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 0-15675
DAVIDSON GROWTH PLUS, L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 52-1462866
(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)
DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 760
Receivables and deposits 210
Restricted escrows 438
Other assets 215
Investment properties:
Land $ 4,650
Buildings and related personal property 20,820
25,470
Less accumulated depreciation (11,543) 13,927
$ 15,550
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 52
Tenant security deposit liabilities 113
Accrued property taxes 372
Other liabilities 300
Mortgage notes payable 11,425
Minority interest 86
Partners' (Deficit) Capital
General partners $ (722)
Limited partners (28,371.75 units issued and
outstanding) 3,924 3,202
$ 15,550
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
b)
DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,385 $ 1,315 $ 4,022 $ 3,932
Other income 90 65 279 241
Total revenues 1,475 1,380 4,301 4,173
Expenses:
Operating 514 510 1,507 1,442
General and administrative 100 56 228 194
Depreciation 233 204 714 611
Interest 255 257 757 774
Property taxes 133 119 370 356
Total expenses 1,235 1,146 3,576 3,377
Income before minority interest
in net income of joint venture 240 234 725 796
Minority interest in net income
of joint venture (24) (12) (64) (68)
Net income $ 216 $ 222 $ 661 $ 728
Net income allocated to general
partners (3%) $ 6 $ 7 $ 20 $ 22
Net income allocated to limited
partners (97%) 210 215 641 706
$ 216 $ 222 $ 661 $ 728
Net income per limited
partnership unit $ 7.40 $ 7.58 $ 22.59 $ 24.88
Distributions per limited
partnership unit $ -- $ 16.57 $ 23.76 $ 48.04
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
DAVIDSON GROWTH PLUS, L.P.
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 28,371.75 $ 1 $28,376 $28,377
Partners' (deficit) capital at
December 31, 1999 28,371.75 $ (721) $ 3,957 $ 3,236
Distributions to partners -- (21) (674) (695)
Net income for the nine months
ended September 30, 2000 -- 20 641 661
Partners' (deficit) capital
at September 30, 2000 28,371.75 $ (722) $ 3,924 $ 3,202
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
DAVIDSON GROWTH PLUS, L.P.
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 income $ 661 $ 728
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 714 611
Amortization of discounts and loan costs 83 79
Minority interest in net income of joint venture 64 68
Change in accounts:
Receivables and deposits 156 (125)
Other assets (27) (42)
Accounts payable (28) 28
Tenant security deposit liabilities (7) (17)
Accrued property taxes 175 167
Other liabilities (17) (16)
Net cash provided by operating activities 1,774 1,481
Cash flows from investing activities:
Property improvements and replacements (600) (465)
Net (deposits to) receipts from restricted escrows (171) 219
Net cash used in investing activities (771) (246)
Cash flows from financing activities:
Payments on mortgage notes payable (211) (190)
Distributions to partners (695) (921)
Distributions to minority partner (83) (177)
Net cash used in financing activities (989) (1,288)
Net increase (decrease) in cash and cash equivalents 14 (53)
Cash and cash equivalents at beginning of period 746 1,186
Cash and cash equivalents at end of period $ 760 $ 1,133
Supplemental disclosure of cash flow information:
Cash paid for interest $ 675 $ 695
Supplemental disclosure of non-cash financing activities:
Distribution payable $ -- $ 484
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
e)
DAVIDSON GROWTH PLUS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Davidson Growth
Plus, L.P. (the "Partnership" or "Registrant") 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 Davidson Growth Plus GP Corporation (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 of the Partnership include its 99% limited
partnership interest in The New Fairways, LP and its 82.5% general partnership
interest in Sterling Crest Joint Venture ("Sterling Crest") which operates
Brighton Crest. Because the Partnership may remove the general partner of The
New Fairways, L.P. and has a controlling interest in Sterling Crest, the
partnerships are controlled and consolidated by the Partnership. All significant
inter-entity balances have been eliminated.
Note B - 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
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 C - 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. Affiliates of the Managing General Partner provide
property management and asset management services to the Partnership. The
Partnership Agreement provides for (i) payments to affiliates for services and
(ii) reimbursement of certain expenses incurred by affiliates on behalf of the
Partnership.
The following amounts were paid or accrued to the Managing General Partner
and/or its affiliates during the nine month periods ended September 30, 2000 and
1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $219 $213
Reimbursement for services of affiliates (included in
general and administrative expense) 124 82
Subordinated management fee (included in general and
administrative expense) 25 24
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 all
of the Partnership's properties as compensation for providing property
management services. The Partnership paid to such affiliates approximately
$219,000 and $213,000 for the nine months ended September 30, 2000 and 1999,
respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $124,000 and
$82,000 for the nine months ended September 30, 2000 and 1999, respectively.
The Partnership Agreement provides for the Managing General Partner to receive a
fee for managing the affairs of the Partnership. The fee is 2% of adjusted cash
from operations, as defined in the Partnership Agreement. Payment of this
management fee is subordinated and is payable only after the Partnership has
distributed, to the limited partners, adjusted cash from operations in any year
equal to 10% of the limited partners adjusted invested capital as defined in the
Partnership Agreement. Unpaid subordinated Partnership management fees at
September 30, 2000, are approximately $158,000. Included in the $158,000
subordinated management fee payable at September 30, 2000, were Partnership
management fees of approximately $25,000 and $24,000 for the nine month periods
ended September 30, 2000 and 1999, respectively.
On September 25, 1997, an affiliate of the Managing General Partner purchased
Lehman Brothers' Class "D" subordinated bonds of SASCO, 1992-MI. These bonds are
secured by 55 multi-family apartment mortgage loan pairs held in Trust,
including The Fairway Apartments owned by the Partnership.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 15,466 limited partnership
units in the Partnership representing 54.51% 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. As a
result of its ownership of 54.51% of the outstanding units, AIMCO is in a
position to influence all voting decisions with respect to the Registrant. 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 D - Distributions to Partners
Cash distributions from operations of approximately $695,000 (approximately
$674,000 to the limited partners or $23.76 per limited partnership unit) were
paid to the partners during the nine months ended September 30, 2000. Subsequent
to September 30, 2000, a distribution from operations of approximately $106,000
(approximately $103,000 to the limited partners or $3.63 per limited partnership
unit) was declared. Cash distributions from operations of approximately $921,000
(approximately $893,000 to the limited partners or $31.47 per limited
partnership unit) were paid to the partners during the nine months ended
September 30, 1999. Subsequent to September 30, 1999 an additional distribution
from operations of approximately $484,000 (approximately $470,000 to the limited
partners or $16.57 per limited partnership unit) was paid to the partners which
was approved and accrued during the nine months ended September 30, 1999.
Note E - Segment Information
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 three apartment complexes one each in Marietta, Georgia; Plano, Texas; and
Brandon, Florida. 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 segments are the same as those of the Partnership as 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 segments: The
Partnership's reportable segment consists of investment properties that offer
similar products and services. Although each of the investment properties is
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 following tables (in thousands). The "Other"
column includes Partnership administration related items and income and expense
not allocated to the reportable segment.
For the Three Months Ended
September 30, 2000 Residential Other Totals
Rental income $ 1,385 $ -- $ 1,385
Other income 82 8 90
Interest expense 255 -- 255
Depreciation 233 -- 233
General and administrative expense -- 100 100
Minority interest in net income of
joint venture -- (24) (24)
Segment profit (loss) 332 (116) 216
For the Nine Months Ended
September 30, 2000 Residential Other Totals
Rental income $ 4,022 $ -- $ 4,022
Other income 249 30 279
Interest expense 757 -- 757
Depreciation 714 -- 714
General and administrative expense -- 228 228
Minority interest in net income of
joint venture -- (64) (64)
Segment profit (loss) 923 (262) 661
Total assets 15,343 207 15,550
Capital expenditures for investment
properties 600 -- 600
For the Three Months Ended
September 30, 1999 Residential Other Totals
Rental income $ 1,315 $ -- $ 1,315
Other income 65 -- 65
Interest expense 257 -- 257
Depreciation 204 -- 204
General and administrative expense -- 56 56
Minority interest in net income of
joint venture -- (12) (12)
Segment profit (loss) 290 (68) 222
For the Nine Months Ended
September 30, 1999 Residential Other Totals
Rental income $ 3,932 $ -- $ 3,932
Other income 195 46 241
Interest expense 774 -- 774
Depreciation 611 -- 611
General and administrative expense -- 194 194
Minority interest in net income of
joint venture -- (68) (68)
Segment profit (loss) 944 (216) 728
Total assets 15,448 681 16,129
Capital expenditures for investment
properties 465 -- 465
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 OPERATION
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 Partnership from time to time.
The discussion of the Partnership'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 Partnership'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 three 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
Brighton Crest Apartments 94% 94%
Marietta, Georgia
The Fairway Apartments 95% 94%
Plano, Texas
The Village Apartments 96% 97%
Brandon, Florida
Results of Operations
The Partnership realized net income of approximately $661,000 for the nine
months ended September 30, 2000, compared to net income of approximately
$728,000 for the nine months ended September 30, 1999. The Partnership's net
income for the three months ended September 30, 2000, was approximately $216,000
compared to net income of approximately $222,000 for the three months ended
September 30, 1999. The decrease in net income for the nine months ended
September 30, 2000 is primarily attributable to an increase in total expenses
partially offset by an increase in total revenues. The slight decrease in net
income for the three month period ended September 30, 2000, is due to an
increase in total expenses and an increase in minority interest in income from
the joint venture which was largely offset by an increase in total revenues.
Total revenues increased for the three and nine month periods ended September
30, 2000 primarily as a result of an increase in rental income and, to a lesser
extent, an increase in other income. Rental income increased primarily due to an
increase in average rental rates at all of the Partnership's properties and
increased occupancy at The Fairway Apartments. These factors were partially
offset by decreased occupancy at The Village Apartments and an increase in
concession costs at all of the Partnership's properties. Other income increased
primarily due to an increase in tenant charges at The Fairway Apartments and an
incentive received from a utility company at The Village Apartments.
The increase in total expenses for the nine months ended September 30, 2000 is
primarily attributable to increases in operating, depreciation, and general and
administrative expenses. The increase in total expenses for the three month
period ended September 30, 2000 is primarily attributable to increases in
depreciation and general and administrative expenses. The increase in
depreciation expense for the three and nine month periods ended September 30,
2000 is due to an increase in capital improvements put into service during the
past twelve months. Operating expenses increased for the nine months ended
September 30, 2000 due to increased advertising and utility expenses at Brighton
Crest Apartments and increased payroll expenses at The Fairway Apartments.
General and administrative expenses increased for the three and nine month
periods ended September 30, 2000 primarily due to an increase in the cost of
services included in the management reimbursements to the Managing General
Partner as allowed under the Partnership Agreement and increased professional
fees associated with managing the Partnership partially offset by decreased
legal expenses. Included in general and administrative expenses at both
September 30, 2000 and 1999, are reimbursements to the Managing General Partner
allowed under the Partnership Agreement associated with its management of the
Partnership. 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. The increase in minority interest in
net income of the joint venture for the three month period ended September 30,
2000 is due to an increase in the net income of the joint venture, resulting
from increased average rental rates and decreased maintenance and repairs
expenses at the joint venture's property, Brighton Crest.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors 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
expense. 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
The Partnership held cash and cash equivalents of approximately $760,000 at
September 30, 2000, compared to approximately $1,133,000 at September 30, 1999.
The increase in cash and cash equivalents of approximately $14,000 from the
Partnership's cash balance at December 31, 1999, is due primarily to
approximately $1,774,000 of cash provided by operating activities, which was
largely offset by approximately $771,000 of cash used in investing activities
and to approximately $989,000 of cash used in financing activities. Cash used in
investing activities consisted primarily of property improvements and
replacements and, to a lesser extent, net deposits to escrow accounts maintained
by the mortgage lenders. Cash used in financing activities consisted primarily
of distributions to the partners, and to a lesser extent, payments of principal
made on the mortgages encumbering the Partnership's properties and distributions
to the minority partner of Sterling Crest. The Partnership invests its working
capital reserves in money market accounts.
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 various 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 the Partnership's properties are detailed below.
Brighton Crest Apartments
During the nine months ended September 30, 2000, the Partnership completed
approximately $354,000 of budgeted and non-budgeted capital improvements at the
property, consisting primarily of roof replacement, carpet and vinyl
replacements, appliances, major landscaping, plumbing upgrades, and other
building improvements. These improvements were funded from cash from operations.
The Partnership has evaluated the capital improvement needs of the property for
the year 2000. The amount budgeted is approximately $379,000, consisting
primarily of air conditioning unit replacements, plumbing upgrades, and carpet
and vinyl replacements. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Fairway Apartments
During the nine months ended September 30, 2000, the Partnership completed
approximately $74,000 of capital improvements at the property, consisting
primarily of carpet and tile replacements, interior decoration, and appliances.
These improvements were funded from operating cash flow. The Partnership has
evaluated the capital improvement needs of the property for the year 2000. The
amount budgeted is approximately $150,000, consisting primarily of air
conditioning unit replacements, carpet replacements, interior decoration,
parking lot improvements, and appliances. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
The Village Apartments
During the nine months ended September 30, 2000, the Partnership completed
approximately $172,000 of budgeted and non-budgeted capital improvements at the
property, consisting primarily of plumbing upgrades, interior decoration, carpet
and vinyl replacements, roof replacement, air conditioning unit replacement,
appliances, and building structural improvements. These improvements were funded
from operating cash flow. The Partnership has evaluated the capital improvement
needs of the property for the year 2000. The amount budgeted in 2000 is
approximately $119,000, consisting primarily of air conditioning unit
replacement, appliances, interior decoration, grounds lighting upgrades, carpet
and vinyl replacements, and plumbing upgrades. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $11,425,000, net of discounts, is amortized over
periods ranging from approximately 21 to 29 years with balloon payments due in
2002 and 2003. 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 Partnership
may risk losing such properties through foreclosure.
Cash distributions from operations of approximately $695,000 (approximately
$674,000 to the limited partners or $23.76 per limited partnership unit) were
paid to the partners during the nine months ended September 30, 2000. Subsequent
to September 30, 2000, a distribution from operations of approximately $106,000
(approximately $103,000 to the limited partners or $3.63 per limited partnership
unit) was approved. Cash distributions from operations of approximately $921,000
(approximately $893,000 to the limited partners or $31.47 per limited
partnership unit) were paid to the partners during the nine months ended
September 30, 1999. Subsequent to September 30, 1999 an additional distribution
from operations of approximately $484,000 (approximately $470,000 to the limited
partners or $16.57 per limited partnership unit) was paid to the partners which
was approved and accrued during the nine months ended September 30, 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 Partnership's distribution policy is
reviewed on a quarterly basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations after required
capital improvements to permit further distributions to its partners during the
remainder of the year 2000 or subsequent periods.
<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:
None 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.
DAVIDSON GROWTH PLUS, L.P.
By: DAVIDSON GROWTH PLUS GP CORPORATION
Its 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:
