<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended MARCH 31, 2000
Commission File Number 0-13112
REAL ESTATE ASSOCIATES LIMITED VI
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3778627
9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CA. 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
<PAGE> 2
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2000
<TABLE>
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets,
March 31, 2000 and December 31, 1999 .............................................1
Consolidated Statements of Operations,
Three Months Ended, March 31, 2000 and 1999.......................................2
Consolidated Statement of Partners' Deficiency
Three Months Ended March 31, 2000 ................................................3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2000 and 1999 .......................................4
Notes to Consolidated Financial Statements ...............................................5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation ......................................................11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................................................13
Item 6. Exhibits and Reports on Form 8-K .............................................................13
Signatures ............................................................................................14
</TABLE>
<PAGE> 3
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
ASSETS
<TABLE>
<CAPTION>
2000 1999
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 544,009 $ 509,999
CASH AND CASH EQUIVALENTS (Note 1) 3,182,685 3,312,395
DUE FROM NAPICO (Note 4) 260,178 239,770
----------- -----------
TOTAL ASSETS $ 3,986,872 $ 4,062,164
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Notes payable and amounts due for partnership
interests (Notes 3 and 6) $ 1,765,000 $ 1,765,000
Accrued interest payable (Notes 3 and 6) 1,976,800 1,957,734
Accounts payable 5,777 6,905
----------- -----------
3,747,577 3,729,639
----------- -----------
COMMITMENTS AND CONTINGENCIES (Notes 4 and 5)
PARTNERS' EQUITY (DEFICIENCY):
General partners (348,796) (347,864)
Limited partners 588,091 680,389
----------- -----------
239,295 332,525
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY
(DEFICIENCY) $ 3,986,872 $ 4,062,164
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
1
<PAGE> 4
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
--------- ---------
<S> <C> <C>
INTEREST AND OTHER INCOME $ 38,285 $ 20,972
--------- ---------
OPERATING EXPENSES:
Management fees - general partner (Note 4) 51,608 110,982
General and administrative 57,707 134,205
Interest (Note 2) 34,200 34,200
--------- ---------
143,515 279,387
--------- ---------
LOSS FROM PARTNERSHIP OPERATIONS (105,230) (258,415)
--------- ---------
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS 12,000 13,000
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) -- 25,909
--------- ---------
NET LOSS $ (93,230) $(219,506)
========= =========
NET LOSS PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ (6) $ (13)
========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
2
<PAGE> 5
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIENCY
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
General Limite
Partners Partners Total
------------ ---------- ---------
<S> <C> <C> <C>
PARTNERSHIP INTERESTS 16,810
=========
EQUITY (DEFICIENCY),
January 1, 2000 $(347,864) $ 680,389 $ 332,525
Net loss for the three months
ended March 31, 2000 (932) (92,298) (93,230)
--------- --------- ---------
EQUITY (DEFICIENCY),
March 31, 2000 $(348,796) $ 588,091 $ 239,295
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE> 6
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (93,230) $ (219,506)
Adjustments to reconcile net loss to net
cash used in operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (12,000) (13,000)
Increase in other assets -- (6,100)
Increase in accrued interest payable 19,066 34,200
Increase in due from NAPICO (20,408) --
Decrease in accounts payable (1,128) (197,354)
----------- -----------
Net cash used in operating activities (107,700) (401,760)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital contributions (22,010)
Sales proceeds -- 1,397,081
----------- -----------
Net cash (used in) provided by invested activities (22,010) 1,397,081
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to partners -- (2,797,081)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (129,710) (1,801,760)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,312,395 5,477,969
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,182,685 $ 3,676,209
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ 15,134 $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
4
<PAGE> 7
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the audited annual
financial statements; accordingly, the financial statements included herein
should be reviewed in conjunction with the financial statements and related
notes thereto contained in the annual report for the year ended December
31, 1999 prepared by Real Estate Associates Limited VI and Subsidiaries
(the "Partnership"). Accounting measurements at interim dates inherently
involve greater reliance on estimates than at year end. The results of
operations for the interim periods presented are not necessarily indicative
of the results for the entire year.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting primarily of normal
recurring accruals) necessary to present fairly the financial position of
the Partnership at March 31, 2000 and the results of operations and changes
in cash flows for the three months then ended.
The general partners have a 1 percent interest in profits and losses of the
Partnership. The limited partners have the remaining 99 percent interest
which is allocated in proportion to their respective individual
investments. National Partnership Investments Corp. (NAPICO) is the
corporate general partner of the Partnership. Casden Properties Inc. owns a
95.25% economic interest in NAPICO, with the balance owned by Casden
Investment Corporation ("CIC"). CIC, which is wholly owned by Alan I.
Casden, owns 95% of the voting common stock of NAPICO.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Real Estate
Associates Limited VI and its majority-owned general partnerships. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
METHOD OF ACCOUNTING FOR INVESTMENT IN THE UNCONSOLIDATED LIMITED
PARTNERSHIPS
The investments in unconsolidated limited partnerships are accounted for on
the equity method. Acquisition, selection and other costs related to the
acquisition of the projects are capitalized as part
5
<PAGE> 8
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
of the investment account and are being amortized on a straight line basis
over the estimated lives of the underlying assets, which is generally 30
years.
NET LOSS PER LIMITED PARTNERSHIP INTEREST
Net loss per limited partnership interest was computed by dividing the
limited partners' share of net loss by the number of limited partnership
interests outstanding during the year. The number of limited partnership
interests was 16,810 for the periods presented.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of unrestricted cash and bank
certificates of deposit with maturities of three months or less. Restricted
cash consist of tenants' security and escrow deposits and mortgage
impounds. The Partnership has its cash and cash equivalents on deposit
primarily with two high credit quality financial institutions. Such cash
and cash equivalents are in excess of the FDIC insurance limit.
INCOME TAXES
No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the liability of the individual
partners.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. If
the sum of the expected future cash flows is less than the carrying amount
of the assets, the Partnership recognizes an impairment loss.
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of March 31, 2000, the Partnership holds limited partnership interests
in 20 limited partnerships. In addition, the Partnership holds a general
partner interest in REA III, which in turn, holds limited partner interests
in 3 additional limited partnerships. In total, therefore, the Partnership
holds interests, either directly or indirectly through REA III, in 23
partnerships which owned as March 31, 2000, residential low income rental
projects consisting of 1,369 apartment units. The mortgage loans of these
projects are payable to or insured by various governmental agencies.
6
<PAGE> 9
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIP (CONTINUED)
The Partnership, as a limited partner, is entitled to between 90 percent
and 99 percent of the profits and losses of the limited partnerships it has
invested in directly. The Partnership is also entitled to 99.9 percent of
the profits and losses of REA III. REA III holds a 99 percent interest in
each of the limited partnerships in which it has invested.
Equity in losses of unconsolidated limited partnerships is recognized in
the financial statements until the limited partnership investment account
is reduced to a zero balance or to a negative amount equal to further
capital contributions required. Losses incurred after the limited
partnership investment account is reduced to zero are not recognized.
Distributions from the unconsolidated limited partnerships are accounted
for as a return of capital until the investment balance is reduced to zero.
Subsequent distributions received are recognized as income.
The following is a summary of the investment in unconsolidated limited
partnerships for the three months ended March 31, 2000:
Balance, beginning of period $ 509,999
Capital contributions 22,010
Equity in income of limited partnerships 13,000
Amortization of acquisition costs (1,000)
---------
Balance, end of period $ 544,009
=========
The following are unaudited combined estimated statements of operations for
the three months ended March 31, 2000 and 1999 of the unconsolidated
limited partnerships in which the Partnership has investments:
Three months Three months
ended ended
March 31, 2000 March 31, 1999
-------------- --------------
Revenues:
Rental and other $2,482,000 $2,478,000
Expenses:
Depreciation 401,000 492,000
Interest 669,000 686,000
Operating expenses 1,519,000 1,448,000
----------- ----------
Total expenses 2,589,000 2,626,000
----------- ----------
Net loss $ (107,000) $ (148,000)
========== ===========
7
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIP (CONTINUED)
NAPICO, or one of its affiliates, is the general partner and property
management agent for certain of the limited partnerships included above.
Under recent adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis on the
existing terms. In connection with renewals of the HAP Contracts under such
new law and policy, the amount of rental assistance payments under renewed
HAP Contracts will be based on market rentals instead of above market
rentals, which was generally the case under existing HAP Contracts. The
payments under the renewed HAP Contracts are not expected to be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service requirements
of existing loans insured by the Federal Housing Administration of HUD
("FHA") unless such mortgage loans are restructured. In order to address
the reduction in payments under HAP Contracts as a result of this new
policy, the Multi-family Assisted Housing Reform and Affordability Act of
1997 ( "MAHRAA"), which was adopted in October 1997, provides for the
restructuring of mortgage loans insured by the FHA with respect to
properties subject to the Section 8 program. Under MAHRAA, an FHA-insured
mortgage loan can be restructured into a first mortgage loan which will be
amortized on a current basis and a low interest second mortgage loan
payable to FHA which will only be payable on maturity of the first mortgage
loan. This restructuring results in a reduction in annual debt service
payable by the owner of the FHA-insured mortgage loan and is expected to
result in an insurance payment from FHA to the holder of the FHA-insured
loan due to the reduction in the principal amount. MAHRAA also phases out
project-based subsidies on selected properties serving families not located
in rental markets with limited supply, converting such subsidies to a
tenant-based subsidy.
On September 11, 1998, HUD issued interim regulations implementing MAHRAA
and final regulations are expected to be issued in 2000.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness under
MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
On December 30, 1998, after obtaining the consents of the limited partners,
the Partnership sold its limited partnership interests in 10 local limited
partnerships to affiliates of Casden Properties Inc. The sale resulted in
cash proceeds to the Partnership of $1,397,081, which was collected in
1999. In March 1999, the Partnership made cash distributions of $2,769,110
to the limited partners and $27,971 to the general partners, primarily
using proceeds from the sale of the partnership interests.
8
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 3 - NOTES PAYABLE
Certain of the Partnership's investments involved purchases of partnership
interests from partners who subsequently withdrew from the operating
partnership. The purchase of these interests provides for additional cash
payments of approximately $325,000 based upon specified events as outlined
in the purchase agreements. Such amounts have been recorded as liabilities.
In addition, the Partnership is obligated on non-recourse notes payable of
$1,440,000 which bear interest at 9.5 or 10 percent per annum and have
principal maturities ranging from December 1999 to December 2012. The
Partnership was relieved of notes payable in the amount of $4,030,000 in
connection to the sale of certain partnership interests in 1998.
The notes and related interest are payable from cash flow generated from
operations of the related rented properties as defined in the notes. These
obligations are collateralized by the Partnership's investments in the
limited partnerships. Unpaid interest is due at maturity of the notes.
NOTE 4 - MANAGEMENT FEES AND EXPENSES DUE TO GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to NAPICO for an annual
management fee of approximately .4 percent of the original invested assets
of the limited partnerships. Invested assets are defined as the costs of
acquiring project interests, including the proportionate amount of the
mortgage loans related to the Partnership's interests in the capital
accounts of the respective partnerships. This fee was approximately $52,000
and $111,000 for the three months ended March 31, 2000 and 1999,
respectively.
The Partnership reimburses NAPICO for certain expenses. The reimbursement
to NAPICO was approximately $10,400 and $10,300 for the three months ended
March 31, 2000 and 1999, respectively, and is included in general and
administrative expenses.
NOTE 5 - CONTINGENCIES
On August 27, 1998, two investors holding an aggregate of eight units of
limited partnership interests in Real Estate Associates Limited III (an
affiliated partnership in which NAPICO is the managing general partner) and
two investors holding an aggregate of five units of limited partnership
interest in the Partnership commenced an action in the United States
District Court for the Central District of California against the
Partnership, NAPICO and certain other affiliated entities. The complaint
alleges that the defendants breached their fiduciary duty to the limited
partners of certain NAPICO managed partnerships and made materially false
and misleading statements in the consent solicitation statements
9
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 5 - CONTINGENCIES (CONTINUED)
sent to the limited partners of such partnerships relating to approval of
the transfer of partnership interests in limited partnerships, owning
certain of the properties, to affiliates of Casden Properties Inc.,
organized by an affiliate of NAPICO. The plaintiffs seek equitable relief,
as well as compensatory damages and litigation related costs. On August 4,
1999, one investor holding one unit of limited partnership interest in
Housing Programs Limited commenced a virtually identical action in the
United States District Court for the Central District of California against
the Partnership, NAPICO and certain other affiliated entities. The managing
general partner of such NAPICO managed partnerships and the other
defendants believe that the plaintiffs' claims are without merit and intend
to contest the actions vigorously.
The corporate general partner of the Partnership is involved in various
lawsuits and have also been named defendants in other lawsuits arising from
transactions in the ordinary course of business. In the opinion of
management and the corporate general partner, the claims will not result in
any material liability to the Partnership.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about Fair
Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. The carrying amount of other
assets and liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.
10
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2000
ITEM 2. MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary sources of funds include interest income on short
term investments and distributions from limited partnerships in which the
Partnership has invested. It is not expected that any of the local limited
partnerships in which the Partnership has invested will generate cash flow
sufficient to provide for distributions to limited partners in any material
amount. The Partnership made a distributions to investors in March 31,
2000, previously using proceeds from the disposition of its investments in
certain limited partnerships.
RESULTS OF OPERATIONS
Partnership revenues consist primarily of interest income earned on
certificates of deposit and other temporary investment of funds not
required for investment in local partnerships.
Operating expenses consist primarily of recurring general and
administrative expenses and professional fees for services rendered to the
Partnership. In addition, an annual Partnership management fee in an amount
equal to .4 percent of invested assets is payable to the corporate general
partner.
The Partnership accounts for its investments in the local limited
partnerships on the equity method, thereby adjusting its investment balance
by its proportionate share of the income or loss of the local limited
partnerships. Losses incurred after the limited partnership investment
account is reduced to zero are not recognized in accordance with the equity
accounting method.
