FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-14248
ANGELES PARTNERS XIV
(Exact name of small business issuer as specified in its charter)
California 95-3959771
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No____
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
ANGELES PARTNERS XIV
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 1,207
Receivables and deposits 371
Restricted escrows 217
Other assets 337
Investment properties:
Land $ 2,243
Buildings and related personal property 26,040
28,283
Less accumulated depreciation (19,160) 9,123
$ 11,255
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 62
Tenant security deposit liabilities 124
Accrued property taxes 343
Accrued interest 7,792
Due to affiliates 1,522
Other liabilities 88
Notes payable, including $4,576 in default 29,849
Partners' Deficit
General partners $ (668)
Limited partners (43,589 units issued and
outstanding) (27,857) (28,525)
$ 11,255
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
b)
ANGELES PARTNERS XIV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,236 $ 1,176 $ 2,446 $ 2,319
Other income 45 38 94 80
Total revenues 1,281 1,214 2,540 2,399
Expenses:
Operating 463 420 842 839
General and administrative 64 60 116 122
Depreciation 342 316 677 632
Interest 858 810 1,705 1,601
Property taxes 85 94 190 196
Total expenses 1,812 1,700 3,530 3,390
Net loss $ (531) $ (486) $ (990) $ (991)
Net loss allocated to general
partners (1%) (5) (5) (10) (10)
Net loss allocated to limited
partners (99%) (526) (481) (980) (981)
$ (531) $ (486) $ (990) $ (991)
Net loss per limited partnership unit $(12.07) $(11.04) $(22.48) $(22.51)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
ANGELES PARTNERS XIV
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 44,390 $ 1 $ 44,390 $ 44,391
Partners' deficit at
December 31, 1999 43,589 $ (658) $(26,877) $(27,535)
Net loss for the six months
ended June 30, 2000 -- (10) (980) (990)
Partners' deficit at
June 30, 2000 43,589 $ (668) $(27,857) $(28,525)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
ANGELES PARTNERS XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (990) $ (991)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 677 632
Amortization of discounts and loan costs 15 16
Change in accounts:
Receivables and deposits (118) (148)
Other assets 6 (29)
Accounts payable (66) (22)
Tenant security deposit liabilities 17 7
Accrued property taxes 78 116
Accrued interest 957 844
Due to affiliates 67 56
Other liabilities (193) 16
Net cash provided by operating activities 450 497
Cash flows from investing activities:
Property improvements and replacements (287) (142)
Net (deposits to) receipts from restricted escrows (16) 34
Net cash used in investing activities (303) (108)
Cash flows used in financing activities:
Principal payments on notes payable (150) (140)
Net (decrease) increase in cash and cash equivalents (3) 249
Cash and cash equivalents at beginning of period 1,210 883
Cash and cash equivalents at end of period $ 1,207 $ 1,132
Supplemental disclosure of cash flow information:
Cash paid for interest $ 704 $ 715
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
e)
ANGELES PARTNERS XIV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Going Concern
The accompanying consolidated financial statements have been prepared assuming
Angeles Partners XIV (the "Partnership" or "Registrant") will continue as a
going concern. The Partnership continues to incur recurring operating losses and
suffers from inadequate liquidity.
The Partnership has unsecured working capital loans to Angeles Acceptance Pool,
L.P. ("AAP") in the amount of approximately $4,576,000 plus related accrued
interest of approximately $3,437,000 that is in default due to non-payment upon
maturity in November 1997. This indebtedness is recourse to the Partnership. The
Partnership does not have the means with which to satisfy this obligation.
Angeles Realty Corporation II (the "Managing General Partner") does not plan to
enter into negotiations with AAP on this indebtedness at this time. The Managing
General Partner believes that it is doubtful that AAP will initiate collection
proceedings on this indebtedness since the estimated value of the Partnership's
investment properties and other assets are significantly less than the existing
first mortgages and other secured Partnership indebtedness. If AAP initiates
proceedings, then the Managing General Partner will enter into negotiations to
restructure this indebtedness.
The Partnership realized a net loss of approximately $990,000 for the six months
ended June 30, 2000. The Managing General Partner expects the Partnership to
continue to incur such losses from operations. The Partnership generated cash
from operations of approximately $450,000 during the six months ended June 30,
2000; however, this was primarily the result of accruing interest of
approximately $957,000 on its indebtedness and, to a lesser extent, $67,000 for
services provided by affiliates.
No other sources of additional financing have been identified by the
Partnership, nor does the Managing General Partner have any other plans to
remedy the liquidity problems the Partnership is currently experiencing. The
Managing General Partner anticipates that Fox Crest Apartments and Waterford
Square Apartments will generate sufficient cash flows for the next twelve months
to meet all property operating expenses, property debt service requirements and
to fund capital expenditures. However, these cash flows will be insufficient to
provide debt service for the unsecured Partnership indebtedness.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or amounts and classifications of
liabilities that may result from these uncertainties.
<PAGE>
Note B - Basis of Presentation
The accompanying unaudited consolidated financial statements of 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 the Managing General
Partner, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six month periods ended June 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 consolidated financial statements include all of the accounts of the
Partnership and its 99% limited partnership interest in Waterford Square
Apartments, Ltd. The general partner of the consolidated partnership is the
Managing General Partner. The Managing General Partner may be removed by the
Registrant; therefore, this consolidated partnership is controlled and
consolidated by the Registrant. All significant interpartnership balances have
been eliminated.
Note C - 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
("IPT") 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 Managing General Partner. The Managing 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 D - Transactions with Affiliated Parties
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 (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership.
The following payments were paid or accrued to the Managing General Partner and
affiliates during each of the six months ended June 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expense) $ 139 $ 133
Reimbursement for services of affiliates (included in
investment properties, operating, and general and
administrative expenses) 67 56
Due to affiliate 1,522 1,398
<PAGE>
During the six months ended June 30, 2000 and 1999 affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from both of the
Registrant's residential properties as compensation for providing property
management services. The Registrant paid to such affiliates approximately
$139,000 and $133,000 for the six months ended June 30, 2000 and 1999,
respectively.
Affiliates of the Managing General Partner were to receive reimbursement of
accountable administrative expenses amounting to approximately $67,000 and
$56,000 for the six months ended June 30, 2000 and 1999, respectively. The
Partnership owed the affiliates approximately $1,522,000 and $1,398,000 at June
30, 2000 and 1999, respectively.
In November 1992, AAP, a Delaware limited partnership which now controls the
working capital loans previously provided by Angeles Capital Investment, Inc.
("ACII"), was organized. Angeles Corporation ("Angeles") is the 99% limited
partner of AAP and Angeles Acceptance Directives, Inc. ("AAD"), which was
wholly-owned by IPT, and was, until April 14, 1995, the 1% general partner of
AAP. On April 14, 1995, as part of a settlement of claims between affiliates of
the General Partner and Angeles, AAD resigned as general partner of AAP and
simultaneously received a 0.5% limited partner interest in AAP. An affiliate of
Angeles now serves as the general partner of AAP.
The AAP working capital loans funded the Partnership's operating deficits in
prior years. Total indebtedness was approximately $4,576,000, plus accrued
interest of approximately $3,437,000, at June 30, 2000, with monthly interest
accruing at prime plus two percent. Upon maturity on November 25, 1997, the
Partnership did not have the means with which to satisfy this maturing debt
obligation. Total interest expense for this loan was approximately $244,000 and
$215,000 for the six months ended June 30, 2000 and 1999, respectively.
Angeles Mortgage Investment Trust ("AMIT") provided financing (the "AMIT Loans")
to the Partnership. Pursuant to a series of transactions, affiliates of the
Managing General Partner acquired ownership interests in AMIT. On September 17,
1998, AMIT was merged with and into IPT, the entity which controlled the
Managing General Partner. Effective February 26, 1999, IPT was merged into
AIMCO. Thus, AIMCO is the current holder of the AMIT loans. The principal
balances on the AMIT Loans totals approximately $7,603,000 at June 30, 2000,
accrues interest at rates of 12% to 12.5% per annum and are recourse to the
Partnership. Two of the three notes totaling $2,838,000 originally matured in
March 1998. The Managing General Partner negotiated with AMIT to extend this
indebtedness and in the second quarter of 1998, executed an extension through
March 2002. The remaining note with a principal balance of approximately
$4,765,000 matures in March 2003. Total interest expense on the AMIT Loans was
approximately $712,000 and $629,000 for the six months ended June 30, 2000 and
1999, respectively. Accrued interest was approximately $4,236,000 at June 30,
2000.
AIMCO and its affiliates currently own 8,658 limited partnership units in the
Partnership representing 19.86% of the outstanding units. A number of these
units were acquired pursuant to tender offers made by AIMCO or its affiliates.
It is possible that AIMCO or its affiliates will make one or more additional
offers to acquire additional limited partnership interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of their
affiliation with the Managing General Partner.
Note E - 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 two apartment complexes
one located in Waukegan, Illinois and the other in Huntsville, Alabama. 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 described in the Partnership's Annual Report on Form 10-KSB for the year
ended December 31, 1999.
Factors management used to identify the enterprise's reportable segment:
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
are managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the three and six month periods ended June 30, 2000 and
1999 is shown in the tables below (in thousands). The "Other" column includes
Partnership administration related items and income and expense not allocated to
the reportable segment.
Three months ended June 30, 2000 Residential Other Totals
Rental income $ 1,236 $ -- $ 1,236
Other income 41 4 45
Interest expense 372 486 858
Depreciation 342 -- 342
General and administrative expense -- 64 64
Segment profit (loss) 14 (545) (531)
Six months ended June 30, 2000 Residential Other Totals
Rental income $ 2,446 $ -- $ 2,446
Other income 84 10 94
Interest expense 745 960 1,705
Depreciation 677 -- 677
General and administrative expense -- 116 116
Segment profit (loss) 76 (1,066) (990)
Total assets 10,877 378 11,255
Capital expenditures for
investment properties 287 -- 287
Three months ended June 30, 1999 Residential Other Totals
Rental income $ 1,176 $ -- $ 1,176
Other income 36 2 38
Interest expense 376 434 810
Depreciation 316 -- 316
General and administrative expense -- 60 60
Segment profit (loss) 6 (492) (486)
Six months ended June 30, 1999 Residential Other Totals
Rental income $ 2,319 $ -- $ 2,319
Other income 74 6 80
Interest expense 753 848 1,601
Depreciation 632 -- 632
General and administrative expense -- 122 122
Segment loss (27) (964) (991)
Total assets 11,236 346 11,582
Capital expenditures for
investment properties 142 -- 142
Note F - 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 Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited partnership units; the management of partnerships by the Insignia
affiliates; and the Insignia Merger. The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the 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 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 Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. The Managing
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 OPERATIONS
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the six
months ended June 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Waterford Square Apartments 97% 95%
Huntsville, Alabama
Fox Crest Apartments 98% 96%
Waukegan, Illinois
Results from Operations
The Partnership's net loss for the six months ended June 30, 2000 was
approximately $990,000 compared to a net loss of approximately $991,000 for the
corresponding period in 1999. The Partnership recorded a net loss of
approximately $531,000 for the three months ended June 30, 2000 compared to a
net loss of approximately $486,000 for the corresponding period in 1999. The net
loss remained comparable for the six month period ended June 30, 2000 as
compared to the six month period ended June 30, 1999 due to an increase in total
expenses which was offset by an increase in total revenues. The increase in net
loss for the three month period ended June 30, 2000 as compared to the three
month period ended June 30, 1999 was primarily due to an increase in total
expenses which was partially offset by an increase in total revenues. The
increase in total revenues for the three and six month periods ended June 30,
2000 was due to an increase in both rental income and other income. Rental
income increased due to increased average occupancy, as noted above, and
increased average rental rates at both Waterford Square Apartments and Fox Crest
Apartments. Other income increased due to an increase in utility charges at Fox
Crest Apartments and increased interest income due to higher average cash
balances in interest bearing accounts.
The increase in total expenses for the six month period ended June 30, 2000 was
the result of increases in interest and depreciation expenses slightly offset by
a decrease in general and administrative and property tax expenses. The increase
in total expenses for the three month period ended June 30, 2000 was the result
of increases in interest, depreciation, operating, and general and
administrative expenses. Interest expense increased due to interest accruing on
the defaulted AAP notes. The increase in depreciation expense is due to
increased capital improvements and replacements made at the properties over the
past year. The increase in operating expenses for the three month period ended
June 30, 2000 was due to increases in administrative and maintenance salaries at
both properties. Property tax expense decreased due to the timing of the receipt
of the property tax bills.
The decrease in general and administrative expense for the six month period
ended June 30, 2000 is primarily due to the settlement of a legal case in 1999
which was disclosed during the first quarter of 1999. The increase in general
and administrative expense for the three month period ended June 30, 2000 is
primarily due to an increase in management reimbursements to the Managing
General Partner allowed under the Partnership Agreement. Included in general and
administrative expenses for the six months ended June 30, 2000 and 1999 are
management reimbursements to the Managing General Partner allowed under the
Partnership Agreement. In addition, 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.
As part of the ongoing business plan of the Partnership, the Managing General
Partner continues to monitor the rental market environment of each of its
investment properties to assess the feasibility of increasing rents, maintaining
or increasing occupancy levels and protecting the Partnership from increases in
expenses. As part of this plan, the 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.
Liquidity and Capital Resources
At June 30, 2000, the Registrant had cash and cash equivalents of approximately
$1,207,000 as compared to approximately $1,132,000 at June 30, 1999. Cash and
cash equivalents decreased approximately $3,000 for the period ended June 30,
2000 from the Registrant's year ended December 31, 1999 and is primarily due to
approximately $303,000 of cash used in investing activities and approximately
$150,000 of cash used in financing activities, partially offset by approximately
$450,000 of cash provided by operating activities. Cash used in investing
activities consisted primarily of property improvements and replacements and, to
a lesser extent, net deposits to restricted escrows. Cash used in financing
activities consisted of payments of principal on the mortgages encumbering the
Registrant's properties. The Registrant invests its working capital reserves in
a money market account.
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. The Partnership continues to incur
recurring operating losses and suffers from inadequate liquidity. Recourse
indebtedness due to AAP of approximately $4,576,000 plus accrued interest of
approximately $3,437,000 is in default at June 30, 2000, as a result of
nonpayment of interest and principal upon its maturity in November 1997. This
indebtedness is recourse to the Partnership. The Partnership does not have the
means with which to satisfy this obligation. The Managing General Partner does
not plan to enter into negotiations with AAP on this indebtedness at this time.
The Managing General Partner believes that the possibility that AAP will
initiate collection proceedings on this indebtedness is remote, as the estimated
value of the Partnership's investment properties and other assets are
significantly less than the existing first mortgages and other secured
Partnership indebtedness. If AAP initiates proceedings, then the Managing
General Partner will enter into negotiations to restructure this indebtedness.
No other sources of additional financing have been identified by the
Partnership, nor does the Managing General Partner have any other plans to
remedy the liquidity problems the Partnership is currently experiencing. The
Managing General Partner anticipates that the Fox Crest Apartments and Waterford
Square Apartments will generate sufficient cash flows during 2000 to meet all
property operating expenses, property debt service requirements and to fund
capital expenditures. However, these cash flows will be insufficient to provide
debt service for the unsecured Partnership indebtedness. If the Managing General
Partner is unsuccessful in its efforts to restructure these loans, then it may
be forced to liquidate the Partnership.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or amounts and classifications of liabilities that may
result from these uncertainties.
With respect to the Partnership's two apartment complexes, the sufficiency of
existing liquid assets to meet future liquidity and capital expenditure
requirements is directly related to the level of capital expenditures required
at the properties to adequately maintain the physical assets and other operating
needs of the Partnership and to comply with Federal, state, and local legal and
regulatory requirements. Capital improvements planned for each of the
Registrant's properties are detailed below.
Waterford Square Apartments
The Partnership has budgeted, but is not limited to, approximately $158,000 of
capital improvements at Waterford Square Apartments for 2000 consisting
primarily of flooring replacements, appliances and HVAC condensing units. As of
June 30, 2000, the property has spent approximately $42,000 on flooring
replacements, HVAC condensing units, and appliances. These improvements were
funded from operating cash flow and the Partnership's reserves.
Fox Crest Apartments
The Partnership has budgeted, but is not limited to, approximately $131,000 of
capital improvements at Fox Crest Apartments for 2000 consisting primarily of
flooring replacements, appliances, plumbing upgrades and heating unit
replacement. As of June 30, 2000, the property has spent approximately $245,000
of budgeted and non-budgeted capital improvements consisting primarily of carpet
replacements, heating unit upgrades, and electrical improvements. These
improvements were funded from operating cash flow.
The additional capital improvements planned for 2000 at the Partnership's
properties will be made only to the extent of cash available from operations and
Partnership reserves.
The existing first mortgage indebtedness, working capital loans and amounts due
to AMIT are thought to be in excess of the value of the properties. (Pursuant to
a series of transactions, affiliates of the Managing General Partner acquired
ownership interests in AMIT as follows: On September 17, 1998, AMIT was merged
with and into IPT and effective February 26, 1999, IPT was merged into AIMCO.
Accordingly, AIMCO is the current holder of the AMIT loans). Two AMIT Notes in
the aggregate amount of approximately $2,838,000 plus related accrued interest
of approximately $918,000 mature in March 2002; these notes are recourse to the
Partnership only. These loans require monthly payments of excess cash flow, as
defined in the terms of the promissory notes. The Partnership's other remaining
note to AMIT for approximately $4,765,000, plus accrued interest at 12.5% per
annum compounded monthly, is due March 2003 and does not require any payments
until maturity. Accrued interest as of June 30, 2000 is approximately
$3,318,000. The first mortgage loan encumbering Waterford Square Apartments,
which is guaranteed by HUD, is scheduled to mature in November 2027, at which
time a balloon payment of $86,000 is due. Likewise, the first mortgage loan
encumbering Fox Crest Apartments is scheduled to mature in May 2003, at which
time a balloon payment of $5,445,000 is due. The Registrant is current in its
payments on both of these mortgages. The Managing General Partner will attempt
to refinance such indebtedness and/or sell the properties prior to such maturity
dates. If the properties cannot be refinanced or sold for a sufficient amount,
the Registrant will risk losing such properties through foreclosure.
There were no distributions made for either of the six month periods ended June
30, 2000 or 1999. Future cash distributions will depend on the levels of net
cash generated from operations, the availability of cash reserves and the timing
of debt maturities, refinancings and/or property sales. The Registrant's
distribution policy is reviewed on an annual basis. However, based on the
current default under the working capital loans and the pending maturities of
the first mortgage loans, it is unlikely that a distribution will be made by the
Registrant in the foreseeable future.
<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 Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited partnership units; the management of partnerships by the Insignia
affiliates; and the Insignia Merger. The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the 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 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 Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. The Managing
General Partner does not anticipate that costs associated with this case will be
material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
No reports were filed during the quarter ended June 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.
ANGELES PARTNERS XIV
By: Angeles Realty Corporation II
Managing 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:
