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 June 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 0-13083
CONSOLIDATED CAPITAL PROPERTIES V
(Exact name of small business issuer as specified in its charter)
California 94-2918560
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the 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)
CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2000
Assets
Cash and cash equivalents $ 2,963
Receivables and deposits 205
Restricted escrows 107
Other assets 154
Investment properties:
Land $ 1,443
Buildings and related personal property 13,927
15,370
Less accumulated depreciation (11,301) 4,069
$ 7,498
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 139
Tenant security deposit liabilities 88
Accrued property taxes 350
Other liabilities 151
Mortgage notes payable 8,451
Partners' Deficit
General partner $ (17)
Special limited partners (48)
Limited partners (179,537.20 units issued and
outstanding) (1,616) (1,681)
$ 7,498
See Accompanying Notes to Consolidated Financial Statements
b) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues: (Restated) (Restated)
<S> <C> <C> <C> <C>
Rental income $ 829 $ 764 $1,597 $1,544
Other income 78 48 137 82
Total revenues 907 812 1,734 1,626
Expenses:
Operating 347 311 682 627
General and administrative 59 52 104 105
Depreciation 209 199 417 397
Interest 175 176 351 353
Property taxes 79 101 174 180
Total expenses 869 839 1,728 1,662
Income (loss) before discontinued
operations and extraordinary gain
on early extinguishments of debt 38 (27) 6 (36)
(Loss) income from discontinued
operations (36) 41 (73) 42
Gain on sale of discontinued
operations 1,658 -- 1,658 --
Income before extraordinary gain on
early extinguishment of debt 1,660 14 1,591 6
Gain on early extinguishment of debt 162 -- 162 --
Net income $1,822 $ 14 $1,753 $ 6
Net income allocated to general
partner (0.2%) 4 -- 4 --
Net income allocated to limited
partner (99.8%) 1,818 14 1,749 6
Net income $1,822 $ 14 $1,753 $ 6
Net income (loss) per limited
partnership unit:
Income (loss) before discontinued
operations and extraordinary gain
on early extinguishments of debt $ 0.20 $(0.15) $ 0.03 $(0.20)
(Loss) income from discontinued
operations (0.19) 0.22 (0.40) 0.23
Gain on sale of discontinued
operations 9.22 -- 9.22 --
Income before extraordinary gain on
early extinguishment of debt 9.23 0.07 8.85 0.03
Gain on early extinguishment of debt 0.90 -- 0.90 --
Net income per limited partnership
unit $10.13 $ 0.07 $ 9.75 $ 0.03
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c)
CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
Original capital
<S> <C> <C> <C> <C> <C>
contributions 180,037 $ 1 $ -- $45,009 $45,010
Partners' deficit at
December 31, 1999 179,537.20 $ (21) $ (48) $(3,365) $(3,434)
Net income for the six
months ended June 30, 2000 -- 4 -- 1,749 1,753
Partners' deficit
at June 30, 2000 179,537.20 $ (17) $ (48) $(1,616) $(1,681)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
d)
CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,753 $ 6
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of discontinued operations (1,658) --
Extraordinary gain on early extinguishment of debt (162) --
Depreciation 577 555
Amortization of lease commissions, loan costs, and
debt forgiveness 41 (4)
Change in accounts:
Receivables and deposits 85 60
Other assets (3) (21)
Accounts payable 47 (17)
Tenant security deposit liabilities 13 12
Accrued property taxes (111) (63)
Other liabilities (37) (9)
Net cash provided by operating activities 545 519
Cash flows from investing activities:
Property improvements and replacements (110) (300)
Proceeds from sale of investment property 2,997 --
Lease commissions paid (7) (58)
Net withdrawals from (deposits to) restricted escrows 2 (45)
Net cash provided by (used in) investing activities 2,882 (403)
Cash flows from financing activities:
Prepayment penalty (190) --
Principal payments on mortgage notes payable (70) (41)
Repayment of mortgage note payable (1,959) --
Net cash from financing activities (2,219) (41)
Net increase in cash and cash equivalents 1,208 75
Cash and cash equivalents at beginning of period 1,755 1,177
Cash and cash equivalents at end of period $ 2,963 $ 1,252
Supplemental disclosure of cash flow information:
Cash paid for interest $ 381 $ 385
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e)
CONSOLIDATED CAPITAL PROPERTIES V
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties V (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 ConCap Equities, Inc. (the "General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six month period ended June 30, 2000, are not necessarily indicative
of the results that may be expected for the 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 Partnership's consolidated financial statements include the accounts of the
Partnership and its 99% limited partnership interests in the lower tier limited
partnerships Aspen Ridge Associates, Ltd., Sutton Place CCPV, L.P. and 51 North
High Street, L.P. The general partner of these lower tier limited partnerships
is limited liability companies of which the Partnership is the sole member.
Accordingly all entities are consolidated by the Partnership. All significant
interpartnership balances have been eliminated.
Reclassifications
Certain reclassifications have been made to the 1999 information 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 General Partner. The 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 - Disposition of Property/Operating Segment
On June 1, 2000, 51 North High Street Building, located in Columbus, Ohio, was
sold to an unaffiliated third party for approximately $3,227,000. After closing
expenses and other payments of approximately $230,000, the net proceeds received
by the Partnership were approximately $2,997,000. The Partnership recorded an
extraordinary gain on early extinguishment of debt of approximately $162,000 due
to
the write off of the remaining unamortized debt forgiveness which was offset
slightly by the payment of prepayment penalties. In addition the Partnership
recorded a gain on sale of discontinued operations of approximately $1,658,000
during the three months ended June 30, 2000.
51 North High Street Building 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, the results of the commercial segment have been shown
as income from discontinued operations and gain on sale of discontinued
operations for both the three and six months ended June 30, 2000 and 1999.
Revenue for this property was approximately $188,000 and $492,000, for the three
and six months ended June 30, 2000, respectively, as compared to approximately
$298,000 and $598,000, for the three and six months ended June 30, 1999,
respectively. Loss from discontinued operations was approximately $36,000 and
$73,000 for the three and six months ended June 30, 2000, respectively, as
compared to income from discontinued operations of approximately $41,000 and
$42,000 for the three and six months ended June 30, 1999, respectively.
Note D - Transactions with Affiliated Partners
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
During the six months ended June 30, 2000 and 1999, affiliates of the General
Partner were entitled to receive 5% of gross receipts from both of the
Registrant's residential properties for providing property management services.
The Registrant paid to such affiliates approximately $87,000 and $84,000 for the
six months ended June 30, 2000 and 1999, respectively.
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. An affiliate of the General Partner received
reimbursement of accountable administrative expenses amounting to approximately
$45,000 and $48,000 for the six months ended June 30, 2000 and 1999,
respectively.
AIMCO and its affiliates currently own 83,208.50 limited partnership units in
the Partnership representing 46.35% of the outstanding units. A number of these
units were acquired pursuant to tender offers made by AIMCO or its affiliates.
It is possible that AIMCO or its affiliates will make one or more additional
offers to acquire additional limited partnership interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. As a result of its
ownership of 46.35% 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 General Partner because of their
affiliation with the General Partner.
Note E - Commitment
The Partnership is required to maintain working capital reserves for normal
repairs, replacements, working capital and contingencies of not less than 5% of
Net Invested Capital, as defined in the Partnership Agreement. In the event
expenditures are made from these reserves, operating revenue shall be allocated
to such reserves to the extent necessary to maintain the foregoing level. Cash
and cash equivalents, tenant security deposits and investments totaling
approximately $3,148,000, exceed the reserve requirement of approximately
$1,760,000 at June 30, 2000. The working capital requirement must be met prior
to any distributions to the partners. No distributions were made for the six
month periods ended June 30, 2000 or 1999.
Note F - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership had two reportable segments: residential properties and
commercial property. The Partnership's residential property segment consists of
two apartment complexes, one located in West Chicago, Illinois and the other in
Corpus Christi, Texas. The Partnership rents apartment units to tenants for
terms that are typically twelve months or less. The commercial property segment
consisted of an office building located in Columbus, Ohio, which was sold on
June 1, 2000. As a result of the sale of the commercial property during 2000,
the commercial segment is shown as discontinued operations (see "Note C -
Disposition of Property/Operating Segment" for further discussion regarding the
commercial property sale).
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segments are the same as
those 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 segments:
The Partnership's reportable segments consist of 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 six months ended June 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 segment (in thousands).
<TABLE>
<CAPTION>
Three Months Ended June 30, 2000 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 829 $ -- $ -- $ 829
Other income 69 -- 9 78
Interest expense 175 -- -- 175
Depreciation 209 -- -- 209
General and administrative
expense -- -- 59 59
Loss from discontinued
operations -- (36) -- (36)
Gain on sale of discontinued
operations -- 1,658 -- 1,658
Gain on early extinguishment
of debt -- 162 -- 162
Segment profit (loss) 88 1,784 (50) 1,822
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30, 2000 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 1,597 $ -- $ -- $ 1,597
Other income 119 -- 18 137
Interest expense 351 -- -- 351
Depreciation 417 -- -- 417
General and administrative
expense -- -- 104 104
(Loss) from discontinued
operations -- (73) -- (73)
Gain on sale of discontinued
operations -- 1,658 -- 1,658
Gain on early extinguishment
of debt -- 162 -- 162
Segment profit (loss) 92 1,747 (86) 1,753
Total assets 5,614 -- 1,884 7,498
Capital expenditures for
investment properties 104 6 -- 110
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30, 1999 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 764 $ -- $ -- $ 764
Other income 40 -- 8 48
Interest expense 176 -- -- 176
Depreciation 199 -- -- 199
General and administrative
expense -- -- 52 52
Income from discontinued
operations -- 41 -- 41
Segment profit (loss) 17 41 (44) 14
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30, 1999 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 1,544 $ -- $ -- $ 1,544
Other income 67 -- 15 82
Interest expense 353 -- -- 353
Depreciation 397 -- -- 397
General and administrative
expense -- -- 105 105
Income from discontinued
operations -- 42 -- 42
Segment profit (loss) 54 42 (90) 6
Total assets 5,550 1,816 876 8,242
Capital expenditures for
investment properties 288 12 -- 300
</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 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. 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 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 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 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 will entertain applications for lead counsel which must
be filed by August 4, 2000. The Court has scheduled a hearing on August 21, 2000
to address the issue of appointing lead counsel. The General Partner does not
anticipate that costs associated with this case will be material to the
Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
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
discussions 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 properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the six
months ended June 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Aspen Ridge Apartments 94% 95%
West Chicago, Illinois
Sutton Place Apartments 93% 93%
Corpus Christi, Texas
Results of Operations
The Registrant's net income for the three and six months ended June 30, 2000 was
approximately $1,822,000 and $1,753,000, respectively, as compared to net income
of approximately $14,000 and $6,000 for the three and six months ended June 30,
1999. The increase in net income is primarily attributable to the gain on sale
of 51 North High Street Building and the gain on early extinguishment of debt.
On June 1, 2000, 51 North High Street Building, located in Columbus, Ohio, was
sold to an unaffiliated third party for approximately $3,227,000. After closing
expenses and other payments of approximately $230,000 the net proceeds received
by the Partnership was approximately $2,997,000. The Partnership recorded an
extraordinary gain on early extinguishment of debt of approximately $162,000 due
to the write off of the remaining unamortized debt forgiveness which was offset
slightly by the payment of prepayment penalties. In addition the Partnership
recorded a gain on sale of discontinued operations of approximately $1,658,000
during the three months ended June 30, 2000.
Excluding the impact of the operations and the sale of 51 North High Street
Building, the Registrant had income from continuing operations for the three and
six months ended June 30, 2000 of approximately $38,000 and $6,000,
respectively, as compared to losses of approximately $27,000 and $36,000 for the
three and six months ended June 30, 1999. The increase in income from continuing
operations for the three and six months ended June 30, 2000 is the result of an
increase in total revenues partially offset by an increase in total expenses.
Total revenues increased for the comparable periods due to an increase in rental
income and an increase in other income. Rental income increased due to an
increase in the average annual rental rates at the Partnership's residential
properties. Other income increased due to an increase in interest income due to
higher cash balances invested in interest bearing accounts and due to increases
in auxiliary services, deposit forfeitures, and late charges.
The increase in total expenses is primarily the result of increases in
operating, and depreciation expenses. Operating expense increased as a result of
an increase in advertising expenses at Sutton Place Apartments in an effort to
increase occupancy. Operating expense also increased due to an increase in
property expenses as a result of increases in utility charges and commissions.
Depreciation expense increased as a result of property additions during the past
twelve months at the Partnership's residential properties.
General and administrative expenses remained relatively constant. Included in
general and administrative expenses for the six months ended June 30, 2000 and
1999 are management reimbursements to the General Partner allowed under the
Partnership Agreement. In addition, costs associated with the quarterly and
annual communications with investors and regulatory agencies are also included.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties 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 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
General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At June 30, 2000, the Partnership had cash and cash equivalents of approximately
$2,963,000 as compared to approximately $1,252,000 at June 30, 1999. Cash and
cash equivalents increased approximately $1,208,000 during the six months ended
June 30, 2000 from the Partnership's year ended December 31, 1999, primarily due
to approximately $2,882,000 of cash provided by investing activities and
approximately $545,000 of cash provided by operating activities, which was
partially offset by approximately $2,219,000 of cash used in financing
activities. Cash provided by investing activities consisted primarily of net
proceeds received as a result of the sale of 51 North High Street Building and
net withdrawals from escrow accounts maintained by the mortgage lender which
were slightly offset by property improvements and replacements and lease
commissions paid. Cash used in financing activities consisted of payments of
principal made on the mortgages encumbering the Partnership's properties along
with repayment of the mortgage on 51 North High Street Building and prepayment
penalties paid. The Partnership invests its working capital reserves in money
market accounts.
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. Capital improvements planned
for the year 2000 for each of the Partnership's properties are detailed below.
Aspen Ridge Apartments
The Partnership has budgeted capital improvements of approximately $102,000 for
2000, consisting of floor covering and appliance replacements and parking lot
improvements. As of June 30, 2000, approximately $73,000 has been incurred
consisting primarily of interior building, electrical, plumbing, and parking lot
improvements, and appliance and floor covering replacements. These improvements
were funded from operating cash flow.
Sutton Place Apartments
The Partnership has budgeted capital improvements of approximately $63,000 for
2000, consisting of appliance and floor covering replacements, HVAC condensing
unit, lighting and water heater replacements. As of June 30, 2000, approximately
$31,000 has been incurred consisting primarily of appliance and floor covering
replacements and lighting improvements. These improvements were funded from
Partnership reserves.
51 North High Street Building
The Partnership had budgeted capital improvements of approximately $158,000 for
2000 consisting of HVAC unit replacements. Through the date of sale of the
property approximately $6,000 had been spent on tenant improvements. The
Partnership is not obligated for any additional capital improvements for this
property.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's assets are currently thought to be sufficient for any
near-term needs (exclusive of capital improvements) of the Partnership. The
mortgage indebtedness of approximately $8,451,000 is amortized over varying
periods with required balloon payments due on October 1, 2003 and November 1,
2003. The General Partner will attempt to refinance such indebtedness and/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.
The Partnership is required to maintain working capital reserves for normal
repairs, replacements, working capital and contingencies of not less than 5% of
Net Invested Capital as defined in the Partnership Agreement. In the event
expenditures are made from these reserves, operating revenue shall be allocated
to such reserves to the extent necessary to maintain the foregoing level. Cash
and cash equivalents, tenant security deposits and investments totaling
approximately $3,148,000, exceed the reserve requirement of approximately
$1,760,000 at June 30, 2000.
There were no cash distributions to the partners during the six months ended
June 30, 2000 and 1999. Future cash distributions will depend on the levels of
net cash generated from operations, the availability of cash reserves, and the
timing of debt maturities, refinancings, and/or property sales. The
Partnership's distribution policy is reviewed on an annual basis. There can be
no assurance, however that the Partnership will generate sufficient funds from
operations after required capital improvements and working capital reserves to
permit distributions to its partners during the remainder of 2000 or subsequent
periods.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its 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. 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 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 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 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 will entertain applications for lead counsel which must
be filed by August 4, 2000. The Court has scheduled a hearing on August 21, 2000
to address the issue of appointing lead counsel. The 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:
Current Report on Form 8-K filed on June 16, 2000 in
connection with the sale of 51 North High Street building on
June 1, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Partnership caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL PROPERTIES V
By: CONCAP EQUITIES, INC.
Its 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: August 9, 2000
