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 0-14248
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)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 1,599
Receivables and deposits 405
Restricted escrows 66
Other assets 312
Investment properties:
Land $ 2,243
Buildings and related personal property 26,116
28,359
Less accumulated depreciation (19,501) 8,858
$ 11,240
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 73
Tenant security deposit liabilities 131
Accrued property taxes 339
Accrued interest 8,297
Due to affiliates 1,612
Other liabilities 95
Notes payable, including $4,576 in default 29,770
Partners' Deficit
General partners $ (673)
Limited partners (43,589 units issued and
outstanding) (28,404) (29,077)
$ 11,240
</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 Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,229 $ 1,187 $ 3,675 $ 3,506
Other income 70 42 164 122
Total revenues 1,299 1,229 3,839 3,628
Expenses:
Operating 409 404 1,251 1,243
General and administrative 116 53 232 175
Depreciation 341 330 1,018 962
Interest 877 825 2,582 2,426
Property taxes 108 81 298 277
Total expenses 1,851 1,693 5,381 5,083
Net loss $ (552) $ (464) $(1,542) $(1,455)
Net loss allocated to general
partners (1%) $ (6) $ (5) $ (15) $ (15)
Net loss allocated to limited
partners (99%) (546) (459) (1,527) (1,440)
$ (552) $ (464) $(1,542) $(1,455)
Net loss per limited partnership unit $(12.53) $(10.53) $(35.03) $(33.04)
</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 nine months
ended September 30, 2000 -- (15) (1,527) (1,542)
Partners' deficit at
September 30, 2000 43,589 $ (673) $(28,404) $(29,077)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
ANGELES PARTNERS XIV
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 $(1,542) $(1,455)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 1,018 962
Amortization of discounts and loan costs 23 25
Change in accounts:
Receivables and deposits (152) (102)
Other assets 23 (9)
Accounts payable (55) (4)
Tenant security deposit liabilities 24 15
Accrued property taxes 74 109
Accrued interest 1,462 1,290
Due to affiliates 157 84
Other liabilities (186) (13)
Net cash provided by operating activities 846 902
Cash flows from investing activities:
Property improvements and replacements (363) (261)
Net receipts from restricted escrows 135 14
Net cash used in investing activities (228) (247)
Cash flows used in financing activities:
Principal payments on notes payable (229) (212)
Net increase in cash and cash equivalents 389 443
Cash and cash equivalents at beginning of period 1,210 883
Cash and cash equivalents at end of period $ 1,599 $ 1,326
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,054 $ 1,071
</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 $3,572,000 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, and
AAP has obtained a judgment against the Partnership for this debt.
The Partnership realized a net loss of approximately $1,542,000 for the nine
months ended September 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 $846,000 during the nine months
ended September 30, 2000; however, this was primarily the result of accruing
interest of approximately $1,462,000 on its indebtedness and, to a lesser
extent, $157,000 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.
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 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 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 nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expense) $ 210 $ 200
Reimbursement for services of affiliates (included in
investment properties, operating, and general and
administrative expenses) 157 90
Due to affiliate 1,595 1,426
During the nine months ended September 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 $210,000 and $200,000 for the nine months ended September 30, 2000
and 1999, respectively.
