FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-14099
CONSOLIDATED CAPITAL PROPERTIES VI
(Exact name of small business issuer as specified in its charter)
California 94-2940204
(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 preceding 12 months (or for such
shorter period that the Partnership was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 656
Receivables and deposits 139
Other assets 139
Investment property:
Land $ 916
Buildings and related personal property 9,725
10,641
Less accumulated depreciation (4,689) 5,952
$ 6,886
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 14
Tenant security deposit liabilities 83
Accrued property taxes 101
Other liabilities 115
Mortgage note payable 5,507
Partners' (Deficit) Capital
General partner $ (1)
Special limited partners (73)
Limited partners (181,300 units issued and
outstanding) 1,140 1,066
$ 6,886
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
b)
CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 423 $ 414 $ 1,281 $ 1,260
Other income 46 42 125 117
Total revenues 469 456 1,406 1,377
Expenses:
Operating 200 225 588 548
General and administrative 67 42 152 126
Depreciation 104 68 325 255
Interest 109 109 371 327
Property taxes 34 29 109 83
Total expenses 514 473 1,545 1,339
Net (loss) income $ (45) $ (17) $ (139) $ 38
Net (loss) income allocated to
general partner (0.2%) $ -- $ -- $ -- $ --
Net (loss) income allocated to
limited partners (99.8%) (45) (17) (139) 38
$ (45) $ (17) $ (139) $ 38
Net (loss) income per limited
partnership unit $ (0.25) $ (0.09) $ (0.77) $ 0.21
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
<S> <C> <C> <C> <C> <C>
Original capital contributions 181,808 $ 1 $ -- $45,452 $45,453
Partners' (deficit) capital
at December 31, 1999 181,300 $ (1) $ (79) $ 1,285 $ 1,205
Amortization of timing
difference -- -- 6 (6) --
Net loss for the nine months
ended September 30, 2000 -- -- -- (139) (139)
Partners' (deficit) capital
at September 30, 2000 181,300 $ (1) $ (73) $ 1,140 $ 1,066
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net (loss) income $ (139) $ 38
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation 325 255
Amortization of loan costs 5 19
Change in accounts:
Receivables and deposits 86 101
Other assets 3 (20)
Accounts payable (23) 95
Tenant security deposit liabilities 4 10
Accrued property taxes (19) (27)
Other liabilities (104) (7)
Net cash provided by operating activities 138 464
Cash flows from investing activities:
Property improvements and replacements (234) (279)
Net withdrawals from (deposits to) restricted escrows 135 (17)
Net cash used in investing activities (99) (296)
Cash flows from financing activities:
Payments on mortgage notes payable (83) (53)
Loan costs paid (35) --
Distributions paid to partners (2,297) --
Net cash used in financing activities (2,415) (53)
Net (decrease) increase in cash and cash equivalents (2,376) 115
Cash and cash equivalents at beginning of period 3,032 1,862
Cash and cash equivalents at end of period $ 656 $ 1,977
Supplemental disclosure of cash flow information:
Cash paid for interest $ 366 $ 308
Distributions to partners of approximately $2,297,000 was accrued at December
31, 1999 and paid in January 2000.
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
e)
CONSOLIDATED CAPITAL PROPERTIES VI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties VI (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. ("CEI" or 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 nine month periods ended September 30, 2000, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 2000. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1999.
Principles of Consolidation
The Partnership's financial statements include the accounts of Colony of
Springdale Associates, Ltd. ("Colony Associates"), which holds fee title to the
Colony of Springdale Apartments. The results of its operations are included in
the Partnership's consolidated financial statements. All inter-entity
transactions between the Partnership and Colony Associates have been eliminated.
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 - Related Party Transactions
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for payments to affiliates for services and
the reimbursement of certain expenses incurred by affiliates on behalf of the
Partnership. The following expenses were paid or accrued to an affiliate of the
General Partner during the nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $ 69 $ 68
Reimbursement for services of affiliates (included in
investment property and operating and general and
administrative expenses) 85 44
During the nine months ended September 30, 2000 and 1999, affiliates of the
General Partner were entitled to receive 5% of gross receipts from the
Partnership's property as compensation for providing property management
services. The Partnership paid to such affiliates approximately $69,000 and
$68,000 for each of the nine months ended September 30, 2000 and 1999,
respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $85,000 and $44,000 for the
nine months ended September 30, 2000 and 1999, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 79,035 limited partnership
units in the Partnership representing 43.593% 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. In this regard, on August 2, 2000, an affiliate of AIMCO commenced a
tender offer to purchase any and all of the remaining Partnership interest for a
purchase price of $11.67 per limited partnership unit. As a result, the
affiliate of AIMCO acquired 4,783 limited partnership units. Under the
Partnership Agreement, unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters, which would include without
limitation, voting on certain amendments to the Partnership Agreement and voting
to remove the General Partner. As a result of its ownership of 43.593% 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 D - Commitment
The Partnership is required to maintain working capital reserves for
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. Reserves, consisting of cash and cash equivalents,
tenant security deposits and investments totaling approximately $782,000 are
less than the reserve requirement of approximately $2,070,000 at September 30,
2000. On September 16, 2000, the Partnership sought the vote of limited partners
to amend the Partnership Agreement to eliminate the requirement for the
Partnership to maintain reserves equal to at least 5% of the limited partners'
capital contributions less distributions to limited partners and instead permit
the General Partner to determine reasonable reserve requirements of the
Partnership. The vote was sought pursuant to a Consent Solicitation that expired
on October 16, 2000 at which time the amendment was approved by the requisite
percent of limited partnership interests. Upon expiration of the consent period,
a total number of 110,551 units had voted of which 102,214 units had voted in
favor of the amendment, 6,832 voted against the amendment and 1,505 units
abstained.
Note E - Change in Status of Non-Corporate General Partner
During the year ended December 31, 1991, the Partnership Agreement was amended
to convert the general partner interests held by the non-corporate general
partner, Consolidated Capital Group II ("CCG"), to that of special limited
partners ("Special Limited Partners"). The Special Limited Partners do not have
a vote and do not have any of the other rights of a Limited Partner except the
right to inspect the Partnership's books and records; however, the Special
Limited Partners retained the economic interest in the Partnership which they
previously owned as general partner.
CEI became the sole general partner of the Partnership effective December 31,
1991. In connection with CCG's conversion, a special allocation of gross income
was made to the Special Limited Partners in order to eliminate its tax basis
negative capital account.
After the conversion, the various Special Limited Partners transferred portions
of their interests to CEI so that CEI now holds a .2% interest in all allocable
items of income, loss and distribution. The differences between the Special
Limited Partners' capital accounts for financial statement and tax reporting
purposes are being amortized to the Limited Partners' capital accounts as the
components of the timing differences which created the balance reverse.
Note F - Distributions
A distribution of approximately $2,297,000 (approximately $2,250,000 to the
limited partners or $12.41 per limited partnership unit) was accrued during
December 1999 and paid in January 2000. This distribution consisted of cash from
operations of approximately $1,175,000 (approximately $1,128,000 to the limited
partners or $6.22 per limited partnership unit) and refinancing proceeds of
approximately $1,122,000 to the limited partners ($6.19 per limited partnership
unit). No distributions were made during the nine months ended September 30,
1999.
Note G - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consists of one apartment complex in
Ohio. The Partnership rents apartment units to tenants for terms that are
typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
Segment information for the three and nine month periods ended September 30,
2000 and 1999 (in thousands) is shown in the tables below. The "Other" column
includes Partnership administration related items and income and expense not
allocated to the reportable segment.
Three Months Ended September 30, 2000 Residential Other Totals
Rental income $ 423 $ -- $ 423
Other income 42 4 46
Interest expense 109 -- 109
Depreciation 104 -- 104
General and administrative expense -- 67 67
Segment profit (loss) 18 (63) (45)
Nine Months Ended September 30, 2000 Residential Other Totals
Rental income $ 1,281 $ -- $ 1,281
Other income 102 23 125
Interest expense 371 -- 371
Depreciation 325 -- 325
General and administrative expense -- 152 152
Segment loss (10) (129) (139)
Total assets 6,474 412 6,886
Capital expenditures for
investment property 234 -- 234
Three Months Ended September 30, 1999 Residential Other Totals
Rental income $ 414 $ -- $ 414
Other income 30 12 42
Interest expense 109 -- 109
Depreciation 68 -- 68
General and administrative expense -- 42 42
Segment profit (loss) 13 (30) (17)
Nine Months Ended September 30, 1999 Residential Other Totals
Rental income $ 1,260 $ -- $ 1,260
Other income 70 47 117
Interest expense 327 -- 327
Depreciation 255 -- 255
General and administrative expense -- 126 126
Segment profit (loss) 117 (79) 38
Total assets 6,568 1,812 8,380
Capital expenditures for
investment property 279 -- 279
Note H - 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. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the 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 is considering applications for lead counsel and has
currently scheduled a hearing on the matter for November 20, 2000. 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.
<PAGE>
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 Partnership from time to time.
The discussion of the Partnership'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 Partnership's business and
results of operation. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
The Partnership's investment property consists of one apartment complex, Colony
of Springdale Apartments, located in Springdale, Ohio. The average occupancy for
the nine month periods ended September 30, 2000 and 1999, was 92% and 94%,
respectively.
Results of Operations
The Partnership realized a net loss of approximately $139,000 compared to net
income of approximately $38,000 for the nine months ended September 30, 2000 and
1999, respectively. The Partnership realized a net loss of approximately $45,000
and $17,000 for the three months ended September 30, 2000 and 1999,
respectively. The increase in net loss for the three and nine months ended
September 30, 2000 is due to an increase in total expenses partially offset by
an increase in total revenues. The increase in total expenses for the nine month
period is due to increases in operating, general and administrative,
depreciation, property tax, and interest expenses. The increase in total
expenses for the three month period is due to increases in general and
administrative and depreciation expenses partially offset by a decrease in
operating expense.
The increase in operating expense for the nine month period is due primarily to
increased maintenance, insurance, and property expenses. Maintenance expense
increased as a result of decreased insurance proceeds received for casualty loss
repairs during the nine months ended September 30, 2000 compared to insurance
proceeds received for casualty loss repairs during the nine months ended
September 30, 1999. Insurance expense increased as a result of the timing of the
insurance premium invoice which affected the timing of the accrual during the
nine months ended September 30, 1999. Property expense increased as a result of
increased salary, employee benefits, and utility expenses at Colony of
Springdale Apartments. The decrease in operating expense for the three month
period is due primarily to net insurance expense incurred for casualty repairs
during the three months ended September 30, 1999. No such costs were incurred
during the three months ended September 30, 2000. The increase in general and
administrative expense is primarily due to an increase in the costs of services
included in the management reimbursements to the General Partner as allowed
under the Partnership Agreement. Costs associated with the quarterly and annual
communications with investors and regulatory agencies and the annual audit
required by the Partnership Agreement are also included at both September 30,
2000 and 1999. The increase in depreciation expense is due to the increase in
fixed asset additions during 1999 and 2000. Interest expense increased due to
increased interest paid during the nine months ended September 30, 2000 related
to the refinancing of the Partnership's property during the fourth quarter of
1999 (see discussion below). The increase in total revenues resulted primarily
from an increase in rental income as the result of an increase in average rental
rates despite a slight decrease in occupancy.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment property to assess the
feasibility of increasing rents, maintaining or increasing occupancy levels and
protecting the Partnership from increases in expenses. As part of this plan, the
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 September 30, 2000, the Partnership had cash and cash equivalents of
approximately $656,000 as compared to approximately $1,977,000 at September 30,
1999. For the nine months ended September 30, 2000, cash and cash equivalents
decreased by approximately $2,376,000 from the Partnership's year ended December
31, 1999. The decrease in cash and cash equivalents is due to approximately
$2,415,000 of cash used in financing activities and approximately $99,000 of
cash used in investing activities slightly offset by approximately $138,000 of
cash provided by operating activities. Cash used in financing activities
consisted primarily of distributions to the partners and, to a lesser extent,
loan costs paid, and principal payments made on the mortgage encumbering the
Partnership's property. Cash used in investing activities consisted of property
improvements and replacements partially offset by net withdrawals from
restricted escrows maintained by the mortgage lender. The Partnership invests
its working capital reserves in a money market account.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical asset
and other operating needs of the Registrant and to comply with Federal, state,
and local legal and regulatory requirements. Capital improvements planned for
the Partnership's property are discussed below.
During the nine month period ended September 30, 2000, the Partnership completed
approximately $234,000 of budgeted and unbudgeted capital improvements at the
property. These improvements consisted primarily of appliance and floor covering
replacements, structural improvements, and roof replacements. These improvements
were funded from operating cash flow and replacement reserves. Approximately
$242,000 has been budgeted for capital improvements at Colony of Springdale for
the year 2000 consisting primarily of floor coverings, sprinkler systems,
plumbing enhancements, and heating units. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property. The
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 Registrant's distributable cash flow, if any,
may be adversely affected at least in the short term.
The Partnership is required to maintain working capital reserves for
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. Reserves, consisting of cash and cash equivalents
and tenant security deposits and investments totaling approximately $782,000 are
less than the reserve requirement of approximately $2,070,000 at September 30,
2000. On September 16, 2000, the Partnership sought the vote of limited partners
to amend the Partnership Agreement to eliminate the requirement for the
Partnership to maintain reserves equal to at least 5% of the limited partners'
capital contributions less distributions to limited partners and instead permit
the General Partner to determine reasonable reserve requirements of the
Partnership. The vote was sought pursuant to a Consent Solicitation that expired
on October 16, 2000 at which time the amendment was approved by the requisite
percent of limited partnership interests. Upon expiration of the consent period,
a total number of 110,551 units had voted of which 102,214 units had voted in
favor of the amendment, 6,832 voted against the amendment and 1,505 units
abstained.
On October 25, 1999, the Partnership refinanced the mortgage encumbering Colony
of Springdale Apartments. Interest on the old mortgage was 9.5%. The refinancing
replaced indebtedness of $4,247,000 with a new mortgage in the amount of
$5,600,000. Interest on the new mortgage is 7.79%. Payments of approximately
$46,000 are due on the first day of each month until the loan matures December
1, 2019. Loan costs of approximately $86,000 were capitalized as of December 31,
1999. Additional loan costs of approximately $35,000 were capitalized during the
nine months ended September 30, 2000. The loan costs are being amortized over
the life of the mortgage and the amortization expense is included in interest
expense.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $5,507,000 is amortized over 240 months and
matures December 1, 2019. The General Partner will attempt to refinance such
indebtedness and/or sell the property prior to such maturity date. If the
property cannot be refinanced or sold for a sufficient amount, the Partnership
will risk losing such property through foreclosure.
A distribution of approximately $2,297,000 (approximately $2,250,000 to the
limited partners or $12.41 per limited partnership unit) was accrued during
December 1999 and paid in January 2000. This distribution consisted of cash from
operations of approximately $1,175,000 (approximately $1,128,000 to the limited
partners or $6.22 per limited partnership unit) and refinancing proceeds of
approximately $1,122,000 to the limited partners ($6.19 per limited partnership
unit). No distributions were made during the nine months ended September 30,
1999. Future cash distributions will depend on the levels of net cash generated
from operations, the availability of cash reserves and the timing of the debt
maturity, refinancing and/or property sale. The Registrant's distribution policy
is reviewed on an annual basis. There can be no assurance, however, that the
Registrant will generate sufficient funds from operations after required capital
improvements to permit further distributions to its partners during the
remainder of 2000 or subsequent periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the 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 is considering applications for lead counsel and has
currently scheduled a hearing on the matter for November 20, 2000. The General
Partner does not anticipate that costs associated with this case will be
material to the Partnership's overall operations.
Item 4. Submission of Matters to a Vote of Security Holders
On September 16, 2000, the Partnership sought the vote of limited partners to
amend the Partnership Agreement to eliminate the requirement for the Partnership
to maintain reserves equal to at least 5% of the limited partners' capital
contributions less distributions to limited partners and instead permit the
General Partner to determine reasonable reserve requirements of the Partnership.
The vote was sought pursuant to a Consent Solicitation that expired on October
16, 2000 at which time the amendment was approved by the requisite percent of
limited partnership interests. Upon expiration of the consent period, a total
number of 110,551 units had voted of which 102,214 units had voted in favor of
the amendment, 6,832 voted against the amendment and 1,505 units abstained.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL PROPERTIES VI
By: CONCAP EQUITIES, INC.
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:
