Table of Contents





UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q


(Mark One)





x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2010oro
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from _____ to _____





Commission File Number:   0-21304





RIDGEWOOD ELECTRIC POWER TRUST II


(Exact Name of Registrant as Specified in Its Charter)


Delaware

22-3206429(State or Other Jurisdiction

of Incorporation or Organization)

(I.R.S. Employer Identification No.)





1314 King Street, Wilmington, Delaware

19801(Address of Principal Executive Offices)

(Zip Code)





(302) 888-7444(Registrant’s Telephone Number, Including Area Code)(Former name, former address and former fiscal year, if changed since last report)





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 þ  No o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large accelerated filer o
Accelerated filer o
Non-accelerated filer o
Smaller reporting company þ(Do not check if a smaller reporting company)





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No þ





As of April 30, 2010, there were 235.3775 Investor Shares outstanding.







Table of Contents


FORM 10-QTABLE OF CONTENTSPART I.
FINANCIAL INFORMATION
PageItem 1.
Financial Statements
1Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
4Item 3.
Quantitative and Qualitative Disclosures About Market Risk
5Item 4.
Controls and Procedures
5PART II.
OTHER INFORMATIONItem 1.
Legal Proceedings
5Item 1A.
Risk Factors
5Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
5Item 3.
Defaults Upon Senior Securities
5Item 4.
Reserved
5Item 5.
Other Information
6Item 6.
Exhibits
6SIGNATURES
7











Table of Contents




PART I.   FINANCIAL INFORMATION








ITEM 1.   FINANCIAL STATEMENTS





RIDGEWOOD ELECTRIC POWER TRUST IICONDENSED CONSOLIDATED STATEMENTS OF NET ASSETS(Liquidation Basis)(in thousands)March 31,


December 31,2010


2009ASSETS

(unaudited)Current assets:Cash and cash equivalents

$
1,399


$
-Due from affiliates


-



1,553Other current assets


2



6Total assets

$
1,401


$
1,559LIABILITIES AND NET ASSETSCurrent liabilities:Accounts payable and accrued expenses

$
134


$
278Due to affiliates


17



31$
151


$
309Net assets in liquidation

$
1,250


$
1,250


The accompanying notes are an integral part of these condensed consolidated financial statements.




1
 Table of Contents


RIDGEWOOD ELECTRIC POWER TRUST II
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollar amounts in thousands)




1.   DESCRIPTION OF BUSINESS





Ridgewood Electric Power Trust II (the “Trust”) is a Delaware trust formed on November 20, 1992. The Trust began offering shares in January 1993 and concluded its offering in January 1994. The objective of the Trust is to provide benefits to its shareholders through a combination of distributions of operating cash flow and capital appreciation. The Managing Shareholder of the Trust is Ridgewood Renewable Power LLC, a New Jersey limited liability company (the “Managing Shareholder” or “RRP”). Historically, the Trust focused primarily on independent power generation facilities located in the US.





The Trust’s accompanying condensed consolidated financial statements include the accounts of the Trust and its wholly-owned subsidiary, Sunnyside Cogeneration Partners, L.P. (“Monterey”). Monterey operated a 5.5 megawatt cogeneration project located in California, which suspended its operations in January 2006. In 2009, the plant was dismantled and the site has been reclaimed after the settlement of a dispute with its only customer, Pacific Gas and Electric Company. The Trust has not had any operating revenues since it suspended Monterey’s operations, though it continued to incur certain expenses such as ground lease and maintenance expenses relating to its idle facility.





Monterey had a non-cancelable ground lease covering its site, which was scheduled to expire in May 2021 with minimum annual lease payments, including the delivery of cogeneration steam. Effective March 31, 2010, Monterey terminated its ground-lease, without penalty.





On December 26, 2008, the Trust’s Plan of Liquidation and Dissolution of Ridgewood Electric Power Trust II (the “Plan of Dissolution”) became effective. Under the Plan of Dissolution, the business of the Trust shifted, and became limited to the disposal of its remaining assets and resolution of its remaining liabilities. Upon the completion of these activities, if successful, the Managing Shareholder expects to distribute any remaining cash to the Trust’s shareholders and then proceed to terminate the Trust and its reporting obligation under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Trust is required to make adequate provisions to satisfy its known and unknown liabilities, which could substantially delay or limit the Trust’s ability to make future distributions to shareholders. The process of accounting for the Trust’s liabilities, including those that are presently unknown, may involve difficult valuation decisions, which could adversely impact the Trust’s ability to make distributions in a timely manner.





The Plan of Dissolution gives sole authority to the Managing Shareholder to conduct the Trust’s dissolution, liquidation and termination without additional shareholder approval. As of May 12, 2010, the Trust has not been liquidated primarily due to on-going litigation discussed in Note 5.





There was no activity during the 2010 period that resulted in a change in total net assets in liquidation since December 31, 2009.





The Trust has evaluated subsequent events and transactions through the date of the issuance of its financial statements, and concluded that except for the distribution of $1,177 made on April 15, 2010, to the holders of investor shares of beneficial interest (“Investor Shares”), there were no events or transactions that require adjustment to, or disclosure in the notes to, the condensed consolidated financial statements.





2.   BASIS OF PRESENTATION





The accompanying condensed consolidated financial statements are unaudited and have been prepared pursuant to the rules of the United States Securities and Exchange Commission (the “SEC”) and, in the opinion of management, include all adjustments that are necessary for a fair presentation of the consolidated financial statements. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to SEC rules. These condensed consolidated financial statements should be read in conjunction with the Trust’s Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC on April 12, 2010 (the “2009 Form 10-K”). No significant changes have been made to the Trust’s accounting policies and estimates disclosed in its 2009 Form 10-K.




2
 Table of Contents


RIDGEWOOD ELECTRIC POWER TRUST II
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollar amounts in thousands)


Upon the effectiveness of the Trust’s Plan of Dissolution, the Trust prepared its consolidated financial statements on liquidation basis of accounting, effective December 27, 2008. This basis of accounting is considered appropriate when, among other things, liquidation of the Trust is probable. Under this basis of accounting, assets are valued at their net realizable values and liabilities are valued at their estimated settlement amounts. The valuation of assets and liabilities requires management to make significant estimates and assumptions. Upon conversion to the liquidation basis of accounting, the Trust accrued known estimated values of assets expected to be received and known estimated costs to be incurred in liquidation. On an ongoing basis, the Trust evaluates the estimates and assumptions that can have a significant impact on the Trust’s reported net assets in liquidation. Actual amounts may differ materially and adversely from these estimates.





3.   CASH AND CASH EQUIVALENTS





The Trust considers all highly liquid investments with maturities, when purchased, of three months or less as cash and cash equivalents. At March 31, 2010, bank balances exceeded federal insured limits by $1,005, all of which was invested either in US Treasury bills or money market accounts that invest solely in US government securities.





4.   TRANSACTIONS WITH MANAGING SHAREHOLDER





The Trust records short-term payables to and receivables from certain of its affiliates in the ordinary course of business. The amounts payable to and receivable from its affiliates, other than amounts relating to management fees, do not bear interest. At December 31, 2009, the Trust had transferred $1,544 to the Managing Shareholder to fund a distribution to its shareholders, but the money was returned back to the Trust in January 2010.





5.   COMMITMENTS AND CONTINGENCIES





On August 16, 2006, the Trust and several affiliated entities, including the Managing Shareholder, filed lawsuits against the former independent registered public accounting firm for the Trust and several affiliated entities, Perelson Weiner LLP (“Perelson Weiner”), in New Jersey Superior Court. The suit alleged professional malpractice and breach of contract in connection with audit and accounting services performed for the Trust and other plaintiffs by Perelson Weiner. On October 20, 2006, Perelson Weiner filed a counterclaim against the Trust and other plaintiffs, alleging breach of contract due to unpaid invoices with a combined total of approximately $1,200. Discovery is ongoing and a trial date is currently scheduled for May 17, 2010. The costs and expenses of this litigation, including adverse judgments, if any, are being paid by the Managing Shareholder and affiliated management companies and not the underlying investment funds.





The Trust may become subject to legal proceedings involving ordinary and routine claims related to its business. The ultimate legal and financial liability with respect to all such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. Estimates for losses from litigation are disclosed if considered reasonably possible and accrued if considered probable after consultation with outside counsel. If estimates of potential losses increase or the related facts and circumstances change in the future, the Trust may be required to record additional litigation expense.  While it is not possible to predict the outcome of the litigation discussed in this Note with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to the Trust, based on its evaluation of matters which are pending or asserted, the Trust’s management believes the disposition of such matters will not have a material adverse effect on the Trust’s business or its financial condition or results of operations.











3
 Table of Contents





ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





This discussion and analysis of the Trust as of March 31, 2010 is intended to help readers analyze the accompanying condensed consolidated financial statements, notes and other supplemental information contained in this document. This discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements, notes and other supplemental information included elsewhere in this report as well as the consolidated financial statements, notes and other supplemental information and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Trust’s 2009 Form 10-K.





Forward-Looking Statements





Certain statements discussed in this item and elsewhere in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the Trust’s plans, objectives and expectations for future events and include statements about the Trust’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. These statements are based upon management’s expectations, opinions and estimates as of the date they are made. Although management believes that the expectations, opinions and estimates reflected in these forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties that may be beyond the Trust’s control, which could cause actual results, performance and achievements to differ materially from the results, performance and achievements projected, expected, expressed or implied by the forward-looking statements. Examples of events that could cause actual results to differ materially from historical results or those anticipated include:





·
possible contingent liabilities and risks associated with the dissolution and liquidation of the Trust, including, without limitation, settlement of the Trust’s liabilities and obligations, and the outcome of the matters described in Part I, Item 1, Note 5. “Commitments and Contingencies” of this report,·
costs incurred in connection with the carrying out of the plan of liquidation and dissolution of the Trust, and


·
the actual timing of the completion of the liquidation process, including the amount and timing of any liquidating distributions.





Additional information concerning the factors that could cause actual results to differ materially from those in the forward-looking statements is contained in this report and in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in the Trust’s 2009 Form 10-K. Any forward-looking statement that the Trust makes, speaks only as of the date of this report. The Trust undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events or otherwise, except as required by law.





Liquidation Basis of Accounting





Upon the effectiveness of the Trust’s Plan of Dissolution, the Trust prepared its consolidated financial statements on liquidation basis of accounting, effective December 27, 2008. This basis of accounting is considered appropriate when, among other things, liquidation of the Trust is probable. Under this basis of accounting, assets are valued at their net realizable values and liabilities are valued at their estimated settlement amounts. The valuation of assets and liabilities requires management to make significant estimates and assumptions.





Upon conversion to the liquidation basis of accounting, the Trust accrued known estimated values of assets expected to be received and known estimated costs to be incurred in liquidation. On an ongoing basis, the Trust evaluates the estimates and assumptions that can have a significant impact on the Trust’s reported net assets in liquidation. Actual amounts may differ materially and adversely from these estimates. If there are delays in liquidating the Trust, actual costs incurred during the liquidation process may increase, reducing net assets available in liquidation.





Critical Accounting Policies and Estimates





The discussion and analysis of the Trust’s financial condition and results of operations are based upon the Trust’s condensed consolidated financial statements, which have been prepared in conformity with GAAP. In preparing these financial statements, the Trust is required to make certain estimates, judgments and assumptions that affect the reported amount of the Trust’s assets, liabilities, revenues and expenses including the disclosure of contingent assets and liabilities, as well as the reported amounts of changes in net assets. The estimates also affect the reported estimated value of net realizable assets and settlement of liabilities. The Trust evaluates these estimates and assumptions on an ongoing basis. The Trust bases its estimates and assumptions on historical experience and on various other factors that the Trust believes to be reasonable at the time the estimates and assumptions are made. However, future events and their effects cannot be predicted with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results may differ from these estimates and assumptions under different circumstances or conditions, and such differences may be material to the condensed consolidated financial statements. No material changes have been made to the Trust’s critical accounting policies and estimates disclosed in its 2009 Form 10-K.




4
 Table of Contents





Results of Operations and Changes in Financial Condition





There was no activity during the 2010 period that resulted in a change in total net assets in liquidation since December 31, 2009.





Future Liquidity and Capital Resource Requirements





The Trust believes that it has sufficient cash and cash equivalents to provide working capital for the next 12 months. The Trust intends to distribute excess cash to its shareholders after liquidating its remaining assets and satisfying its liabilities. In April 2010, the Trust made a distribution of $1.2 million to the holders of Investor Shares.





Off-Balance Sheet Arrangements and Contractual Obligations and Commitments





The Trust has no off-balance sheet arrangements and has no contractual obligations and commitments since the termination of Monterey ground-lease in March 2010.





ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not required.





ITEM 4.  CONTROLS AND PROCEDURES





In accordance with Rule 13a-15(b) of the Exchange Act, the Trust’s management, with the participation of the Trust’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Trust’s disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e). Based on this evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer concluded that the Trust’s disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed by the Trust in reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed by the Trust is accumulated and communicated to senior management so as to allow timely decisions regarding required disclosure.





Changes in Internal Control over Financial Reporting





The Trust’s Chief Executive Officer and Chief Financial Officer have concluded that there was no change in the Trust's internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2010 that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.





PART II.  OTHER INFORMATION





ITEM 1.  LEGAL PROCEEDINGS





There have been no material changes to the legal proceedings disclosed in the Trust’s 2009 Form 10-K.





ITEM 1A.  RISK FACTORS





Not required.





ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None.





ITEM 3.  DEFAULTS UPON SENIOR SECURITIES





None.





ITEM 4.  RESERVED





5
 Table of Contents




ITEM 5.  OTHER INFORMATION





None.





ITEM 6.  EXHIBITS





Exhibit No.

Description31.1
*
Certification of Randall D. Holmes, Chief Executive Officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a).31.2
*
Certification of Jeffrey H. Strasberg, Chief Financial Officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a).32
*
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Randall D. Holmes, Chief Executive Officer of the Registrant, and Jeffrey H. Strasberg, Chief Financial Officer of the Registrant.


_____________________


*  Filed herewith.
















6
 Table of Contents





SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.








RIDGEWOOD ELECTRIC POWER TRUST IIDate:  May 12, 2010
By:
/s/  Randall D. HolmesRandall D. HolmesPresident and Chief Executive Officer(Principal Executive Officer)








Date:  May 12, 2010
By:
/s/  Jeffrey H. StrasbergJeffrey H. StrasbergExecutive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)


















7