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 0-16877
FOX STRATEGIC HOUSING INCOME PARTNERS (Exact name of
small business issuer as specified in its charter)
California 94-3016373
(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 preceding 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___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
FOX STRATEGIC HOUSING INCOME PARTNERS
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 475
Receivables and deposits 203
Restricted escrows 50
Other assets 244
Investment properties:
Land $ 3,120
Buildings and related personal property 18,904
22,024
Less accumulated depreciation (8,237) 13,787
$ 14,759
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 18
Due to general partner 204
Tenant security deposit liabilities 49
Accrued property taxes 230
Other liabilities 147
Mortgage notes payable 10,254
Partners' (Deficit) Capital
General partner $ (306)
Limited partners (26,111 units issued and
outstanding) 4,163 3,857
$ 14,759
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
b)
FOX STRATEGIC HOUSING INCOME PARTNERS
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 $ 764 $ 734 $ 2,263 $ 2,129
Other income 40 54 108 160
Total revenues 804 788 2,371 2,289
Expenses:
Operating 253 252 748 728
General and administrative 78 152 269 277
Depreciation 180 133 530 455
Interest 179 179 537 533
Property taxes 74 80 220 197
Total expenses 764 796 2,304 2,190
Net income (loss) $ 40 $ (8) $ 67 $ 99
Net income (loss) allocated to
general partner $ 8 $ (2) $ 13 $ 20
Net income (loss) allocated to
limited partners 32 (6) 54 79
$ 40 $ (8) $ 67 $ 99
Net income (loss) per limited
partnership unit $1.23 $(.23) $ 2.07 $ 3.03
Distributions per limited
partnership unit $ -- $69.82 $28.57 $ 69.93
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
c)
FOX STRATEGIC HOUSING INCOME PARTNERS
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 26,111 $ -- $26,111 $26,111
Partners' (deficit) capital at
December 31, 1999 26,111 $ (304) $ 4,855 $ 4,551
Distribution to partners -- (15) (746) (761)
Net income for the nine months
ended September 30, 2000 -- 13 54 67
Partners' (deficit) capital
at September 30, 2000 26,111 $ (306) $ 4,163 $ 3,857
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
d)
FOX STRATEGIC HOUSING INCOME PARTNERS
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 $ 67 $ 99
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 530 455
Amortization of loan costs 23 14
Change in accounts:
Receivables and deposits (93) (40)
Other assets (11) 15
Accounts payable (3) 21
Tenant security deposit liabilities 6 --
Accrued property taxes 55 31
Due to general partner (13) 92
Other liabilities 15 (2)
Net cash provided by operating activities 576 685
Cash flows from investing activities:
Property improvements and replacements (279) (219)
Net withdrawals from restricted escrows 45 19
Net cash used in investing activities (234) (200)
Cash flows from financing activities:
Payments on mortgage notes payable (93) (87)
Distribution to partners (761) (1,863)
Net cash used in financing activities (854) (1,950)
Net decrease in cash and cash equivalents (512) (1,465)
Cash and cash equivalents at beginning of period 987 2,127
Cash and cash equivalents at end of period $ 475 $ 662
Supplemental disclosure of cash flow information:
Cash paid for interest $ 514 $ 520
At December 31, 1999, approximately $69,000 of property improvements and
replacements were included in accounts payable.
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
e)
FOX STRATEGIC HOUSING INCOME PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Fox Strategic
Housing Income Partners (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 Fox Capital Management Corporation
("FCMC" or the "Managing General Partner"), a California corporation, 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 the
statements of the Partnership and Westlake East Associates, L.P., a limited
partnership in which the partnership owns a 99% interest. The general partner of
Westlake East Associates, L.P., may be removed by the Registrant; therefore, the
consolidated partnership is controlled and consolidated by the Registrant. All
significant inter-partnership transactions and 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. 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 transactions
with the Managing General Partner and/or its affiliates were incurred during the
nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $119 $114
Reimbursement for services of affiliates (included in
investment properties and general and administrative
expenses) 133 101
Partnership management fee (included in general and
administrative expense) 63 149
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 Partnership's properties as compensation for providing property
management services. The Partnership paid to such affiliates approximately
$119,000 and $114,000 for the nine months ended September 30, 2000 and 1999,
respectively.
An affiliate of the Managing General Partner received reimbursements of
accountable administrative expenses amounting to approximately $71,000 and
$40,000 for the nine month periods ended September 30, 2000 and 1999,
respectively.
In addition, the general partner earned approximately $63,000 and $149,000 in
Partnership management fees on distributions from operations during the nine
months ended September 30, 2000 and September 30, 1999, respectively, of which
approximately $39,000 and $92,000 are subordinated to the limited partner's
annual receipt of 8% of adjusted investment capital, as defined in the
Partnership Agreement. At September 30, 2000 approximately $204,000 is owed to
the general partner as cumulative subordinated management fees.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 9,750 limited partnership
units in the Partnership representing approximately 37.34% 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.
<PAGE>
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 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 D - Distributions
During the nine months ended September 30, 2000, the Partnership distributed
cash from operations of approximately $761,000 (approximately $746,000 to the
limited partners, $28.57 per limited partnership unit). During the nine months
ended September 30, 1999, the Partnership distributed cash from operations of
approximately $1,860,000 (approximately $1,823,000 to the limited partners,
$69.82 per limited partnership unit). Additionally, in April 1999, the
Partnership paid approximately $3,000 for withholding taxes on behalf of the
limited partners.
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 two apartment complexes,
one each located in Ohio and Georgia. 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 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 segment:
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 below. The "Other" column
includes Partnership administration related items and income and expense not
allocated to the reportable segment.
<PAGE>
Three Months Ended September 30, 2000 Residential Other Totals
(in thousands)
Rental income $ 764 $ -- $ 764
Other income 39 1 40
Interest expense 179 -- 179
Depreciation 180 -- 180
General and administrative expense -- 78 78
Segment profit (loss) 117 (77) 40
Nine Months Ended September 30, 2000 Residential Other Totals
(in thousands)
Rental income $ 2,263 $ -- $ 2,263
Other income 102 6 108
Interest expense 537 -- 537
Depreciation 530 -- 530
General and administrative expense -- 269 269
Segment profit (loss) 330 (263) 67
Total assets 14,599 160 14,759
Capital expenditures for investment
properties 210 -- 210
Three Months Ended September 30, 1999 Residential Other Totals
(in thousands)
Rental income $ 734 $ -- $ 734
Other income 53 1 54
Interest expense 179 -- 179
Depreciation 133 -- 133
General and administrative expense -- 152 152
Segment profit (loss) 143 (151) (8)
<PAGE>
Nine Months Ended September 30, 1999 Residential Other Totals
(in thousands)
Rental income $ 2,129 $ -- $ 2,129
Other income 156 4 160
Interest expense 533 -- 533
Depreciation 455 -- 455
General and administrative expense -- 277 277
Segment profit (loss) 372 (273) 99
Total assets 15,407 139 15,546
Capital expenditures for investment
properties 219 -- 219
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 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
Barrington Place Apartments 93% 86%
Westlake, Ohio
Wood View Apartments 96% 95%
Atlanta, Georgia
The Managing General Partner attributes the increase in occupancy at Barrington
Place to the implementation of a more aggressive marketing campaign and a
reduction in average rental rates to be more competitive with other complexes
within the market.
Results of Operations
The Partnership's net income for the nine months ended September 30, 2000 was
approximately $67,000 compared to approximately $99,000 for the nine months
ended September 30, 1999. The Partnership's net income for the three months
ended September 30, 2000 was approximately $40,000 compared to a net loss of
approximately $8,000 for the three months ended September 30, 1999. The decrease
in net income for the nine months ended September 30, 2000 is due to an increase
in total expenses which more than offset an increase in total revenues. Total
expenses increased due to an increase in operating, depreciation and property
tax expenses. Operating expense increased as a result of an increase in
advertising expense in an effort to increase occupancy at Barrington Place
Apartments as discussed above. Operating expense also increased as a result of
an increase in payroll costs at both the Partnership's properties. The increase
in property tax expense is due to increased assessed values at both properties.
Depreciation expense increased primarily due to capital improvements completed
during the last twelve months.
The increase in net income for the three months ended September 30, 2000 is the
result of a decrease in total expenses and a slight increase in total revenues.
The decrease in total expenses is the result of a decrease in general and
administrative expenses which was partially offset by an increase in
depreciation expense as discussed above. The decrease in general and
administrative expenses is primarily due to a decrease in Partnership management
fees on distributions from operations. The Managing General Partner earned
approximately $92,000 in Partnership Management fees on distributions from
operations during the nine months ended September 30, 1999 as compared to
approximately $63,000 for the nine months ended September 30, 2000. In addition,
there was a decrease in legal expenses as a result of the settlement of a
lawsuit in 1999 as disclosed in the Partnership's Form 10-QSB at March 31, 1999.
Partially offsetting these decreases was an increase in professional expenses
necessary to operate the Partnership.
Total revenues increased for the three and nine months ended September 30, 2000
as a result of an increase in rental income partially offset by a decrease in
other income. Rental income increased as a result of increases in occupancy at
both of the Partnership's investment properties. The decrease in other income
for both periods is primarily due to a decrease in interest income due to lower
average cash balances held in interest bearing accounts and a decrease in lease
cancellation fees and cleaning and damage fees.
Included in general and administrative expenses for the nine months ended
September 30, 2000 and 1999 are reimbursements to the Managing General Partner
allowed under the Partnership Agreement associated with its management of the
Partnership. 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 monitors the rental market environment of both 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 Partnership had cash and cash equivalents of
approximately $475,000 as compared to approximately $662,000 at September 30,
1999. The net decrease in cash and cash equivalents from the Partnership's year
ended December 31, 1999 is approximately $512,000. The decrease is due to
approximately $854,000 of cash used in financing activities and approximately
$534,000 of cash used in investing activities partially offset by approximately
$576,000 of cash provided by operating activities. Cash used in financing
activities consisted of distributions to partners and to a lesser extent,
payments of principal made on the mortgages encumbering the Partnership's
properties. Cash used in investing activities consisted of property improvements
and replacements which was partially offset by net withdrawals from restricted
escrows. 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 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 Partnership's properties are detailed below.
<PAGE>
Barrington Place
During the nine months ended September 30, 2000, the Partnership expended
approximately $79,000 for capital improvements at Barrington Place primarily
consisting of swimming pool upgrades, carpet and vinyl replacements, heating
upgrades, and water heater replacements. These improvements were funded from
operating cash flow and property replacement reserves. Capital improvements
budgeted for 2000 are expected to cost approximately $227,000, which include,
but are not limited to, floor covering replacement, exterior painting, heating
upgrades, swimming pool improvements and plumbing enhancements.
Wood View
During the nine months ended September 30, 2000, the Partnership expended
approximately $131,000 for capital improvements at Wood View primarily
consisting of plumbing enhancements, a submetering project, a water conservation
project, and carpet and vinyl replacement. These improvements were funded from
operating cash flow. Capital improvements budgeted for 2000 are expected to cost
approximately $177,000 which include, but are not limited to, plumbing
enhancements, floor covering replacement, wall covering replacement, and air
conditioning unit replacement.
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 at least in the short term.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. At September 30,
2000, mortgage indebtedness was approximately $10,254,000. The loan on the Wood
View Apartments in the amount of approximately $5,469,000 bears interest at a
rate of 6.64% per annum. The mortgage encumbering Barrington Place Apartments in
the amount of $4,785,000 bears interest at a rate of 6.65%. Both mortgage loans
mature on August 1, 2008, with balloon payments due, at which time the
properties will need to be refinanced or sold. If the properties cannot be
refinanced and/or sold for a sufficient amount, the Partnership will risk losing
such properties through foreclosure.
During the nine months ended September 30, 2000, the Partnership distributed
cash from operations of approximately $761,000 (approximately $746,000 to the
limited partners, $28.57 per limited partnership unit). During the nine months
ended September 30, 1999 the Partnership distributed cash from operations of
approximately $1,860,000 (approximately $1,823,000 to the limited partners,
$69.82 per limited partnership unit). Additionally, in April 1999, the
Partnership paid approximately $3,000 for withholding taxes on behalf of the
limited partners. 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 expenditures to permit additional distributions to its
partners during the remainder of 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.
<PAGE>
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.
FOX STRATEGIC HOUSING INCOME PARTNERS
(a California Limited Partnership)
By: FOX PARTNERS VIII
Its General Partner
By: Fox Capital Management 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: November 13, 2000
