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 0-10256
SHELTER PROPERTIES II
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0709233
(State or other jurisdiction of (I.R.S. 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 Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
SHELTER PROPERTIES II
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 483
Receivables and deposits 177
Restricted escrows 885
Other assets 168
Investment properties:
Land $ 1,814
Buildings and related personal property 25,269
27,083
Less accumulated depreciation (18,442) 8,641
$ 10,354
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 82
Tenant security deposit liabilities 142
Accrued property taxes 223
Other liabilities 240
Mortgage notes payable 7,985
Partners' (Deficit) Capital
General partners $ (132)
Limited partners (27,500 units issued and
outstanding) 1,814 1,682
$ 10,354
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
b)
SHELTER PROPERTIES II
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,507 $ 1,411 $ 3,008 $ 2,834
Other income 92 73 155 137
Total revenues 1,599 1,484 3,163 2,971
Expenses:
Operating 655 541 1,278 1,163
General and administrative 67 41 120 94
Depreciation 235 243 558 499
Interest 197 189 352 380
Property taxes 112 107 221 216
Total expenses 1,266 1,121 2,529 2,352
Net income $ 333 $ 363 $ 634 $ 619
Net income allocated to
general partners (1%) $ 3 $ 3 $ 6 $ 6
Net income allocated to
limited partners (99%) 330 360 628 613
$ 333 $ 363 $ 634 $ 619
Net income per limited
partnership unit $ 12.00 $ 13.09 $ 22.84 $ 22.29
Distributions per limited
partnership unit $ 40.87 $ -- $ 40.87 $ --
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
c)
SHELTER PROPERTIES II
STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 27,500 $ 2 $27,500 $27,502
Partners' (deficit) capital at
December 31, 1999 27,500 $ (127) $ 2,310 $ 2,183
Distributions to partners -- (11) (1,124) (1,135)
Net income for the six months
ended June 30, 2000 -- 6 628 634
Partners' (deficit) capital at
June 30, 2000 27,500 $ (132) $ 1,814 $ 1,682
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
d)
SHELTER PROPERTIES II
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 $ 634 $ 619
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 558 499
Amortization of discounts and loan costs 61 53
Change in accounts:
Receivables and deposits 192 (9)
Other assets (16) (84)
Accounts payable (56) (27)
Tenant security deposit liabilities (53) 9
Accrued property taxes 73 (18)
Other liabilities (202) 5
Net cash provided by operating activities 1,191 1,047
Cash flows from investing activities:
Property improvements and replacements (242) (611)
Net (deposits to) withdrawals from restricted escrows (500) 338
Net cash used in investing activities (742) (273)
Cash flows from financing activities:
Distributions to partners (1,135) --
Payments on mortgage notes payable (158) (146)
Net cash used in financing activity (1,293) (146)
Net (decrease) increase in cash and cash equivalents (844) 628
Cash and cash equivalents at beginning of period 1,327 576
Cash and cash equivalents at end of period $ 483 $ 1,204
Supplemental disclosure of cash flow information:
Cash paid for interest $ 315 $ 327
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
e)
SHELTER PROPERTIES II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Shelter Properties II (the
"Partnership" or "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 Shelter Realty II Corporation (the "Corporate 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
months 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 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 Corporate General Partner. The Corporate 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 - Reconciliation of Cash Flows
The following is a reconciliation of the subtotal on the accompanying statements
of cash flows captioned "Net cash provided by operating activities" to "Net cash
used in operations", as defined in the partnership agreement. However, "Net cash
used in operations" should not be considered an alternative to net income as an
indicator of the Partnership's operating performance or to cash flows as a
measure of liquidity.
Six Months Ended
June 30,
2000 1999
(in thousands)
Net cash provided by operating activities $ 1,191 $ 1,047
Payments on mortgage notes payable (158) (146)
Property improvements and replacements (242) (611)
Change in restricted escrows, net (500) 338
Changes in reserves for net operating
liabilities 62 124
Additional operating reserves (353) (752)
Net cash from operations $ -- $ --
<PAGE>
For the six months ended June 30, 2000 and 1999, the Corporate General Partner
believed it to be in the best interest of the Partnership to reserve an
additional $353,000 and $752,000, respectively, to fund continuing capital
improvement needs in order for the properties to remain competitive.
Note D - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership. Balances and other
transactions with affiliates of the Corporate General Partner for the six months
ended June 30, 2000 and 1999 are as follows:
2000 1999
(in thousands)
Property management fees (included in
operating expenses) $157 $150
Reimbursement for services of affiliates
(included in investment properties,
general and administrative expense and
operating expense) 66 66
Due to general partners 58 58
During the six months ended June 30, 2000 and 1999, affiliates of the Corporate
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $157,000 and
$150,000 for the six months ended June 30, 2000 and 1999, respectively.
Affiliates of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $66,000 for both
the six months ended June 30, 2000 and 1999.
During 1983, a liability of approximately $58,000 was incurred to the general
partners for sales commissions earned. Pursuant to the Partnership Agreement,
this liability cannot be paid until certain levels of return are received by the
limited partners. As of June 30, 2000, the level of return to the limited
partners has not been met.
On September 26, 1997, an affiliate of the Corporate General Partner purchased
Lehman Brothers' Class "D" subordinated bonds of SASCO 1992-M1. These bonds are
secured by 55 multi-family apartment mortgage loan pairs held in Trust,
including Parktown Townhouses, Raintree Apartments, and Signal Pointe Apartments
owned by the Partnership.
AIMCO and its affiliates currently own 16,634 limited partnership units in the
Partnership representing 60.487% 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 60.487% 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 Corporate General Partner because of their
affiliation with the Corporate General Partner.
Note E - Distributions
During the six months ended June 30, 2000, the Partnership paid cash
distributions from operations of approximately $1,135,000 (approximately
$1,124,000 to the limited partners or $40.87 per limited partnership unit). No
distributions were made during the six months ended June 30, 1999.
Note F - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues: The Partnership has one reportable segment:
residential properties, consisting of three apartment complexes one located in
each of Texas, South Carolina, and Florida. The Partnership rents apartment
units to tenants for terms that are typically twelve months or less.
Measurement of segment profit and loss: The Partnership evaluates performance
based on segment profit (loss) before depreciation. The accounting policies of
the reportable segment are the same as those described in the 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: The
Partnership's reportable segment consists of investment properties that offer
similar products and services. Although each of the investment properties is
managed separately, they have been aggregated into one segment as they provide
services with similar types of products and customers.
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 $ 1,507 $ -- $ 1,507
Other income 90 2 92
Interest expense 197 -- 197
Depreciation 235 -- 235
General and administrative expense -- 67 67
Segment profit (loss) 398 (65) 333
Six Months Ended June 30, 2000 Residential Other Totals
Rental income $ 3,008 $ -- $ 3,008
Other income 152 3 155
Interest expense 352 -- 352
Depreciation 558 -- 558
General and administrative expense -- 120 120
Segment profit (loss) 751 (117) 634
Total assets 10,103 251 10,354
Capital expenditures for investment
properties 242 -- 242
Three Months Ended June 30, 1999 Residential Other Totals
Rental income $ 1,411 $ -- $ 1,411
Other income 71 2 73
Interest expense 189 -- 189
Depreciation 243 -- 243
General and administrative expense -- 41 41
Segment profit (loss) 402 (39) 363
Six Months Ended June 30, 1999 Residential Other Totals
Rental income $ 2,834 $ -- $ 2,834
Other income 132 5 137
Interest expense 380 -- 380
Depreciation 499 -- 499
General and administrative expense -- 94 94
Segment profit (loss) 708 (89) 619
Total assets 10,642 210 10,852
Capital expenditures for investment
properties 611 -- 611
<PAGE>
Note G - 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 Corporate 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. ("Insignia") 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 Corporate 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 Corporate 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 Corporate 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
Corporate General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
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.
<PAGE>
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 Registrant from time to time. The
discussion of the Registrant'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 Registrant's business and results of
operations. 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 properties consist of three apartment complexes.
The following table sets forth the average occupancy of the properties for each
of the six months ended June 30, 2000 and 1999:
Average
Occupancy
Property 2000 1999
Parktown Townhouses
Deer Park, Texas 94% 93%
Raintree Apartments
Anderson, South Carolina 95% 96%
Signal Pointe Apartments
Winter Park, Florida 95% 94%
Results of Operations
The Partnership realized net income for the six months ended June 30, 2000 of
approximately $634,000 compared to approximately $619,000 for the corresponding
period in 1999. For the three month periods ended June 30, 2000 and 1999, the
Partnership realized net income of approximately $333,000 and $363,000,
respectively. The increase in net income for the six months ended June 30, 2000
is due to an increase in total revenues partially offset by an increase in total
expenses. The decrease in net income for the three months ended June 30, 2000
was due to an increase in total expenses partially offset by an increase in
total revenues. Total expenses for the six months ended June 30, 2000 increased
primarily due to an increase in operating and depreciation expenses and, to a
lesser extent, an increase in general and administrative expense partially
offset by a decrease in interest expense. Total expenses for the three months
ended June 30, 2000 increased primarily due to an increase in operating and
general and administrative expenses. Operating expense increased primarily as a
result of increased salary expense, insurance premiums, commissions, and bonuses
at all of the Partnership's properties. Depreciation expense for the six months
ended June 30, 2000 increased due to property improvements and replacements
completed during the past twelve months. Interest expense decreased for the six
months ended June 30, 2000 due to a decrease in the average outstanding debt
balances. Total revenues for the three and six month periods ended June 30, 2000
increased primarily due to increased rental income. Rental income increased
primarily due to increased average rental rates at all of the Partnership's
properties. Partially offsetting the increases in average rental rates for the
three and six months ended June 30, 2000 was a slight decrease in occupancy at
Raintree Apartments.
General and administrative expense increased due to increased professional fees
associated with managing the Partnership. Included in general and administrative
expenses at both June 30, 2000 and 1999, are reimbursements to the Corporate
General Partner allowed under the Partnership Agreement. In addition, 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 Registrant, the Corporate General
Partner monitors the rental market environment at 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 Corporate 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 Corporate General Partner will be able to sustain such
a plan.
Liquidity and Capital Resources
At June 30, 2000, the Partnership had cash and cash equivalents of approximately
$483,000 compared to approximately $1,204,000 at June 30, 1999. Cash and cash
equivalents decreased approximately $844,000 from the Partnership's previous
year ended December 31, 1999. The decrease is due to approximately $742,000 of
cash used in investing activities and approximately $1,293,000 of cash used in
financing activities which was partially offset by approximately $1,191,000 of
cash provided by operating activities. Cash used in investing activities
consisted of deposits to escrow accounts maintained by the mortgage lender and
property improvements and replacements. Cash used in financing activities
consisted of payments of principal made on the mortgages encumbering the
Registrant's properties and distributions to the partners. The Partnership
invests it working capital reserves in money market accounts.
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 properties to adequately maintain the physical
assets and other operating needs of the Registrant and to comply with Federal,
state, local legal and regulatory requirements. Capital improvements planned for
each of the Registrant's properties are detailed below.
Parktown Townhouses
For 2000, the Partnership has budgeted approximately $113,000 for capital
improvements at Parktown Townhouses, consisting primarily of structural
improvements, floor covering replacements, appliance replacements and HVAC unit
replacements. During the six months ended June 30, 2000, the Partnership
completed approximately $58,000 of capital improvements, consisting primarily of
flooring covering replacements, office equipment, and appliance replacements.
These improvements were funded from operating cash flow.
Raintree Apartments
For 2000, the Partnership has budgeted approximately $73,000 for capital
improvements at Raintree Apartments, consisting primarily of major landscaping,
floor covering replacements and roof replacements. During the six months ended
June 30, 2000, the Partnership completed approximately $58,000 of budgeted and
unbudgeted capital improvements, consisting primarily of roof replacement,
flooring covering replacements, appliance replacements, swimming pool
enhancements, and major landscaping. These improvements were funded from
operating cash flow.
Signal Pointe Apartments
For 2000, the Partnership has budgeted approximately $119,000 for capital
improvements at Signal Pointe Apartments, consisting primarily of floor covering
replacements, appliance replacements and HVAC unit replacements. During the six
months ended June 30, 2000, the Partnership completed approximately $126,000 of
budgeted and unbudgeted capital improvements, consisting primarily of flooring
covering, appliance, and air conditioning replacements, structural and other
improvements. These improvements were funded from operating cash flow.
The additional capital expenditures will be incurred only if cash is available
from operations and Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.
The Registrant's current assets are thought to be sufficient for any near term
needs (exclusive of capital improvements) of the Registrant. The mortgage
indebtedness of approximately $7,985,000, net of discount, is amortized over 257
months with required balloon payments of approximately $7,370,000 due on
November 15, 2002. The Corporate General Partner will attempt to refinance such
indebtedness and/or sell the properties prior to such maturity date. If the
properties cannot be refinanced or sold for a sufficient amount, the Registrant
may risk losing such properties through foreclosure.
During the six months ended June 30, 2000, the Partnership paid cash
distributions from operations of approximately $1,135,000 (approximately
$1,124,000 to the limited partners or $40.87 per limited partnership unit). No
distributions were made during the six months ended June 30, 1999. Future cash
distributions will depend on the levels of net cash generated from operations,
the availability of cash reserves, and the timing of debt maturities,
refinancings, and/or property sales. The Registrant's distribution policy is
reviewed on a semi-annual basis. Distributions may be restricted by the
requirement to deposit net operating income (as defined in the mortgage note)
into the reserve account until the reserve account is funded in an amount equal
to a minimum of $400 and a maximum of $1,000 per apartment unit for each
respective property for a total of approximately $341,000 to $853,000. The
reserve account balance at June 30, 2000 was approximately $861,000. There can
be no assurance, however, that the Partnership will generate sufficient funds
from operations after required capital expenditures to permit additional
distributions to its partners during the remainder of 2000 or subsequent
periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEDINGS
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 Corporate 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. ("Insignia") 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 Corporate 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 Corporate 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 Corporate 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
Corporate General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
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 filed during the quarter ended June 30, 2000:
None.
<PAGE>
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.
SHELTER PROPERTIES II
By: Shelter Realty II Corporation
Corporate 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:
