FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities And Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_________to_________
Commission file number 0-13418
CENTURY PROPERTIES GROWTH FUND XXII
(Exact name of small business issuer as specified in its charter)
California 94-2939418
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X . No .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1998
Assets
Unrestricted cash and cash equivalents $ 7,596
Restricted cash 500
Receivables and deposits 1,756
Restricted escrows 791
Other assets 1,715
Investment properties:
Land $ 14,396
Buildings and related personal property 117,514
131,910
Less accumulated depreciation (55,088) 76,822
$ 89,180
Liabilities and Partners' (Deficit) Capital
Liabilities:
Accounts payable $ 213
Tenant security deposits payable 345
Accrued property taxes 1,275
Other liabilities 776
Mortgage notes payable 73,299
Partners' (Deficit) Capital:
General partner's $ (7,214)
Limited partners' (82,848 units issued and
outstanding) 20,486 13,272
$ 89,180
See Accompanying Notes to Consolidated Financial Statements
b)
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues:
Rental income $ 5,159 $ 4,880 $ 15,325 $ 14,465
Other income 327 326 922 923
Total revenues 5,486 5,206 16,247 15,388
Expenses:
Operating 2,119 2,499 5,878 6,386
General and administrative 96 123 282 288
Depreciation 1,025 1,000 3,029 2,961
Interest 1,481 1,431 4,451 4,417
Property taxes 448 409 1,330 1,161
Total expenses 5,169 5,462 14,970 15,213
Income (loss) before
extraordinary item 317 (256) 1,277 175
Extraordinary loss on early
extinguishment of debt -- -- (28) --
Net income (loss) $ 317 $ (256) $ 1,249 $ 175
Net income (loss) allocated
to general partner $ 37 $ (30) $ 147 $ 21
Net income (loss) allocated
to limited partners 280 (226) 1,102 154
$ 317 $ (256) $ 1,249 $ 175
Net income (loss) per limited
partnership unit:
Income (loss) before
extraordinary item $ 3.38 $ (2.73) $ 13.60 $ 1.86
Extraordinary loss on early
extinguishment of debt -- -- (.30) --
Net income (loss) per limited
partnership unit $ 3.38 $ (2.73) $ 13.30 $ 1.86
See Accompanying Notes to Consolidated Financial Statements
c)
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 82,848 $ -- $ 82,848 $ 82,848
Partners' (deficit) capital at
December 31, 1997 82,848 $ (7,361) $ 19,384 $ 12,023
Net income for the nine months
ended September 30, 1998 -- 147 1,102 1,249
Partners' (deficit) capital
at September 30, 1998 82,848 $ (7,214) $ 20,486 $ 13,272
See Accompanying Notes to Consolidated Financial Statements
d)
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,249 $ 175
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 3,029 2,961
Amortization of loan costs 157 157
Loss on disposal of property 42 78
Extraordinary loss on early extinguishment of debt 28 --
Changes in accounts:
Receivables and deposits (337) 16
Other assets (28) (81)
Accounts payable 19 268
Tenant security deposits payable (17) (6)
Accrued property taxes 347 20
Other liabilities 77 8
Net cash provided by operating activities 4,566 3,596
Cash flows from investing activities:
Net withdrawals from (deposits to) restricted escrows 159 (390)
Property improvements and replacements (1,003) (1,097)
Net cash used in investing activities (844) (1,487)
Cash flows from financing activities:
Mortgage principal payments (464) (416)
Loan costs paid (167) (17)
Repayment of mortgage note payable (2,840) --
Proceeds from mortgage note payable 4,000 --
Net cash provided by (used in)
financing activities 529 (433)
Net increase in unrestricted cash and cash equivalents 4,251 1,676
Unrestricted cash and cash equivalents at beginning of period 3,345 1,111
Unrestricted cash and cash equivalents at end of period $ 7,596 $ 2,787
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,296 $ 4,266
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
e)
CENTURY PROPERTIES GROWTH FUND XXII
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Century
Properties Growth Fund XXII (the "Partnership") have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Fox Capital Management Corporation ("FCMC" or the "Managing
General Partner"), a California corporation, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 1998, are not necessarily indicative of the results that may be
expected for the fiscal year ended December 31, 1998. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the annual report of the Partnership on Form 10-KSB for the year ended December
31, 1997.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
Fox Partners IV, a California general partnership, is the general partner of the
Partnership. The general partners of Fox Partners IV are FCMC, Fox Realty
Investors ("FRI"), a California general partnership, and Fox Associates 84, a
California general partnership. NPI Equity Investments II, Inc. ("NPI Equity"),
a Florida corporation, is the managing general partner of FRI. Insignia
Properties Trust ("IPT") is the sole shareholder of both FCMC and NPI Equity
(see "Note E").
