FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 333-52117
AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
(Exact name of registrant as specified in its
Agreement of Limited Partnership)
Delaware 39-1965590
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1004 Farnam Street, Omaha, Nebraska 68102
(Address of principal executive offices) (Zip Code)
(402) 444-1630
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by the 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 (229.405 of the chapter) is not contained herein,
and will not be contained, to the best of the registrant's 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]
There are currently no outstanding units of the Partnership which are
traded in any market. Therefore, there is no market price or average bid and
asked price for Partnership units within the 60 days prior to the date of this
filing.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE> -i-
TABLE OF CONTENTS
Page
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . 2
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters. . . . . . . . . . . . . . . . . . . . 2
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . 2
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . . . . . . . . . 2
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . 2
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . 2
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . 2
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . 3
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . 4
Item 12. Security Ownership of Certain Beneficial Owners and Management . . 4
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . 5
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K . 5
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
<PAGE> -ii-
Item 1. Business. America First Real Estate Investment Partners, L.P. (the
"Registrant" or the "Partnership") was formed on June 18, 1999 under the
Delaware Revised Uniform Limited Partnership Act for the purpose of acquiring,
holding, operating, selling and otherwise dealing primarily with multifamily
residential properties, including the acquisition of debt and equity
securities of entities engaged in similar activities. Upon approval of the
merger described below, the Registrant's business objectives will be to: (i)
provide increased cash distributions to investors; (ii) provide a potential
for an increase in net asset value; and, (iii) provide enhanced liquidity and
market value of the units.
As of December 31, 1999, the Partnership had not yet begun its business
operations. However, on or about November 16, 1999, the general partners of
Capital Source L.P. ("Cap Source") and Capital Source II L.P.-A ("Cap Source
II") submitted a proposal to their limited partners relating to a merger of
the Registrant with Capital Source and Cap Source II. As of December 31,
1999, the solicitation of the written consent of the Cap Source and Cap Source
II limited partners was still in process and, therefore, the merger had not
been completed. The Partnership intends to issue up to 7,765,772 units of
assigned limited partnership interest to holders of the limited partners of
the Cap Source and Cap Source II.
Upon approval of the merger, the Partnership will succeed to
the assets and liabilities of Cap Source and Cap Source II. The Partnership
will also have the ability to acquire additional multifamily residential
properties. The Partnership will have the ability to more actively manage the
makeup of its real estate portfolio as compared to Cap Source and Cap Source
II. The Partnership's investment strategy will be funded initially from
available cash and short-term investments and from (1) borrowing against or
sale of the existing properties, (2) borrowing against or sale of the
Government National Mortgage Association (GNMA) certificates and the Federal
Housing Administration (FHA) loans, and (3) borrowing against the additional
properties acquired by the Partnership following the transaction. The
Partnership may also use additional sources of financing, both debt and
equity, to further its business objectives and investment strategies.
The Partnership will have no employees. Certain services will be provided to
the Partnership by employees of America First Companies L.L.C. ("America
First") which is an affiliate of the general partner of the Partnership.
America First will be reimbursed by the Partnership for such services at
cost. The Registrant will not be charged, and will not reimburse, for the
services performed by managers and officers of America First.
Item 2. Properties. The Partnership owned or leased no real property at
December 31, 1999.
Item 3. Legal Proceedings.
The Partnership has been named as a defendant in a purported class action
lawsuit filed in the Delaware Court of Chancery on February 3, 1999, by Alvin
M. Panzer and Sandra G. Panzer, against the Partnership, its general partner,
America First and various of their affiliates (including Capital Source L.P.,
Capital Source II L.P.-A, and their general partners (Capital Source L.P. and
Capital Source II L.P.-A are partnerships with general partners that are
affiliates of America First.) and Lehman Brothers, Inc. Alvin M. Panzer and
Sandra G. Panzer are two Beneficial Assignment Certificate (BAC) holders of
Capital Source L.P. and Capital Source II L.P.-A. The plaintiffs seek to have
the lawsuit certified as a class action on behalf of all BAC holders of
Capital Source L.P. and Capital Source II L.P.-A. The lawsuit alleges, among
other things, that a proposed merger transaction involving the Partnership,
Capital Source L.P. and Capital Source II L.P.-A is deficient and coercive,
that the defendants have breached the terms of Capital Source L.P.'s and
Capital Source II L.P.-A's partnership agreement and that the defendants have
acted in manners which violate their fiduciary duties to the BAC holders. In
this complaint, the plaintiffs sought to enjoin the proposed merger
transaction and seek to appoint an independent BAC holder representative to
investigate alternative transactions. The lawsuit also requests a judicial
dissolution of Capital Source L.P. and Capital Source II L.P.-A, an
accounting, and unspecified damages and costs.
