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 March 31, 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 0-11766
ANGELES PARTNERS XI
(Exact name of small business issuer as specified in its charter)
California 95-3788040
(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 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
ANGELES PARTNERS XI
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 2000
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 2,611
Receivables and deposits 647
Other assets 281
Investment in joint venture 4
Investment property:
Land $ 3,998
Buildings and related personal property 26,762
30,760
Less accumulated depreciation (20,517) 10,243
$ 13,786
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 103
Tenant security deposits 577
Other liabilities 463
Mortgage notes payable 29,907
Partners' Deficit
General partners $ (489)
Limited partners (39,627 units issued and
outstanding) (16,775) (17,264)
$ 13,786
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
b)
ANGELES PARTNERS XI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2000 1999
Revenues:
Rental income $1,903 $1,886
Other income 99 87
Total revenues 2,002 1,973
Expenses:
Operating 668 493
General and administrative 45 55
Depreciation 375 378
Interest 684 727
Property taxes 209 175
Total expenses 1,981 1,828
Income before equity in income
and extraordinary loss on
debt extinguishment of joint venture 21 145
Equity in income of joint
venture (Note D) -- 1,144
Income before equity in
extraordinary loss on debt
extinguishment of joint venture 21 1,289
Equity in extraordinary loss on
debt extinguishment (Note D) -- (3)
Net income $ 21 $1,286
Net income allocated to general partners (1%) $ -- $ 13
Net income allocated to limited partners (99%) 21 1,273
$ 21 $1,286
Net income per limited partnership unit:
Income before equity in extraordinary loss on
debt extinguishment of joint venture $ .53 $32.20
Extraordinary loss -- (.08)
$ .53 $32.12
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
ANGELES PARTNERS XI
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 40,000 $ 30 $ 40,000 $ 40,030
Partners' deficit at
December 31, 1999 39,627 $ (489) $ (16,796) $(17,285)
Net income for the three months
ended March 31, 2000 -- -- 21 21
Partners' deficit
at March 31, 2000 39,627 $ (489) $ (16,775) $(17,264)
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d)
ANGELES PARTNERS XI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 21 $ 1,286
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of joint venture -- (1,144)
Equity in extraordinary loss on debt extinguishment
of joint venture -- 3
Depreciation 375 378
Amortization of loan costs 28 28
Change in accounts:
Receivables and deposits 138 (231)
Other assets (51) (54)
Accounts payable 61 (15)
Tenant security deposit liabilities 8 14
Other liabilities 140 191
Net cash provided by operating activities 720 456
Cash flows used in investing activities:
Property improvements and replacements (146) (172)
Cash flows used in financing activities:
Payment on mortgage notes payable (81) (68)
Net increase in cash and cash equivalents 493 216
Cash and cash equivalents at beginning of period 2,118 1,207
Cash and cash equivalents at end of period $ 2,611 $ 1,423
Supplemental disclosure of cash flow information:
Cash paid for interest $ 434 $ 699
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e)
ANGELES PARTNERS XI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Angeles Partners
XI (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 Angeles Realty Corporation II (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 month period ended March 31, 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 consolidated financial statements and
footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1999.
Principles of Consolidation
The Partnership's consolidated financial statements include all of the accounts
of Fox Run AP XI, L.P., of which the Partnership owns a 99% limited partnership
interest. The general partner of Fox Run AP XI, L.P. is AP XI Fox Run GP, LLC, a
single member limited liability corporation which is wholly-owned by the
Registrant. Thus, these Partnerships are deemed controlled and, therefore,
consolidated by the Partnership. All inter-entity balances have been eliminated.
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
("IPT") 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 (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership.
The following payments owed to the Managing General Partner and affiliates
during the three months ended March 31, 2000 and 1999 were paid or accrued:
2000 1999
(in thousands)
Property management fees (included in
operating expense) $ 99 $ 98
Reimbursement for services of affiliates (included
in general and administrative and operating
expenses and investment property) 30 33
Due to affiliates 35 33
During the three months ended March 31, 2000 and 1999, affiliates of the
Managing General Partner were entitled to receive 5% of gross receipts from the
Registrant's property for providing property management services. The Registrant
paid to such affiliates approximately $99,000 and $98,000 for the three months
ended March 31, 2000 and 1999, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $30,000 and
$33,000 for the three months ended March 31, 2000 and 1999, respectively.
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust,
provided financing (the "AMIT Loan") to the Princeton Meadows Golf Course Joint
Venture ("Joint Venture") (see "Note D"). Pursuant to a series of transactions,
affiliates of the Managing General Partner acquired ownership interests in AMIT.
On September 17, 1998, AMIT was merged with and into IPT, the entity which
controlled the Managing General Partner. Effective February 26, 1999, IPT was
merged into AIMCO. As a result, AIMCO became the holder of the AMIT loan.
On February 26, 1999, Princeton Meadows Golf Course was sold to an unaffiliated
third party. Upon closing, the AMIT principal balance of $1,567,000 plus accrued
interest of approximately $17,000 was paid off.
Also, the Partnership had an AMIT note payable, which was collateralized by the
Partnership's investment in the Joint Venture with a principal balance of
approximately $868,000 and accrued interest of $8,500. In June 1999, the Joint
Venture distributed a total of approximately $2,641,000 to the joint venturers
from the proceeds of the sale of the property. The Partnership's share of this
distribution represented approximately $1,086,000. Upon receipt of the
distribution funds, the Partnership repaid its AMIT note payable of
approximately $868,000 plus accrued interest of $8,500.
In addition, the Partnership made advances to the Joint Venture as deemed
appropriate by the Managing General Partner. These advances did not bear
interest nor have stated terms of repayment. In June 1999, the advance
receivable from the Joint Venture of approximately $164,000 was collected from
the proceeds of the sale of the golf course.
AIMCO and its affiliates currently own 20,667 limited partnership units in the
Partnership representing 52.15% 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 52.15% 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.
Note D - Investment in Joint Venture
The Partnership has a 41.1% investment in Princeton Meadows Golf Course Joint
Venture. On February 26, 1999, the Joint Venture sold its only investment
property, Princeton Meadows Golf Course, to an unaffiliated third party. The
sale resulted in net proceeds of approximately $3,411,000 after payment of
closing costs, and repayment of mortgage principal and accrued interest. As of
March 31, 1999, the Joint Venture recorded a gain on sale of approximately
$2,885,000 after the write-off of undepreciated fixed assets. Subsequent to
March 31, 1999, in connection with the sale, a commission of approximately
$153,000 was paid to the Joint Venture's managing general partner in accordance
with the Joint Venture Agreement. The Partnership's 1999 pro-rata share of this
gain at March 31, 1999 was approximately $1,186,000 and its equity in loss on
operations of the Joint Venture at March 31, 1999 amounted to approximately
$42,000. The Joint Venture also recognized an extraordinary loss on early
extinguishment of debt of approximately $7,000 as a result of unamortized loan
costs being written off.
Condensed balance sheet information of the Joint Venture at March 31, 2000, is
as follows (in thousands):
Assets
Cash $ 17
Total $ 17
Liabilities and Partners' Capital
Other liabilities $ 7
Partners' capital 10
Total $ 17
The condensed statement of operations of the Joint Venture for the three months
ended March 31, 2000 and 1999 are summarized as follows (in thousands):
Three Months Ended
March 31,
2000 1999
Revenues $ -- $ 30
Costs and expenses -- (131)
Loss before gain on sale of
investment property and extraordinary
loss on extinguishment of debt -- (101)
Gain on sale of investment property -- 2,885
Extraordinary loss on extinguishment
of debt -- (7)
Net income $ -- $ 2,777
The Partnership recognized its 41.1% equity income of approximately $1,144,000
in the Joint Venture for the three months ended March 31, 1999. The Partnership
also realized an extraordinary loss on extinguishment of debt of $3,000 for the
three months ended March 31, 1999. Due to the sale of Princeton Meadows Golf
Course in February 1999, the Joint Venture had no operations during the three
months ended March 31, 2000. Therefore the Partnership did not recognize any
equity in the Joint Venture for the three months ended March 31, 2000. In
addition, the Partnership anticipates that after filing the final tax return of
the Joint Venture during the second quarter of 2000, all remaining assets and
liabilities of the Joint Venture will be liquidated.
The Princeton Meadows Golf Course property had an underground fuel storage tank
that was removed in 1992. This fuel storage tank caused contamination to the
area. Management installed monitoring wells in the area where the tank was
formerly buried. Some samples from these wells indicated lead and phosphorous
readings that were higher than the range prescribed by the New Jersey Department
of Environmental Protection ("DEP"). The Joint Venture notified the DEP of the
findings when they were first discovered. However, the DEP did not give any
directives as to corrective action until late 1995.
In November 1995, representatives of the Joint Venture and the New Jersey DEP
met and developed a plan of action to clean-up the contamination site at
Princeton Meadows Golf Course. The Joint Venture engaged an engineering firm to
conduct consulting and compliance work and a second firm to perform the field
work necessary for the clean-up. Field work commenced with skimmers installed at
three test wells on the site. These skimmers were in place to detect any
residual fuel that may still be in the ground. Upon the sale of the Golf Course,
as noted above, the Joint Venture was released from any further responsibility
or liability with respect to the clean-up.
Note E - 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. The
Partnership's residential property segment consists of one apartment complex
located in Plainsboro, New Jersey. 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 the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
Segment information for the three months ended March 31, 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.
2000 Residential Other Totals
Rental income $ 1,903 $ -- $ 1,903
Other income 89 10 99
Interest expense 684 -- 684
Depreciation 375 -- 375
General and administrative expense -- 45 45
Segment profit (loss) 56 (35) 21
Total assets 12,676 1,110 13,786
Capital expenditures for
investment property 146 -- 146
1999 Residential Other Totals
Rental income $ 1,886 $ -- $ 1,886
Other income 80 7 87
Interest expense 727 -- 727
Depreciation 378 -- 378
General and administrative expense -- 55 55
Equity in income of joint venture -- 1,144 1,144
Equity in extraordinary loss on debt
extinguishment of joint venture -- (3) (3)
Segment profit 193 1,093 1,286
Total assets 12,860 2,587 15,447
Capital expenditures for
investment property 172 -- 172
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, the 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 by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). 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 own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, 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 class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Managing 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.
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 disclosure
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 property consists of one apartment complex. The
following table sets forth the average occupancy of the property for the three
months ended March 31, 2000 and 1999:
Average Occupancy
Property 2000 1999
Fox Run Apartments 93% 98%
Plainsboro, New Jersey
The Managing General Partner attributes the decrease in occupancy at Fox Run
Apartments to increased home purchases and tenant job transfers during the first
quarter of 2000.
Results from Operations
The Partnership's net income for the three months ended March 31, 2000 was
approximately $21,000 compared to approximately $1,286,000 for the corresponding
period in 1999. The decrease in net income is primarily due to the recognition
of the gain on disposal of the Princeton Meadows Golf Course Joint Venture
("Joint Venture") during the three months ended March 31, 1999. Income before
equity in income and extraordinary loss on debt extinguishment of the joint
venture for the three months ended March 31, 2000 decreased as compared to the
corresponding period in 1999 due to an increase in total expenses which was
partially offset by an increase in total revenues. The increase in total
revenues was the result of increases in rental and other income. Other income
increased due to increases in corporate unit revenue. Rental income increased
due to an increase in average rental rates at Fox Run Apartments which more than
offset the decrease in average occupancy.
Total expenses for the three months ended March 31, 2000 increased primarily due
to increases in operating expenses and property tax expense which was partially
offset by decreases in interest expense and general and administrative expense.
The increase in operating expenses was due to increases in utilities, interior
painting, snow removal and payroll bonuses. Property tax expense increased due
to the timing of the receipt of tax bills in 1999 and 1998, which affected the
accruals at March 31, 1999. Interest expense decreased primarily due to the
repayment of the note payable to Angeles Mortgage Investment Trust ("AMIT") in
1999, which was collateralized by the Partnership's investment in the Joint
Venture. In June 1999, the Partnership paid off the principal balance of the
AMIT note plus accrued interest upon receiving its share of net proceeds from
the sale of Princeton Meadows Golf Course.
General and administrative expense decreased for the three months ended March
31, 2000 due to a decrease in legal costs due to the settlement of a legal
dispute which was previously disclosed during 1999. Included in general and
administrative expense at both March 31, 2000 and 1999 are management
reimbursements to the Managing 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.
The Partnership has a 41.1% investment in Princeton Meadows Golf Course Joint
Venture. On February 26, 1999, the Joint Venture sold the Princeton Meadows Golf
Course to an unaffiliated third party for gross sale proceeds of $5,100,000. The
Joint Venture received net proceeds of $3,411,000 after payment of closing
costs, and repayment of the mortgage principal and accrued interest. As of March
31, 1999 the Joint Venture recorded a gain on sale of approximately $2,885,000
after the write-off of undepreciated fixed assets. For the three months ended
March 31, 2000 the Partnership realized equity in income of the Joint Venture of
approximately $1,144,000, which included its equity in the gain on disposal of
Princeton Meadows Golf Course of $1,186,000 and the equity in loss on operations
of $42,000. For the three months ended March 31, 2000, Princeton Meadows Golf
Course did not have any operations, therefore, the Partnership did not recognize
any equity earnings from the Joint Venture.
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.
Liquidity and Capital Resources
At March 31, 2000, the Partnership had cash and cash equivalents of
approximately $2,611,000 as compared to approximately $1,423,000 at March 31,
1999. Cash and cash equivalents increased approximately $493,000 for the period
ended March 31, 2000, from the Registrant's fiscal year-end and is primarily due
to approximately $720,000 of cash provided by operating activities which is
partially offset by approximately $146,000 of cash used in investing activities
and approximately $81,000 of cash used in financing activities. Cash used in
investing activities consisted of property improvements and replacements. Cash
used in financing activities consisted of payments of principal made on the
mortgages encumbering Fox Run Apartments. The Registrant invests its working
capital reserves in a money market account.
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. The Partnership has budgeted
approximately $252,000 for capital improvements for the property during 2000
consisting primarily of appliances and floor coverings. As of March 31, 2000,
the Partnership spent approximately $146,000 on capital improvements at Fox Run
Apartments, primarily consisting of cabinet replacements, carpet and vinyl
replacements, appliances, air conditioning units, and electrical upgrades. These
improvements were funded from cash flow. The additional improvements planned for
2000 at the Partnership's property 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 $29,907,000 encumbering Fox Run Apartments is
being amortized over periods ranging from 15 to 27 years with balloon payments
of $29,108,000 due January 2002. The Managing General Partner may 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.
There were no cash distributions during the three months ended March 31, 2000,
or 1999, respectively. 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 maturities, refinancings and/or sale of the property. The
Partnership's distribution policy is reviewed on a semi-annual basis. There can
be no assurance, however, that the Partnership will generate sufficient funds
from operations, after required capital improvement expenditures, to permit
additional 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, the 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 by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Part I - Financial Information, Item 1. Financial Statements, Note B - Transfer
of Control"). 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 own units as of November
3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999
from the Superior Court of the State of California, County of San Mateo, 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 class plaintiffs' counsel to enter the
settlement. On December 14, 1999, the Managing General Partner and its
affiliates terminated the proposed settlement. Certain plaintiffs have filed a
motion to disqualify some of the plaintiffs' counsel in the action. The Managing
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 is filed as an exhibit to this report.
b) Reports on Form 8-K:
None filed during the quarter ended March 31, 2000.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS XI
By: Angeles Realty Corporation II
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: May 4, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XI 2000 First Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000702986
<NAME> Angeles Partners XI
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,611
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 30,760
<DEPRECIATION> 20,517
<TOTAL-ASSETS> 13,786
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 29,907
0
0
<COMMON> 0
<OTHER-SE> (17,264)
<TOTAL-LIABILITY-AND-EQUITY> 13,786
<SALES> 0
<TOTAL-REVENUES> 2,002
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,981
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 684
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21
<EPS-BASIC> 0.53 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
