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 September 30, 1998
[ ] 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 0-11935
CENTURY PROPERTIES FUND XIX
(Exact name of small business issuer as specified in its charter)
California 94-2887133
(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 Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X . No .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1998
Assets
Cash and cash equivalents $ 4,495
Receivables and deposits 1,306
Restricted escrows 223
Other assets 775
Investment properties:
Land $ 11,635
Buildings and related personal property 85,070
96,705
Less accumulated depreciation (42,204) 54,501
$61,300
Liabilities and Partners' (Deficit) Capital
Liabilities:
Accounts payable $ 180
Tenant security deposits payable 306
Accrued property taxes 910
Payable to affiliate (Note C) 270
Other liabilities 540
Mortgage notes payable (Note C) 60,578
Partners' (Deficit) Capital:
General partner's $ (9,068)
Limited partners' (89,292 units issued and
outstanding) 7,584 (1,484)
$61,300
See Accompanying Notes to Consolidated Financial Statements
b)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues:
Rental income $ 3,903 $ 3,604 $11,545 10,967
Other income 220 218 657 624
Total revenues 4,123 3,822 12,202 11,591
Expenses:
Operating 1,551 1,512 4,604 4,529
General and administrative 55 86 212 239
Depreciation 732 723 2,188 2,144
Interest 1,240 1,260 3,731 3,785
Property tax 301 283 913 840
Total expenses 3,879 3,864 11,648 11,537
Net income (loss) $ 244 $ (42) $ 554 54
Net income (loss) allocated to
general partner $ 28 $ (5) $ 65 6
Net income (loss) allocated to
limited partners 216 (37) 489 48
$ 244 $ (42) $ 554 54
Net income (loss) per limited
partnership unit $ 2.42 $ (.41) $ 5.48 .54
Distribution per limited
partnership unit $ -- $ -- $ 20.01 --
See Accompanying Notes to Consolidated Financial Statements
c)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 89,292 $ -- $89,292 $89,292
Partners' (deficit) capital
at December 31, 1997 89,292 $(9,096) $ 8,882 $ (214)
Distribution paid to partners -- (37) (1,787) (1,824)
Net income for the nine months
ended September 30, 1998 -- 65 489 554
Partners' (deficit) capital
at September 30, 1998 89,292 $(9,068) $ 7,584 $(1,484)
See Accompanying Notes to Consolidated Financial Statements
d)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1998 1997
Cash flows from operating activities:
Net income $ 554 $ 54
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 2,188 2,144
Amortization of loan costs and mortgage discount 91 102
Changes in accounts:
Receivables and deposits (461) (265)
Other assets 16 (80)
Accounts payable 7 (95)
Tenant security deposits payable 28 (19)
Accrued property taxes 489 391
Other liabilities (486) 173
Net cash provided by operating activities 2,426 2,405
Cash flows from investing activities:
Property improvements and replacements (864) (615)
Net withdrawals from (deposits to) restricted escrows 183 (197)
Net cash used in investing activities (681) (812)
Cash flows from financing activities:
Payment on mortgage notes payable (462) (571)
Proceeds from affiliate 270 --
Distribution to partners (1,824) --
Loan costs paid (21) (21)
Net cash used in financing activities (2,037) (592)
Net (decrease) increase in cash and cash equivalents (292) 1,001
Cash and cash equivalents at beginning of period 4,787 3,419
Cash and cash equivalents at end of period $ 4,495 $ 4,420
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,144 $ 3,523
Supplemental information on noncash financing activity:
Conversion of accrued interest to principal $ 154 $ --
See Accompanying Notes to Consolidated Financial Statements
e)
CENTURY PROPERTIES FUND XIX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Century
Properties Fund XIX (the "Partnership") 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 Fox Capital Management Corporation, a California corporation,
("FCMC" or the "Managing General Partner"), all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 1998, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1998. 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 year ended December 31,
1997.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The general partners of Fox Partners II, the general partner of the Partnership,
are FCMC, Fox Realty Investors ("FRI"), and Fox Partners 83. NPI Equity
Investments II, Inc., a Florida Corporation ("NPI Equity"), is the managing
general partner of FRI.
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 certain payments
to affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following transactions with the Managing General Partner and its affiliates
were incurred in the nine month periods ended September 30, 1998 and 1997:
1998 1997
(in thousands)
Property management fees (included in operating expenses) $613 $552
Reimbursement for services of affiliates including
approximately $5,000 and $12,000 of construction
oversight reimbursements in 1998 and 1997, respectively
(included in investment properties and general and
administrative and operating expenses) 123 130
During the first quarter of 1998, the Partnership borrowed $270,000 from an
affiliate of the Managing General Partner in conjunction with the modification
of the mortgages encumbering McMillan Place as discussed in Note C.