<PAGE> -1-
The general partners of the Partnership, Capital Source L.P. and Capital
Source II L.P.-A determined not to pursue the merger transaction which was the
subject of the initial lawsuit and proposed an alternative transaction to BAC
holders. A prospectus/consent solicitation statement outlining this
alternative transaction was sent to BAC holders on or about November 16,
1999. The plaintiffs amended their complaint on December 8, 1999, and again
on February 22, 2000. The second amended complaint challenges this current
prospectus/consent solicitation statement on grounds similar to those alleged
in the original complaint, as well as on other procedural grounds. The second
amended complaint does not seek to enjoin the proposed merger transaction.
The general partners of the Partnership, Capital Source L.P. and Capital
Source II L.P.-A have moved to dismiss these complaints, and they intend to
defend these lawsuits vigorously, but are unable to estimate the effect of
either of these lawsuits, if any, on the financial statements of the
Partnership or on the ability of the Partnership to consummate the proposed
merger with Capital Source L.P. and Capital Source II L.P.-A.
There are no other material pending legal proceedings to which the
Partnership is a party or to which any of its property is subject.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ended December 31, 1999 to a vote
of the Partnership's security holders.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
(a) Market Information. There were no outstanding units of the
Partnership as of December 31, 1999, therefore no market information existed
with respect to the time period covered by this item. For market information
relating to the BACs of Cap Source and Cap Source II, please refer to the Form
10-Ks filed by Capital Source L.P. and Capital Source II L.P.-A for the year
ended December 31, 1999.
(b) Investors. There were no unit holders as of March 28, 2000.
(c) Distributions. As of December 31, 1999, the Partnership had not yet
commenced operations. As such, no distributions were paid through that date.
For information on distributions made by Cap Source and Cap Source II, please
refer to the respective Form 10-Ks filed by Cap Source and Cap Source II for
the year ended December 31, 1999.
Item 6. Selected Financial Data. As of December 31, 1999, the
Partnership had not yet commenced operations. For selected financial data
relating to Cap Source and Cap Source II, for the five year period ended
December 31, 1999, please refer to the Form 10-Ks of Cap Source and
Cap Source II for the year ended December 31, 1999.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
As of December 31, 1999, the Partnership had not commenced operations. For
management's discussion and analysis of the financial condition and results of
operations of the Cap Source and Cap Source II for its two most recent fiscal
years, please refer to the Form 10-Ks of Cap Source and Cap Source II for the
year ended December 31, 1999.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. As
of December 31, 1999, the Partnership had not yet commenced operations. For
quantitative and qualitative disclosure regarding market risk of the assets to
be acquired from Cap Source and Cap Source II as a result of the merger,
please refer to the Form 10-Ks of Cap Source and Cap Source II for the year
ended December 31, 1999.
Item 8. Financial Statements and Supplementary Data. The Financial
Statements and supporting schedules of the Registrant are set forth in Item 14
hereof and are incorporated herein by reference.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
None
<PAGE> -2-
PART III
Item 10. Directors and Executive Officers of the Registrant. The
Registrant has no directors or officers. The general partner of the
Registrant is America First Capital Source I, L.L.C. ("Cap Source L.L.C."),
which is controlled by America First. The following individuals are the
managers and officers of the general partner and America First, and each
serves for a term of one year.
<TABLE>
<CAPTION>
Name Position Held Position Held Since
- ----------------------- -------------------------- -----------------------
<S> <C> <C>
Michael B. Yanney Chairman of the Board, 1984
President, Chief Executive
Officer and Manager of
America First
Chairman and Chief Executive 1991
Officer of Cap Source L.L.C.
Michael Thesing Vice President, Secretary, 1984
Treasurer and Manager of
America First
Vice President, Secretary, 1991
Treasurer and Manager of
Cap Source L.L.C.
William S. Carter, M.D. Manager of America First 1994
Martin A. Massengale Manager of America First 1994
Alan Baer Manager of America First 1994
Gail Walling Yanney Manager of America First 1996
Mariann Byerwalter Manager of America First 1997
Lisa Yanney Roskens Manager of America First 1999
</TABLE>
Michael B. Yanney, 66, has served as the Chairman, President and Chief
Executive Officer of America First Companies L.L.C. and its predecessors since
1984. From 1977 until the organization of the first such fund in 1984, Mr.
Yanney was principally engaged in the ownership and management of commercial
banks. Mr. Yanney also has investments in private corporations engaged in a
variety of businesses. From 1961 to 1977, Mr. Yanney was employed by Omaha
National Bank and Omaha National Corporation (now part of U.S. Bank), where he
held various positions, including the position of Executive Vice President and
Treasurer of the holding company. Mr. Yanney also serves as a member of the
boards of directors of Burlington Northern Santa Fe Corporation, Forest Oil
Corporation, Level 3 Communications, Inc., Freedom Communications, Inc.,
Magnum Resources, Inc., America First Mortgage Investments, Inc., RCN
Corporation, Rio Grande Medical Technologies, Inc., Mid-America Apartment
Communities, Inc. and Telecom Technologies, Inc. Mr. Yanney is the husband of
Gail Walling Yanney and the father of Lisa Yanney Roskens.
Michael Thesing, 45, has been Vice President and Chief Financial Officer
of affiliates of America First Companies L.L.C. since July 1984. He serves as
President of America First Investment Advisors, L.L.C. and is a member of the
Board of Managers of America First Companies L.L.C. and America First
Investment Advisors, L.L.C. From January 1984 until July 1984 he was employed
by various companies controlled by Mr. Yanney. He was a certified public
accountant with Coopers & Lybrand from 1977 through 1983.
William S. Carter, M.D., 73 is a retired physician. Dr. Carter
practiced medicine for 30 years in Omaha, Nebraska, specializing in
otolaryngology (disorders of the ears, nose and throat).
<PAGE> -3-
Martin A. Massengale, 66 is President Emeritus of the University of
Nebraska, Director of the Center for Grassland Studies and Foundation
Distinguished Professor. Prior to becoming President in 1991, he served as
Interim President from 1989, as Chancellor of the University of Nebraska
Lincoln from 1981 until 1991 and as Vice Chancellor for Agriculture and
Natural Resources from 1976 to 1981. Prior to that time, he was a professor
and associate dean of the College of Agriculture at the University of
Arizona. Dr. Massengale currently serves on the board of directors of Woodmen
Accident & Life Insurance Company and IBP, Inc. and is a member of the Board
of Trustees of the Great Plains Funds, Inc.
Alan Baer, 77 is presently Chairman of Alan Baer & Associates, Inc., a
management company located in Omaha, Nebraska. He is also Chairman of Lancer
Hockey, Inc., Baer Travel Services, Wessan Telemarketing, Total Security
Systems, Inc. and several other businesses. Mr. Baer is the former Chairman
and Chief Executive Officer of the Brandeis Department Store chain which,
before its acquisition, was one of the larger retailers in the Midwest.
Mr. Baer has also owned and served on the board of directors of several banks
in Nebraska and Illinois.
Gail Walling Yanney, 63, is a retired physician. Dr. Walling practiced
anesthesia and was most recently the Executive Director of the Clarkson
Foundation until October of 1995. In addition, she was a director of FirsTier
Bank, N.A., Omaha prior to its merger with First Bank, N.A.. Ms. Yanney is
the wife of Michael B. Yanney and the mother of Lisa Yanney Roskens.
Mariann Byerwalter, 39, is Vice President of Business Affairs and Chief
Financial Officer of Stanford University. Ms. Byerwalter was Executive Vice
President of America First Eureka Holdings, Inc. ("AFEH") and EurekaBank from
1988 to January 1996. Ms. Byerwalter was Chief Financial Officer and Chief
Operating Officer of AFEH, and Chief Financial Officer of EurekaBank from 1993
to January 1996. She was an officer of BankAmerica Corporation and its
venture capital subsidiary from 1984 to 1987. She served as Vice President
and Executive Assistant to the President of Bank of America and was a Vice
President in the bank's Corporate Planning and Development Department. Ms.
Byerwalter currently serves on the board of directors of Redwood Trust, Inc.,
SRI International, Stanford Management Company and Stanford Hospitals and
Clinics.
Lisa Yanney Roskens, 33 is a Managing Director of Twin Compass, LLC, a
small business consulting firm. From 1997 to 1999, Ms. Roskens was employed
by Inacom Corporation, where she held the position of Director of Business
Development and Director of Field Services Development. From 1995 to 1997 Ms.
Roskens served as Finance Director for the U.S. Senate campaign of Senator
Charles Hagel of Nebraska. From 1992 to 1995, Ms. Roskens was an attorney
with the Kutak Rock law firm in Omaha, Nebraska, specializing in commercial
litigation. Ms. Roskens is the daughter of Michael Yanney and Gail Walling
Yanney.
Item 11. Executive Compensation. The Registrant does not have any
directors or officers. Certain services will be provided to the Registrant by
managers and officers of America First.
None of the managers or officers of America First receive compensation from
the Registrant and Cap Source L.L.C. receives no reimbursement from the
Registrant for any portion of their salaries. No remuneration was paid by the
Registrant to Cap Source L.L.C. pursuant to the terms of its limited
partnership agreement during 1999. However, upon commencement of operations,
remuneration will be paid by the Registrant to Cap Source L.L.C.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) The current sole limited partner of the Registrant is an
affiliate of Cap Source L.L.C.. Such affiliate also serves as a general
partner of Cap Source.
(b) No manager or officer of America First or Cap Source L.L.C.
owns any direct interest in the Registrant.
(c) There are no arrangements known to the Registrant the operation
of which may, at any subsequent date, result in a change in control of the
Registrant. As described in Item 1, the general partners of Cap Source and
Cap Source II submitted a proposal for a merger of the Registrant with Cap
Source and Cap Source II. Cap Source L.L.C. is also one of the general
partners of Cap Source.
<PAGE> -4-
Item 13. Certain Relationships and Related Transactions. The members of
Cap Source L.L.C. are America First Companies L.L.C. and Mr. Yanney. During
the period covered by this report, the Registrant did not engage in any
transaction with Cap Source L.L.C., America First or with any person who is
(i) a member, manager or executive officer of Cap Source L.L.C. or America
First; (ii) a nominee for election as manager of Cap Source L.L.C. or America
First; (iii) an owner of more that 5% of the Registrant or (iv) a member of
the immediate family of any of the foregoing persons. For information
relating to reimbursements paid by Cap Source and Cap Source II to America
First, please see the Form 10-Ks filed by Cap Source and Cap Source II for the
year ended December 31, 1999.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K. (a) The following documents are filed as part of this report:
1. Financial Statements. The following financial statements are
included in response to Item 8 of this report:
Independent Auditors' Report.
Balance Sheet of the Registrant as of December 31, 1999.
Notes to Balance Sheet of the Registrant.
2. Financial Statement Schedules. The information required to be
set forth in the financial statement schedules is shown in the Notes to
Balance Sheet filed in response to Item 8 hereof.
