<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 0-13810
REAL ESTATE ASSOCIATES LIMITED VII
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3290316
9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CALIF. 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 VII
(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
Balance Sheets, March 31, 2000 and December 31, 1999 ...............................................1
Statements of Operations,
Three Months Ended March 31, 2000 and 1999 ..................................................2
Statement of Partners' Deficiency,
Three Months Ended March 31, 2000 ...........................................................3
Statements of Cash Flows,
Three Months Ended March 31, 2000 and 1999 ..................................................4
Notes to 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 VII
(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) $ 229,464 $ 239,464
CASH 50,424 96,379
------------ ------------
TOTAL ASSETS $ 279,888 $ 335,843
============ ============
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Notes payable (Note 3) $ 17,424,501 $ 17,424,501
Accrued interest payable (Note 3) 23,997,933 23,588,625
Accrued fees and expenses
due general partner (Note 4) 5,131,358 5,006,313
Accounts payable and other liabilities 61,098 64,456
------------ ------------
46,614,890 46,083,895
------------ ------------
COMMITMENTS AND CONTINGENCIES
(Notes 4 and 5)
PARTNERS' DEFICIENCY:
General partners (786,481) (780,611)
Limited partners (45,548,522) (44,967,441)
------------ ------------
(46,335,002) (45,748,052)
------------ ------------
TOTAL LIABILITIES AND PARTNERS'
DEFICIENCY $ 279,888 $ 335,843
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
--------- ---------
<S> <C> <C>
REVENUE:
Interest income $ 1,010 $ 309
--------- ---------
OPERATING EXPENSES:
Interest (Note 3) 409,308 409,308
Management fees - general partner (Note 4) 125,045 97,188
General and administrative (Note 4) 18,819 63,161
Legal and accounting 24,788 28,780
--------- ---------
577,960 598,437
--------- ---------
LOSS FROM OPERATIONS (576,950) (598,128)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIP RECOGNIZED
AS INCOME (Note 2) -- 71,893
EQUITY IN (LOSS) INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ADDITIONAL BASIS AND
ACQUISITION COSTS (Note 2) (10,000) 7,000
--------- ---------
NET LOSS $(586,950) $(519,235)
========= =========
NET LOSS PER LIMITED PARTNERSHIP
INTEREST $ (28) $ (25)
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' DEFICIENCY
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
----------- ------------ -----------
<S> <C> <C> <C>
PARTNERSHIP INTERESTS 20,802
============
DEFICIENCY
January 1, 2000 $ (780,611) $(44,967,441) $(45,748,052)
Net loss for the three months
ended March 31, 2000 (5,870) (581,081) (586,950)
------------ ------------ ------------
DEFICIENCY
March 31, 2000 $ (786,481) $(45,548,522) $(46,335,002)
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
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 $(586,950) $(519,235)
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in loss (income) of limited partnerships
and amortization of additional basis
and acquisition costs 10,000 (7,000)
Increase in accrued interest payable 409,308 401,578
Increase in accrued fees and expenses
due general partner 125,045 97,188
Decrease in accounts payable
and other liabilities (3,358) (106,702)
--------- ---------
Net cash used in operating activities (45,955) (134,171)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from limited partnerships recognized
as a return of capital -- 9,171
Sale proceeds -- 400,000
--------- ---------
Net cash provided by investing activities -- 409,171
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners -- (275,000)
--------- ---------
NET DECREASE IN CASH (45,955) --
CASH, BEGINNING OF PERIOD 96,379 --
--------- ---------
CASH, END OF PERIOD $ 50,424 $ --
========= =========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
CASH PAID DURING THE PERIOD FOR INTEREST $ -- $ 7,730
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO 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 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 VII (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
he 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.
USES 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.
METHOD OF ACCOUNTING FOR INVESTMENT IN LIMITED PARTNERSHIPS
The investment in limited partnerships is accounted for on the equity
method. Acquisition, selection and other costs related to the acquisition
of the projects were capitalized as part of the investment account and are
being amortized on a straight line basis over the estimated lines of the
underlying assets, which is generally 30 years.
5
<PAGE> 8
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 20,802 for the periods presented.
CASH
The Partnership has its cash on deposit primarily with two high credit
quality financial institutions. Such cash is 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 21 limited partnerships. In addition, the Partnership holds a general
partner interest in Real Estate Associates IV ("REA IV"), which in turn,
holds limited partner interest in 15 additional limited partnerships.
NAPICO is also a general partner in REA IV. In total, therefore the
Partnership holds interests, either directly or indirectly through REAL
VII, in 36 limited partnerships which owns residential low income rental
projects consisting of 3,379 apartment units. The mortgage loans of these
projects are payable to or insured by various governmental agencies.
The Partnership, as a limited partner, is entitled to between 98 percent
and 99 percent of the profits and losses in the limited partnerships it has
invested in directly. The Partnership is also entitled to 99 percent of the
profits and losses of REA IV. REA IV holds a 99 percent interest in each of
the limited partnerships in which it has invested.
Equity in losses of limited partnerships is recognized in the financial
statements until the limited partnership investment account is reduced to a
zero balance. Losses incurred after the limited partnership investment
account is reduced to zero are not recognized.
6
<PAGE> 9
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Distributions from the 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 limited partnerships for
the three months ended March 31, 2000:
Balance, beginning of period $239,464
Cash distributions recognized as a return of capital (9,171)
Amortization of acquisition costs (2,000)
Equity in loss of limited partnerships (8,000)
--------
Balance, end of period $229,464
========
The following are unaudited combined estimated statements of operations for
the three months ended March 31, 2000 and 1999 for the limited partnerships
in which the Partnership has investments:
Three months Three months
ended ended
March 31, 2000 March 31, 1999
-------------- --------------
Revenues:
Rental and other $4,907,000 $4,837,000
---------- ----------
Expenses:
Depreciation 848,000 1,019,000
Interest 382,000 410,000
Operating 3,765,000 3,659,000
---------- -----------
4,995,000 5,088,000
---------- ----------
Net loss $ (88,000) $ (251,000)
========== ===========
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
7
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
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 11 local limited
partnerships to affiliates of Casden Properties Inc. The sale resulted in
cash proceeds to the Partnership of $400,000, which was collected in 1999.
In March 1999, the Partnership made cash distributions of $272,500 to the
limited partners and $2,750 to the general partners, primarily using
proceeds from the sale of the partnership interests.
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 Partnership is obligated on non-recourse notes payable of
$17,424,501, bearing interest at 9 1/2 percent, to the sellers of the
Partnership interests. The notes have principal maturity dates ranging from
December 1999 to December 2002 or upon sale or refinancing of the
underlying partnership properties. These obligations are collateralized by
the Partnership's investments in the investee partnerships and are payable
out of cash distributions from the investee partnerships, as defined in the
notes. Unpaid interest is due at maturity of the notes.
8
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
NOTE 4 - ACCRUED FEES AND EXPENSES DUE 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 equal to .5 percent of the invested assets of the
partnerships. Invested assets is 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. The fee was approximately $125,000 and $97,000 for the three
months ended March 31, 2000 and 1999, respectively.
The Partnership reimburses NAPICO for certain expenses. The reimbursement
to NAPICO was approximately $7,370 and $10,100 for the three months ended
March 31, 2000 and 1999, respectively, and is included in 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 Real Estate Associates Limited VI (another affiliated
partnership in which NAPICO is the managing general partner) 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 (another affiliated
partnership in which NAPICO is the managing general partner) 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 a plaintiff in various
lawsuits and has also been named a defendant 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.
9
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2000
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 VII
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary sources of funds include interest income earned
from investing available cash 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.
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 .5 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 account is
reduced to zero are not recognized.
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 interests in other limited and
general partnerships owning government assisted projects. Available cash is
invested in money market funds and certificates of deposit which provide
interest income as reflected in the statement of operations. These
temporary investments can be easily 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 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
11
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
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 partner,
the Partnership sold its limited partnership interests in 11 local limited
partnerships to affiliates of Casden Properties, Inc. The sale resulted in
cash proceeds to the Partnership of $400,000, which was collected in 1999.
In March 1999, the Partnership made cash distributions of $272,000 to the
limited partners and $2,750 to the general partners, primarily using
proceeds from the sale of the partnership interests.
12
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED VII
(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 Real
Estate Associates Limited VI (another affiliated partnership in which NAPICO is
the managing general partner) 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 (another affiliated partnership in which NAPICO is
the managing general partner) 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 Corporate General Partner is involved in various lawsuits.
None of these are related to REAL VII.
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 VII
(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 VII
(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> 50,424
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 50,424
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 279,888
<CURRENT-LIABILITIES> 61,098
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (46,335,002)
<TOTAL-LIABILITY-AND-EQUITY> 279,888
<SALES> 0
<TOTAL-REVENUES> 1,010
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 178,652
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 409,308
<INCOME-PRETAX> (586,950)
<INCOME-TAX> 0
<INCOME-CONTINUING> (586,950)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (586,950)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
