SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (or Date of Earliest Event Reported): March 15, 1999
AETNA REAL ESTATE ASSOCIATES, L.P.
(Exact name of Registrant as specified in its charter)
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DELAWARE 0-14986 11-2827907
(State of (Commission File Number) (IRS Employer
incorporation Identification No.)
or organization)
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242 Trumbull Street
Hartford, Connecticut 06103
(Address of principal executive offices)
(860) 275-2178
(Registrant's telephone number)
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ITEM 5. Other Events.
In November 1996, the Partnership and its general partners, Aetna/AREA
Corporation and AREA GP Corporation (the "General Partners"), were named as
defendants in two purported class action lawsuits filed in the Chancery Court of
Delaware in New Castle County, entitled Bobbitt v. Aetna Real Estate Associates,
L.P., et al and Estes v. Aetna Real Estate Associates, L.P., et al
(collectively, the "Complaints"). The Complaints alleged, among other things,
that management fees that have been paid and are paid to the General Partners
are excessive and that a standstill agreement with a then tender offeror which
had the effect of limiting the number of Partnership Units that would be the
subject of any tender offer is unlawful.
On March 15, 1999, the parties entered into a Stipulation and Agreement of
Compromise, Settlement and Release (the "Settlement Agreement"), which was filed
with and is subject to approval by the Delaware Chancery Court. Pursuant to the
terms of the Settlement Agreement, the following actions will take place:
(1) Upon the "Final Date" (the date that the judgment is no longer
subject to appeal) the Applicable Percentage, as defined in Section
6.6 of the Partnership Agreement, used to calculate the Investment
Portfolio Fee per quarter which is paid to the General Partners,
will be reduced by 0.0625% from that set forth in Section 6.6 of the
Partnership Agreement (the "First Reduction"). The First Reduction
will be effective on the Final Date and will be applied
retroactively to the date of the execution of the Settlement
Agreement. The First Reduction will result in a 0.25% reduction of
the annual Investment Portfolio Fee otherwise provided in the
Partnership Agreement.
(2) Effective on the second anniversary of the Final Date, the
Applicable Percentage will be reduced by an additional 0.0625% per
quarter (the "Second Reduction"). The First and Second Reductions
will apply cumulatively so that the annual Investment Portfolio Fee
from the second anniversary of the Final Date through the
termination of the Partnership will be a total of 0.50% below the
annual Investment Portfolio Fee otherwise provided in the
Partnership Agreement.
(3) The General Partners will institute a marketing plan, market the
Partnership's assets on a property-by-property basis and, subject to
their fiduciary duties, determine whether or not the sale of any
particular property should take place. The determination of whether
to engage in the sale of one or more properties will reside solely
within the discretion and business judgment of the General Partners,
in accordance with their fiduciary duties.
(4) The Partnership shall make a special distribution no later than
April 15, 1999 of at least $2,500,000 (or approximately $0.20 per
Unit) of Partnership cash to limited partners holding Partnership
Units as of the date of such distribution.
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(5) The representative plaintiffs and the class will agree to release
any and all claims, to the extent such claims relate to or arise out
of the class action lawsuits, against the defendants to the fullest
extent permitted by law. If the Settlement Agreement is approved by
the Delaware Chancery Court and judgment is entered, the actions
will be dismissed with prejudice.
(6) The representative plaintiffs or their counsel may submit an
application to the Delaware Chancery Court for reimbursement by the
Partnership of attorneys' fees in an amount not to exceed $2,000,000
and out-of-pocket expenses in an amount not to exceed $200,000.
The Settlement Agreement is subject to approval by the Delaware Chancery
Court, although there can be no assurance that the Court will approve the
Settlement Agreement. A hearing to consider the Settlement Agreement is
scheduled for May 19, 1999.
This summary description of the Settlement Agreement does not purport to
be complete and is qualified in its entirety by reference to the Settlement
Agreement which is filed with the Delaware Chancery Court.
<PAGE>
ITEM 7. Financial Statements and Exhibits
(a) None
(b) None
(c) None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: March 18, 1999
AETNA REAL ESTATE ASSOCIATES, L.P.
By: Aetna/AREA Corporation, General Partner
By: /s/Daniel R. Leary
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Name: Daniel R. Leary
Title: President
By: AREA GP Corporation, General Partner
By: /s/Mark J. Marcucci
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Name: Mark J. Marcucci
Title: President
