UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended September 30, 1997
-----------------------------------------------------
OR
[ ] 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 0-14267
MCNEIL REAL ESTATE FUND XXIV, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 74-2339537
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (972) 448-5800
----------------------------
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
<PAGE>
MCNEIL REAL ESTATE FUND XXIV, L.P.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---------------- --------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land..................................................... $ 1,624,347 $ 2,409,114
Buildings and improvements............................... 16,132,820 19,449,373
-------------- -------------
17,757,167 21,858,487
Less: Accumulated depreciation and amortization......... (7,786,879) (8,887,172)
-------------- -------------
9,970,288 12,971,315
Assets held for sale........................................ 11,129,910 8,408,672
Cash and cash equivalents................................... 1,829,954 1,615,604
Cash segregated for security deposits....................... 83,668 82,466
Accounts receivable, net of allowance for doubtful
accounts of $18,498 and $41,151 at September 30,
1997 and December 31, 1996, respectively................. 741,006 550,752
Prepaid expenses and other assets, net...................... 134,928 142,341
-------------- -------------
$ 23,889,754 $ 23,771,150
============== =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------
Mortgage note payable....................................... $ 5,324,446 $ 5,421,763
Accounts payable and accrued expenses....................... 329,169 202,045
Payable to affiliates....................................... 23,299 74,343
Deferred gain............................................... - -
Security deposits and deferred rental revenue............... 151,103 91,894
-------------- -------------
5,828,017 5,790,045
-------------- -------------
Partners' equity (deficit):
Limited partners - 40,000 limited partnership
units authorized and outstanding at September 30,
1997 and December 31, 1996............................. 18,084,793 18,009,967
General Partner.......................................... (23,056) (28,862)
-------------- -------------
18,061,737 17,981,105
-------------- -------------
$ 23,889,754 $ 23,771,150
============== =============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
1997 1996 1997 1996
-------------- --------------- -------------- --------------
Revenue:
<S> <C> <C> <C> <C>
Rental revenue................ $ 1,074,348 $ 1,046,447 $ 3,184,085 $ 3,116,216
Interest...................... 27,505 23,383 71,805 82,518
Gain on involuntary
conversion.................. 55,105 - 149,585 24,663
Other income.................. 20,000 - 20,000 20,434
------------- ------------- ------------- -------------
Total revenue............... 1,176,958 1,069,830 3,425,475 3,243,831
------------- ------------- ------------- -------------
Expenses:
Interest...................... 95,306 104,306 293,774 323,343
Depreciation and
amortization................ 218,048 307,550 677,954 935,828
Property taxes................ 112,726 112,922 330,172 341,190
Personnel costs............... 80,216 71,413 234,754 209,376
Utilities..................... 52,299 54,581 169,451 161,281
Repairs and maintenance....... 97,658 110,042 304,524 306,718
Property management
fees - affiliates........... 60,186 55,842 176,145 171,449
Other property operating
expenses.................... 54,738 56,179 215,886 174,561
General and administrative.... 15,924 47,400 61,113 88,442
General and administrative -
affiliates.................. 129,178 131,883 381,070 423,019
------------- ------------- ------------- -------------
Total expenses.............. 916,279 1,052,118 2,844,843 3,135,207
------------- ------------- ------------- -------------
Net income....................... $ 260,679 $ 17,712 $ 580,632 $ 108,624
============= ============= ============= ============
Net income allocable to
limited partners.............. $ 258,073 $ 17,535 $ 574,826 $ 107,538
Net income allocable to
General Partner............... 2,606 177 5,806 1,086
------------- ------------- ------------- ------------
Net income....................... $ 260,679 $ 17,712 $ 580,632 $ 108,624
============= ============= ============= ============
Net income per limited
partnership unit.............. $ 6.45 $ .44 $ 14.37 $ 2.69
============= ============= ============= ============
Distributions per limited
partnership unit.............. $ 12.50 $ 9.38 $ 12.50 $ 18.75
============= ============= ============= ============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
For the Nine Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Equity
--------------- --------------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1995.............. $ (22,780) $ 19,362,083 $ 19,339,303
Net income................................ 1,086 107,538 108,624
Distributions............................. - (750,016) (750,016)
------------- ------------- -------------
Balance at September 30, 1996............. $ (21,694) $ 18,719,605 $ 18,697,911
============= ============= =============
Balance at December 31, 1996.............. $ (28,862) $ 18,009,967 $ 17,981,105
Net income................................ 5,806 574,826 580,632
Distributions............................. - (500,000) (500,000)
------------- ------------- -------------
Balance at September 30, 1997............. $ (23,056) $ 18,084,793 $ 18,061,737
============= ============= =============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------------------
1997 1996
----------------- ----------------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants........................ $ 3,047,071 $ 3,014,721
Cash paid to suppliers............................ (1,015,557) (974,332)
Cash paid to affiliates........................... (608,259) (611,332)
Interest received................................. 71,805 82,518
Interest paid..................................... (285,997) (301,906)
Property taxes paid............................... (168,816) (182,103)
Other income...................................... 20,000 20,434
--------------- --------------
Net cash provided by operating activities............ 1,060,247 1,048,000
--------------- --------------
Cash flows from investing activities:
Additions to real estate investments.............. (475,327) (209,616)
Proceeds received from insurance company.......... 226,747 75,000
--------------- --------------
Net cash used in investing activities................ (248,580) (134,616)
--------------- ---------------
Cash flows from financing activities:
Principal payments on mortgage note
payable......................................... (97,317) (85,004)
Distributions paid................................ (500,000) (750,016)
Repayment of advances from affiliates............. - (642,581)
--------------- ---------------
Net cash used in financing activities................ (597,317) (1,477,601)
--------------- --------------
Net increase (decrease) in cash and cash
equivalents....................................... 214,350 (564,217)
Cash and cash equivalents at beginning of
period............................................ 1,615,604 2,381,183
--------------- --------------
Cash and cash equivalents at end of period........... $ 1,829,954 $ 1,816,966
=============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Income to Net Cash Provided by
Operating Activities
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------------
1997 1996
---------------- ---------------
<S> <C> <C>
Net income........................................... $ 580,632 $ 108,624
--------------- --------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on involuntary conversion.................... (149,585) (24,663)
Depreciation and amortization..................... 677,954 935,828
Amortization of deferred borrowing costs.......... 7,770 23,309
Changes in assets and liabilities:
Cash segregated for security deposits........... (1,202) 9,038
Accounts receivable, net........................ (190,254) (149,972)
Prepaid expenses and other assets, net.......... (357) 1,061
Accounts payable and accrued expenses........... 127,124 122,209
Payable to affiliates........................... (51,044) (16,864)
Security deposits and deferred rental
revenue....................................... 59,209 39,430
--------------- --------------
Total adjustments............................. 479,615 939,376
--------------- --------------
Net cash provided by operating activities............ $ 1,060,247 $ 1,048,000
=============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXIV, L.P.
Notes to Financial Statements
September 30, 1997
(Unaudited)
NOTE 1.
- -------
McNeil Real Estate Fund XXIV, L.P. (the "Partnership"), formerly known as
Southmark Equity Partners, Ltd., was organized on October 19, 1984, as a limited
partnership under the provisions of the California Revised Limited Partnership
Act to acquire and operate commercial and residential properties. The general
partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a
Delaware limited partnership, an affiliate of Robert A. McNeil ("McNeil"). The
principal place of business for the Partnership and the General Partner is 13760
Noel Road, Suite 600, LB70, Dallas, Texas, 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the nine months ended September 30, 1997
are not necessarily indicative of the results to be expected for the year ending
December 31, 1997.
NOTE 2.
- -------
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1996, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate Fund XXIV, L.P., c/o The Herman Group, 2121 San Jacinto
St., 26th Floor, Dallas, Texas 75201.
NOTE 3.
- -------
The Partnership pays property management fees equal to 5% of the gross rental
receipts for its residential properties and 6% of gross rental receipts for its
commercial properties to McNeil Real Estate Management, Inc. ("McREMI"), an
affiliate of the General Partner, for providing property management services for
the Partnership's residential and commercial properties and leasing services for
its residential properties. McREMI may also choose to provide leasing services
for the Partnership's commercial properties, in which case McREMI will receive
property management fees from such commercial properties equal to 3% of the
property's gross rental receipts plus leasing commissions based on the
prevailing market rate for such services where the property is located.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
<PAGE>
The Partnership is paying an asset management fee which is payable to the
General Partner. Through 1999, the asset management fee is calculated as 1% of
the Partnership's tangible asset value. Tangible asset value is determined by
using the greater of (i) an amount calculated by applying a capitalization rate
of 9% to the annualized net operating income of each property or (ii) a value of
$10,000 per apartment unit for residential properties and $50 per gross square
foot for commercial properties to arrive at the property tangible asset value.
The property tangible asset value is then added to the book value of all other
assets excluding intangible items. The fee percentage decreases subsequent to
1999.
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner or its affiliates are as follows:
Nine Months Ended
September 30,
---------------------------
1997 1996
----------- ----------
Property management fees................... $ 176,145 $ 171,449
Charged to general and administrative -
affiliates:
Partnership administration.............. 147,876 179,873
Asset management fee.................... 233,194 243,146
---------- ---------
$ 557,215 $ 594,468
========== =========
Payable to affiliates at September 30, 1997 and December 31, 1996 consisted
primarily of unpaid property management fees, Partnership general and
administrative expenses and asset management fees and are due and payable from
current operations.
NOTE 4.
- -------
In December 1995, wind and hail damage occurred at Pine Hills Apartments and
$75,000 was received from the insurance carrier in February 1996. The
Partnership recorded a $24,663 gain on involuntary conversion in the first
quarter of 1996, which represents the amount of insurance reimbursements
received in excess of the basis of the property damaged.
NOTE 5.
- -------
In February 1997, a fire occurred at Riverbay Plaza Shopping Center. One
tenant's space was completely destroyed and several tenant spaces incurred water
and smoke damage. In addition, there was damage to the roof and ventilation
system. Repairs of damages totaling approximately $233,000 were completed and
reimbursements totaling $226,747 were received from the insurance carrier in
1997. The Partnership recognized a gain on involuntary conversion of $149,585 in
1997, which represents the insurance claims in excess of the basis of the
property damaged by the fire.
<PAGE>
NOTE 6.
- -------
In 1996, the Partnership adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
This statement requires the cessation of depreciation on assets held for sale.
Since Island Plaza, Southpointe Plaza and Springwood Plaza were placed on the
market for sale, no depreciation was taken effective April 1, 1996, October 1,
1996 and August 1, 1997, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
There has been no significant change in the operations of the Partnership's
properties since December 31, 1996. The Partnership reported net income for the
first nine months of 1997 of $580,632 as compared to $108,624 for the first nine
months of 1996. Revenues were $3,425,475 in 1997, as compared to $3,243,831 for
the same period in 1996. Expenses decreased to $2,844,843 in 1997, from
$3,135,207 in 1996.
Net cash provided by operating activities was $1,060,247 for the first nine
months of 1997. The Partnership expended $475,327 for capital improvements and
$97,317 for principal payments on its mortgage note payable. The Partnership
received $226,747 in insurance reimbursements for a fire that occurred at
Riverbay Plaza. After distributions to the limited partners of $500,000, cash
and cash equivalents increased by $214,350 for the first nine months of 1997,
leaving a balance of $1,829,954 at September 30, 1997.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Total revenue increased by $107,128 and $181,644 for the quarter and nine months
ended September 30, 1997, respectively, as compared to the same periods in 1996.
The increase was primarily due to a greater gain on involuntary conversion being
recognized in 1997 than in 1996. In addition, there was an increase in rental
revenue in 1997. These increases were partially offset by a decrease in interest
income, as discussed below.
Rental revenue increased by $27,901 and $67,869 for the three and nine months
ended September 30, 1997, respectively, in relation to the respective periods in
1996. Rental revenue for the first nine months of 1997 increased by
approximately $46,000 and $41,000 at Springwood Plaza and Island Plaza shopping
centers, respectively. An increase in rental rates as well as an increase in
average occupancy caused the increase in rental revenue at Springwood Plaza. The
increase at Island Plaza was mainly due to an increase in occupancy from 79% at
the beginning of 1996 to 86% at September 30, 1997. Rental revenue increased at
all of the remaining properties except for Southpointe Plaza Shopping Center
where rental revenue decreased by approximately $69,000 due to a decrease in
rental rates charged to tenants who were previously paying above market rent.
<PAGE>
Interest income for the three and nine months ended September 30, 1997 increased
by $4,122 and decreased by $10,713, respectively, as compared to the same
periods in 1996. The overall decrease was due to a lower amount of cash
available for short-term investment in the first half of 1997. Cash and cash
equivalents decreased from $2.4 million at the beginning of 1996 to $1.9 million
at September 30, 1996. Cash further decreased to $1.6 million at the beginning
of 1997 and was $1.8 million at September 30, 1997. The decrease in available
cash was mainly due to distributions paid to the limited partners in 1997 and
1996 and the repayment of advances from affiliates in 1996.
As discussed in Item 1, Note 5, the Partnership recognized a $149,585 gain on
involuntary conversion in 1997 relating to a fire that occurred at Riverbay
Plaza Shopping Center. A gain on involuntary conversion of $24,663 was
recognized in 1996 relating to wind and hail damage at Pine Hills Apartments
(see Item 1, Note 4).
Expenses:
Total expenses decreased by $135,839 and $290,364 for the three and nine months
ended September 30, 1997, respectively, as compared to the same periods in 1996.
The decrease was primarily the result of a decrease in depreciation and
amortization expense, as discussed below.
Depreciation and amortization expense for the three and nine months ended
September 30, 1997 decreased by $89,502 and $257,874, respectively, in relation
to the same periods in 1996. The decrease was due to Island Plaza, Southpointe
Plaza and Springwood Plaza being classified as assets held for sale by the
Partnership effective April 1, 1996, October 1, 1996 and August 1, 1997,
respectively. In accordance with the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
the Partnership ceased recording depreciation on these assets at the time they
were placed on the market for sale.
Personnel costs increased by $8,803 and $25,378 for the three and nine months
ended September 30, 1997, respectively, as compared to the same periods in the
prior year. The cost of workers' compensation insurance was lower in 1996 as a
result of an audit performed in the first quarter of 1996.
Other property operating expenses decreased by $1,441 and increased by $41,325
for the three and nine months ended September 30, 1997, respectively, in
relation to the comparable periods in the prior year. The overall increase was
mainly due to expenses incurred in connection with marketing three of the
Partnership's properties for sale, as previously discussed.
General and administrative expenses decreased by $31,476 for the three months
and by $27,329 for the nine months ended September 30, 1997 as compared to the
same periods in 1996. The decrease was mainly due to a decrease in cost incurred
relating to evaluation and dissemination of information regarding an unsolicited
tender offer. This decrease was partially offset by approximately $14,000 of
costs incurred for investor services which were paid to an unrelated third party
in 1997. In 1996, such costs were paid to an affiliate of the General Partner
and were included in general and administrative - affiliates on the Statements
of Operations.
<PAGE>
General and administrative - affiliates decreased by $2,705 and $41,949 for the
three and nine months ended September 30, 1997, respectively, as compared to the
same periods in 1996. The decrease was mainly due to a decrease in overhead
expenses allocated to the Partnership by McREMI, which was partially due to
investor services being performed by an unrelated third party in 1997, as
discussed above.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership's primary source of cash flows is from operating activities
which generated $1,060,247 of cash in the first nine months of 1997, comparable
to the $1,048,000 generated for the same period in 1996.
The Partnership expended $475,327 and $209,616 for additions to its real estate
investments in the first nine months of 1997 and 1996, respectively. A greater
amount was expended in 1997 to repair fire damage at Riverbay Plaza Shopping
Center.
In 1997, the Partnership received $226,747 from the insurance carrier for a fire
at Riverbay Plaza. The Partnership received $75,000 from the insurance carrier
in 1996 for wind and hail damage at Pine Hills Apartments.
The Partnership made principal payments on the Southpointe Plaza mortgage note
payable of $97,317 and $85,004 in the first nine months of 1997 and 1996,
respectively. As the adjustable interest rate on the loan declined in 1997, a
larger portion of the monthly payment was used to reduce the principal balance
on the loan.
The Partnership distributed $500,000 and $750,016 to the limited partners in the
first nine months of 1997 and 1996, respectively.
In the second quarter of 1996, the Partnership repaid $642,581 of advances from
an affiliate. No such advances were repaid in 1997.
Short-term liquidity:
At September 30, 1997, the Partnership held cash and cash equivalents of
$1,829,954. This balance provides a reasonable level of working capital for the
Partnership's immediate needs in operating its properties.
For the remainder of 1997, Partnership properties are expected to provide
positive cash flow from operations after payment of debt service and capital
improvements. The Partnership has budgeted approximately $2 million for
necessary capital improvements for all properties in 1997, approximately $1.6
million of which will be used to expand an anchor tenant's space at Riverbay
Plaza Shopping Center. The Partnership has arranged financing from a
non-affiliate for the Riverbay expansion. The remainder of capital improvements
are expected to be funded from available cash reserves or from operations of the
properties. The present cash balance is believed to provide an adequate reserve
for property operations.
Only one property, Southpointe Plaza Shopping Center, is encumbered with
mortgage debt, which matured on September 1, 1997. The Partnership has received
an offer from a non-affiliate to sell the property. If the property is not sold,
the Partnership will attempt to extend the maturity date or refinance the
mortgage.
<PAGE>
Long-term liquidity:
While the present outlook for the Partnership's liquidity is favorable, market
conditions may change and property operations can deteriorate. In that event,
the Partnership would require other sources of working capital. No such other
sources have been identified and the Partnership has no established lines of
credit. Other possible actions to resolve working capital deficiencies include
refinancing or renegotiating terms of existing loans, deferring major capital
expenditures on Partnership properties except where improvements are expected to
enhance the competitiveness or marketability of the properties, or arranging
working capital support from affiliates. No affiliate support has been required
in the past, and there is no assurance that support would be provided in the
future, since neither the General Partner nor any affiliates have any obligation
in this regard.
The Partnership has determined to begin orderly liquidation of all its assets.
Although there can be no assurance as to the timing of the liquidation due to
real estate market conditions, the general difficulty of disposing of real
estate, and other general economic factors, it is anticipated that such
liquidation would result in the dissolution of the Partnership followed by a
liquidating distribution to the limited partners by December 1998. In this
regard, the Partnership has placed Island Plaza, Southpointe Plaza and
Springwood Plaza on the market for sale effective April 1, 1996, October 1, 1996
and August 1, 1997, respectively. The Partnership has received an offer from a
non-affiliate to purchase Southpointe Plaza for $6.7 million.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil,
Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd.,
McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate
Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII, L.P., et al. - Superior Court of
the State of California for the County of Los Angeles, Case No. BC133799 (Class
and Derivative Action Complaint).
The action involves purported class and derivative actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their fiduciary duties and certain obligations under the respective Amended
Partnership Agreement. Plaintiffs allege that Defendants have rendered such
Units highly illiquid and artificially depressed the prices that are available
for Units on the resale market. Plaintiffs also allege that Defendants engaged
in a course of conduct to prevent the acquisition of Units by an affiliate of
Carl Icahn by disseminating purportedly false, misleading and inadequate
information. Plaintiffs further allege that Defendants acted to advance their
own personal interests at the expense of the Partnerships' public unit holders
by failing to sell Partnership properties and failing to make distributions to
unitholders.
<PAGE>
On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs are suing for breach of fiduciary duty, breach of contract and an
accounting, alleging, among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive, that these fees should
be reduced retroactively and that the respective Amended Partnership Agreements
governing the Partnerships are invalid.
Defendants filed a demurrer to the consolidated and amended complaint and a
motion to strike on February 14, 1997, seeking to dismiss the consolidated and
amended complaint in all respects. A hearing on Defendant's demurrer and motion
to strike was held on May 5, 1997. The Court granted Defendants' demurrer,
dismissing the consolidated and amended complaint with leave to amend. On
October 31, 1997, the Plaintiffs filed a second consolidated and amended
complaint. Defendants intend to file a demurrer to the second consolidated and
amended complaint on or before December 1, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits.
Exhibit
Number Description
------- -----------
4. Amended and Restated Limited Partnership
Agreement dated March 30, 1992.
(Incorporated by reference to the Current
Report of the registrant on Form 8-K dated
March 30, 1992, as filed on April 10, 1992).
4.1 Amendment No. 1 to the Amended and Restated
Limited Partnership Agreement of McNeil Real
Estate Fund XXIV, L.P. dated June 1995
(incorporated by reference to the Quarterly
Report of the registrant on Form 10-Q for
the period ended June 30,1995, as filed on
August 14, 1995).
11. Statement regarding computation of Net
Income per Limited Partnership Unit: Net
income. per limited partnership unit is
computed by dividing net income allocated to
the limited partners by the number of
limited partnership units outstanding. Per
unit information has been computed based on
40,000 limited partnership units outstanding
in 1997 and 1996.
27. Financial Data Schedule for the quarter
ended September 30, 1997.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended September 30, 1997.
<PAGE>
McNEIL REAL ESTATE FUND XXIV, L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
McNEIL REAL ESTATE FUND XXIV, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
November 13, 1997 By: /s/ Ron K. Taylor
- ----------------- ------------------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
November 13, 1997 By: /s/ Carol A. Fahs
- ----------------- ------------------------------------------------
Date Carol A. Fahs
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
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0
0
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</TABLE>
