FORM 10-QSB.--QUARTERLY OR TRANSITIONAL REPORT
UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U. S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-9136
ANGELES PARTNERS VIII
(Exact name of small business issuer as specified in its charter)
California 95-3264317
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
ANGELES PARTNERS VIII
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1998
Assets
Cash and cash equivalents $ 267
Receivables and deposits 377
Other assets 138
Investment properties:
Land $ 543
Buildings and related personal property 14,984
15,527
Less accumulated depreciation (10,949) 4,578
$ 5,360
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 60
Tenant security deposit liabilities 80
Accrued property taxes 493
Accrued interest 2,384
Other liabilities 366
Notes payable, $1,721 in default 16,737
Partners' Deficit
General partner $ (182)
Limited partners (11,855 units issued (14,578) (14,760)
and outstanding)
$ 5,360
See Accompanying Notes to Consolidated Financial Statements
b)
ANGELES PARTNERS VIII
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues:
Rental income $ 945 $ 928 $ 2,788 $ 2,728
Other income 54 61 162 155
Total revenues 999 989 2,950 2,883
Expenses:
Operating 395 389 1,220 1,111
General and administrative 29 38 109 103
Depreciation 178 169 514 499
Interest 472 465 1,420 1,378
Property taxes 114 67 245 331
Total expenses 1,188 1,128 3,508 3,422
Net loss $ (189) $ (139) $ (558) $ (539)
Net loss allocated to general
partner (1%) $ (2) $ (1) $ (6) $ (5)
Net loss allocated to limited
partners (99%) (187) (138) (552) (534)
$ (189) $ (139) $ (558) $ (539)
Net loss per limited
partnership unit $(15.79) $(11.64) $(46.60) $(45.04)
See Accompanying Notes to Consolidated Financial Statements
c)
ANGELES PARTNERS VIII
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 12,000 $ 121 $ 12,000 $ 12,121
Partners' deficit at
December 31, 1997 11,855 $ (176) $ (14,026) $ (14,202)
Net loss for the nine months
ended September 30, 1998 -- (6) (552) (558)
Partners' deficit at
September 30, 1998 11,855 $ (182) $ (14,578) $ (14,760)
See Accompanying Notes to Consolidated Financial Statements
d)
ANGELES PARTNERS VIII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1998 1997
Cash flows from operating activities:
Net loss $ (558) $ (539)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 514 499
Amortization of loan costs 41 42
Change in accounts:
Receivables and deposits (246) (121)
Other assets 7 (22)
Accounts payable 30 (41)
Tenant security deposit liabilities 8 13
Accrued property taxes 128 207
Accrued interest 374 410
Other liabilities 114 80
Net cash provided by operating activities 412 528
Cash flows from investing activities:
Property improvements and replacements (261) (170)
Receipt of insurance proceeds -- 65
Net cash used in investing activities (261) (105)
Cash flows from financing activities:
Payments on notes payable (212) (161)
Net cash used in financing activities (212) (161)
Net (decrease) increase in cash and cash equivalents (61) 262
Cash and cash equivalents at beginning of period 328 193
Cash and cash equivalents at end of period $ 267 $ 455
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,004 $ 927
See Accompanying Notes to Consolidated Financial Statements
e)
ANGELES PARTNERS VIII
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1998
NOTE A - GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming
Angeles Partners VIII (the "Partnership") will continue as a going concern. The
Partnership has incurred recurring operating losses and continues to suffer from
inadequate liquidity. In addition, the Partnership is in default on a portion
of its mortgage notes payable and does not generate sufficient cash flows to
meet current debt-service requirements on its subordinated debt.
The Partnership incurred an operating loss of approximately $558,000 for the
nine months ended September 30, 1998, and Angeles Realty Corporation (the
"General Partner") expects this trend to continue. The Partnership realized net
cash from operations of approximately $412,000; however, interest of
approximately $374,000 was accrued during the nine months ended September 30,
1998 on a note payable and on the second mortgage securing one of the
Partnership's investment properties.
The Partnership's second mortgage to Angeles Mortgage Investment Trust ("AMIT")
in the amount of $1,350,000 plus accrued interest, which is secured by Bercado
Shores Apartments, has been in default since 1993 due to nonpayment of interest
and the maturity of the note in 1995. This indebtedness is recourse to the
Partnership and the estimated fair value of this property is less than the total
of its first and second mortgages. This property remains subject to foreclosure
under the terms of the second mortgage agreement. Pursuant to a series of
transactions, affiliates of the General Partner acquired ownership interests in
AMIT. On September 17, 1998, AMIT was merged with and into Insignia Properties
Trust ("IPT"), the sole shareholder of the General Partner (See "Note C"). As a
result, IPT became the holder of the AMIT debt. The Partnership had initiated
discussions to negotiate a work-out with AMIT. IPT has indicted that it is
reviewing its options with respect to this second mortgage.
The Partnership's note payable of approximately $556,000, including accrued
interest, due to Angeles Acceptance Pool, L.P. ("AAP") matured in November of
1997. The Partnership is currently in negotiations with the lender and hopes to
either extend this note or settle the liability at a reduced amount.
There can be no assurance that these negotiations with the lenders will be
successful. If the Partnership is unable to successfully complete its
negotiations with either or both of the lenders, the Partnership will be
required to explore other alternatives, including the filing for protection
under the Chapter 11 of the Federal Bankruptcy Code, or it is likely that the
Partnership's properties will be lost through foreclosure. No other sources of
additional financing are apparent and the General Partner currently has not
developed alternative plans to remedy the liquidity problems the Partnership is
currently experiencing.
The General Partner anticipates that Brittany Point will generate sufficient
cash flows for the next twelve months to meet its operating expenses, debt
service requirements and to fund capital expenditures. The General Partner
anticipates that Bercado Shores will generate sufficient cash flows for the next
twelve months to cover its operating expenditures, however it is not expected to
be able to completely fund desired capital expenditures or to pay its scheduled
debt service on its second mortgage to IPT. The Partnership's plan is to fund
these items to the extent of available cash flow.
The Partnership will fund its administrative expenses for the next twelve months
by using cash on hand at September 30, 1998, and cash flow generated during
1998. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
amounts and classification of liabilities that may result from this uncertainty.
NOTE B - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the General Partner, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine months
ended September 30, 1998, are not necessarily indicative of the results that may
be expected for the year ending December 31, 1998. For further information,
refer to the financial statements and footnotes thereto included in the
Partnership's annual report on Form 10-KSB for the year ended December 31, 1997.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
Principles of Consolidation
The consolidated financial statements of the Partnership include its 99% limited
partnership interests in Brittany Point AP VIII, L.P. and Brittany Point GP,
L.P. The Partnership may remove the General Partner of Brittany Point AP VIII,
L.P. and Brittany Point GP, L.P.; therefore, these partnerships are controlled
and consolidated by the Partnership. All significant interpartnership balances
have been eliminated.
NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The Partnership Agreement provides for certain payments to affiliates of the
General Partner for services and as reimbursement of certain expenses incurred
by affiliates on behalf of the Partnership.
The following payments were paid or accrued to the General Partner and its
affiliates during the nine months ended September 30, 1998 and 1997,
respectively:
1998 1997
(in thousands)
Property management fees, included in $148 $144
operating expenses
Reimbursement for services of affiliates
(including approximately $13,000 and $7,000
of reimbursements for construction oversight
costs in 1998 and 1997, respectively),
included in general and administrative and
operating expenses and investment properties 86 82
For the period of January 1, 1997 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency affiliated with the
General Partner with an insurer unaffiliated with the General Partner. An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the master policy. The agent assumed the financial
obligations to the affiliate of the General Partner, which received payment on
these obligations from the agent. The amount of the Partnership's insurance
premiums accruing to the benefit of the affiliate of the General Partner by
virtue of the agent's obligation was not significant.
In June 1990, AMIT provided secondary financing on the Partnership's investment
properties. Total indebtedness was approximately $2,920,000 at September 30,
1998, of which $1,350,000 was in default at September 30, 1998 (see "Note A").
Total interest expense related to this debt was approximately $525,000 and
$466,000 for the nine month periods ended September 30, 1998 and 1997,
respectively. Accrued interest related to this debt was approximately
$2,106,000 at September 30, 1998. As discussed in Note A, IPT is now the holder
of the AMIT debt.
In November 1992, AAP, a Delaware limited partnership which now controls the
working capital loan previously provided by Angeles Capital Investment, Inc.
("ACII"), was organized. Angeles Corporation ("Angeles") is the 99% limited
partner of AAP and Angeles Acceptance Directives, Inc.("AAD"), which is wholly-
owned by IPT, was, until April 14, 1995, the 1% general partner of AAP. On
April 14, 1995, as part of a settlement of claims between affiliates of the
General Partner and Angeles, AAD resigned as general partner of AAP and
simultaneously received a .5% limited partner interest in AAP. An affiliate of
Angeles now serves as the general partner of AAP. This indebtedness, which is
included in notes payable, was approximately $371,000 at September 30, 1998, and
is in default due to non-payment upon maturity in November of 1997 (see "Note
A"). Interest is accruing monthly at prime plus 0.75% (9.25% at September 30,
1998). Total interest expense for this loan was approximately $26,000 for each
of the nine months ended September 30, 1998 and 1997. Total accrued interest
for this loan was approximately $185,000 at September 30, 1998.
NOTE D - TRANSFER OF CONTROL - SUBSEQUENT EVENT
On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
into Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control
of the General Partner. In addition, AIMCO also acquired approximately 51% of
the outstanding common shares of beneficial interest of IPT, the sole
shareholder of the General Partner. Also, effective October 1, 1998, IPT and
AIMCO entered into an Agreement and plan of Merger pursuant to which IPT is to
be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The
IPT Merger requires the approval of the holders of a majority of the outstanding
IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned by it in favor
of the IPT Merger and has granted an irrevocable limited proxy to unaffiliated
representatives of IPT to vote the IPT Shares acquired by AIMCO and its
subsidiaries in favor of the IPT Merger. As a result of AIMCO's ownership and
its agreement, the vote of no other holder of IPT is required to approve the
merger. The General Partner does not believe that this transaction will have a
material effect on the affairs and operations of the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the nine
months ended September 30, 1998 and 1997:
Average Occupancy
1998 1997
Bercado Shores Apartments
Mishawaka, Indiana 93% 92%
Brittany Point Apartments
Huntsville, Alabama 92% 94%
Results of Operations
The Partnership realized a net loss of approximately $189,000 and $558,000 for
the three and nine months ended September 30, 1998, compared to a net loss of
approximately $139,000 and $539,000 for the three and nine months ended
September 30, 1997. The slight increase in net loss for the nine months ended
September 30, 1998 was due to an increase in operating and interest expenses to
a large extent offset by an increase in rental income and a decrease in property
taxes. Operating expense increased due to increases in maintenance salaries at
both of the Partnership's investment properties, an increase in tax services
related to a successful tax appeal on behalf of the Bercado Shores Apartment
property and an increase in contract maintenance expense at Brittany Point
Apartments. Interest expense increased over the same period in 1997 due to
increased default interest charged on the second mortgage note secured by
Bercado Shores (see discussion of AMIT note below). Rental income increased as a
result of rental rate increases at both of the Partnership's investment
properties and an increase in occupancy at Bercado Shores Apartments. These
increases in rental income were partially offset by a decline in occupancy at
Brittany Point Apartments. The decrease in tax expense is attributable to a
reduction in taxes for 1998 and 1997 following the successful tax appeal for
Bercado Shores Apartments in 1997.
Included in operating expense for the nine months ended September 30, 1998 is
approximately $66,000 of major repairs and maintenance comprised primarily of
gutter repairs and exterior building repairs. For the nine months ended
September 30, 1997, approximately $56,000 of major repairs and maintenance
comprised primarily of gutter and swimming pool repairs are included in
operating expense.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
The Partnership held cash and cash equivalents of approximately $267,000 at
September 30, 1998 compared to approximately $455,000 at September 30, 1997.
The net decrease in cash and cash equivalents for the nine months ended
September 30, 1998 was $61,000 as compared to a net increase in cash and cash
equivalents of approximately $262,000 for the same period in 1997. Net cash
provided by operating activities primarily decreased as a result of an increase
in receivables and deposits due to a larger increase in tax and insurance
escrows. Net cash used in investing activities increased as a result of
increased property improvements and replacements in 1998, offset by insurance
proceeds received in 1997, with none received in 1998. Net cash used in
financing activities increased due to increased principal payments on notes
payable.