For the period from January 1, 1997 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency affiliated with the
Managing General Partner but with an insurer unaffiliated with the Managing
General Partner. An affiliate of the Managing General Partner acquired, in the
acquisition of a business, certain financial obligations from an insurance
agency which was later acquired by the agent who placed the master policy. The
agent assumed the financial obligations to the affiliate of the Managing General
Partner which received payments on these obligations from the agent. The amount
of the Partnership's insurance premiums that accrued to the benefit of the
affiliate of the Managing General Partner by virtue of the agent's obligations
was not significant.
On August 28, 1997, an affiliate of the Managing General Partner (the
"Purchaser") commenced a tender offer for limited partnership interests in the
Partnership. The Purchaser offered to purchase up to 27,000 of the outstanding
units of limited Partnership interest in the Partnership, at $175.00 per unit,
net to the seller in cash. As a result of the tender offer, the Purchaser
acquired 4,892 of the outstanding limited partner units of the Partnership.
NOTE C - MORTGAGE NOTES PAYABLE
On January 29, 1998, the Managing General Partner successfully negotiated a
modification of the terms of the mortgages encumbering McMillan Place, which had
been in default since January 20, 1997. The total future cash payments of the
modified loans exceed the carrying value of the loans as of the date of
modification. Consequently, interest on the restructured debt is being recorded
at an effective rate of 9.15% for the first mortgage and 4.47% for the second
mortgage which are the rates required to equate the present value of the total
future cash payments under the new terms with the carrying amount of the loans
at the date of modification. Accrued interest and late charges to the effective
date were paid on the first mortgage and approximately $86,000 was transferred
from the second mortgage balance to the first mortgage balance increasing the
first mortgage to approximately $10,219,000. The first mortgage requires
interest only payments through October 31, 2001, at a rate of 9.15% and for the
final year, at a fixed rate of 325 basis points plus the annualized yield on
United States Treasury non-callable bonds having a one year maturity, as
determined at November 1, 2001. In addition, any excess cash as defined in the
modified loan agreement is required to be remitted to the mortgage holder by
January 20 of each year to be applied to outstanding principal and interest.
Additional interest is required to be paid upon maturity of the note equal to
50% of the appreciated fair market value of McMillan Place as defined in the
note agreement. The Partnership was required to pay $270,000 of accrued
interest on the second mortgage. In addition, an affiliate of the Managing
General Partner paid an additional $270,000 on behalf of the Partnership which
was applied to accrued interest on the second mortgage. The remaining accrued
interest on the second mortgage was rolled to principal in the amount of
approximately $154,000. The second mortgage balance of approximately $2,207,000
consists of a non-interest bearing portion of $800,000 which is due at the
maturity date of October 31, 2002, and an interest bearing portion. The
interest bearing portion has a stated interest rate of 9.15% and an effective
rate of 4.47%. Under the terms of the modified mortgages, the Partnership is no
longer restricted from making distributions to its partners from cash from
operations generated by the Partnership's properties other than McMillan Place.
The Partnership is still prohibited, however, from making distributions from
cash from operations derived from McMillan Place.
NOTE D - DISTRIBUTION
In June 1998, the Partnership distributed approximately $1,787,000 ($20.01 per
limited partnership unit) to the limited partners and approximately $37,000 to
the general partner from sale proceeds for Parkside Village Apartments in May
1993. No cash distributions were paid in 1997.
NOTE E - TRANSFER OF CONTROL; SUBSEQUENT EVENT
On October 1, 1998, Insignia Financial Group, Inc. ("Insignia") completed its
merger with and into Apartment Investment and Management Company ("AIMCO"), a
publicly traded real estate investment trust, with AIMCO being the surviving
corporation (the "Insignia Merger"). As a result of the Insignia Merger, AIMCO
acquired control of the Managing General Partner. In addition, AIMCO also
acquired approximately 51% of the outstanding common shares of beneficial
interest of Insignia Properties Trust ("IPT"), the entity which controls the
Managing General Partner of the Partnership. Also, effective October 1, 1998,
IPT and AIMCO entered into an Agreement and plan of Merger pursuant to which IPT
is to be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger").
The IPT Merger requires the approval of the holders of a majority of the
outstanding IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned
by it in favor of the IPT Merger and has granted an irrevocable limited proxy
to unaffiliated representatives of IPT to vote the IPT Shares acquired by AIMCO
and its subsidiaries in favor of the IPT Merger. As a result of AIMCO's
ownership and its agreement, the vote of no other holder of IPT is required to
approve the merger. The Managing General Partner does not believe
that this transaction will have a material effect on the affairs and operations
of the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of eight apartment complexes.
The following table sets forth the average occupancy of the properties for each
of the nine months ended September 30, 1998 and 1997:
Average Occupancy
Property 1998 1997
Sunrunner Apartments
St. Petersburg, Florida 96% 95%
Misty Woods Apartments
Charlotte, North Carolina 92% 91%
McMillan Place Apartments
Dallas, Texas 96% 96%
Vinings Peak Apartments
Atlanta, Georgia 94% 92%
Plantation Crossing
Atlanta, Georgia 93% 89%
Wood Lake Apartments
Atlanta, Georgia 94% 93%
Greenspoint Apartments
Phoenix, Arizona 91% 90%
Sandspoint Apartments
Phoenix, Arizona 94% 89%
The Managing General Partner attributes the increase in occupancy at Plantation
Crossing to the improved economy of the market and an increase in concessions to
new tenants and at Sandspoint to increased marketing efforts.
The Partnership realized net income of approximately $554,000 and $54,000 for
the nine month periods ended September 30, 1998 and 1997, respectively. The
Partnership realized net income of approximately $244,000 for the three months
ended September 30, 1998, and a net loss of approximately $42,000 for the three
months ended September 30, 1997. The increase in net income, for both the three
and nine month periods ended September 30, 1998, is primarily due to an increase
in rental income attributable to increased occupancy at all of the Partnership's
properties. The increase in net income is also due to a decline in interest and
general and administrative expenses. The decrease in interest expense is the
result of the refinancing of the mortgage encumbering McMillan Place. General
and administrative expenses declined due to decreases in administrative, audit,
and tax expenditures. Partially offsetting the increase in net income is an
increase in property tax expense as the result of an increase in the assessed
value of Greenspoint.
Included in operating expense for the nine month period ended September 30,
1998, are approximately $252,000 in major repairs and maintenance expense versus
approximately $242,000 for the corresponding period in 1997. The 1998 expense
are primarily comprised of exterior building improvements and landscaping. The
1997 expense are primarily comprised of landscaping, window coverings, and
exterior building improvements.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. 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.
At September 30, 1998, the Partnership held cash and cash equivalents of
approximately $4,495,000 as compared to approximately $4,420,000 at September
30, 1997. The net decrease in cash and cash equivalents for the nine month
period ended September 30, 1998, was approximately $292,000. For the nine month
period ended September 30, 1997, the Partnership had a net increase in cash and
cash equivalents of approximately $1,001,000. Net cash provided by operations
remained relatively stable. Cash provided by operations increased due to the
increase in net income, as discussed above, and a decrease in other liabilities.
The decrease in other liabilities is due to the repayment of accrued interest.
This repayment was in connection with the modification of the debt encumbering
McMillan Place, as discussed below. Partially offsetting these changes was an
increase in accounts payable. The increase in accounts payable is the result of
the timing of payments to vendors. Net cash used in investing activities
decreased due to increased net withdrawals from restricted escrows related to
capital improvements. Partially offsetting this decrease was an increase in cash
used for property improvements and replacements. Net cash used in financing
activities increased due to the distribution paid to the partners in the second
quarter of 1998. Partially offsetting the effect of the distribution was the
receipt of proceeds from the borrowing from an affiliate of the Managing General
Partner in conjunction with the modification of the terms of the mortgages
encumbering McMillian Place in January of 1998.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line of up to $150,000 per property owned by the
Partnership. The Partnership has no outstanding amounts due under this line of
credit. Based on present plans, management does not anticipate the need to
borrow in the near future. Other than cash and cash equivalents, the line of
credit is the Partnership's only unused source of liquidity.
On January 29, 1998, the Managing General Partner successfully negotiated a
modification of the terms of the mortgages encumbering McMillan Place, which had
been in default since January 20, 1997. The total future cash payments of the
modified loans exceed the carrying value of the loans as of the date of
modification. Consequently, interest on the restructured debt is being recorded
at an effective rate of 9.15% for the first mortgage and 4.47% for the second
mortgage which are the rates required to equate the present value of the total
future cash payments under the new terms with the carrying amount of the loans
at the date of modification. Accrued interest and late charges to the effective
date were paid on the first mortgage and approximately $86,000 was transferred
from the second mortgage balance to the first mortgage balance increasing the
first mortgage to approximately $10,219,000. The first mortgage requires
interest only payments through October 31, 2001, at a rate of 9.15% and for the
final year, at a fixed rate of 325 basis points plus the annualized yield on
United States Treasury non-callable bonds having a one year maturity, as
determined at November 1, 2001. In addition, any excess cash as defined in the
modified loan agreement is required to be remitted to the mortgage holder by
January 20 of each year to be applied to outstanding principal and interest.
Additional interest is required to be paid upon maturity of the note equal to
50% of the appreciated fair market value of McMillan Place as defined in the
note agreement. The Partnership was required to pay $270,000 of accrued
interest on the second mortgage. In addition, an affiliate of the Managing
General Partner paid an additional $270,000 on behalf of the Partnership which
was applied to accrued interest on the second mortgage. The remaining accrued
interest on the second mortgage was rolled to principal in the amount of
approximately $154,000. The second mortgage balance of approximately $2,207,000
consists of a non-interest bearing portion of $800,000 which is due at the
maturity date of October 31, 2002, and an interest bearing portion. The
interest bearing portion has a stated interest rate of 9.15% and an effective
rate of 4.47%. Under the terms of the modified mortgages, the Partnership is no
longer restricted from making distributions to its partners from cash from
operations generated by the Partnership's properties other than McMillan Place.
The Partnership is still prohibited, however, from making distributions from
cash from operations derived from McMillan Place.
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 Partnership and to comply with Federal,
state and local legal and regulatory requirements. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
Managing General Partner is currently assessing the need for capital
improvements at each of the Partnership's properties. To the extent that
additional capital improvements are required, the Partnership's distributable
cash flow, if any, may be adversely affected, at least in the short term.
Mortgage indebtedness of approximately $60,578,000 is amortized over varying
periods with required balloon payments ranging from October 2002 to January
2006. The Managing General Partner will attempt to refinance such remaining
indebtedness or sell the properties prior to such maturity dates. If the
properties cannot be refinanced or sold for a sufficient amount, the Partnership
will risk losing such properties through foreclosure. In June 1998, the
Partnership distributed approximately $1,787,000 ($20.01 per limited partnership
unit) to the limited partners and approximately $37,000 to the general partner
from sale proceeds for Parkside Village Apartments in May 1993. No cash
distributions were paid in 1997. Future cash distributions will depend on the
levels of cash generated from operations, refinancings, property sales and the
availability of cash reserves. The Partnership's distribution policy will be
reviewed on a quarterly basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations to permit
distributions to its partners in 1998 or subsequent periods.
Transfer of Control; Subsequent Event
On October 1, 1998, Insignia completed its merger with and into AIMCO, a
publicly traded real estate investment trust, with AIMCO being the surviving
corporation (the "Insignia Merger"). As a result of the Insignia Merger, AIMCO
acquired control of the Managing General Partner. In addition, AIMCO also
acquired approximately 51% of the outstanding common shares of beneficial
interest of Insignia Properties Trust ("IPT"), the entity which controls the
Managing General Partner of the Partnership. Also, effective October 1, 1998,
IPT and AIMCO entered into an Agreement and plan of Merger pursuant to which IPT
is to be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger").
The IPT Merger requires the approval of the holders of a majority of the
outstanding IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned by
it in favor of the IPT Merger and has granted an irrevocable limited proxy to
unaffiliated representatives of IPT to vote the IPT Shares acquired by AIMCO
and its subsidiaries in favor of the IPT Merger. As a result of AIMCO's
ownership and its agreement, the vote of no other holder of IPT is required to
approve the merger. The Managing General Partner does not believe that this
transaction will have a material effect on the affairs and operations of the
Partnership.
Year 2000
GENERAL DESCRIPTION OF THE YEAR 2000 ISSUE AND THE NATURE AND EFFECTS OF THE
YEAR 2000 ON INFORMATION TECHNOLOGY (IT) AND NON-IT SYSTEMS
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
The Managing Agent has determined that it will be required to modify or replace
significant portions of its software and certain hardware so that those systems
will properly utilize dates beyond December 31, 1999. The Managing Agent
presently believes that with modifications or replacements of existing software
and certain hardware, the Year 2000 Issue can be mitigated. However, if such
modifications and replacements are not made, or are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the Managing
Agent and the Partnership.
STATUS OF PROGRESS IN BECOMING YEAR 2000 COMPLIANT
The Managing Agent's plan to resolve the Year 2000 Issue involves the following
four phases: assessment, remediation, testing and implementation. To date, the
Managing Agent has fully completed its assessment of all information systems
that could be significantly affected by the Year 2000, and has begun the
remediation, testing and implementation phase on both hardware and software
systems. Assessments are continuing in regards to embedded systems in operating
equipment. The Managing Agent anticipates having all phases complete by June 1,
1999.
In addition to the areas the Partnership is relying on the Managing Agent to
verify compliance with, the Partnership has certain operating equipment,
primarily at the property sites, which needed to be evaluated for Year 2000
compliance. The focus of the Managing General Partner was to the security
systems, elevators, heating-ventilation-air-conditioning systems, telephone
systems and switches, and sprinkler systems. The Managing General Partner is
currently engaged in the identification of all non-compliant operational
systems, and is in the process of estimating the costs associated with any
potential modifications or replacements needed to such systems in order for them
to be Year 2000 compliant. It is not expected that such costs would have a
material adverse affect upon the operations of the Partnership.
RISK ASSOCIATED WITH THE YEAR 2000
The Managing General Partner believes that the Managing Agent has an effective
program in place to resolve the Year 2000 issue in a timely manner and has
appropriate contingency plans in place for critical applications that could
affect the Partnership's operations. To date, the Managing General Partner is
not aware of any external agent with a Year 2000 issue that would materially
impact the Partnership's results of operations, liquidity or capital resources.
However, the Managing General Partner has no means of ensuring that external
agents will be Year 2000 compliant. The Managing General Partner does not
believe that the inability of external agents to complete their Year 2000
resolution process in a timely manner will have a material impact on the
financial position or results of operations of the Partnership. However, the
effect of non-compliance by external agents is not readily determinable.
Other
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date
of this quarterly report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie 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 complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia and entities which were, at
the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain
general partner entities, past tender offers by Insignia Affiliates as well as a
recently announced agreement between Insignia and AIMCO. The complaint seeks
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the 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 has
filed demurrers to the amended complaint which are scheduled to be heard on
January 8, 1999. The Managing General Partner believes the action to be without
merit, and intends to vigorously defend it.
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties LLC, et.
al. v. Insignia Financial Group, Inc., et. al. in the Superior Court of the
State of California, County of Los Angeles. The action involves 44 real estate
limited partnerships (including the Partnership) in which the plaintiffs
allegedly own interests and which Insignia Affiliates allegedly manage or
control (the "Subject Partnerships"). The complaint names as defendants
Insignia, several Insignia Affiliates alleged to be managing partners of the
Subject Partnerships, the Partnership and the Managing General Partner.
Plaintiffs allege that they have requested from, but have been denied by each
of the Subject Partnerships, lists of their respective limited partners for the
purpose of making tender offers to purchase up to 4.9% of the limited partner
units of each of the Subject Partnerships. The complaint also alleges that
certain of the defendants made tender offers to purchase limited partner units
in many of the Subject Partnerships, with the alleged result that plaintiffs
have been deprived of the benefits they would have realized from ownership of
the additional units. The plaintiffs assert eleven causes of action, including
breach of contract, unfair business practices, and violations of the partnership
statutes of the states in which the Subject Partnerships are organized.
Plaintiffs seek compensatory, punitive and treble damages. The Managing General
Partner filed an answer to the complaint on September 15, 1998. The Managing
General Partner believes the claims to be without merit and intends to defend
the action vigorously.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature. The Managing General Partner believes that all such
pending or outstanding litigation will be resolved without a material adverse
effect upon the business, financial condition, or operations of the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 1998.
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.
CENTURY PROPERTIES FUND XIX
By: FOX PARTNERS II,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION
Its Managing General Partner
By: /s/ Patrick Foye
Patrick Foye
Executive Vice President
By: /s/ Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting
(Duly authorized officer)
Date: November 12, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Century Properties Fund XIX 1998 Third Quarter 10-QSB and is qualified in
its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000705752
<NAME> CENTURY PROPERTIES FUND XIX
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 4,495
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 96,705
<DEPRECIATION> 42,204
<TOTAL-ASSETS> 61,300
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 60,578
0
0
<COMMON> 0
<OTHER-SE> (1,484)
<TOTAL-LIABILITY-AND-EQUITY> 61,300
<SALES> 0
<TOTAL-REVENUES> 12,202
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,917
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,731
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 554
<EPS-PRIMARY> 5.48<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