3. Exhibits. The following exhibits are filed as required
by Item 14(c) of this report. Exhibit numbers refer to the
paragraph numbers under Item 601 of Regulation S-K:
2(a) Agreement and Plan of Merger among the
Partnership and Cap Source and Cap Source II
(incorporated by reference to Appendix A to the
Prospectus included in Registration Statement on
Form S-4 (No. 333-52117) filed by the Registrant
on November 8, 1999).
4(a) Certificate of Limited Partnership of the Partnership
(incorporated by reference to Exhibit 3.01 to
Registration Statement on Form S-4 (No. 333-52117)
filed by Registrant on July 21, 1999).
4(b) Amended and Restated Agreement of Limited
Partnership of America First Real Estate Investment
Partners, L.P. (incorporated by reference to Exhibit
3.02 to the Registration Statement on
Form S-4 (No. 333-52117) filed by the Registrant on
July 21, 1999).
4(c) Form of Indenture between Partnership and U.S. Bank
Trust National Association, as trustee, (incorporated
by reference to Exhibit 4.02 to the Registration
Statement on Form S-4 (No. 333-52117) filed by the
Registrant on May 7, 1998).
4(d) Form of Unit Certificate of the Registrant
(incorporated by reference to Exhibit 4.03 to the
Registration Statement on Form S-4 (No. 333-52117)
filed by the Registrant on September 28, 1999).
4(e) Form of Variable Rate Junior Notes are included in
Exhibit 4.02 (incorporated by reference to Exhibit
4.04 to the Registration Statement on Form S-4
(No. 333-52117) filed by the Registrant on May 7,
1998).
24. Power of Attorney.
27. Financial Data Schedule.
(b) The Registrant did not file any reports on Form 8-K during
the last quarter of the period covered by this report.
<PAGE> -5-
INDEPENDENT AUDITORS' REPORT
To the Partners
America First Real Estate Investment Partners, L.P.:
We have audited the accompanying balance sheet of America First Real Estate
Investment Partners, L.P. as of December 31, 1999. This financial statement
is the responsibility of the Partnership's management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit 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 statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of America First Real Estate
Investment Partners, L.P. as of December 31, 1999 in conformity with generally
accepted accounting principles.
Omaha, Nebraska
March 27, 2000 /s/KPMG LLP
<PAGE> -6-
AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
Dec. 31, 1999
---------------
<S> <C>
Assets
Cash $ 1,000
---------------
$ 1,000
===============
Partners' Capital
General Partner $ 10
Limited Partner 990
---------------
$ 1,000
===============
The accompanying notes are an integral part of the balance sheet.
</TABLE>
<PAGE> -7-
AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO BALANCE SHEET
DECEMBER 31, 1999
1. Organization
America First Real Estate Investment Partners, L.P. (the "Partnership") was
formed on June 18, 1999, under the Delaware Revised Uniform Limited
Partnership Act for the purpose of acquiring, holding, operating, selling and
otherwise dealing primarily with multifamily residential properties, including
the acquisition of debt and equity securities of entities engaged in similar
activities. The Partnership will facilitate the proposed merger of Capital
Source L.P. and Capital Source II L.P.-A (collectively referred to as the
"Capital Source Funds"). The Partnership intends to issue up to 7,765,772
units of assigned limited partnership interest to holders of Beneficial
Assignment Certificates (BACs) of the Capital Source Funds. The General
Partner of the Partnership is America First Capital Source I L.L.C. The
General Partner will hold a 1% interest in the Partnership. The Company has
not yet commenced operations.
2. Related Party Transactions
The Partnership will pay the General Partner an acquisition fee in connection
with the identification, evaluation and acquisition of new assets and the
financing thereof in an amount equal to 1.25% of the aggregate purchase price
paid by the Partnership for such new assets. The acquisition fee with respect
to an acquisition of a new asset will be payable at the time of the closing of
the acquisition. The Partnership will also pay the General Partner an
administrative fee in connection with the ongoing administration of the
business of the Partnership in an amount equal to 0.50%, per annum, of the sum
of (i) the fair market value on the merger date of the original assets that
are then still owned by the Partnership, plus, (ii) the purchase price paid by
the Partnership for new assets that are then held by the Partnership. The
first $100,000 of the administrative fee shall be payable each year, with the
balance payable only during years that funds from operations ("FFO"),
calculated before administrative fees, exceeds 7% of the unit holders' average
capital for that year. FFO represents net income (or loss) (computed in
accordance with GAAP), excluding gains (or losses) from debt restructuring and
sales of properties, plus real estate-related depreciation and amortization
(excluding amortization of deferred financing costs and depreciation of
non-real estate assets) and after adjustments for unconsolidated partnerships
and joint ventures. Such administrative fee will be paid on a monthly basis.
The Partnership may pay an affiliate of the General Partner a reasonable
property management fee in connection with the management of the Properties.
The property management fee paid with respect to any Property may not exceed
5% of the gross revenues of such Property (in the case of residential
property) or 6% of the gross revenues of such Property (in the case of
industrial or commercial property); provided, however, that the property
management fee shall not exceed an amount that would be charged by
unaffiliated parties rendering similar services in the same geographic
location and for comparable property.
The Partnership will reimburse the General Partner or its affiliates on a
monthly basis for the actual out-of-pocket costs of direct general and
administrative expenses.
<PAGE> -8-
AMERICA FIRST REAL ESTATE INVESTMENT PARTNERS, L.P.
NOTES TO BALANCE SHEET
DECEMBER 31, 1999
3. Legal Proceedings
The Partnership has been named as a defendant in a purported class action
lawsuit filed in the Delaware Court of Chancery on February 3, 1999, by Alvin
M. Panzer and Sandra G. Panzer, against the Partnership, its general partner,
America First and various of their affiliates (including Capital Source L.P.,
Capital Source II L.P.-A, and their general partners (Capital Source L.P. and
Capital Source II L.P.-A are partnerships with general partners that are
affiliates of America First.) and Lehman Brothers, Inc. Alvin M. Panzer and
Sandra G. Panzer are two Beneficial Assignment Certificate (BAC) holders of
Capital Source L.P. and Capital Source II L.P.-A. The plaintiffs seek to have
the lawsuit certified as a class action on behalf of all BAC holders of
Capital Source L.P. and Capital Source II L.P.-A. The lawsuit alleges, among
other things, that a proposed merger transaction involving the Partnership,
Capital Source L.P. and Capital Source II L.P.-A is deficient and coercive,
that the defendants have breached the terms of Capital Source L.P.'s and
Capital Source II L.P.-A's partnership agreement and that the defendants have
acted in manners which violate their fiduciary duties to the BAC holders. In
this complaint, the plaintiffs sought to enjoin the proposed merger
transaction and seek to appoint an independent BAC holder representative to
investigate alternative transactions. The lawsuit also requests a judicial
dissolution of Capital Source L.P. and Capital Source II L.P.-A, an
accounting, and unspecified damages and costs.
The general partners of the Partnership, Capital Source L.P. and Capital
Source II L.P.-A determined not to pursue the merger transaction which was the
subject of the initial lawsuit and proposed an alternative transaction to BAC
holders. A prospectus/consent solicitation statement outlining this
alternative transaction was sent to BAC holders on or about November 16,
1999. The plaintiffs amended their complaint on December 8, 1999, and again
on February 22, 2000. The second amended complaint challenges this current
prospectus/consent solicitation statement on grounds similar to those alleged
in the original complaint, as well as on other procedural grounds. The second
amended complaint does not seek to enjoin the proposed merger transaction.
The general partners of the Partnership, Capital Source L.P. and Capital
Source II L.P.-A have moved to dismiss these complaints, and they intend to
defend these lawsuits vigorously, but are unable to estimate the effect of
either of these lawsuits, if any, on the financial statements of the
Partnership or on the ability of the Partnership to consummate the proposed
merger with Capital Source L.P. and Capital Source II L.P.-A.
<PAGE> -9-
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.
AMERICA FIRST REAL ESTATE INVESTMENT
PARTNERS, L.P.
By America First Capital
Source I, L.L.C., General
Partner of the Registrant
By /s/ Michael Thesing
Michael Thesing,
Vice President and
Principal Financial Officer
Date: March 28, 2000
<PAGE> -10-
Pursuant to the requirements of the Securities and 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.
Date: March 28, 2000 By /s/ Michael B. Yanney*
Michael B. Yanney,
Chairman and Chief Executive Officer of
the General Partner
(Principal Executive Officer)
Chairman of the Board, President,
Chief Executive Officer and Manager of
America First Companies L.L.C.
Date: March 28, 2000 By /s/ Michael Thesing
Michael Thesing, Vice
President, Secretary and
Treasurer (Principal Financial Officer)
of the General Partner
Vice President, Secretary, Treasurer
and Manager of America First Companies L.L.C.
Date: March 28, 2000 By /s/ William S. Carter, M.D.*
William S. Carter, M.D.
Manager of America First Companies L.L.C.
Date: March 28, 2000 By /s/ Martin A. Massengale*
Martin A. Massengale
Manager of America First Companies L.L.C.
Date: March 28, 2000 By /s/ Alan Baer*
Alan Baer
Manager of America First Companies L.L.C.
Date: March 28, 2000 By /s/ Gail Walling Yanney*
Gail Walling Yanney
Manager of America First Companies L.L.C.
Date: March 28, 2000 By /s/ Mariann Byerwalter*
Mariann Byerwalter
Manager of America First Companies L.L.C.
Date: March 28, 2000 By /s/ Lisa Yanney Roskens*
Lisa Yanney Roskens
Manager of America First Companies L.L.C.
*By Michael Thesing,
Attorney in Fact
/s/ Michael Thesing
Michael Thesing
<PAGE> -11-
EXHIBIT 24
POWER OF ATTORNEY
<PAGE> -12-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1999, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
America First Real Estate Investment Partners, L.P.
IN WITNESS WHEREOF, the undersigned has executed
this Power of Attorney as of the 1st day of February 2000.
/s/ Michael B. Yanney
Michael B. Yanney
<PAGE> -13-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1999, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
America First Real Estate Investment Partners, L.P.
IN WITNESS WHEREOF, the undersigned has executed
this Power of Attorney as of the 1st day of February 2000.
/s/ William S. Carter, M.D.
William S. Carter, M.D.
<PAGE> -14-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1999, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
America First Real Estate Investment Partners, L.P.
IN WITNESS WHEREOF, the undersigned has executed
this Power of Attorney as of the 1st day of February 2000.
/s/ Martin A. Massengale
Martin A. Massengale
<PAGE> -15-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1999, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
America First Real Estate Investment Partners, L.P.
IN WITNESS WHEREOF, the undersigned has executed
this Power of Attorney as of the 1st day of February 2000.
/s/ Alan Baer
Alan Baer
<PAGE> -16-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1999, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
America First Real Estate Investment Partners, L.P.
IN WITNESS WHEREOF, the undersigned has executed
this Power of Attorney as of the 1st day of February 2000.
/s/ Gail Walling Yanney
Gail Walling Yanney
<PAGE> -17-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1999, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
America First Real Estate Investment Partners, L.P.
IN WITNESS WHEREOF, the undersigned has executed
this Power of Attorney as of the 1st day of February 2000.
/s/ Mariann Byerwalter
Mariann Byerwalter
<PAGE> -18-
POWER OF ATTORNEY
The undersigned hereby appoints Michael Thesing as his agent and
attorney-in-fact for the purpose of executing and filing all reports on Form
10-K relating to the year ending December 31, 1999, and any amendments
thereto, required to be filed with the Securities and Exchange Commission by
the following persons:
America First Tax Exempt Investors, L.P.
America First Apartment Investors, L.P.
Capital Source L.P.
Capital Source II L.P.-A
America First Real Estate Investment Partners, L.P.
IN WITNESS WHEREOF, the undersigned has executed
this Power of Attorney as of the 1st day of February 2000.
/s/ Lisa Yanney Roskens
Lisa Yanney Roskens
<PAGE> -19-
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
1,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
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<CHANGES> 0
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</TABLE>