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following transactions with the Managing General Partner and its affiliates
were incurred during the nine month periods ended September 30, 1998 and 1997:
1998 1997
(in thousands)
Property management fees (included in operating
expenses) $807 $780
Reimbursement for services of affiliates, including
approximately $23,000 and $52,000 of construction
oversight reimbursements for the nine months ended
September 30, 1998 and 1997, respectively (included in
investment properties and operating and general
and administrative expenses) 141 170
As part of the refinancing of Promontory Point Apartments (see "Note C"), the
Partnership paid an affiliate of the Managing General Partner a broker's fee of
$20,000 during the nine months ended September 30, 1998, for arranging such
financing.
Subsequent to September 30, 1998, the Partnership paid the general partner a
partnership management fee of approximately $151,000 (see "Note D").
For the period from January 1, 1997 to August 31, 1997, the Partnership insured
its investment properties under a master policy through an agency affiliated
with the Managing General Partner but with an insurer unaffiliated with the
Managing General Partner. An affiliate of the Managing General Partner acquired,
in the acquisition of a business, certain financial obligations from an
insurance agency which was later acquired by the agent who placed the master
policy. The agent assumed the financial obligations to the affiliate of the
Managing General Partner which received payments on these obligations from the
agent. The amount of the Partnership's insurance premiums that accrued to the
benefit of the affiliate of the Managing General Partner by virtue of the
agent's obligations was not significant.
On August 28, 1997, an affiliate of the Managing General Partner (the
"Purchaser") commenced a tender offer for limited partnership interests in the
Partnership. The Purchaser offered to purchase up to 25,000 of the outstanding
units of limited partnership interest in the Partnership, at $275.00 per Unit,
net to the seller in cash. As a result of the tender offer, the Purchaser
acquired 5,504 of the outstanding limited partnership units of the Partnership.
NOTE C - REFINANCING AND EXTRAORDINARY LOSS
On April 3, 1998, the Partnership refinanced the mortgage encumbering Promontory
Point. The refinancing replaced indebtedness of $2,840,000 with a new mortgage
in the amount of $4,000,000. The new mortgage carries a stated interest rate of
7.04%, which replaced a rate equal to LIBOR plus 3.75% (approximately 9.46% at
the time of the refinancing). The new mortgage matures May 1, 2008. For
financial statement purposes, the Partnership recognized an extraordinary loss
on the early extinguishment of debt of approximately $28,000 during the second
quarter of 1998. This loss is attributable to the write-off of unamortized loan
costs associated with the previous mortgage.
NOTE D - DISTRIBUTION; SUBSEQUENT EVENT
In October 1998, the Partnership distributed approximately $2,302,000 ($27.79
per limited partnership unit) to the limited partners and approximately $47,000
to the general partner. The distribution consisted of proceeds from the
refinancing of Promontory Point and from operations.
NOTE E - TRANSFER OF CONTROL - SUBSEQUENT EVENT
On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
into Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control
of the Managing General Partner. In addition, AIMCO also acquired approximately
51% of the outstanding common shares of beneficial interest of IPT, the entity
which controls the Managing General Partner. Also, effective October 1, 1998,
IPT and AIMCO entered into an Agreement and plan of Merger pursuant to which IPT
is to be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger").
The IPT Merger requires the approval of the holders of a majority of the
outstanding IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned
by it in favor of the IPT Merger and has granted an irrevocable limited proxy
to unaffiliated representatives of IPT to vote the IPT Shares acquired by AIMCO
and its subsidiaries in favor of the IPT Merger. As a result of AIMCO's
ownership and its agreement, the vote of no other holder of IPT is required to
approve the merger. The Managing General Partner does not believe that this
transaction will have a material effect on the affairs and operations of the
Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of nine apartment complexes.
The following table sets forth the average occupancy of the properties for the
nine month periods ended September 30, 1998 and 1997:
Average
Occupancy
Property 1998 1997
Cooper's Pointe Apartments
North Charleston, South Carolina 97% 97%
Copper Mill Apartments (1)
Richmond, Virginia 88% 95%
Four Winds Apartments
Overland Park, Kansas 97% 99%
Autumn Run Apartments
Naperville, Illinois 95% 93%
Plantation Creek Apartments (2)
Atlanta, Georgia 95% 92%
Wood Creek Apartments
Mesa, Arizona 95% 93%
Promontory Point Apartments (3)
Austin, Texas 94% 90%
Hampton Greens Apartments
Dallas, Texas 92% 91%
Stoney Creek Apartments
Dallas, Texas 93% 94%
1) Decrease due to the decrease in corporate unit rentals. Market is
currently overbuilt and is slow to absorb additional units.
2) Increase due to improved economy of the market and an increase in
concessions.
3) Increase due to increased marketing efforts.
The Partnership's net income was approximately $317,000 and $1,249,000 for the
three and nine month periods ended September 30, 1998. The Partnership recorded
a net loss of approximately $256,000 for the three month period and net income
of approximately $175,000 for the nine month period ended September 30, 1997.
Included in the net income for the nine month period ended September 30, 1998,
is the extraordinary loss on early extinguishment of debt recognized on the
refinancing of Promontory Point (as discussed below). The increase in net
income resulted primarily from an increase in rental income and a decrease in
operating expenses partially offset by an increase in property taxes.
The increase in rental income is due to increases in rental rates and occupancy
at several of the investment properties. Operating expenses decreased for the
nine month period ended September 30, 1998, compared to the same period in 1997,
as a result of decreases in maintenance expenses at several investment
properties. The decreases at Four Winds, Autumn Run, and Stoney Creek
Apartments were due to the completion of exterior painting projects in 1997. At
Hampton Greens, the decrease resulted from the completion of exterior
enhancement projects during 1997. General and administrative expenses decreased
as a result of decreases in administrative expenses and audit fees partially
offset by an increase in legal expenses. Depreciation expenses increased as a
result of the addition of depreciable assets. The increase in property taxes is
primarily due to increases in tax rates for Four Winds, Hampton Greens and
Stoney Creek Apartments. At Plantation Creek and Autumn Run, the increase was
due to the receipt of tax refunds in 1997 relating to prior years, which
decreased the 1997 expense.
Included in operating expenses for the nine months ended September 30, 1998, is
approximately $173,000 of major repairs and maintenance comprised primarily of
landscaping and exterior building improvements. Included in operating expenses
for the nine months ended September 30, 1997, is approximately $651,000 of major
repairs and maintenance comprised primarily of exterior painting, exterior
building repairs, and landscaping.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in 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.
On April 3, 1998, the Partnership refinanced the mortgage encumbering Promontory
Point. The refinancing replaced indebtedness of $2,840,000 with a new mortgage
in the amount of $4,000,000. The new mortgage carries a stated interest rate of
7.04%, which replaced a rate equal to LIBOR plus 3.75% (approximately 9.46% at
the time of the refinancing). The new mortgage matures May 1, 2008. For
financial statement purposes, the Partnership recognized an extraordinary loss
on the early extinguishment of debt of approximately $28,000 during the second
quarter of 1998. This loss is attributable to the write-off of unamortized loan
costs associated with the previous mortgage.
At September 30, 1998, the Partnership held unrestricted cash and cash
equivalents of approximately $7,596,000, versus approximately $2,787,000 at
September 30, 1997. Unrestricted cash and cash equivalents increased
approximately $4,251,000 during the nine month period ended September 30, 1998,
as compared to an increase of approximately $1,676,000 during the corresponding
period in 1997. Net cash provided by operating activities increased as a result
of an increase in net income, as discussed above, and an increase in cash
provided by accrued property taxes due to the timing of payments. In addition, a
decrease in other assets due to a reduction in prepaid insurance and an increase
in accounts payable due to the timing of payments contributed to the increase in
cash flow provided by operating activities. Net cash used in investing
activities decreased as a result of an increase in net withdraws from restricted
escrows. Net cash provided by financing activities increased as a result of the
net proceeds from the refinance of the mortgage note encumbering Promontory
Point Apartments.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line of up to $150,000 per property owned by the
Partnership. The Partnership has no outstanding amounts due under this line of
credit. Based on present plans, the Managing General Partner does not
anticipate the need to borrow in the near future. Other than cash and cash
equivalents, the line of credit is the Partnership's only unused source of
liquidity.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state and local legal and regulatory requirements. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
Managing General Partner is currently assessing the need for capital
improvements at each of the Partnership's properties. To the extent that
additional capital improvements are required, the Partnership's distributable
cash flow, if any, may be adversely affected at least in the short term. The
mortgage indebtedness of approximately $73,299,000 is amortized over varying
periods with balloon payments ranging from December 1999 to May 2008. The
Managing General Partner will attempt to refinance such remaining indebtedness
or sell the properties prior to such maturity dates. If the properties cannot
be refinanced or sold for a sufficient amount, the Partnership will risk losing
such properties through foreclosure. No distributions were made in 1997. In
October 1998, the Partnership distributed approximately $2,302,000 ($27.79 per
limited partnership unit) to the limited partners and approximately $47,000 to
the general partner. In addition, the Partnership paid the general partner a
partnership management fee of approximately $151,000. The distribution
consisted of proceeds from the refinancing of Promontory Point and from
operations. Future cash distributions will depend on the levels of net cash
generated from operations, refinancings, property sales, an the availability of
cash reserves. The Partnership's distribution policy will be reviewed on a
quarterly basis. There can be no assurance, however, that the Partnership will
generate sufficient funds from operations to permit distributions to its
partners in 1998 or subsequent periods.
Transfer of Control - Subsequent Event
On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
into Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control
of the Managing General Partner. In addition, AIMCO also acquired
approximately 51% of the outstanding common shares of beneficial interest of
Insignia Properties Trust ("IPT"), the entity which controls the Managing
General Partner. Also, effective October 1, 1998, IPT and AIMCO entered into an
Agreement and plan of Merger pursuant to which IPT is to be merged with and into
AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The IPT Merger requires the
approval of the holders of a majority of the outstanding IPT Shares.
AIMCO has agreed to vote all of the IPT Shares owned by it in favor of the IPT
Merger and has granted an irrevocable limited proxy to unaffiliated
representatives of IPT to vote the IPT Shares acquired by AIMCO and its
subsidiaries in favor of the IPT Merger. As a result of AIMCO's ownership and
its agreement, the vote of no other holder of IPT is required to approve the
merger. The Managing General Partner does not believe that this transaction
will have a material effect on the affairs and operations of the Partnership.
YEAR 2000
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
The Managing Agent has determined that it will be required to modify or replace
significant portions of its software and certain hardware so that those systems
will properly utilize dates beyond December 31, 1999. The Managing Agent
presently believes that with modifications or replacements of existing software
and certain hardware, the Year 2000 Issue can be mitigated. However, if such
modifications and replacements are not made, or are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the Managing
Agent and the Partnership.
Status of Progress in Becoming Year 2000 Compliant
The Managing Agent's plan to resolve the Year 2000 Issue involves the following
four phases: assessment, remediation, testing and implementation. To date, the
Managing Agent has fully completed its assessment of all information systems
that could be significantly affected by the Year 2000, and has begun the
remediation, testing and implementation phase on both hardware and software
systems. Assessments are continuing in regards to embedded systems in operating
equipment. The Managing Agent anticipates having all phases complete by June 1,
1999.
In addition to the areas the Partnership is relying on the Managing Agent to
verify compliance with, the Partnership has certain operating equipment,
primarily at the property sites, which needed to be evaluated for Year 2000
compliance. The focus of the Managing General Partner was to the security
systems, elevators, heating-ventilation-air-conditioning systems, telephone
systems and switches, and sprinkler systems. The Managing General Partner is
currently engaged in the identification of all non-compliant operational
systems, and is in the process of estimating the costs associated with any
potential modifications or replacements needed to such systems in order for them
to be Year 2000 compliant. It is not expected that such costs would have a
material adverse affect upon the operations of the Partnership.
Risk Associated with the Year 2000
The Managing General Partner believes that the Managing Agent has an effective
program in place to resolve the Year 2000 issue in a timely manner and has
appropriate contingency plans in place for critical applications that could
affect the Partnership's operations. To date, the Managing General Partner is
not aware of any external agent with a Year 2000 issue that would materially
impact the Partnership's results of operations, liquidity or capital resources.
However, the Managing General Partner has no means of ensuring that external
agents will be Year 2000 compliant. The Managing General Partner does not
believe that the inability of external agents to complete their Year 2000
resolution process in a timely manner will have a material impact on the
financial position or results of operations of the Partnership. However, the
effect of non-compliance by external agents is not readily determinable.
Other
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date
of this quarterly report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia and entities which were, at
the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain
general partner entities, past tender offers by Insignia Affiliates as well as a
recently announced agreement between Insignia and AIMCO. The complaint seeks
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner has
filed demurrers to the amended complaint which are scheduled to be heard on
January 8, 1999. The Managing General Partner believes the action to be without
merit and intends to vigorously defend it.
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties, LLC, et.
al. v. Insignia Financial Group, Inc., et. al. in the Superior Court of the
State of California, County of Los Angeles. The action involves 44 real estate
limited partnerships (including the Partnership) in which the plaintiffs
allegedly own interests and which Insignia Affiliates allegedly manage or
control (the "Subject Partnerships"). The complaint names as defendants
Insignia, several Insignia Affiliates alleged to be managing partners of the
Subject Partnerships, the Partnership and the Managing General Partner.
Plaintiffs allege that they have requested from, but have been denied by each of
the Subject Partnerships, lists of their respective limited partners for the
purpose of making tender offers to purchase up to 4.9% of the limited partner
units of each of the Subject Partnerships. The complaint also alleges that
certain of the defendants made tender offers to purchase limited partner units
in many of the Subject Partnerships, with the alleged result that plaintiffs
have been deprived of the benefits they would have realized from ownership of
the additional units. The plaintiffs assert eleven causes of action, including
breach of contract, unfair business practices, and violations of the partnership
statutes of the states in which the Subject Partnerships are organized.
Plaintiffs seek compensatory, punitive and treble damages. The Managing General
Partner filed an answer to the complaint on September 15, 1998. The Managing
General Partner believes the claims to be without merit and intends to defend
the action vigorously.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature. The Managing General Partner believes that all such
pending or outstanding litigation will be resolved without a material adverse
effect upon the business, financial condition, or operations of the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K: None filed during the quarter ended September 30,
1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CENTURY PROPERTIES GROWTH FUND XXII
By: FOX PARTNERS IV,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION
Its Managing General Partner
By: /s/Patrick Foye
Patrick Foye
Executive Vice President
By: /s/Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting
(Duly Authorized Officer)
Date: November 12, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Century Properties Growth Fund XXII 1998 Third Quarter 10-QSB and is
qualified in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000740156
<NAME> CENTURY PROPERTIES GROWTH FUND XXII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,596
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 131,910
<DEPRECIATION> 55,088
<TOTAL-ASSETS> 89,180
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 73,299
0
0
<COMMON> 0
<OTHER-SE> 13,272
<TOTAL-LIABILITY-AND-EQUITY> 89,180
<SALES> 0
<TOTAL-REVENUES> 16,247
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,519
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,451
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (28)
<CHANGES> 0
<NET-INCOME> 1,249
<EPS-PRIMARY> 13.30<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