Distributions received from limited partnerships are recognized as return
of capital until the investment balance has been reduced to zero or to a
negative amount equal to future capital contributions required. Subsequent
distributions received are recognized as income.
Except for certificates of deposit and money market funds, the
Partnership's investments are entirely from interests in other limited and
general partnerships owning government assisted projects. Funds temporarily
not required for such investments in projects are invested providing
interest income as reflected in the statement of operations. These funds
can be converted to cash to meet obligations as they arise. The Partnership
intends to continue investing available funds in this manner.
Under recent adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis on the
existing terms. In connection with renewals of the HAP Contracts under such
new law and policy, the amount of rental assistance payments under renewed
HAP Contracts will be based on market rentals instead of above market
rentals, which was generally the case under existing HAP Contracts. The
payments under the renewed HAP Contracts are not expected to be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service requirements
of existing loans insured by the Federal
11
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2000
ITEM 2. MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Housing Administration of HUD ("FHA") unless such mortgage loans are
restructured. In order to address the reduction in payments under HAP
Contracts as a result of this new policy, the Multi-family Assisted Housing
Reform and Affordability Act of 1997 ( "MAHRAA"), which was adopted in
October 1997, provides for the restructuring of mortgage loans insured by
the FHA with respect to properties subject to the Section 8 program. Under
MAHRAA, an FHA-insured mortgage loan can be restructured into a first
mortgage loan which will be amortized on a current basis and a low interest
second mortgage loan payable to FHA which will only be payable on maturity
of the first mortgage loan. This restructuring results in a reduction in
annual debt service payable by the owner of the FHA-insured mortgage loan
and is expected to result in an insurance payment from FHA to the holder of
the FHA-insured loan due to the reduction in the principal amount. MAHRAA
also phases out project-based subsidies on selected properties serving
families not located in rental markets with limited supply, converting such
subsidies to a tenant-based subsidy.
On September 11, 1998, HUD issued interim regulations implementing MAHRAA
and final regulations are expected to be issued in 2000.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness under
MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
On December 30, 1998, after obtaining the consents of the limited partners,
the Partnership sold its limited partnership interests in 10 local limited
partnerships to affiliates of Casden Properties Inc. The sale resulted in
cash proceeds to the Partnership of $1,397,081, which was collected in
1999. In March 2000, the Partnership made cash distributions of $2,769,110
to the limited partners and $27,971 to the general partners, primarily
using proceeds from the sale of the partnership interests.
12
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2000
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership interests in Real Estate Associates Limited III (an affiliated
partnership in which NAPICO is the managing general partner) and two investors
holding an aggregate of five units of limited partnership interest in the
Partnership commenced an action in the United States District Court for the
Central District of California against the Partnership, NAPICO and certain other
affiliated entities. The complaint alleges that the defendants breached their
fiduciary duty to the limited partners of certain NAPICO managed partnerships
and made materially false and misleading statements in the consent solicitation
statements sent to the limited partners of such partnerships relating to
approval of the transfer of partnership interests in limited partnerships,
owning certain of the properties, to affiliates of Casden Properties Inc.,
organized by an affiliate of NAPICO. The plaintiffs seek equitable relief, as
well as compensatory damages and litigation related costs. On August 4, 1999,
one investor holding one unit of limited partnership interest in Housing
Programs Limited commenced a virtually identical action in the United States
District Court for the Central District of California against the Partnership,
NAPICO and certain other affiliated entities. The managing general partner of
such NAPICO managed partnerships and the other defendants believe that the
plaintiffs' claims are without merit and intend to contest the actions
vigorously.
The Partnership's general partner is involved in various lawsuits. None of these
lawsuits are related to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required per the provision of item 6 of regulation S-K
and no reports on Form 8-K were filed during the quarter ended
March 31, 2000.
13
<PAGE> 16
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2000
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.
REAL ESTATE ASSOCIATES LIMITED VI AND
SUBSIDIARIES (a California limited partnership)
By: National Partnership Investments
Corp., General Partner
/s/ BRUCE NELSON
---------------------------------------
Bruce Nelson
President
Date: May 22, 2000
------------------------------------------
/s/ PAUL PATIERNO
---------------------------------------
Paul Patierno
Chief Financial Officer
Date: May 22, 2000
----------------------------------------
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,182,685
<SECURITIES> 0
<RECEIVABLES> 260,178
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,442,863
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,986,872
<CURRENT-LIABILITIES> 5,777
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 239,295
<TOTAL-LIABILITY-AND-EQUITY> 3,986,872
<SALES> 0
<TOTAL-REVENUES> 50,285
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 109,315
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,200
<INCOME-PRETAX> (93,230)
<INCOME-TAX> 0
<INCOME-CONTINUING> (93,230)
<DISCONTINUED> 0
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</TABLE>
