UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
-------------------------------------------
OR
[ ] 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 0-10743
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MCNEIL REAL ESTATE FUND XII, LTD.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2717957
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (972) 448-5800
-----------------------------
Indicate by check mark whether the registrant, (1) has 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 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
- ------- --------------------
MCNEIL REAL ESTATE FUND XII, LTD.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------- -------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land ....................................................... $ 4,534,618 $ 4,534,618
Buildings and improvements ................................. 59,731,595 59,614,889
------------ ------------
64,266,213 64,149,507
Less: Accumulated depreciation and amortization ........... (40,634,973) (39,854,829)
------------ ------------
23,631,240 24,294,678
Cash and cash equivalents ..................................... 2,304,383 2,135,190
Cash segregated for security deposits ......................... 321,806 320,540
Accounts receivable ........................................... 188,438 198,842
Prepaid expenses and other assets ............................. 98,788 103,546
Escrow deposits ............................................... 1,514,098 1,295,584
Deferred borrowing costs, net of accumulated amorti-
zation of $516,722 and $491,761 at March 31,
1999 and December 31, 1998, respectively ................... 1,334,695 1,359,656
------------ ------------
$ 29,393,448 $ 29,708,036
============ ============
LIABILITIES AND PARTNERS' DEFICIT
- ---------------------------------
Mortgage notes payable ........................................ $ 37,344,725 $ 37,449,291
Accounts payable .............................................. 9,921 --
Accrued expenses .............................................. 255,796 252,497
Accrued interest .............................................. 254,620 255,330
Accrued property taxes ........................................ 824,873 684,333
Deferred gain - land condemnation ............................. 297,754 297,754
Deferred gain - fire damage ................................... 50,880 50,880
Advance from Southmark ........................................ 42,716 42,177
Advances from affiliates - General Partner .................... 35,348 34,746
Payable to affiliates - General Partner ....................... 4,174,196 4,255,518
Security deposits and deferred rental revenue ................. 335,586 325,586
------------ ------------
43,626,415 43,648,112
------------ ------------
Partners' deficit:
Limited partners - 240,000 limited partnership units
authorized; 229,666 limited partnership units
issued and outstanding at March 31, 1999 and
December 31, 1998 ........................................ (4,211,855) (3,834,776)
General Partner ............................................ (10,021,112) (10,105,300)
------------ ------------
(14,232,967) (13,940,076)
------------ ------------
$ 29,393,448 $ 29,708,036
============ ============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1999 1998
------------ -----------
Revenue:
<S> <C> <C>
Rental revenue ....................................... $ 3,211,348 $ 4,169,057
Interest ............................................. 25,159 17,059
----------- -----------
Total revenue ...................................... 3,236,507 4,186,116
----------- -----------
Expenses:
Interest ............................................. 816,878 1,193,972
Interest - affiliates ................................ 602 654
Depreciation and amortization ........................ 780,144 760,041
Property taxes ....................................... 238,753 300,780
Personnel expenses ................................... 327,081 463,150
Utilities ............................................ 315,916 369,326
Repair and maintenance ............................... 402,509 439,372
Property management fees - affiliates ................ 160,216 201,019
Other property operating expenses .................... 134,450 205,230
General and administrative ........................... 96,702 248,175
General and administrative - affiliates .............. 66,614 65,194
----------- -----------
Total expenses ..................................... 3,339,865 4,246,913
----------- -----------
Net loss ................................................ $ (103,358) $ (60,797)
=========== ===========
Net loss allocable to limited partners .................. $ (377,079) $ (57,757)
Net income (loss) allocable to General Partner .......... 273,721 (3,040)
----------- -----------
Net loss ................................................ $ (103,358) $ (60,797)
=========== ===========
Net loss per limited partnership unit ................... $ (1.64) $ (.25)
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF PARTNERS' DEFICIT
(Unaudited)
For the Three Months Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
------------- ------------- -------------
<S> <C> <C> <C>
Balance at December 31, 1997 ............... $(10,163,672) $(10,579,935) $(20,743,607)
Net loss ................................... (3,040) (57,757) (60,797)
Management Incentive Distribution .......... (225,558) -- (225,558)
------------ ------------ ------------
Balance at March 31, 1998 .................. $(10,392,270) $(10,637,692) $(21,029,962)
============ ============ ============
Balance at December 31, 1998 ............... $(10,105,300) $ (3,834,776) $(13,940,076)
Net income (loss) .......................... 273,721 (377,079) (103,358)
Management Incentive Distribution .......... (189,533) -- (189,533)
------------ ------------ ------------
Balance at March 31, 1999 .................. $(10,021,112) $ (4,211,855) $(14,232,967)
============ ============ ============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
1999 1998
------------ ------------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants ....................... $ 3,238,574 $ 4,078,873
Cash paid to suppliers ........................... (1,350,639) (1,872,349)
Cash paid to affiliates .......................... (184,957) (201,987)
Interest received ................................ 25,159 17,059
Interest paid .................................... (792,088) (1,157,458)
Property taxes paid .............................. (232,856) (359,895)
----------- -----------
Net cash provided by operating activities ........... 703,193 504,243
----------- -----------
Cash used in investing activities:
Additions to real estate investments and
assets held for sale ........................... (116,706) (107,883)
----------- -----------
Cash flows from financing activities:
Principal payments on mortgage notes
payable ........................................ (104,566) (175,370)
Management Incentive Distribution paid ........... (312,728) --
----------- -----------
Net cash used in financing activities ............... (417,294) (175,370)
----------- -----------
Net increase in cash and cash equivalents ........... 169,193 220,990
Cash and cash equivalents at beginning of
period ........................................... 2,135,190 1,423,658
----------- -----------
Cash and cash equivalents at end of period .......... $ 2,304,383 $ 1,644,648
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash Provided by
Operating Activities
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1999 1998
---------- ----------
<S> <C> <C>
Net loss ............................................... $(103,358) $ (60,797)
--------- ---------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization ....................... 780,144 760,041
Amortization of deferred borrowing costs ............ 24,961 37,168
Net interest added on advances from
affiliates - General Partner ...................... 602 654
Net interest added on advances from
Southmark ......................................... 539 585
Changes in assets and liabilities:
Cash segregated for security deposits ............. (1,266) (7,589)
Accounts receivable ............................... 10,404 (61,386)
Prepaid expenses and other assets ................. 4,758 8,536
Escrow deposits ................................... (218,514) (286,520)
Accounts payable .................................. 9,921 (60)
Accrued expenses .................................. 3,299 (49,269)
Accrued interest .................................. (710) (1,239)
Accrued property taxes ............................ 140,540 131,213
Payable to affiliates - General Partner ........... 41,873 64,226
Security deposits and deferred rental
revenue ......................................... 10,000 (31,320)
--------- ---------
Total adjustments ............................... 806,551 565,040
--------- ---------
Net cash provided by operating activities .............. $ 703,193 $ 504,243
========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XII, LTD.
Notes to Financial Statements
(Unaudited)
March 31, 1999
NOTE 1.
- -------
McNeil Real Estate Fund XII, Ltd. (the "Partnership") was organized February 2,
1981 as a limited partnership organized under the provisions of the California
Uniform Limited Partnership Act. The general partner of the Partnership is
McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership,
an affiliate of Robert A. McNeil. The Partnership is governed by an amended and
restated limited partnership agreement, dated September 6, 1991 (the "Amended
Partnership Agreement"). The principal place of business for the Partnership and
the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the three months ended March 31, 1999 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1999.
NOTE 2.
- -------
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1998, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate Fund XII, Ltd., c/o McNeil Real Estate Management, Inc.,
Investor Services, 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240.
NOTE 3.
- -------
The Partnership pays property management fees equal to 5% of the gross rental
receipts of the Partnership's properties to McNeil Real Estate Management, Inc.
("McREMI"), an affiliate of the General Partner, for providing property
management services for the Partnership's residential and commercial properties
and leasing services for its residential properties. McREMI may choose to
provide leasing services for the Partnership's commercial properties, in which
case McREMI will receive a property management fee from such commercial
properties equal to 3% of the property's gross rental receipts plus commissions
based on the prevailing market rate for such services where the property is
located.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
Affiliates of the General Partner have advanced funds to the Partnership to meet
working capital requirements. These advances accrue interest at a rate equal to
the prime lending rate plus 1%.
<PAGE>
Under terms of the Amended Partnership Agreement, the Partnership is paying a
Management Incentive Distribution ("MID") to the General Partner. The maximum
MID is calculated as 1% of the tangible asset value of the Partnership. Tangible
asset value is determined by using the greater of (i) an amount calculated by
applying a capitalization rate of 9% to the annualized net operating income of
each property or (ii) a value of $10,000 per apartment unit for residential
property and $50 per gross square foot for commercial property to arrive at the
property tangible asset value. The property tangible asset value is then added
to the book value of all other assets excluding intangible items. The maximum
MID percentage decreases to .75% in 2000, .50% in 2001 and .25% thereafter.
MID will be paid to the extent of the lesser of the Partnership's excess cash
flow, as defined, or net operating income, as defined, and may be paid (i) in
cash, unless there is insufficient cash to pay the distribution in which event
any unpaid portion not taken in limited partnership ("Units") will be deferred
and is payable, without interest, from the first available cash and/or (ii) in
Units. A maximum of 50% of the MID may be paid in Units. The number of Units
issued in payment of the MID is based on the greater of $50 per Unit or the net
tangible asset value, as defined, per Unit.
Any amount of the MID that is paid to the General Partner in Units will be
treated as if cash is distributed to the General Partner and is then contributed
to the Partnership by the General Partner. The MID represents a return of equity
to the General Partner for increasing cash flow, as defined, and accordingly is
treated as a distribution.
Compensation, reimbursements and distributions paid to or accrued for the
benefit of the General Partner and its affiliates are as follows:
Three Months Ended
March 31,
----------------------
1999 1998
--------- ---------
Property management fees - affiliates................ $ 160,216 $ 201,019
Interest - affiliates................................ 602 654
Charged to general and administrative affiliates:
Partnership administration........................ 66,614 65,194
-------- --------
$ 227,432 $ 266,867
======== ========
Charged to General Partner's deficit:
MID............................................... $ 189,553 $ 225,558
======== ========
<PAGE>
NOTE 4.
- -------
The Partnership has become aware of the presence of certain solvent based
contamination in ground water under a portion of the Lodge at Aspen Grove. The
source of the contamination is related to a documented release of solvents from
underground storage tanks located at a Colorado Department of Transportation
("CDOT") facility nearby. The Partnership has been informed that CDOT, as the
responsible party, has agreed to remediate the property to comply with state and
federal standards. CDOT has submitted a corrective action plan to the Colorado
Department of Public Health and Environment and implementation of the plan is
ongoing. The Partnership is unable to estimate impairment, if any, to the
property at this time. However, due to the existence and involvement of the
responsible party, the Partnership does not believe that this event has a
material impact on the accompanying financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership is engaged in diversified real estate activities, including the
ownership, operation and management of residential and commercial real estate
and other real estate related assets. At March 31, 1999, the Partnership owned
four apartment properties and one shopping center. Four of the Partnership's
properties are subject to mortgage notes.
Rental revenues increased at four of the Partnership's five properties. The
properties reporting the largest increases in rental revenue, on a percentage
basis, were The Lodge at Aspen Grove Apartments and Brendon Way Apartments.
These increases were partially offset by a decrease in contingent rent billed on
Plaza Westlake as compared to the prior year.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Partnership rental revenues decreased $957,709 or 23% for the three months ended
March 31, 1999 as compared to the same period last year. Excluding the effects
of the sale of Channingway Apartments in April 1998, Partnership revenues
decreased $22,514 for the three months ended March 31, 1999. Interest income
increased $8,100 for the three months ended March 31, 1999 as compared to the
same period last year due to an increase in cash balances being invested in
interest bearing accounts.
Expenses:
Partnership expenses decreased $907,048 or 21% for the three months ended March
31, 1999 as compared to the same period last year. Excluding the effects of the
sale of Channingway Apartments, Partnership expenses decreased $164,514 or 4%
for the three months ended March 31, 1999.
<PAGE>
Repairs and maintenance (excluding Channingway Apartments) increased $71,194 for
the three months ended March 31, 1999 as compared to the same period last year.
This increase is primarily due to an increase in snow removal at Brendon Way
Apartments and Plaza Westlake.
Other property operating expense (excluding Channingway Apartments) decreased
$23,146 or 11% for the three months ended March 31, 1999 as compared to the same
period last year. This decrease is due to a reduction in the property insurance
expense for all the properties.
General and administrative expenses decreased $151,473 for the three months
ended March 31, 1999 as compared to the same period last year. The decrease was
mainly due to decreased costs incurred to explore alternatives to maximize the
value of the Partnership (see Liquidity and Capital Resources).
All other remaining expense categories remained comparable to the same period
last year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the first three months of 1999, the Partnership provided $703,193 in cash
from operations as compared to $504,243 in cash from operations in 1998. The
$198,950 increase can be attributed to the decreases in cash paid to suppliers,
interest and property taxes paid offset by the decrease in cash received from
tenants in the first three months of 1999 as compared to the same period in
1998.
The Partnership expended $116,706 and $107,883 for capital improvements to its
properties for the three months ended March 31, 1999 and 1998, respectively.
Total principal payments on mortgage notes payable were $104,566 for the three
months ended March 31, 1999 as compared to $175,370 for the same period in 1998.
During the first quarter of 1999, the Partnership also paid $312,728 in MID to
the General Partner.
Short-term liquidity:
At March 31, 1999, the Partnership held cash and cash equivalents of $2,304,383.
The General Partner believes that anticipated operating results for 1999 will be
sufficient to fund the Partnership's budgeted $1.2 million in capital
improvements for 1999 and to repay the current portion of the Partnership's
mortgage notes.
Long-term liquidity:
For the long-term, property operations will remain the primary source of funds.
In this regard, the General Partner expects that the capital improvements made
by the Partnership during the past will yield improved cash flow from property
operations in the future. If the Partnership's cash position deteriorates, the
General Partner may elect to defer certain of the capital improvements, except
where such improvements are expected to increase the competitiveness or
marketability of the Partnership's properties.
<PAGE>
As previously announced, the Partnership has retained PaineWebber, Incorporated
as its exclusive financial advisor to explore alternatives to maximize the value
of the Partnership, including, without limitation, a transaction in which
limited partnership interests in the Partnership are converted into cash. During
the last full week of March, the Partnership entered into a 45 day exclusivity
agreement with a well-financed bidder with whom it had commenced discussions
with respect to a sale transaction. The Partnership and such party have made
significant progress in negotiating the terms of a proposed transaction and are
continuing to have intensive discussions with respect to a transaction. In light
on these continuing negotiations, the exclusivity agreement has been extended
for an additional 21 days until June 4, 1999. It is possible that the General
Partner and its affiliates will receive non-cash consideration for their
ownership interests in connection with any such transaction. There can be no
assurance regarding whether any such agreement will be reached nor the terms
thereof.
Income (loss) allocation and distributions:
Terms of the Amended Partnership Agreement specify that income (loss) before
depreciation is allocated to the General Partner to the extent of MID paid in
cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and
the General Partner, respectively. Therefore, for the three months ended March
31, 1999 and 1998, $273,271 and $(3,040), respectively, was allocated to the
General Partner. The limited partners received loss allocations of $(377,079)
and $(57,757) for the three months ended March 31, 1999 and 1998, respectively.
Forward-Looking Information:
Within this document, certain statements are made as to the expected occupancy
trends, financial condition, results of operations, and cash flows of the
Partnership for periods after March 31, 1999. All of these statements are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are not
historical and involve risks and uncertainties. The Partnership's actual
occupancy trends, financial condition, results of operations, and cash flows for
future periods may differ materially due to several factors. These factors
include, but are not limited to, the Partnership's ability to control costs,
make necessary capital improvements, negotiate sales or refinancings of its
properties, and respond to changing economic and competitive factors.
YEAR 2000 DISCLOSURE
- --------------------
State of readiness
The year 2000 problem is the result of computer programs being written using two
digits rather than four to define the applicable year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in major systems failure or
miscalculations.
<PAGE>
Management has assessed its information technology ("IT") infrastructure to
identify any systems that could be affected by the year 2000 problem. The IT
used by the Partnership for financial reporting and significant accounting
functions was made year 2000 compliant during recent systems conversions. The
software utilized for these functions is licensed by third party vendors who
have warranted that their systems are year 2000 compliant.
Management is in the process of evaluating the mechanical and embedded
technological systems at the various properties. Management has inventoried all
such systems and queried suppliers, vendors and manufacturers to determine year
2000 compliance. Based on this review, management believes these systems are
substantially compliant. In circumstances of non-compliance management will work
with the vendor to remedy the problem or seek alternative suppliers who will be
in compliance. Management believes that the remediation of any outstanding year
2000 conversion issues will not have a material or adverse effect on the
Partnership's operations. However, no estimates can be made as to the potential
adverse impact resulting from the failure of third party service providers and
vendors to be year 2000 compliant.
Cost
- ----
The cost of IT and embedded technology systems testing and upgrades is not
expected to be material to the Partnership. Because all the IT systems have been
upgraded over the last three years, all such systems were compliant, or made
compliant at no additional cost by third party vendors. Management anticipates
the costs of assessing, testing, and if necessary replacing embedded technology
components will be less than $50,000. Such costs will be funded from operations
of the Partnership.
Risks
- -----
Ultimately, the potential impact of the year 2000 issue will depend not only on
the corrective measures the Partnership undertakes, but also on the way in which
the year 2000 issue is addressed by government agencies and entities that
provide services or supplies to the Partnership. Management has not determined
the most likely worst case scenario to the Partnership. As management studies
the findings of its property systems assessment and testing, management will
develop a better understanding of what would be the worst case scenario.
Management believes that progress on all areas is proceeding and that the
Partnership will experience no adverse effect as a result of the year 2000
issue. However, there is no assurance that this will be the case.
Contingency plans
- -----------------
Management is developing contingency plans to address potential year 2000
non-compliance of IT and embedded technology systems. Management believes that
failure of any IT system could have an adverse impact on operations. However,
management believes that alternative systems are available that could be
utilized to minimize such impact. Management believes that any failure in the
embedded technology systems could have an adverse impact on that property's
performance. Management will assess these risks and develop plans to mitigate
possible failures by July 1999.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil,
Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd.,
McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate
Fund XXIII, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
XXV, L.P., McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund
XXVII, L.P., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and
Regency North Associates, L.P., - Superior Court of the State of California for
the County of Los Angeles, Case No. BC133799 (Class and Derivative Action
Complaint).
The action involves purported class and derivative actions brought by limited
partners of each of the limited partnerships that were named as nominal
defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their fiduciary duties and certain obligations under the respective Amended
Partnership Agreement. Plaintiffs allege that Defendants have rendered such
Units highly illiquid and artificially depressed the prices that are available
for Units on the resale market. Plaintiffs also allege that Defendants engaged
in a course of conduct to prevent the acquisition of Units by an affiliate of
Carl Icahn by disseminating purportedly false, misleading and inadequate
information. Plaintiffs further allege that Defendants acted to advance their
own personal interests at the expense of the Partnerships' public unit holders
by failing to sell Partnership properties and failing to make distributions to
unitholders.
On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs are suing for breach of fiduciary duty, breach of contract and an
accounting, alleging, among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive, that these fees should
be reduced retroactively and that the respective Amended Partnership Agreements
governing the Partnerships are invalid.
Defendants filed a demurrer to the consolidated and amended complaint and a
motion to strike on February 14, 1997, seeking to dismiss the consolidated and
amended complaint in all respects. A hearing on Defendant's demurrer and motion
to strike was held on May 5, 1997. The Court granted Defendants' demurrer,
dismissing the consolidated and amended complaint with leave to amend. On
October 31, 1997, the Plaintiffs filed a second consolidated and amended
complaint. The case was stayed pending settlement discussions. A Stipulation of
Settlement dated September 15, 1998 has been signed by the parties. Preliminary
Court approval was received on October 6, 1998. A hearing for Final Approval of
Settlement, initially scheduled for December 17, 1998, has been continued to
July 2, 1999.
Because McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil
Midwest Properties I, L.P. and Regency North Associates, L.P. would be part of
the transaction contemplated in the settlement and Plaintiffs claim that an
effort should be made to sell the McNeil Partnerships, Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII, L.P., Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.
Plaintiff's counsel intends to seek an order awarding attorney's fees and
reimbursements of their out-of-pocket expenses. The amount of such award is
undeterminable until final approval is received from the court. Fees and
expenses shall be allocated amongst the Partnerships on a pro rata basis, based
upon tangible asset value of each such partnership, less total liabilities,
calculated in accordance with the Amended Partnership Agreements for the quarter
most recently ended.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits.
Exhibit
Number Description
------- -----------
3.3 Amended and Restated Partnership Agreement,
dated September 6, 1991 (Incorporated by
reference to the Quarterly Report on Form
10-Q for the quarter ended September 30,
1991).
11. Statement regarding computation of net loss
per limited partnership unit: net loss per
limited partnership unit is computed by
dividing net loss allocated to the limited
partners by the number of limited
partnership units outstanding. Per unit
information has been computed based on
229,666 limited partnership units
outstanding in 1999 and 1998.
27. Financial Data Schedule for the quarter
ended March 31, 1999.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended March 31, 1999.
<PAGE>
McNEIL REAL ESTATE FUND XII, LTD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
McNEIL REAL ESTATE FUND XII, Ltd.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
May 18, 1999 By: /s/ Ron K. Taylor
- -------------- ---------------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
May 18, 1999 By: /s/ Brandon K. Flaming
- -------------- ---------------------------------------------
Date Brandon K. Flaming
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,304,383
<SECURITIES> 0
<RECEIVABLES> 188,438
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 64,266,213
<DEPRECIATION> (40,634,973)
<TOTAL-ASSETS> 29,393,448
<CURRENT-LIABILITIES> 0
<BONDS> 37,344,725
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 29,393,448
<SALES> 3,211,348
<TOTAL-REVENUES> 3,236,507
<CGS> 0
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<OTHER-EXPENSES> 2,522,385
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 817,480
<INCOME-PRETAX> 0
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<INCOME-CONTINUING> (103,358)
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<NET-INCOME> (103,358)
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<EPS-DILUTED> 0
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