No distributions were made by the Partnership during the nine months ended
September 30, 1998 or 1997 nor are any anticipated in the near-term.
The Partnership's second mortgage to Angeles Mortgage Investment Trust ("AMIT")
in the amount of $1,350,000 plus accrued interest, which is secured by Bercado
Shores Apartments, has been in default since 1993 due to nonpayment of interest
and the maturity of the note in 1995. This indebtedness is recourse to the
Partnership and the estimated fair value of this property is less than the total
of its first and second mortgages. This property remains subject to foreclosure
under the terms of the second mortgage agreement. Pursuant to a series of
transactions, affiliates of the General Partner acquired ownership interests in
AMIT. On September 17, 1998, AMIT was merged with and into Insignia Properties
Trust ("IPT"), the sole shareholder of the General Partner. As a result, IPT
became the holder of the AMIT debt. The Partnership had initiated discussions
to negotiate a work-out with AMIT. IPT has indicated that it is reviewing its
options with respect to this second mortgage.
The Partnership's note payable and accrued interest of approximately $556,000
due to Angeles Acceptance Pool, L.P. ("AAP") matured in November of 1997. The
Partnership is currently in negotiations with the lender and hopes to either
extend this note or settle the liability at a reduced amount.
There can be no assurance that these negotiations with the lenders will be
successful. If the Partnership is unable to successfully complete its
negotiations with either or both of the lenders, the Partnership will be
required to explore other alternatives, including the filing for protection
under the Chapter 11 of the Federal Bankruptcy Code, or it is likely that the
Partnership's properties will be lost through foreclosure. No other sources of
additional financing are apparent and the General Partner currently has not
developed alternative plans to remedy the liquidity problems the Partnership is
currently experiencing.
The General Partner anticipates that Brittany Point will generate sufficient
cash flows for the next twelve months to meet its operating expenses, debt
service requirements and to fund capital expenditures. The General Partner
anticipates that Bercado Shores will generate sufficient cash flows for the next
twelve months to cover its operating expenditures, however it is not expected to
be able to completely fund desired capital expenditures or to pay its scheduled
debt service on its second mortgage to IPT. The Partnership's plan is to fund
these items to the extent of available cash flow. The Partnership will fund its
administrative expenses for the next twelve months by using cash on hand at
September 30, 1998, and cash flow generated during 1998.
Transfer of Control; Subsequent Event
On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
into Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control
of the General Partner. In addition, AIMCO also acquired approximately 51% of
the outstanding common shares of beneficial interest of IPT, the sole
shareholder of the General Partner. Also, effective October 1, 1998, IPT and
AIMCO entered into an Agreement and plan of Merger pursuant to which IPT is to
be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The
IPT Merger requires the approval of the holders of a majority of the outstanding
IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned by it in favor
of the IPT Merger and has granted an irrevocable limited proxy to unaffiliated
representatives of IPT to vote the IPT Shares acquired by AIMCO and its
subsidiaries in favor of the IPT Merger. As a result of AIMCO's ownership and
its agreement, the vote of no other holder of IPT is required to approve the
merger. The General Partner does not believe that this transaction will have a
material effect on the affairs and operations of the Partnership.
Year 2000
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. The Partnership is
dependent upon the General Partner and its affiliates for management and
administrative services ("Managing Agent"). Any computer programs or hardware
that have date-sensitive software or embedded chips may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
The Managing Agent has determined that it will be required to modify or replace
significant portions of its software and certain hardware so that those systems
will properly utilize dates beyond December 31, 1999. The Managing Agent
presently believes that with modifications or replacements of existing software
and certain hardware, the Year 2000 Issue can be mitigated. However, if such
modifications and replacements are not made, or are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the Managing
Agent and the Partnership.
Status of Progress in Becoming Year 2000 Compliant
The Managing Agent's plan to resolve the Year 2000 Issue involves the following
four phases: assessment, remediation, testing and implementation. To date, the
Managing Agent has fully completed its assessment of all information systems
that could be significantly affected by the Year 2000, and has begun the
remediation, testing and implementation phase on both hardware and software
systems. Assessments are continuing in regards to embedded systems in operating
equipment. The Managing Agent anticipates having all phases complete by June 1,
1999.
In addition to the areas the Partnership is relying on the Managing Agent to
verify compliance with, the Partnership has certain operating equipment,
primarily at the property sites, which needed to be evaluated for Year 2000
compliance. The focus of the General Partner was to the security systems,
elevators, heating-ventilation-air-conditioning systems, telephone systems and
switches, and sprinkler systems. The General Partner is currently engaged in the
identification of all non-compliant operational systems, and is in the process
of estimating the costs associated with any potential modifications or
replacements needed to such systems in order for them to be Year 2000 compliant.
It is not expected that such costs would have a material adverse affect upon
the operations of the Partnership.
Risk Associated with the Year 2000
The General Partner believes that the Managing Agent has an effective program in
place to resolve the Year 2000 issue in a timely manner and has appropriate
contingency plans in place for critical applications that could affect the
Partnership's operations. To date, the General Partner is not aware of any
external agent with a Year 2000 issue that would materially impact the
Partnership's results of operations, liquidity or capital resources. However,
the General Partner has no means of ensuring that external agents will be Year
2000 compliant. The General Partner does not believe that the inability of
external agents to complete their Year 2000 resolution process in a timely
manner will have a material impact on the financial position or results of
operations of the Partnership. However, the effect of non-compliance by
external agents is not readily determinable.
Other
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date of
this quarterly report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled ROSALIE NUANCES, ET AL. V. INSIGNIA
FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc. and
entities which were, at the time, affiliates of Insignia ("Insignia Affiliates")
of interests in certain general partner entities, past tender offers by Insignia
Affiliates to acquire limited partnership units, the management of partnerships
by Insignia Affiliates as well as a recently announced agreement between
Insignia and AIMCO. The complaint seeks monetary damages and equitable relief,
including judicial dissolution of the Partnership. On June 25, 1998, the General
Partner filed a motion seeking dismissal of the action. In lieu of responding
to the motion, the plaintiffs have filed an amended complaint. The General
Partner has filed demurrers to the amended complaint which are scheduled to be
heard on January 8, 1999. The General Partner believes the action to be without
merit, and intends to vigorously defend it.
On July 30, 1998 certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint in the Superior Court of the State of
California, County of Los Angeles. The action, entitled EVEREST PROPERTIES LLC
V. INSIGNIA FINANCIAL GROUP, INC., involves 44 real estate limited partnerships
(including the Partnership) in which the plaintiffs allegedly own interests and
which Insignia Affiliates allegedly manage or control (the "Subject
Partnerships"). The complaint names as defendants Insignia, several Insignia
Affiliates alleged to be managing partners of the defendant limited
partnerships, the Partnership and the Managing General Partner. Plaintiffs
allege that they have requested from, but have been denied by each of the
Subject Partnerships, lists of their respective limited partners for the purpose
of making tender offers to purchase up to 4.9% of the limited partner units of
each of the Subject Partnerships. The complaint also alleges that certain of the
defendants made tender offers to purchase limited partner units in many of the
Subject Partnerships, with the alleged result that plaintiffs have been deprived
of the benefits they would have realized from ownership of the additional units.
The plaintiffs assert eleven causes of action, including breach of contract,
unfair business practices, and violations of the partnership statutes of the
states in which the Subject Partnerships are organized. Plaintiffs seek
compensatory, punitive and treble damages. The General Partner filed an answer
to the complaint on September 15, 1998. The General Partner believes the claims
to be without merit and intends to defend the action vigorously.
The General Partner is unaware of any other pending or outstanding litigation
that is not of a routine nature. The General Partner believes that all such
other matters will be resolved without a material adverse effect upon the
Partnership's financial condition, results of operations, or liquidity.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Partnership caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS VIII
By: Angeles Realty Corporation
as General Partner
By: /s/Patrick Foye
Patrick Foye
Executive Vice President
By: /s/Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting
(Duly Authorized Officer)
Date: November 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Angeles Partners VIII 1998 Third Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB filing.
</LEGEND>
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<NAME> ANGELES PARTNERS VIII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 267
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<RECEIVABLES> 377
<ALLOWANCES> 0
<INVENTORY> 0
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<PP&E> 15,527
<DEPRECIATION> 10,949
<TOTAL-ASSETS> 5,360
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<COMMON> 0
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<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