Affiliates of the Managing General Partner were to receive reimbursement of
accountable administrative expenses amounting to approximately $157,000 and
$90,000 for the nine months ended September 30, 2000 and 1999, respectively. The
Partnership owed the affiliates approximately $1,595,000 and $1,426,000 at
September 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 $3,572,000, at September 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 $378,000 and
$332,000 for the nine months ended September 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 September 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 $1,085,000 and $959,000 for the nine months ended September 30,
2000 and 1999, respectively. Accrued interest was approximately $4,609,000 at
September 30, 2000.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 10,090 limited partnership
units in the Partnership representing 23.15% 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, which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the Managing General Partner. 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 nine month periods ended September 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 September 30, 2000 Residential Other Totals
Rental income $ 1,229 $ -- $ 1,229
Other income 66 4 70
Interest expense 368 509 877
Depreciation 341 -- 341
General and administrative expense -- 116 116
Segment profit (loss) 69 (621) (552)
Nine Months Ended September 30, 2000 Residential Other Totals
Rental income $ 3,675 $ -- $ 3,675
Other income 150 14 164
Interest expense 1,113 1,469 2,582
Depreciation 1,018 -- 1,018
General and administrative expense -- 232 232
Segment profit (loss) 145 (1,687) (1,542)
Total assets 10,642 598 11,240
Capital expenditures for
investment properties 363 -- 363
Three Months Ended September 30, 1999 Residential Other Totals
Rental income $ 1,187 $ -- $ 1,187
Other income 40 2 42
Interest expense 377 448 825
Depreciation 330 -- 330
General and administrative expense -- 53 53
Segment profit (loss) 35 (499) (464)
Nine Months Ended September 30, 1999 Residential Other Totals
Rental income $ 3,506 $ -- $ 3,506
Other income 114 8 122
Interest expense 1,130 1,296 2,426
Depreciation 962 -- 962
General and administrative expense -- 175 175
Segment profit (loss) 8 (1,463) (1,455)
Total assets 11,186 324 11,510
Capital expenditures for
investment properties 261 -- 261
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 is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. 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 nine
months ended September 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Waterford Square Apartments 97% 95%
Huntsville, Alabama
Fox Crest Apartments 98% 95%
Waukegan, Illinois
The Managing General Partner attributes the increase in occupancy at Fox Crest
Apartments to increased marketing and advertising efforts and resident
referrals.
Results from Operations
The Partnership's net loss for the nine months ended September 30, 2000 was
approximately $1,542,000 compared to a net loss of approximately $1,455,000 for
the corresponding period in 1999. The Partnership recorded a net loss of
approximately $552,000 for the three months ended September 30, 2000 compared to
a net loss of approximately $464,000 for the corresponding period in 1999. The
increase in net loss for the three and nine month periods ended September 30,
2000 as compared to the three and nine month periods ended September 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
nine month periods ended September 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 three and nine month periods ended
September 30, 2000 was primarily the result of increases in interest,
depreciation, property tax, 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. Property tax expense
increased due to an increase in the assessed value at Fox Crest Apartments.
General and administrative expenses increased primarily due to an increase in
the cost of services included in the management reimbursements to the Managing
General Partner as followed 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 September 30, 2000, the Registrant had cash and cash equivalents of
approximately $1,599,000 as compared to approximately $1,326,000 at September
30, 1999. Cash and cash equivalents increased approximately $389,000 for the
period ended September 30, 2000 from the Registrant's year ended December 31,
1999 and is primarily due to approximately $846,000 of cash provided by
operating activities, partially offset by approximately $228,000 of cash used in
investing activities and approximately $229,000 of cash used in financing
activities. Cash used in investing activities consisted of property improvements
and replacements, partially offset by net receipts from 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 $3,572,000 is in default at September 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, and AAP has obtained a judgment
against the Partnership for this debt.
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
September 30, 2000, the property has spent approximately $85,000 on flooring
replacements, HVAC condensing units, and appliances. These improvements were
funded from the Partnership's reserves.
Fox Crest Apartments
The Partnership has budgeted, but is not limited to, approximately $555,000 of
capital improvements at Fox Crest Apartments for 2000 consisting primarily of
flooring replacements, recreational facilities, structural improvements,
plumbing upgrades, major landscaping, parking lot upgrades, and heating unit
replacement. As of September 30, 2000, the property has spent approximately
$278,000 on capital improvements consisting primarily of carpet replacements,
heating unit upgrades, air conditioning unit replacement, and electrical
improvements. These improvements were funded from operating cash flow and the
Partnership's reserves.
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 $1,036,000 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 September 30, 2000 is
approximately $3,573,000. 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 nine month periods ended
September 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 is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. 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 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.
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:
