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, 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 0-13192
ANGELES INCOME PROPERTIES, LTD. III
(Exact name of small business issuer as specified in its charter)
California 95-3903984
(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___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
ANGELES INCOME PROPERTIES, LTD. III
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 275
Receivables and deposits (net of $175 allowance for
doubtful accounts) 25
Other assets 11
Investment property:
Land $ 657
Buildings and related personal property 4,298
4,955
Less accumulated depreciation (3,323) 1,632
$ 1,943
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 3
Tenant security deposit liabilities 23
Accrued property taxes 31
Other liabilities 86
Partners' (Deficit) Capital
General partners $ (14)
Limited partners (86,738 units issued and
outstanding) 1,814 1,800
$ 1,943
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
b)
ANGELES INCOME PROPERTIES, LTD. III
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues: (Restated) (Restated)
<S> <C> <C> <C> <C>
Rental income $ 215 $ 207 $ 638 $ 601
Other income 12 16 68 47
Total revenues 227 223 706 648
Expenses:
Operating 86 76 260 252
General and administrative 41 30 106 116
Depreciation 66 64 201 193
Property taxes 9 10 30 29
Total expenses 202 180 597 590
Income from continuing operations 25 43 109 58
(Loss) income from discontinued
operations (50) 9 (50) (30)
Net (loss) income $ (25) $ 52 $ 59 $ 28
Net income allocated to general
partners (1%) $ -- $ -- $ 1 $ --
Net (loss) income allocated to
limited partners (99%) (25) 52 58 28
$ (25) $ 52 $ 59 $ 28
Per limited partnership unit:
Income from continuing operations $ 0.29 $ 0.50 $ 1.25 $ 0.66
(Loss) income from discontinued
operations (0.58) 0.10 (0.58) (0.34)
Net (loss) income $ (0.29) $ 0.60 $ 0.67 $ 0.32
Distributions per limited
partnership unit $ -- $ 11.41 $ 25.17 $ 11.41
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
ANGELES INCOME PROPERTIES, LTD. III
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 86,920 $ 1 $43,460 $43,461
Partners' capital
at December 31, 1999 86,738 $ 7 $ 3,939 $ 3,946
Distributions to partners -- (22) (2,183) (2,205)
Net income for the nine months
ended September 30, 2000 -- 1 58 59
Partners' (deficit) capital
at September 30, 2000 86,738 $ (14) $ 1,814 $ 1,800
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
ANGELES INCOME PROPERTIES, LTD. III
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 59 $ 28
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 201 511
Amortization of loan costs and leasing commissions -- 29
Change in accounts:
Receivables and deposits 135 (146)
Other assets (4) 38
Accounts payable (30) 7
Tenant security deposit liabilities 3 1
Accrued property taxes (8) 56
Other liabilities (94) (20)
Net cash provided by operating activities 262 504
Cash flows from investing activities:
Property improvements and replacements (35) (69)
Net deposits to restricted escrows -- (21)
Lease commissions paid -- (21)
Net cash used in investing activities (35) (111)
Cash flows from financing activities:
Payments on mortgage note payable -- (37)
Distributions to partners (2,205) (1,000)
Net cash used in financing activities (2,205) (1,037)
Net decrease in cash and cash equivalents (1,978) (644)
Cash and cash equivalents at beginning of period 2,253 1,347
Cash and cash equivalents at end of period $ 275 $ 703
Supplemental disclosure of cash flow information:
Cash paid for interest $ -- $ 255
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
e)
ANGELES INCOME PROPERTIES, LTD. III
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Angeles Income
Properties, Ltd. III (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 and nine month periods ended September 30, 2000,
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2000. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Partnership's Annual Report on Form 10-KSB for the year ended December 31, 1999.
Principles of Consolidation: The consolidated financial statements of the
Partnership include its 99% limited partnership interests in Poplar Square AIP
III, L.P. and Poplar Square GP LP. Poplar Square GP LP is the general partner of
Poplar Square AIP III and ARC II is the general partner of Poplar Square GP LP.
Both general partners of the consolidated partnerships may be removed by the
Registrant; therefore, the partnerships are controlled and consolidated by the
Partnership. All significant interpartnership balances have been eliminated.
Certain reclassifications have been made to the 1999 balances to conform to the
2000 presentation.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the 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 - Discontinued Operations
Poplar Square Shopping Center was the only commercial property of the
Partnership and was one segment of the Partnership's operations. Due to the sale
of this property in December 1999, the operating results of this property have
been shown as income (loss) from discontinued operations for the three and nine
month periods ended September 30, 1999 and, accordingly, the 1999 consolidated
statement of operations has been restated to reflect this presentation. Revenues
of this property were approximately $286,000 and $779,000 for the three and nine
months ended September 30, 1999, respectively. Due to the sale, no revenue was
recorded in 2000. For the three and nine months ended September 30, 2000, the
Partnership realized a loss from discontinued operations of approximately
$50,000. The Partnership realized income from discontinued operations of
approximately $9,000 and a loss from discontinued operations of approximately
$30,000 for the three and nine months ended September 30, 1999, respectively.
Note D - 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 (i) for certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership.
The following payments were made to the Managing General Partner and affiliates
during the nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating
expenses) $ 34 $ 32
Reimbursement for services of affiliates (included
in general and administrative expenses) 41 42
During the nine months ended September 30, 2000 and 1999, affiliates of the
Managing General Partner were entitled to receive 5% of gross receipts from the
Registrant's residential property as compensation for providing property
management services. The Registrant paid to such affiliates approximately
$34,000 and $32,000 for the nine months ended September 30, 2000 and 1999,
respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $41,000 and
$42,000 for the nine months ended September 30, 2000 and 1999, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 36,580 limited partnership
units in the Partnership representing 42.173% 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, which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the Managing General Partner. As a
result of its ownership of 42.173% of the outstanding units, AIMCO is in a
position to significantly 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 E - Distributions
The Partnership paid a cash distribution from sale proceeds of Poplar Square
Shopping Center of approximately $1,205,000 (approximately $1,193,000 to the
limited partners or $13.76 per limited partnership unit) and from operations of
approximately $1,000,000 (approximately $990,000 to the limited partners, or
$11.41 per limited partnership unit), during the nine months ended September 30,
2000. The Partnership paid an operating cash distribution of approximately
$1,000,000 (approximately $990,000 to the limited partners or $11.41 per limited
partnership unit) during the nine months ended September 30, 1999.
Subsequent to September 30, 2000, a cash distribution was approved and paid from
operations of approximately $137,000 of which approximately $135,000 was paid to
the limited partners ($1.56 per limited partnership unit).
Note F - Segment Reporting
Description of the types of products and services from which reportable segment
derives its revenues:
The Partnership had two reportable segments: residential properties and
commercial properties. The Partnership's residential property segment consists
of one apartment complex located in Mississippi. The Partnership rents apartment
units to tenants for terms that are typically twelve months or less. The
commercial property segment consisted of a shopping center located in Oregon,
which was sold on December 30, 1999. As a result of the sale of the commercial
property during 1999, the commercial segment is shown as discontinued
operations.
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.
Factors management used to identify the enterprise's reportable segment:
The Partnership's reportable segments are investment properties that offer
different products and services. The reportable segments are each managed
separately because they provide distinct services with different types of
products and customers.
Segment information for the three and nine month periods ended September 30,
2000 and 1999 is shown in the tables below. The "Other" column includes
Partnership administration related items and income and expense not allocated to
the reportable segments (in thousands).
<TABLE>
<CAPTION>
Three Months Ended
September 30, 2000 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 215 $ -- $ -- $ 215
Other income 11 -- 1 12
Depreciation 66 -- -- 66
General and administrative
expense -- -- 41 41
Loss from discontinued
operations -- (50) -- (50)
Segment profit (loss) 65 (50) (40) (25)
Nine Months Ended
September 30, 2000 Residential Commercial Other Totals
(discontinued)
Rental income $ 638 $ -- $ -- $ 638
Other income 55 -- 13 68
Depreciation 201 -- -- 201
General and administrative
expense -- -- 106 106
Loss from discontinued
operations -- (50) -- (50)
Segment profit (loss) 202 (50) (93) 59
Total assets 1,836 -- 107 1,943
Capital expenditures for
investment property 35 -- -- 35
Three Months Ended
September 30, 1999 Residential Commercial Other Totals
(discontinued)
Rental income $ 207 $ -- $ -- $ 207
Other income 9 -- 7 16
Depreciation 64 -- -- 64
General and administrative -- -- 30 30
expense
Income from discontinued
operations -- 9 -- 9
Segment profit (loss) 66 9 (23) 52
Nine Months Ended
September 30, 1999 Residential Commercial Other Totals
(discontinued)
Rental income $ 601 $ -- $ -- $ 601
Other income 19 -- 28 47
Depreciation 193 -- -- 193
General and administrative
expense -- -- 116 116
Loss from discontinued
operations -- (30) -- (30)
Segment profit (loss) 146 (30) (88) 28
Total assets 2,251 3,334 205 5,790
Capital expenditures for
investment properties 69 -- -- 69
</TABLE>
Note G - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the 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 owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. 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.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. 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 nine
months ended September 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Lake Forest Apartments 94% 92%
Brandon, Mississippi
Results from Operations
The Registrant's net income for the nine months ended September 30, 2000 was
approximately $59,000 as compared to approximately $28,000 for the nine months
ended September 30, 1999. The Registrant's net loss for the three months ended
September 30, 2000 was approximately $25,000 as compared to net income of
approximately $52,000 for the three months ended September 30, 1999. Poplar
Square was the only commercial property owned by the Partnership and represented
one segment of the Partnership's operations. Due to the sale of this property in
December 1999, the results of the commercial segment have been shown as income
(loss) from discontinued operations for the three and nine months ended
September 30, 1999 and, accordingly, the 1999 consolidated statements of
operations have been restated to reflect this presentation.
The Registrant's income from continuing operations for the nine months ended
September 30, 2000 was approximately $109,000 as compared to approximately
$58,000 for the nine months ended September 30, 1999. The Registrant's income
from continuing operations for the three months ended September 30, 2000 was
approximately $25,000 as compared to income from continuing operations of
approximately $43,000 for the three months ended September 30, 1999. The
increase in income from continuing operations for the nine months ended
September 30, 2000 as compared to the corresponding period in 1999 is
attributable to an increase in total revenues offset by an increase in total
expenses. The increase in total revenues is the result of an increase in other
and rental income. Other income increased due to an increase in miscellaneous
income. The increase in rental revenue was the result of an increase in
occupancy and average rental rates at the Partnership's remaining investment
property. The increase in total expenses is primarily attributable to an
increase in operating and depreciation expenses offset by a decrease in general
and administrative expense. The increase in operating expense is primarily due
to an increase in employee benefits at Lake Forest Apartments. The increase in
depreciation expense is due to new depreciable assets being placed into service
at the Partnership's investment property. The decrease in general and
administrative expense is primarily due to decreases in fees and licenses
expense and administrative expenses associated with managing the Partnership.
The decrease in income from continuing operations for the three months ended
September 30, 2000 as compared to the corresponding period in 1999 is
attributable to an increase in total expenses. Total expenses increased due to
increases in operating expense, as discussed above, and an increase in general
and administrative expense. General and administrative expense increased due to
an increase in the cost of services included in the management reimbursements to
the Managing General Partner as allowed under the Partnership Agreement.
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 in general and administrative expense for the nine months
ended September 30, 2000 and 1999.
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 September 30, 2000, the Registrant had cash and cash equivalents of
approximately $275,000 as compared to approximately $703,000 at September 30,
1999. The net decrease in cash and cash equivalents was approximately $1,978,000
for the nine months ended September 30, 2000, from the Registrant's fiscal year
end. The decrease in cash and cash equivalents is due to approximately
$2,205,000 of cash used in financing activities and approximately $35,000 of
cash used in investing activities, partially offset by approximately $262,000 of
cash provided by operating activities. Cash used in financing activities
consisted of distributions to the partners. Cash used in investing activities
consisted of property improvements and replacements. 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 Partnership's property to adequately maintain the
physical assets and other operating needs of the Registrant and to comply with
Federal, state, and local legal and regulatory requirements. The Partnership
budgeted approximately $59,000 for capital improvements at Lake Forest
Apartments for the year 2000 consisting primarily of appliance replacements, air
conditioning unit replacements, floor covering replacements and structural
improvements. As of September 30, 2000 the Partnership has spent approximately
$35,000 on capital expenditures, consisting primarily of floor covering and
appliance replacements, major landscaping and roof improvements. These
improvements were funded from operating cash flow. Additional improvements may
be considered and will depend on the physical condition of the property as well
as replacement reserves and anticipated cash flow generated by the property.
The additional capital expenditures will be incurred only if cash is available
from operations or 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 Partnership
paid a cash distribution from sale proceeds of Poplar Square Shopping Center of
approximately $1,205,000 (approximately $1,193,000 to the limited partners or
$13.76 per limited partnership unit) and from operations of approximately
$1,000,000 (approximately $990,000 to the limited partners or $11.41 per limited
partnership unit), during the nine months ended September 30, 2000. The
Partnership paid an operating cash distribution of approximately $1,000,000
(approximately $990,000 to the limited partners or $11.41 per limited
partnership unit) during the nine months ended September 30, 1999. Subsequent to
September 30, 2000, a cash distribution was approved and paid from operations of
approximately $137,000 of which approximately $135,000 was paid to the limited
partners ($1.56 per limited partnership unit). The Partnership's distribution
policy is reviewed on a semi-annual basis. Future cash distributions will depend
on the levels of net cash generated from operations, the availability of cash
reserves, mortgage financing, and/or the sale of the property. There can be no
assurance, however, that the Partnership will generate sufficient funds from
operations, after required capital expenditures, to permit additional
distributions to its partners during the remainder of 2000 or subsequent
periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the 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 owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. 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, 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, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES INCOME PROPERTIES, LTD. III
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:
