UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
------------------------------------------
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 0-15459
----------
MCNEIL REAL ESTATE FUND XXIII, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 33-0139793
- --------------------------------------------------------------------------------
(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>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
MCNEIL REAL ESTATE FUND XXIII, L.P.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------ ------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land ......................................................... $ 239,966 $ 239,966
Buildings and improvements ................................... 6,545,368 6,534,417
----------- -----------
6,785,334 6,774,383
Less: Accumulated depreciation .............................. (3,569,993) (3,488,340)
----------- -----------
3,215,341 3,286,043
Cash and cash equivalents ....................................... 315,188 263,851
Cash segregated for security deposits ........................... 49,079 47,679
Accounts receivable and other assets ............................ 20,828 20,971
Escrow deposits ................................................. 118,192 91,267
----------- -----------
$ 3,718,628 $ 3,709,811
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------
Mortgage note payable, net ...................................... $ 3,683,160 $ 3,692,420
Accounts payable and accrued expenses ........................... 93,248 100,291
Accrued property taxes .......................................... 74,584 47,083
Payable to affiliates - General Partner ......................... 547,530 521,770
Deferred gain on involuntary conversion ......................... 5,106 5,106
Security deposits and deferred rental revenue ................... 55,333 57,258
----------- -----------
4,458,961 4,423,928
----------- -----------
Partners' equity (deficit):
Limited partners - 45,000,000 Units authorized;
11,425,696 and 11,492,696 Units outstanding at
March 31, 1999 and December 31, 1998, respectively
(6,574,985 and 6,631,985 Current Income Units out-
standing at March 31, 1999 and December 31, 1998,
respectively; 4,850,711 and 4,860,711 Growth/Shelter
Units outstanding at March 31, 1999 and December
31, 1998, respectively) .................................... (5,590,144) (5,564,190)
General Partner .............................................. 4,849,811 4,850,073
----------- -----------
(740,333) (714,117)
----------- -----------
$ 3,718,628 $ 3,709,811
=========== ===========
</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 XXIII, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1999 1998
--------- ---------
Revenue:
<S> <C> <C>
Rental revenue ...................................... $ 376,648 $ 348,623
Interest ............................................ 2,276 4,230
--------- ---------
Total revenue ..................................... 378,924 352,853
--------- ---------
Expenses:
Interest ............................................ 84,161 84,778
Depreciation ........................................ 81,653 73,957
Property taxes ...................................... 27,501 29,001
Personnel expenses .................................. 47,059 55,106
Utilities ........................................... 27,322 32,015
Repairs and maintenance ............................. 43,607 35,386
Property management fees - affiliates ............... 18,503 17,483
Other property operating expenses ................... 17,059 15,338
General and administrative .......................... 20,318 18,907
General and administrative - affiliates ............. 37,957 33,647
--------- ---------
Total expenses .................................... 405,140 395,618
--------- ---------
Net loss ............................................... $ (26,216) $ (42,765)
========= =========
Net loss allocated to limited
partners - Current Income Units ..................... $ (2,360) $ (3,849)
Net loss allocated to limited
partners - Growth/Shelter Units ..................... (23,594) (38,488)
Net loss allocated to General Partner .................. (262) (428)
--------- ---------
Net loss ............................................... $ (26,216) $ (42,765)
========= =========
Net loss per thousand limited partnership units:
Current Income Units ................................ $ (.36) $ (.58)
========= =========
Growth/Shelter Units ................................ $ (4.86) $ (7.92)
========= =========
</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 XXIII, L.P.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Equity (Deficit)
------------ ------------ ----------------
<S> <C> <C> <C>
Balance at December 31, 1997 ........... $ 4,851,535 $(5,419,474) $ (567,939)
Net loss:
General Partner ..................... (428) -- (428)
Current Income Units ................ -- (3,849) (3,849)
Growth/Shelter Units ................ -- (38,488) (38,488)
----------- ----------- -----------
Total net loss .................... (428) (42,337) (42,765)
----------- ----------- -----------
Balance at March 31, 1998 .............. $ 4,851,107 $(5,461,811) $ (610,704)
=========== =========== ===========
Balance at December 31, 1998 ........... $ 4,850,073 $(5,564,190) $ (714,117)
Net loss:
General Partner ..................... (262) -- (262)
Current Income Units ................ -- (2,360) (2,360)
Growth/Shelter Units ................ -- (23,594) (23,594)
----------- ----------- -----------
Total net loss .................... (262) (25,954) (26,216)
----------- ----------- -----------
Balance at March 31, 1999 .............. $ 4,849,811 $(5,590,144) $ (740,333)
=========== =========== ===========
</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 XXIII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
1999 1998
---------- -----------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants ....................... $ 371,766 $ 365,986
Cash paid to suppliers ........................... (160,620) (172,630)
Cash paid to affiliates .......................... (30,700) (17,631)
Interest received ................................ 2,276 4,230
Interest paid .................................... (79,440) (80,453)
Property taxes paid and escrowed ................. (26,925) (37,941)
--------- ---------
Net cash provided by operating activities ........... 76,357 61,561
--------- ---------
Cash flows from investing activities:
Additions to real estate investments ............. (10,951) (10,372)
--------- ---------
Cash flows from financing activities:
Principal payments on mortgage note
payable ........................................ (14,069) (13,055)
--------- ---------
Net increase in cash and cash equivalents ........... 51,337 38,134
Cash and cash equivalents at beginning of
period ........................................... 263,851 308,271
--------- ---------
Cash and cash equivalents at end of period .......... $ 315,188 $ 346,405
========= =========
</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 XXIII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash Provided by Operating Activities
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1999 1998
---------- ----------
<S> <C> <C>
Net loss ..................................................... $ (26,216) $ (42,765)
--------- ---------
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation .............................................. 81,653 73,957
Amortization of discount on mortgage
note payable ............................................ 4,809 4,406
Changes in assets and liabilities:
Cash segregated for security deposits ................... (1,400) (375)
Accounts receivable and other assets .................... 143 2,994
Escrow deposits ......................................... (26,925) 6,735
Accounts payable and accrued expenses ................... (7,043) (14,587)
Accrued property taxes .................................. 27,501 (15,675)
Payable to affiliates - General Partner ................. 25,760 33,499
Security deposits and deferred rental
revenue ............................................... (1,925) 13,372
--------- ---------
Total adjustments ..................................... 102,573 104,326
--------- ---------
Net cash provided by operating activities .................... $ 76,357 $ 61,561
========= =========
</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 XXIII, L.P.
Notes to Financial Statements
(Unaudited)
March 31, 1999
NOTE 1.
- -------
McNeil Real Estate Fund XXIII, L.P. (the "Partnership"), formerly known as
Southmark Realty Partners III, Ltd., was organized on March 4, 1985 as a limited
partnership under provisions of the California Revised Limited Partnership Act
to acquire and operate 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 three months ended March 31, 1999,
are not necessarily indicative of the results to be expected for the year ending
December 31, 1999.
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, 1998, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate XXIII, L.P., c/o McNeil Real Estate Management, Inc.,
Investor Services, 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240.
NOTE 3.
- -------
The Partnership pays property management fees equal to 5% of the gross rental
receipts for its property to McNeil Real Estate Management, Inc. ("McREMI"), an
affiliate of the General Partner, for providing property management and leasing
services.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
The Partnership incurs asset management fees which are 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 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. Total accrued but unpaid asset management fees in the amount of $311,057
were outstanding at March 31, 1999. The fee percentage decreases to .75% in
2000, .50% in 2001 and .25% thereafter.
<PAGE>
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
Three Months Ended
March 31,
-------------------------
1999 1998
----------- ----------
Property management fees...................... $ 18,503 $ 17,483
Charged to general and administrative -
affiliates:
Partnership administration................. 14,713 12,674
Asset management fee....................... 23,244 20,973
---------- ---------
$ 56,460 $ 51,130
========== =========
Payable to affiliates - General Partner at March 31, 1999, and December 31,
1998, consists primarily of unpaid asset management fees and reimbursable costs
that are due and payable from current operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership's net loss for the first quarter of 1999 decreased to $26,216
from $42,765 for the first quarter of 1998. Operations at Harbour Club II
Apartments are providing sufficient cash flow to pay the property's operating
expenses, debt service on the related mortgage note, and limited capital
improvements. However, the property is in need of major capital improvements in
order to compete effectively in its local market. The Partnership does not have
sufficient cash reserves to fund the needed capital improvements, nor does the
property generate sufficient cash flow from operations to fund such capital
improvements.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
The Partnership's rental revenue increased $28,025 or 8.0% for the first quarter
of 1999 as compared to the first quarter of 1998. The Partnership increased base
rental rates at Harbour Club II Apartments by an average 1.8% at the beginning
of 1999. Vacancy, concessions and other rental losses also decreased for the
first quarter of 1999, amplifying the effects of the increased base rental
rates.
<PAGE>
Expenses:
Partnership expenses increased $9,522 or 2.4% for the first quarter of 1999 as
compared to the first quarter of 1998. Increases in depreciation and repairs and
maintenance were partially offset by decreased personnel and utility expenses.
Depreciation expense increased $7,696 or 10.4% for the first quarter of 1999.
The Partnership added approximately $302,000 of capital improvements over the
past twelve months that are being depreciated over lives ranging from 5 to 10
years. The new capital improvements are the source of the increase in
depreciation expense.
Repair and maintenance expense increased $8,221 or 23% for the first quarter of
1999. The Partnership incurred increased snow removal expenses during the first
quarter that accounted for the increase in repair and maintenance expense.
Personnel expenses decreased $8,047 or 14.6% for the first quarter of 1999 due
to a decrease in employee benefit costs as compared to the first quarter of
1998.
Utilities expense decreased $4,693 or 14.7% for the first quarter of 1999. Due
to decreased first quarter 1999 vacancy losses discussed above, the Partnership
incurred decreased utility expenses for vacant units.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership's operating activities provided $76,357 of cash for the first
quarter of 1999, a 24% increase over cash flow provided by operating activities
for the first quarter of 1998. The Partnership increased cash received from
tenants and decreased cash paid to suppliers and cash paid for property taxes.
Cash used for investing and financing activities did not significantly change
for the first quarter of 1999 as compared to the first quarter of 1998. The
Partnership continues to invest minimal amounts into capital improvements at
Harbour Club II Apartments and to pay down the mortgage note as called for by
terms of the mortgage note agreement.
Short-term liquidity:
The Partnership's balance of cash and cash equivalents totaled to $315,188 at
March 31, 1999, an increase of $51,337 from the balance of cash and cash
equivalents at the beginning of the year. The General Partner considers the
Partnership's cash reserves adequate for anticipated operations for the
remainder of 1999.
Operating activities at Harbour Club II Apartments for 1999 are expected to
provide sufficient cash flow for operating expenses, debt service payments, and
limited capital improvements. However, Harbour Club II Apartments is in need of
extensive capital improvements to enable the property to compete effectively in
the local market. Projected cash flows from operations will not be adequate to
fund such extensive capital improvements. To date, the Partnership has been
unable to secure financing for the needed capital improvements. The Partnership
has no established lines of credit from outside sources.
In the past, the General Partner, at its discretion, has advanced funds to the
Partnership to fund working capital requirements. The General Partner is not
obligated to advance funds to the Partnership and there is no assurance that the
Partnership will receive any additional funds.
<PAGE>
Long-term liquidity:
The long-term operating viability of Harbour Club II Apartments is dependent on
the Partnership's ability to fund substantial capital improvements to the
property. If the Partnership does not liquidate, as contemplated below, it will
seek to obtain additional financing to allow the completion of the extensive
capital improvements, which will enable the Partnership to raise rental rates at
the property to market rates.
Harbour Club II Apartments is part of a four-phase apartment complex located in
Belleville, Michigan. Phases I and III of the complex are owned by partnerships
affiliated with the General Partner. Phase IV is owned by an unaffiliated
entity. McREMI managed all four phases of the complex until December 1992, when
the property management agreement between McREMI and Phase IV was canceled.
As previously announced, the Partnership has retained PaineWebber, Incorporated
as its exclusive financial advisor to explore alternatives to maximize the value
of the Partnership, including, without limitation, a transaction in which
limited partnership interests in the Partnership are converted into cash. During
the last full week of March, the Partnership entered into a 45 day exclusivity
agreement with a well-financed bidder with whom it had commenced discussions
with respect to a sale transaction. The Partnership and such party have made
significant progress in negotiating the terms of a proposed transaction and are
continuing to have intensive discussions with respect to a transaction. In light
on these continuing negotiations, the exclusivity agreement has been extended
for an additional 21 days until June 4, 1999. It is possible that the General
Partner and its affiliates will receive non-cash consideration for their
ownership interests in connection with any such transaction. There can be no
assurance regarding whether any such agreement will be reached nor the terms
thereof.
Distributions:
To maintain adequate cash balances of the Partnership, distributions to Current
Income Unit holders were suspended in 1988. There have been no distributions to
Growth/Shelter Unit holders. Distributions to Unit holders will remain suspended
for the foreseeable future. The General Partner will continue to monitor the
cash reserves and working capital needs of the Partnership to determine when
cash flows will support distributions to the Unit holders.
Forward-Looking Information:
Within this document, certain statements are made as to the expected occupancy
trends, financial condition, results of operations, and cash flows of the
Partnership for periods after March 31, 1999. All of these statements are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are not
historical and involve risks and uncertainties. The Partnership's actual
occupancy trends, financial condition, results of operations, and cash flows for
future periods may differ materially due to several factors. These factors
include, but are not limited to, the Partnership's ability to control costs,
make necessary capital improvements, negotiate the sale or refinancing of its
property, and respond to changing economic and competitive factors.
<PAGE>
YEAR 2000 DISCLOSURE
- --------------------
State of readiness
- ------------------
The year 2000 problem is the result of computer programs being written using two
digits rather than four to define the applicable year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in major systems failure or
miscalculations.
Management has assessed its information technology ("IT") infrastructure to
identify any systems that could be affected by the year 2000 problem. The IT
used by the Partnership for financial reporting and significant accounting
functions was made year 2000 compliant during recent systems conversions. The
software utilized for these functions is licensed by third party vendors who
have warranted that their systems are year 2000 compliant.
Management is in the process of evaluating the mechanical and embedded
technological systems at the various properties. Management has inventoried all
such systems and queried suppliers, vendors and manufacturers to determine year
2000 compliance. Based on this review, management believes these systems are
substantially compliant. In circumstances of non-compliance management will work
with the vendor to remedy the problem or seek alternative suppliers who will be
in compliance. Management believes that the remediation of any outstanding year
2000 conversion issues will not have a material or adverse effect on the
Partnership's operations. However, no estimates can be made as to the potential
adverse impact resulting from the failure of third party service providers and
vendors to be year 2000 compliant.
Cost
- ----
The cost of IT and embedded technology systems testing and upgrades is not
expected to be material to the Partnership. Because all the IT systems have been
upgraded over the last three years, all such systems were compliant, or made
compliant at no additional cost by third party vendors. Management anticipates
the costs of assessing, testing, and if necessary replacing embedded technology
components will be less than $50,000. Such costs will be funded from operations
of the Partnership.
Risks
- -----
Ultimately, the potential impact of the year 2000 issue will depend not only on
the corrective measures the Partnership undertakes, but also on the way in which
the year 2000 issue is addressed by government agencies and entities that
provide services or supplies to the Partnership. Management has not determined
the most likely worst case scenario to the Partnership. As management studies
the findings of its property systems assessment and testing, management will
develop a better understanding of what would be the worst case scenario.
Management believes that progress on all areas is proceeding and that the
Partnership will experience no adverse effect as a result of the year 2000
issue. However, there is no assurance that this will be the case.
<PAGE>
Contingency plans
- -----------------
Management is developing contingency plans to address potential year 2000
non-compliance of IT and embedded technology systems. Management believes that
failure of any IT system could have an adverse impact on operations. However,
management believes that alternative systems are available that could be
utilized to minimize such impact. Management believes that any failure in the
embedded technology systems could have an adverse impact on that property's
performance. Management will assess these risks and develop plans to mitigate
possible failures by July 1999.
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 XXIII, 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., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and
Regency North Associates, L.P., - 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 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.
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.
<PAGE>
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. The case was stayed pending settlement discussions. A Stipulation of
Settlement dated September 15, 1998 has been signed by the parties. Preliminary
Court approval was received on October 6, 1998. A hearing for Final Approval of
Settlement, initially scheduled for December 17, 1998, has been continued to
July 2, 1999.
Because McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil
Midwest Properties I, L.P. and Regency North Associates, L.P. would be part of
the transaction contemplated in the settlement and Plaintiffs claim that an
effort should be made to sell the McNeil Partnerships, Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII, L.P., Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.
Plaintiff's counsel intends to seek an order awarding attorney's fees and
reimbursements of their out-of-pocket expenses. The amount of such award is
undeterminable until final approval is received from the court. Fees and
expenses shall be allocated amongst the Partnerships on a pro rata basis, based
upon tangible asset value of each such partnership, less total liabilities,
calculated in accordance with the Amended Partnership Agreements for the quarter
most recently ended.
<PAGE>
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).
11. Statement regarding computation of Net
Income (Loss) per Thousand Limited
Partnership Units: Net income (loss) per
thousand limited partner units is computed
by dividing net income (loss) allocated to
the limited partners by the weighted average
number of limited partnership units
outstanding expressed in thousands. Per unit
information has been computed based on 6,575
and 6,632 Current Income Units (in
thousands) outstanding in 1999 and 1998,
respectively, and 4,851 and 4,861
Growth/Shelter Units (in thousands)
outstanding in 1999 and 1998, respectively.
27. Financial Data Schedule for the quarter
ended March 31, 1999.
b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended March 31, 1999.
<PAGE>
MCNEIL REAL ESTATE FUND XXIII, 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 XXIII, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
May 18, 1999 By: /s/ Ron K. Taylor
- -------------- ---------------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
May 18, 1999 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 315,188
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,785,334
<DEPRECIATION> (3,569,993)
<TOTAL-ASSETS> 3,718,628
<CURRENT-LIABILITIES> 0
<BONDS> 3,683,160
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,718,628
<SALES> 376,648
<TOTAL-REVENUES> 378,924
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 320,979
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 84,161
<INCOME-PRETAX> (26,216)
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