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
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-10412
NATIONAL PROPERTY INVESTORS 4
(Exact name of small business issuer as specified in its charter)
California 13-3031722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO 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 preceding 12 months (or for such
shorter period that the Partnership 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)
NATIONAL PROPERTY INVESTORS 4
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
June 30, 2000
Assets
<S> <C> <C>
Cash and cash equivalents $ 257
Receivables and deposits 963
Restricted escrows 267
Other assets 333
Investment property:
Land $ 1,980
Buildings and related personal property 25,497
27,477
Less accumulated depreciation (20,565) 6,912
$ 8,732
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 106
Tenant security deposit liabilities 372
Other liabilities 443
Mortgage note payable 19,300
Partners' Deficit
General partner $ (362)
Limited partners (60,005 units
issued and outstanding) (11,127) (11,489)
$ 8,732
See Accompanying Notes to Financial Statements
</TABLE>
b)
NATIONAL PROPERTY INVESTORS 4
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,737 $ 1,586 $ 3,409 $ 3,229
Other income 96 96 157 174
Total revenues 1,833 1,682 3,566 3,403
Expenses:
Operating 581 548 1,132 1,086
General and administrative 185 41 237 218
Depreciation 284 267 562 515
Interest 373 373 745 745
Property taxes 134 123 268 245
Total expenses 1,557 1,352 2,944 2,809
Net income $ 276 $ 330 $ 622 $ 594
Net income allocated to
general partner (1%) 3 3 6 6
Net income allocated to
limited partners (99%) 273 327 616 588
$ 276 $ 330 $ 622 $ 594
Net income per limited
partnership unit $ 4.55 $ 5.45 $ 10.27 $ 9.80
Distribution per limited
partnership unit $ 24.15 $ -- $ 24.15 $ 33.95
See Accompanying Notes to Financial Statements
</TABLE>
c)
NATIONAL PROPERTY INVESTORS 4
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 60,005 $ 1 $ 30,003 $ 30,004
Partners' deficit at
December 31, 1999 60,005 $ (353) $(10,294) $(10,647)
Distributions to partners (15) (1,449) (1,464)
Net income for the six months
ended June 30, 2000 -- 6 616 622
Partners' deficit at
June 30, 2000 60,005 $ (362) $(11,127) $(11,489)
See Accompanying Notes to Financial Statements
</TABLE>
d)
NATIONAL PROPERTY INVESTORS 4
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 622 $ 594
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 562 515
Amortization of loan costs 37 37
Change in accounts:
Receivables and deposits (310) (74)
Other assets 170 100
Accounts payable 71 87
Tenant security deposit liabilities 10 (6)
Other liabilities (171) 57
Net cash provided by operating activities 991 1,310
Cash flows from investing activities:
Net (deposits to) withdrawals from restricted escrows (94) 213
Property improvements and replacements (243) (147)
Net cash (used in) provided by investing activities (337) 66
Cash flows used in financing activities:
Distribution to partners (2,015) (2,058)
Net decrease in cash and cash equivalents (1,361) (682)
Cash and cash equivalents at beginning of period 1,618 3,418
Cash and cash equivalents at end of period $ 257 $ 2,736
Supplemental disclosure of cash flow information:
Cash paid for interest $ 707 $ 707
Distributions to partners of approximately $551,000 were accrued at December 31,
1999 and paid in January 2000.
See Accompanying Notes to Financial Statements
</TABLE>
e)
NATIONAL PROPERTY INVESTORS 4
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of National Property Investors 4
(the "Partnership" or the "Registrant") 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 NPI Equity Investments, Inc. ("NPI Equity" or the "Managing
General Partner"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and six month periods ended June 30, 2000, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2000. For further information, refer to the financial
statements and footnotes thereto included in the Partnership's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged 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, AIMCO acquired 100% ownership interest in
the Managing General Partner. The Managing General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and for reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following transactions with
affiliates of the Managing General Partner were incurred during the six month
periods ended June 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $ 176 $ 171
Reimbursement for services of affiliates (included in
investment property and general and administrative and
operating expenses) 58 52
Partnership management fee (included in general and
administrative expense) 30 42
Non-accountable reimbursement (included in general
and administrative expenses) 100 100
During the six months ended June 30, 2000, and 1999, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from the
Partnership's property for providing property management services. The
Partnership paid to such affiliates approximately $176,000 and $171,000 for the
six month periods ended June 30, 2000, and 1999, respectively.
Affiliates of the Managing General Partner received reimbursements of
accountable administrative expenses amounting to approximately $58,000 and
$52,000 for the six month periods ended June 30, 2000, and 1999, respectively.
For services relating to the administration of the Partnership and operation of
the Partnership's property, the Managing General Partner is entitled to receive
payment for the non-accountable expenses up to a maximum of $100,000 per year
based upon the number of Partnership units sold, subject to certain limitations.
The Managing General Partner was entitled to receive $100,000 for such services
in both 2000 and 1999, which was paid during the six month periods ended June
30, 2000 and 1999.
In addition to the amounts discussed above, as compensation for services
rendered in managing the Partnership, the Managing General Partner is entitled
to receive Partnership management fees in conjunction with distributions of cash
from operations, subject to certain limitations. During the six month periods
ended June 30, 2000 and 1999, approximately $30,000 and $42,000, respectively,
was paid in conjunction with the operating distributions.
The Managing General Partner has made available to the Partnership a $300,000
line of credit. At the present time, the Partnership has no outstanding amounts
due under this line of credit. Based on present plans, the Managing General
Partner does not anticipate the need to borrow in the near future. Other than
cash and cash equivalents, the line of credit is the Partnership's only unused
source of liquidity.
AIMCO and its affiliates currently own 43,188 limited partnership units in the
Partnership representing 71.974% of the outstanding units. A number of these
units were acquired pursuant to tender offers made by AIMCO or its affiliates.
It is possible that AIMCO or its affiliates will make one or more additional
offers to acquire additional limited partnership interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. As a result of its
ownership of 71.974% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of their
affiliation with the Managing General Partner. However, with respect to 26,466
units, Insignia Properties, LP, an affiliate of the Managing General Partner, is
required to vote such Units: (i) against any increase in compensation payable to
the Managing General Partner or to affiliates; and (ii) on all other matters
submitted by it or its affiliates, in proportion to the votes cast by
non-tendering unitholders. Except for the foregoing, no other limitations are
imposed on Insignia Properties, L.P.'s ability to influence voting decisions
with respect to the Partnership.
Note D - Distribution to Partners
Cash distributions from operations of approximately $1,464,000 were paid during
the six months ended June 30, 2000, of which approximately $1,449,000 was paid
to the limited partners ($24.15 per limited partnership unit). At December 31,
1999, a distribution payable of approximately $551,000 (approximately $545,000
to the limited partners or $9.08 per limited partnership unit) was accrued and
subsequently paid in January 2000.
Cash distributions from operations of approximately $2,058,000 were paid during
the six months ended June 30, 1999, of which approximately $2,037,000 was paid
to the limited partners ($33.95 per limited partnership unit).
Note E - Segment Information
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: a residential property. The
Partnership's residential property segment consists of one apartment complex in
Pennsylvania. The Partnership rents apartment units to tenants for terms that
are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as described in Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
Factors management used to identify the enterprise's reportable segment:
Segment information for the three and six month periods ended June 30, 2000 and
1999, is shown in the tables below (in thousands). The "Other" column includes
Partnership administration related items and income and expense not allocated to
the reportable segment.
Three Months Ended June 30, 2000 Residential Other Totals
Rental income $ 1,737 $ -- $ 1,737
Other income 96 -- 96
Interest expense 373 -- 373
Depreciation 284 -- 284
General and administrative expense -- 185 185
Segment profit (loss) 461 (185) 276
Six Months Ended June 30, 2000 Residential Other Totals
Rental income $ 3,409 $ -- $ 3,409
Other income 155 2 157
Interest expense 745 -- 745
Depreciation 562 -- 562
General and administrative expense -- 237 237
Segment profit (loss) 857 (235) 622
Total assets 8,494 238 8,732
Capital expenditures for investment
property 243 -- 243
Three Months Ended June 30, 1999 Residential Other Totals
Rental income $ 1,586 $ -- $ 1,586
Other income 77 19 96
Interest expense 373 -- 373
Depreciation 267 -- 267
General and administrative expense -- 41 41
Segment profit (loss) 352 (22) 330
Six Months Ended June 30, 1999 Residential Other Totals
Rental income $ 3,229 $ -- $ 3,229
Other income 134 40 174
Interest expense 745 -- 745
Depreciation 515 -- 515
General and administrative expense -- 218 218
Segment profit (loss) 772 (178) 594
Total assets 9,458 2,037 11,495
Capital expenditures for investment
property 147 -- 147
Note F - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, 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, its Managing General Partner and several of their affiliated
partnerships and corporate entities. The action 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited partnership units; the management of partnerships by the Insignia
affiliates; and the Insignia Merger. The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Managing 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 Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to final court approval, on behalf of the Partnership
and all limited partners who owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. The Managing
General Partner does not anticipate that costs associated with this case will be
material to the Partnership's overall operations.
Estate of Harry Schubert v. National Property Investors 4, Civil Action No.
97-09129, Court of Common Pleas of Bucks County, Pennsylvania. During 1998, the
Plaintiff brought action against the Partnership alleging that as the result of
carbon monoxide and methane poisoning due to a malfunctioning heating unit in
the deceased's apartment at the Partnership's property, the decedent lost
consciousness for several hours, suffered respiratory arrest and suffered other
pains and injuries. The Plaintiff alleges breach of contract, fraud, violations
of the Unfair Trade Practices and Consumer Protection Law and negligence. This
matter is currently in the preliminary stages of discovery. The Partnership
intends to vigorously defend this matter.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operation. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
The Partnership's investment property consists of one apartment complex, Village
of Pennbrook Apartments, located in Falls Township, Pennsylvania. The average
occupancy was 96% and 94% for the six month periods ended June 30, 2000, and
1999, respectively.
Results of Operations
The Partnership realized net income of approximately $622,000 and $594,000 for
the six month periods ended June 30, 2000 and 1999, respectively. The increase
in net income for the six months ended June 30, 2000 is attributable to an
increase in total revenues largely offset by an increase in total expenses. The
increase in total revenues is primarily due to an increase in rental income
partially offset by a decrease in other income. The increase in rental income is
due to an increase in both average occupancy and average rental rates at the
property. The decrease in other income is primarily due to a decrease in
interest income as a result of lower average cash balances in interest bearing
accounts. The increase in total expenses is primarily the result of increased
operating and depreciation expenses. The increase in operating expense is
primarily due to an increase in property, administrative and insurance expenses
at the Partnership's investment property. The increase in property expense is
primarily due to an increase in manager and maintenance salaries. The increase
in administrative expense is primarily due to an increase in legal expense as a
result of the Schubert matter discussed in "Part 1 - Financial Information, Item
1. Financial Statements, Note F - Legal Proceedings". The increase in insurance
expense is the result of an increase in the insurance policy premiums. The
increase in depreciation is the result of property improvements and replacements
at Pennbrook during the past year.
The Partnership realized net income of approximately $276,000 and $330,000 for
the three months ended June 30, 2000 and 1999, respectively. The decrease in net
income is attributable to an increase in total expenses partially offset by an
increase in total revenues. The increase in total expenses is primarily due to
increased operating, general and administrative and depreciation expenses. For
the increase in operating and depreciation expense, refer to the discussions
above. The increase in general and administrative expense is primarily due to
the timing of the payment of Partnership management fees and non-accountable
reimbursements in 2000 and 1999. During 2000, these amounts were paid along with
the distributions during the three months ended June 30, 2000. During 1999,
these amounts were paid along with the distributions during the three months
ended March 31, 1999. The increase in total revenues is primarily due to an
increase in rental income, as discussed above.
Included in general and administrative expenses for the six months ended June
30, 2000 and 1999, are reimbursements to the Managing General Partner allowed
under the Partnership Agreement associated with its management of the
Partnership. Costs associated with the quarterly and annual communications with
investors and regulatory agencies, and the annual audit required by the
Partnership Agreement are also included.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment property 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 Managing 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
Managing General Partner will be able to sustain such a plan.
Capital Resources and Liquidity
At June 30, 2000, the Partnership had cash and cash equivalents of approximately
$257,000 as compared to approximately $2,736,000 at June 30, 1999. For the six
months ended June 30, 2000, cash and cash equivalents decreased approximately
$1,361,000 from the Partnership's year ended December 31, 1999. This decrease
was due to approximately $2,015,000 of cash used in financing activities and
approximately $337,000 of cash used in investing activities partially offset by
approximately $991,000 of cash provided by operating activities. Cash used in
financing activities consisted of distributions paid to the partners. Cash used
in investing activities consisted of property improvements and replacements and
net deposits to restricted escrows held by the mortgage lender. The Partnership
invests its working capital reserves in a money market account.
The Managing General Partner has extended to the Partnership a $300,000 line of
credit. At the present time, the Partnership has no outstanding amounts due
under this line of credit. Based on present plans, the Managing General Partner
does not anticipate the need to borrow in the near future. Other than cash and
cash equivalents, the line of credit is the Partnership's only unused source of
liquidity.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership and to comply with Federal, state
and local legal and regulatory requirements. Approximately $295,000 has been
budgeted for capital improvements at Village of Pennbrook during the year 2000,
consisting primarily of floor covering replacements, appliances, heating units,
and parking lot improvements. During the six months ended June 30, 2000, the
Partnership completed approximately $243,000 of budgeted and unbudgeted capital
improvements at Village of Pennbrook consisting primarily of appliance
replacements, structural improvements, water heater replacements, and carpet and
vinyl replacement. These capital improvements were funded from operating cash
flows. Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flows generated by the property. The capital improvements will be incurred only
if cash is available from operations or from partnership reserves. To the extent
that such budgeted capital improvements are completed, the Partnership's
distributable cash flow, if any, may be adversely affected at least in the short
term.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of $19,300,000 consists of monthly interest only payments of
approximately $118,000 at a stated rate of 7.33%. The mortgage matures on
November 1, 2003, with the principal due on the maturity date. The Managing
General Partner will attempt to refinance such indebtedness and/or sell the
property prior to such maturity date. If the property cannot be refinanced or
sold for a sufficient amount, the Partnership will risk losing such property
through foreclosure.
Cash distributions from operations of approximately $1,464,000 were paid during
the six months ended June 30, 2000, of which approximately $1,449,000 was paid
to the limited partners ($24.15 per limited partnership unit). At December 31,
1999, a distribution payable of approximately $551,000 (approximately $545,000
to the limited partners or $9.08 per limited partnership unit) was accrued and
subsequently paid in January 2000. Cash distributions from operations of
approximately $2,058,000 were paid during the six months ended June 30, 1999, of
which approximately $2,037,000 was paid to the limited partners ($33.95 per
limited partnership unit). The Partnership's distribution policy is reviewed on
a semi-annual basis. Future cash distributions will depend on the levels of net
cash generated from operations, the availability of cash reserves, and the
timing of the debt maturity, refinancing, and/or property sale. There can be no
assurance, however, that the Partnership will generate sufficient funds from
operations after required capital improvements to permit further distributions
to its partners during the remainder of 2000 or subsequent periods.
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 Nuanes, 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, its Managing General Partner and several of their affiliated
partnerships and corporate entities. The action 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited partnership units; the management of partnerships by the Insignia
affiliates; and the Insignia Merger. The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Managing 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 Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to final court approval, on behalf of the Partnership
and all limited partners who owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. The Managing
General Partner does not anticipate that costs associated with this case will be
material to the Partnership's overall operations.
Estate of Harry Schubert v. National Property Investors 4, Civil Action No.
97-09129, Court of Common Pleas of Bucks County, Pennsylvania. During 1998, the
Plaintiff brought action against the Partnership alleging that as the result of
carbon monoxide and methane poisoning due to a malfunctioning heating unit in
the deceased's apartment at the Partnership's property, the decedent lost
consciousness for several hours, suffered respiratory arrest and suffered other
pains and injuries. The Plaintiff alleges breach of contract, fraud, violations
of the Unfair Trade Practices and Consumer Protection Law and negligence. This
matter is currently in the preliminary stages of discovery. The Partnership
intends to vigorously defend this matter.
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 filed during the quarter ended June 30, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NATIONAL PROPERTY INVESTORS 4
By: NPI EQUITY INVESTMENTS, INC.
Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date: August 9, 2000
