<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the Quarterly Period Ended September 30, 2000
Commission File Number 0-09262
REAL ESTATE ASSOCIATES LIMITED
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3187912
9090 WILSHIRE BLVD., SUITE 201,
BEVERLY HILLS, CALIF. 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
<PAGE> 2
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets, September 30, 2000 and December 31, 1999 ..................1
Statements of Operations,
Nine and Three Months Ended September 30, 2000 and 1999 .............2
Statement of Partner's Equity (Deficiency),
Nine Months Ended September 30, 2000.................................3
Statements of Cash Flows
Nine Months Ended September 30, 2000 and 1999 .......................4
Notes to Financial Statements .............................................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ..........................11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................13
Item 6. Exhibits and Reports on Form 8-K ...................................13
Signatures ..............................................................14
</TABLE>
<PAGE> 3
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
2000
(Unaudited) 1999
--------- ---------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 631,494 $ 579,027
CASH AND CASH EQUIVALENTS (Note 1) 61,435 203,866
--------- ---------
TOTAL ASSETS $ 692,929 $ 782,893
========= =========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accounts payable $ 46,967 $ 46,368
--------- ---------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)
PARTNERS' EQUITY (DEFICIENCY):
General partners (120,610) (119,704)
Limited partners 766,572 856,229
--------- ---------
645,962 736,525
--------- ---------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 692,929 $ 782,893
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine months Three months Nine months Three months
ended ended ended ended
Sept 30, 2000 Sept 30, 2000 Sept 30, 1999 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INTEREST AND OTHER INCOME $ 5,118 $ 1,167 $ 13,080 $ 3,414
--------- --------- --------- ---------
OPERATING EXPENSES:
Legal and accounting 56,318 7,700 57,688 1,300
Management fees - general partner (Note 3) 79,656 26,538 79,674 26,558
Administrative (Note 3) 33,388 7,228 93,635 12,209
--------- --------- --------- ---------
Total operating expenses 169,362 41,466 230,997 40,067
--------- --------- --------- ---------
LOSS FROM OPERATIONS (164,244) (40,299) (217,917) (36,653)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 9,481 -- 9,481 --
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) 64,200 22,200 57,000 20,000
--------- --------- --------- ---------
NET LOSS $ (90,563) $ (18,099) $(151,436) $ (16,653)
========= ========= ========= =========
NET LOSS PER LIMITED
PARTNERSHIP INTEREST (Note 1) $ (5) $ (1) $ (9) $ (1)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
-------- -------- -----
<S> <C> <C> <C>
PARTNERSHIP INTERESTS 16,505
=========
EQUITY (DEFICIENCY),
January 1, 2000 $(119,704) $ 856,229 $ 736,525
Net loss for the nine months
ended September 30, 2000 (906) (89,657) (90,563)
--------- --------- ---------
EQUITY (DEFICIENCY),
September 30, 2000 $(120,610) $ 766,572 $ 645,962
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (90,563) $ (151,436)
Adjustments to reconcile net loss to net
cash used in operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (64,200) (57,000)
Increase (decrease) in accounts payable 599 (74,943)
----------- -----------
Net cash used in operating activities (154,164) (283,379)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from limited partnerships
recognized as return of capital 35,733 37,918
Advances to limited partnerships (24,000) (20,000)
Proceeds from the sale of limited partnership interests - 3,900,000
----------- -----------
Net cash provided by investing activities 11,733 3,917,918
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners - (3,900,000)
----------- -----------
NET DECREASE IN CASH AND CASH
EQUIVALENTS (142,431) (265,461)
CASH AND CASH EQUIVALENTS, beginning of period 203,866 540,568
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 61,435 $ 275,107
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual
audited financial statements; accordingly, the financial statements
included herein should be reviewed in conjunction with the financial
statements and related notes thereto contained in the annual report for
the year ended December 31, 1999 prepared by Real Estate Associates
Limited (the "Partnership.") Accounting measurements at interim dates
inherently involve greater reliance on estimates than at year end. The
results of operations for the interim period presented are not
necessarily indicative of the results for the entire year.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting primarily of normal
recurring accruals) necessary to present fairly the financial position
as of September 30, 2000, and the results of operations for the nine and
three months then ended and changes in cash flows for the nine months
then ended.
The general partners have a 1 percent interest in profits and losses of
the Partnership. The limited partners have the remaining 99 percent
interest which is allocated in proportion to their respective individual
investments. National Partnership Investments Corp. (NAPICO) is the
corporate general partner of the Partnership. Casden Properties Inc.
owns a 95.25% economic interest in NAPICO, with the balance owned by
Casden Investment Corporation ("CIC"). CIC, which is wholly owned by
Alan I. Casden, owns 95% of the voting common stock of NAPICO.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity
with accounting principles generally in the United States of America.
5
<PAGE> 8
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
METHOD OF ACCOUNTING FOR INVESTMENT IN LIMITED PARTNERSHIPS
The investment in limited partnerships is accounted for on the equity
method. Acquisition, selection fees and other costs related to the
acquisition of the projects have been capitalized to the investment
account and are being amortized on a straight line basis over the
estimated lives of the underlying assets, which is generally 30 years.
NET LOSS PER LIMITED PARTNERSHIP INTEREST
Net loss per limited partnership interest was computed by dividing the
limited partners' share of net loss by the number of limited partnership
interests outstanding during the year. The number of limited partnership
interests was 16,505 for the periods presented.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less. The
Partnership has its cash and cash equivalents on deposit primarily with
two high credit quality financial institutions. Such cash and cash
equivalents are in excess of the FDIC insurance limit.
INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of the
individual partners.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable.
If the sum of the expected future cash flows is less than the carrying
amount of the assets, the Partnership recognizes an impairment loss.
6
<PAGE> 9
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 9 limited
partnerships. The limited partnerships as of September 30, 2000 own
residential low income rental projects consisting of 657 apartment
units. The mortgage loans of these projects are payable to or insured by
various governmental agencies.
The Partnership, as a limited partner, is entitled from 50 percent to 99
percent of the profits and losses in the limited partnerships.
Equity in losses of limited partnerships are recognized in the financial
statements until the limited partnership investment account is reduced
to a zero balance. Losses incurred after the limited partnership
investment account is reduced to zero are not recognized.
Distributions from the limited partnerships are accounted for as a
return of capital until the investment balance is reduced to zero.
Subsequent distributions received are recognized as income.
The following is a summary of the investments in limited partnerships
for the nine months ended September 30, 2000:
<TABLE>
<S> <C>
Balance, beginning of period $ 579,027
Amortization of acquisition costs (2,800)
Cash distribution recognized as return of capital (35,733)
Advances to limited partnerships 24,000
Equity in income of limited partnerships 67,000
---------
Balance, end of period $ 631,494
=========
</TABLE>
7
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The following are unaudited combined estimated statements of operations
for the nine and three months ended September 30, 2000 and 1999 for the
limited partnerships in which the Partnership has investments:
<TABLE>
<CAPTION>
Nine months Three months Nine months Three months
ended ended ended ended
Sept. 30, 2000 Sept. 30, 2000 Sept. 30, 1999 Sept. 30,1999
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
REVENUES
Rental and other $3,130,000 $1,044,000 $4,893,000 $1,631,000
---------- ---------- ---------- ----------
EXPENSES
Depreciation 569,000 190,000 1,110,000 370,000
Interest 666,000 222,000 807,000 269,000
Operating 1,729,000 576,000 2,493,000 831,000
---------- ---------- ---------- ----------
2,964,000 988,000 4,410,000 1,470,000
---------- ---------- ---------- ----------
Net income $ 166,000 $ 56,000 $ 483,000 $ 161,000
========== ========== ========== ==========
</TABLE>
NAPICO, or one of its affiliates, is the general partner and property
management agent for certain of the limited partnerships included above.
Under recently adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis under
the existing terms. In connection with renewals of the HAP Contracts
under such new law and policy, the amount of rental assistance payments
under renewed HAP Contracts will be based on market rentals instead of
above market rentals, which may be the case under existing HAP
Contracts. The payments under the renewed HAP Contracts may not be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service
requirements of existing loans insured by the Federal Housing
Administration of HUD ("FHA") unless such mortgage loans are
restructured. In order to address the reduction in payments under HAP
Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 ("MAHRAA"), which was
adopted in
8
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
October 1997, provides for the restructuring of mortgage loans insured
by the FHA with respect to properties subject to the Section 8 program.
Under MAHRAA, an FHA-insured mortgage loan can be restructured into a
first mortgage loan which will be amortized on a current basis and a low
interest second mortgage loan payable to FHA which will only be payable
on maturity of the first mortgage loan. This restructuring results in a
reduction in annual debt service payable by the owner of the FHA-insured
mortgage loan and is expected to result in an insurance payment from FHA
to the holder of the FHA-insured loan due to the reduction in the
principal amount. MAHRAA also phases out project-based subsidies on
selected properties serving families not located in rental markets with
limited supply, converting such subsidies to a tenant-based subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness
under MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
On December 30, 1998, after obtaining the consents of the limited
partners, the Partnership sold its limited partnership interests in 8
local limited partnerships to subsidiaries of Casden Properties Inc. The
sale resulted in cash proceeds to the Partnership of $3,900,000 which
was collected in 1999. In March, 1999, the Partnership made cash
distributions of $3,861,000 to the limited partners and $39,000 to the
general partners, primarily using proceeds from the sale of the
partnership interests.
NOTE 3 - ACCRUED FEES AND EXPENSES DUE TO GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to NAPICO for an annual
management fee equal to 1/2 and 1 percent of the original invested
assets of the limited partnerships. Invested assets is defined as the
costs of acquiring project interests, including the proportionate amount
of the mortgage loans related to the Partnership's interest in the
capital accounts of the respective partnerships. The management fee
incurred was $79,656 and $79,674 for the nine months ended September 30,
2000 and 1999, respectively.
9
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
NOTE 3 - ACCRUED FEES AND EXPENSES DUE TO GENERAL PARTNER (CONTINUED)
The Partnership reimburses NAPICO for certain expenses. The
reimbursement paid to NAPICO was approximately $5,300 and $3,300 for the
nine months ended September 30, 2000 and 1999, respectively, and is
included in administrative expenses.
NOTE 4 - CONTINGENCIES
On August 27, 1998, two investors holding an aggregate of eight units of
limited partnership interests in Real Estate Associates Limited III (an
affiliated partnership in which NAPICO is the managing general partner)
and two investors holding an aggregate of five units of limited
partnership interest in Real Estate Associates Limited VI (another
affiliated partnership in which NAPICO is the managing general partner)
commenced an action in the United States District Court for the Central
District of California against the Partnership, NAPICO and certain other
affiliated entities. The complaint alleges that the defendants breached
their fiduciary duty to the limited partners of certain NAPICO managed
partnerships and made materially false and misleading statements in the
consent solicitation statements sent to the limited partners of such
partnerships relating to approval of the transfer of partnership
interests in limited partnerships, owning certain of the properties, to
subsidiaries of Casden Properties Inc. The plaintiffs seek equitable
relief, as well as compensatory damages and litigation related costs. On
August 4, 1999, one investor holding one unit of limited partnership
interest in Housing Programs Limited (another affiliated partnership in
which NAPICO is the managing general partner) commenced a virtually
identical action in the United States District Court for the Central
District of California against the Partnership, NAPICO and certain other
affiliated entities. The managing general partner of such NAPICO managed
partnerships and the other defendants believe that the plaintiffs'
claims are without merit and intend to contest the actions vigorously.
The corporate general partner of the Partnership is a plaintiff in
various lawsuits and has also been named a defendant in other lawsuits
arising from transactions in the ordinary course of business. In the
opinion of management and the corporate general partner, the claims will
not result in any material liability to the Partnership.
NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. The carrying amount of assets
and liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.
10
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
SEPTEMBER 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary sources of funds include interest income
earned from investing available cash and distributions from limited
partnerships in which the Partnership has invested. It is not expected
that any of the local limited partnerships in which the Partnership has
invested will generate cash flow sufficient to provide for distributions
to limited partners in any material amount. The Partnership made a
distribution to investors on March 12, 1999, using proceeds from the
disposition of its investments in certain limited partnerships.
RESULTS OF OPERATIONS
Partnership revenues consist primarily of interest income earned on
certificates of deposit and other temporary investment of funds not
required for investment in local partnerships.
Operating expenses consist primarily of recurring general and
administrative expenses and professional fees for services rendered to
the Partnership. In addition, an annual Partnership management fee in an
amount equal to .5 percent of investment assets is payable to the
corporate general partner.
The Partnership accounts for its investments in the local limited
partnerships on the equity method, thereby adjusting its investment
balance by its proportionate share of the income or loss of the local
limited partnerships. The equity in income of limited partnerships is
received from two investee limited partnerships. All other investee
limited partnerships have reduced their investment balances to zero and
as a result thereof, the Partnership does not recognize equity in losses
from those investments in accordance with the equity accounting method.
Distributions received from limited partnerships are recognized as
return of capital until the investment balance has been reduced to zero
or to a negative amount equal to future capital contributions required.
Subsequent distributions received are recognized as income.
Except for certificates of deposit and money market funds, the
Partnership's investments are entirely interests in other limited
partnerships owning government assisted projects. Available cash is
invested in these funds earning interest income as reflected in the
statements of operations. These investments can be converted to cash to
meet obligations as they arise.
11
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
SEPTEMBER 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Under recently adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis under
the existing terms. In connection with renewals of the HAP Contracts
under such new law and policy, the amount of rental assistance payments
under renewed HAP Contracts will be based on market rentals instead of
above market rentals, which may be the case under existing HAP
Contracts. The payments under the renewed HAP Contracts may not be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service
requirements of existing loans insured by the Federal Housing
Administration of HUD ("FHA") unless such mortgage loans are
restructured. In order to address the reduction in payments under HAP
Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 ("MAHRAA"), which was
adopted in October 1997, provides for the restructuring of mortgage
loans insured by the FHA with respect to properties subject to the
Section 8 program. Under MAHRAA, an FHA-insured mortgage loan can be
restructured into a first mortgage loan which will be amortized on a
current basis and a low interest second mortgage loan payable to FHA
which will only be payable on maturity of the first mortgage loan. This
restructuring results in a reduction in annual debt service payable by
the owner of the FHA-insured mortgage loan and is expected to result in
an insurance payment from FHA to the holder of the FHA-insured loan due
to the reduction in the principal amount. MAHRAA also phases out
project-based subsidies on selected properties serving families not
located in rental markets with limited supply, converting such subsidies
to a tenant-based subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness
under MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
On December 30, 1998, after obtaining the consents of the limited
partners, the Partnership sold its limited partnership interests in 8
local limited partnerships to subsidiaries of Casden Properties Inc. The
sale resulted in cash proceeds to the Partnership of $3,900,000 which
was collected in 1999. In March 1999, the Partnership made cash
distributions of $3,861,000 to the limited partners and $39,000 to the
general partners, primarily using proceeds from the sale of the
partnership interests.
12
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
SEPTEMBER 30, 2000
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership interests in Real Estate Associates Limited III (an affiliated
partnership in which NAPICO is the managing general partner) and two investors
holding an aggregate of five units of limited partnership interest in Real
Estate Associates Limited VI (another affiliated partnership in which NAPICO is
the managing general partner) commenced an action in the United States District
Court for the Central District of California against the Partnership, NAPICO and
certain other affiliated entities. The complaint alleges that the defendants
breached their fiduciary duty to the limited partners of certain NAPICO managed
partnerships and made materially false and misleading statements in the consent
solicitation statements sent to the limited partners of such partnerships
relating to approval of the transfer of partnership interests in limited
partnerships, owning certain of the properties, to subsidiaries of Casden
Properties Inc. The plaintiffs seek equitable relief, as well as compensatory
damages and litigation related costs. On August 4, 1999, one investor holding
one unit of limited partnership interest in Housing Programs Limited (another
affiliated partnership in which NAPICO is the managing general partner)
commenced a virtually identical action in the United States District Court for
the Central District of California against the Partnership, NAPICO and certain
other affiliated entities. The managing general partner of such NAPICO managed
partnerships and the other defendants believe that the plaintiffs' claims are
without merit and intend to contest the actions vigorously.
The corporate general partner is involved in various lawsuits. None of these are
related to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required per the provision of Item 6 of regulation S-K
and no reports on Form 8-K were filed during the quarter ended September
30, 2000.
13
<PAGE> 16
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
SEPTEMBER 30, 2000
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.
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
By: National Partnership Investments Corp.
General Partner
By: /s/ BRUCE NELSON
----------------------------
Bruce Nelson
President
Date: November 14, 2000
--------------------------
By: /s/ BRIAN H. SHUMAN
----------------------------
Brian H. Shuman
Chief Financial Officer
Date: November 14, 2000
--------------------------
14
