner of the Partnership own as a group the following Units of the Partnership as of December 31, 1996: Amount and Nature of Beneficial Percent Title of Class Ownership of Class --------------- ----------------- -------- Limited Partnership 243.27 Units directly 1.21% Units No officer or director of the General Partner of the Partnership possesses a right to acquire beneficial ownership of Units of the Partnership. All of the outstanding shares of the General Partner of the Partnership are owned by an Affiliate or its officers and directors as set forth above in Item 10. (c) There exists no arrangement, known to the Partnership, the operation of which may, at a subsequent date, result in a change in control of the Partnership. Item 13. Certain Relationships and Related Transactions There were no significant transactions or business relationships with the General Partner, Affiliates or their management other than those described in Items 10 and 11 above. Reference is made to Note 3 of the Notes to Financial Statements (Item 8 of this Annual Report) for information regarding related party transactions. -26- PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) The financial statements listed in the index on page 8 of this Annual Report are filed as part of this Annual Report. (b) Exhibits. The following documents are filed as part of this Report: 3 Amended and Restated Agreement of Limited Partnership and Certificate of Limited Partnership, included as Exhibits A and B to the Prospectus dated February 12, 1986, as supplemented, are incorporated herein by reference thereto. 27 Financial Data Schedule 28 Prospectus dated February 12, 1986, as supplemented, included in Post- Effective Amendment No. 2 to Form S-11 Registration Statement, File No. 33- 2377, is incorporated herein by reference thereto. (c) Financial Statement Schedules: All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes. (d) Reports on Form 8-K No reports on Form 8-K have been filed since the beginning of the last quarter of the period covered by this report. No Annual Report or proxy material for the year 1996 has been sent to the Partners of the Partnership. An Annual Report will be sent to the Partners subsequent to this filing and the Partnership will furnish copies of such report to the Commission when it is sent to the Partners. -27- SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) 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. INLAND MORTGAGE INVESTORS FUND, L.P. Inland Real Estate Investment Corporation General Partner By: Robert D. Parks Chairman of the Board and Chief Executive Officer Date: March 24, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: By: Inland Real Estate Investment Corporation General Partner By: Robert D. Parks Chairman of the Board and Chief Executive Officer Date: March 24, 1997 By: Mark Zalatoris Vice President Date: March 24, 1997 By: Kelly Tucek Principal Financial Officer and Principal Accounting Officer Date: March 24, 1997 By: Daniel L. Goodwin Director Date: March 24, 1997 By: Robert H. Baum Director Date: March 24, 1997 -28-
EX-27 2
5 YEAR DEC-31-1996 DEC-31-1996 1226087 0 3739833 0 0 1252754 0 0 4965920 6324 0 0 0 0 4959596 4965920 0 434350 0 0 72821 0 0 361529 0 361529 0 0 0 361529 17.08 17.08
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