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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 2, 1998
CAPITAL SOURCE II L.P.-A
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(Exact name of Registrant as Specified in Charter)
Delaware 0-16862 38-2684691
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
1004 Farnam Street, Suite 400, Omaha, Nebraska 68102
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (402) 444-1630
NONE
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(Former Name or Former Address, if Change Since Last Report)
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Item 4. Change in Registrant's Certifying Accountant.
(a)
(i) On October 2, 1998, PricewaterhouseCoopers LLP, the Registrant's
independent accountants (the "Former Accountants"), resigned from their
engagement as principal accountants for the Registrant. The Former
Accountants resigned due to a question about their independence. The
Registrant has engaged KPMG Peat Marwick, L.L.P. ("KPMG") as its new
principal independent accountants effective October 9, 1998.
(ii) The reports of the Former Accountants on the financial statements
for the past two (2) fiscal years contained no adverse opinion or
disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope, or accounting principals.
(iii) The decision to engage KPMG as the principal independent accountant
for the Registrant was approved by the general partners of the Registrant.
(iv) In connection with its audits for the two (2) most recent fiscal
years and through October 2, 1998, there have been no disagreements with
the Former Accountants on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements if not resolved to the satisfaction of the Former Accountants
would have caused them to make reference thereto in their report on the
financial statements for such years.
(v) During the two (2) most recent fiscal years and through October 2,
1998, there were no "reportable events" as defined by Item 304 (a)(1)(v) of
Regulation S-K.
(vi) The Registrant has requested that the Former Accountants furnish it
with a letter addressed to the U.S. Securities and Exchange Commission
stating whether or not it agrees with the above statements. A copy of such
letter is filed as Exhibit 16.01 to this Form 8-K/A.
(b)
Neither the Registrant nor anyone on its behalf has consulted KPMG
during the Registrant's two (2) most recent fiscal years, or any subsequent
interim period prior to its engagement of KPMG.
Item 5. Other Events.
The Registrant holds a majority interest in certain limited partnerships
(the "Operating Partnerships"). CS Properties II, Inc., which is owned by
the general partners of the Registrant, can influence the decisions of the
general partners of the Operating Partnerships in certain circumstances.
Accordingly, the Registrant had consolidated the Operating Partnerships on
its financial statements since inception. It has recently been determined
that this influence did not constitute control of the Operating Partnerships.
Therefore, the Registrant's financial statements will be restated to
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deconsolidate the Operating Partnerships and to account for the investments
in the Operating Partnerships under the equity method of accounting rather
than consolidation. Accordingly, the Registrant's financial statements
appearing in its Form 10-K for the year ending December 31, 1997, should no
longer be relied upon. The determination to change from consolidation
accounting to the equity method was made in response to conversations with
the staff of the U.S. Securities and Exchange Commission (the "Staff") and a
comment letter dated August 4, 1998, issued by the Staff during its review
of the registration statement on Form S-4 of America First Real Estate
Investment Company, Inc. (the "Company") relating to the proposed merger of
the Registrant, Capital Source L.P., and each partnership's respective general
partners, with and into the Company.
Under the equity method of accounting, the Registrant's investments are
adjusted to reflect its share of Operating Partnership profits or losses and
distributions. As required by consolidation accounting, the Registrant had
recorded losses from the Operating Partnerships substantially in excess of
its investments. Since the Registrant is not a general partner of the
Operating Partnerships, it is not obliged to fund the negative balances.
Under equity accounting, the Registrant does not reduce the carrying value of
its investments below zero. As restated, investments in the Operating
Partnership will be zero and losses will be recorded based on net capital
contributions from the Operating Partnerships.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
16.01 Letter dated November 13, 1998, from Registrant's former principal
independent accountant.
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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 hereunto duly authorized.
CAPITAL SOURCE II L.P.-A (Registrant)
By: America First Capital Source II L.L.C.,
General Partner of the Registrant
By /s/ Michael Thesing
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Michael Thesing, Vice President and
Principal Financial Officer
Dated: November 13, 1998
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[PricewaterhouseCoopers Letterhead]
November 13, 1998
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Commissioners:
We have read the statements made by Capital Source II L.P.-A (copy attached),
which we understand will be filed with the Commission, pursuant to Item 4
of Form 8-K/A, as part of the Company's Form 8-K/A report for the month of
October 1998. We agree with the statements concerning our Firm in such Form
8-K/A.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
