<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 JUNE 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 JUNE 30, 2000
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets, June 30, 2000 and December 31, 1999................. 1
Statements of Operations,
Six and Three Months Ended June 30, 2000 and 1999............... 2
Statement of Partner's Equity (Deficiency),
Six Months Ended June 30, 2000.................................. 3
Statements of Cash Flows
Six Months Ended June 30, 2000 and 1999......................... 4
Notes to Financial Statements....................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 15
Item 6. Exhibits and Reports on Form 8-K............................... 15
Signatures.............................................................. 16
</TABLE>
<PAGE> 3
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
2000 1999
(Unaudited) (Audited)
----------- ---------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 609,294 $ 579,027
CASH AND CASH EQUIVALENTS (Note 1) 107,284 203,866
--------- ---------
TOTAL ASSETS $ 716,578 $ 782,893
========= =========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accounts payable (Note 3) $ 52,519 $ 46,368
--------- ---------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)
PARTNERS' EQUITY (DEFICIENCY):
General partners (120,429) (119,704)
Limited partners 784,488 856,229
--------- ---------
664,059 736,525
--------- ---------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 716,578 $ 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
FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Six months Three months Six months Three months
ended ended ended ended
June 30, 2000 June 30, 2000 June 30, 1999 June 30, 1999
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INTEREST AND OTHER INCOME $ 3,950 $ 1,736 $ 9,665 $ 3,791
--------- -------- --------- --------
OPERATING EXPENSES:
Legal and accounting 48,618 23,700 56,388 28,900
Management fees - general partner (Note 3) 53,118 26,566 53,116 26,558
Administrative (Notes 2 and 3) 26,161 20,679 82,426 14,313
--------- -------- --------- --------
Total operating expenses 127,897 70,945 191,930 69,771
--------- -------- --------- --------
LOSS FROM OPERATIONS (123,947) (69,209) (182,265) (65,980)
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) 42,000 22,000 18,000 (1,000)
--------- -------- --------- --------
NET LOSS $ (72,466) $(47,209) $(154,784) $(66,980)
========= ======== ========= ========
NET LOSS PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ (4) $ (3) $ (9) $ (4)
========= ======== ========= ========
</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 SIX MONTHS ENDED JUNE 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
Distributions for the six months
ended June 30, 2000 0
Net loss for the six months
ended June 30, 2000 (725) (71,741) (72,466)
--------- --------- ---------
EQUITY (DEFICIENCY),
June 30, 2000 $(120,429) $ 784,488 $ 664,059
========= ========= =========
</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 SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
----------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (72,466) $ (154,784)
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (42,000) (18,000)
Increase in accrued fees and
expenses due general partner -- 8,851
Increase (decrease) in accounts payable 6,151 (74,935)
--------- -----------
Net cash used in operating activities (108,315) (238,868)
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from limited partnership
recognized as return of capital 35,733 37,918
Advances to limited partnerships (24,000) (20,000)
Proceed 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 (96,582) (220,950)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 203,866 540,568
--------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 107,284 $ 319,618
========= ===========
</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
JUNE 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 June 30, 2000, and the results of operations and changes in cash flows
for the six and three 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 accounting
principles generally accepted in the United States of America 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.
5
<PAGE> 8
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 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)
JUNE 30, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 9 limited
partnerships. The limited partnerships as of June 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 six months ended June 30, 2000:
<TABLE>
<S> <C>
Balance, beginning of period $ 579,027
Amortization acquisition costs (2,000)
Cash distribution recognized as return of capital (35,733)
Advances to limited partnerships 24,000
Equity in income of limited partnerships 44,000
---------
Balance, end of period $609,294
=========
</TABLE>
7
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED):
The following are unaudited combined estimated statements of operations
for the six and three months ended June 30, 2000 and 1999 for the limited
partnerships in which the Partnership has investments:
<TABLE>
<CAPTION>
Six months Three months Six months Three months
ended ended ended ended
June 30, 2000 June 30, 2000 June 30, 1999 June 30,1999
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
REVENUES
Rental and other $2,088,000 $1,044,000 $3,262,000 $1,631,000
---------- ---------- ---------- ----------
EXPENSES
Depreciation 380,000 190,000 740,000 370,000
Interest 444,000 222,000 538,000 269,000
Operating 1,152,000 576,000 1,662,000 831,000
----------- ---------- ------------ ------------
1,976,000 988,000 2,940,000 1,470,000
----------- ---------- ------------ ------------
NET INCOME $ 112,000 $ 56,000 $ 322,000 $ 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 on 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 was generally the case under existing HAP Contracts.
The payments under the renewed HAP Contracts are not expected to 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
8
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED):
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.
On September 11, 1998, HUD issued interim regulations implementing MAHRAA
and final regulations are expected to be issued in 2000.
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
$53,118 and $53,116 for the six months ended June 30, 2000 and 1999,
respectively.
9
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
NOTE 3 - ACCRUED FEES AND EXPENSES DUE TO GENERAL PARTNER
The Partnership reimburses NAPICO for certain expenses. The reimbursement
paid to NAPICO was approximately $3,300 and $3,300 for the six months
ended June 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 Casden
Properties Inc., which was organized by an affiliate of NAPICO. 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 are contesting 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.
10
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
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.
11
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 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 distributions to
investors on March 12, 1999, primarily 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.
12
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 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 on 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 was generally the case under existing HAP Contracts.
The payments under the renewed HAP Contracts are not expected to 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.
On September 11, 1998, HUD issued interim regulations implementing MAHRAA
and final regulations are expected to be issued in 2000.
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.
13
<PAGE> 16
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
On December 30, 1998, 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.
14
<PAGE> 17
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 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 Casden Properties Inc., which
was organized by an affiliate of NAPICO. 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 are contesting 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 June 30, 2000.
15
<PAGE> 18
REAL ESTATE ASSOCIATES LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 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
/s/ BRUCE NELSON
--------------------
Bruce Nelson
President
Date: August 21, 2000
--------------------
/s/ PAUL PATIERNO
--------------------
Paul Patierno
Chief Financial Officer
Date: August 21, 2000
--------------------
16
