FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended June 30, 2000
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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
0-21558
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CNL Income Fund XII, Ltd.
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(Exact name of registrant as specified in its charter)
Florida 59-3078856
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Avenue
Orlando, Florida 32801-3336
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number
(including area code) (407) 540-2000
----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
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 _________
<PAGE>
CONTENTS
Part I Page
Item 1. Financial Statements:
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Partners' Capital 3
Condensed Statements of Cash Flows 4
Notes to Condensed Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-11
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 11
Part II
Other Information 12-14
<PAGE>
1
CNL INCOME FUND XII, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------------ -------------------
<S> <C>
ASSETS
Land and buildings on operating leases, less
accumulated depreciation $ 21,896,886 $ 20,780,828
Net investment in direct financing leases 10,390,076 11,441,924
Investment in joint ventures 3,396,084 3,415,888
Mortgage note receivable 46,686 51,301
Cash and cash equivalents 1,714,155 1,870,366
Receivables, less allowance for doubtful accounts
of $31,764 and $14,491, respectively 99,295 80,791
Due from related parties -- 5,222
Prepaid expenses 29,158 13,552
Lease costs, less accumulated amortization
of $8,814 and $6,142, respectively 53,609 56,281
Accrued rental income, less allowance for doubtful
accounts of $8,717 and $6,323, respectively 2,817,894 2,724,774
------------------ -------------------
$ 40,443,843 $ 40,440,927
================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 37,421 $ 136,006
Accrued and escrowed real estate taxes payable 19,590 11,897
Distributions payable 956,252 956,252
Due to related parties 163,536 74,909
Rents paid in advance and deposits 39,491 50,987
------------------ -------------------
Total liabilities 1,216,290 1,230,051
Partners' capital 39,227,553 39,210,876
------------------ -------------------
$ 40,443,843 $ 40,440,927
================== ===================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND XII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
Revenues:
Rental income from operating leases $ 678,728 $ 629,748 $1,384,467 $1,234,632
Earned income from direct financing leases 324,241 372,240 620,740 748,574
Contingent rental income 947 2,311 1,714 4,682
Interest and other income 16,392 25,180 61,881 44,935
------------ ------------ ------------ ------------
1,020,308 1,029,479 2,068,802 2,032,823
------------ ------------ ------------ ------------
Expenses:
General operating and administrative 60,619 31,597 109,200 78,881
Professional services 5,548 11,435 19,970 22,576
Management fees to related party 10,898 10,925 21,576 21,455
Real estate taxes -- 1,371 -- 3,496
State and other taxes 131 -- 20,834 20,764
Depreciation and amortization 101,375 84,071 198,656 168,777
Transaction costs 30,882 92,263 77,277 127,682
------------ ------------ ------------ ------------
209,453 231,662 447,513 443,631
------------ ------------ ------------ ------------
Income Before Equity in Earnings of Joint
Ventures and Gain on Sale of Land and
Buildings 810,855 797,817 1,621,289 1,589,192
Equity in Earnings of Joint Ventures 82,187 119,068 160,259 190,206
Gain on Sale of Land and Buildings -- 74,714 147,633 74,714
------------ ------------ ------------ ------------
Net Income $ 893,042 $ 991,599 $1,929,181 $
1,854,112
============ ============ ============ ============
Allocation of Net Income:
General partners $ 8,930 $ 9,270 $ 17,815 $ 17,895
Limited partners 884,112 982,329 1,911,366 1,836,217
------------ ------------ ------------ ------------
$ 893,042 $ 991,599 $1,929,181 $1,854,112
============ ============ ============ ============
Net Income Per Limited Partner Unit $ 0.2 $ 0.22 $ 0.42 $ 0.41
============ ============ ============ ============
Weighted Average Number of Limited Partner
Units Outstanding 4,500,000 4,500,000 4,500,000 4,500,000
============ ============ ============ ============
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND XII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended
June 30, December 31,
2000 1999
----------------------- --------------------
General partners:
Beginning balance $ 259,109 $ 223,305
Net income 17,815 35,804
----------------------- --------------------
276,924 259,109
----------------------- --------------------
Limited partners:
Beginning balance 38,951,767 39,167,536
Net income 1,911,366 3,609,239
Distributions ($0.43 and $0.85 per
limited partner unit, respectively) (1,912,504 ) (3,825,008 )
----------------------- --------------------
38,950,629 38,951,767
----------------------- --------------------
Total partners' capital $ 39,227,553 $ 39,210,876
======================= ====================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND XII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2000 1999
---------------- ---------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $1,969,359 $1,837,011
---------------- ---------------
Cash Flows from Investing Activities:
Proceeds from sale of land and buildings 791,450 467,300
Investment in joint venture -- (135,825 )
Additions to land and buildings on operating
leases (1,009,067 ) --
Collections on mortgage note receivable 4,551 706
---------------- ---------------
Net cash provided by (used in) investing
activities (213,066 ) 332,181
---------------- ---------------
Cash Flows from Financing Activities:
Distributions to limited partners (1,912,504 ) (2,047,504 )
---------------- ---------------
Net cash used in financing activities (1,912,504 ) (2,047,504 )
---------------- ---------------
Net Increase (Decrease) in Cash and Cash
Equivalents (156,211 ) 121,688
Cash and Cash Equivalents at Beginning of Period 1,870,366 2,362,980
---------------- ---------------
Cash and Cash Equivalents at End of Period $1,714,155 $2,484,668
================ ===============
Supplemental Schedule of Non-Cash Investing and Financing
Activities:
Mortgage note accepted in exchange for sale of
land and building -- $ 55,000
================ ===============
Distributions declared and unpaid at end of
period $ 956,252 $ 956,252
================ ===============
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
CNL INCOME FUND XII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2000 and 1999
1. Basis of Presentation:
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments, consisting of normal recurring adjustments,
which are, in the opinion of management, necessary to a fair statement
of the results for the interim periods presented. Operating results for
the quarter and six months ended June 30, 2000, may not be indicative
of the results that may be expected for the year ending December 31,
2000. Amounts as of December 31, 1999, included in the financial
statements, have been derived from audited financial statements as of
that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K of CNL
Income Fund XII, Ltd. (the "Partnership") for the year ended December
31, 1999.
Certain items in the prior year's financial statements have been
reclassified to conform to 2000 presentation. These reclassifications
had no effect on partners' capital or net income.
2. Land and Buildings on Operating Leases:
Land and buildings on operating leases consisted of the following at:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------------- -------------------
<S> <C>
Land $ 12,672,797 $ 12,262,712
Buildings 11,547,810 10,645,853
------------------- -------------------
24,220,607 22,908,565
Less accumulated depreciation (2,323,721 ) (2,127,737 )
------------------- -------------------
$ 21,896,886 $ 20,780,828
=================== ===================
</TABLE>
Effective January 1, 2000, the Partnership amended the lease relating
to its property in St. Ann, Missouri, to allow for a rent reduction. As
a result, the Partnership reclassified the building portion of this
asset from net investment in direct financing lease to building on
operating lease. In accordance with statement of Financial Accounting
Standards No. 13, "Accounting for Leases," the Partnership recorded the
reclassified asset at the lower of original cost, present fair value,
or present carrying value. No loss was recorded on the
reclassification.
<PAGE>
CNL INCOME FUND XII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2000 and 1999
2. Land and Buildings on Operating Leases - Continued:
In April 2000, the Partnership reinvested the net sales proceeds it
received from the sale of the property in Cleveland, Tennessee, along
with additional funds, in a Krystal property located in Pooler, Georgia
(see Note 3). In connection therewith, the Partnership entered into a
long term, triple-net lease with terms substantially the same as its
other leases.
3. Net Investment in Direct Financing Leases:
In March 2000, the Partnership sold its property in Cleveland,
Tennessee, for which the land and building had been classified as a
direct financing lease, for $806,460 and received net sales proceeds of
$791,450, resulting in a gain of $147,633 for financial reporting
purposes. In connection therewith, the gross investment (minimum lease
payments receivable and the estimated residual value) and unearned
income relating to the land and building were removed from the
accounts. This property was originally acquired by the Partnership in
December 1992 and had a cost of approximately $622,800, excluding
acquisition fees and miscellaneous acquisition expenses; therefore, the
Partnership sold the property for approximately $168,700 in excess of
its original purchase price. In April 2000, the Partnership reinvested
the net sales proceeds, along with additional funds, in a Krystal
property located in Pooler, Georgia (see Note 2).
4. Termination of Merger:
On March 1, 2000, the general partners and CNL American Properties
Fund, Inc. ("APF") mutually agreed to terminate the Agreement and Plan
of Merger entered into in March 1999. The general partners are
continuing to evaluate strategic alternatives for the Partnership,
including alternatives to provide liquidity to the limited partners.
5. Subsequent Events:
In July 2000, the Partnership sold its property in Bradenton, Florida
to an unrelated third party for approximately $1,227,900, resulting in
a gain of approximately $106,800 for financial reporting purposes.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund XII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on August 20, 1991, to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurants, as well as Properties upon which restaurants were to be
constructed (the "Properties"), which are leased primarily to operators of
national and regional fast-food and family-style restaurant chains. The leases
are generally triple-net leases, with the lessees responsible for all repairs
and maintenance, Property taxes, insurance and utilities. As of June 30, 2000,
the Partnership owned 48 Properties, which included interests in six Properties
owned by joint ventures in which the Partnership is a co-venturer.
Capital Resources
The Partnership's primary source of capital for the six months ended
June 30, 2000 and 1999 was cash from operations (which includes cash received
from tenants, distributions from joint ventures, and interest and other income
received, less cash paid for expenses). Cash from operations was $1,969,359 and
$1,837,011 for the six months ended June 30, 2000 and 1999, respectively. The
increase in cash from operations for the six months ended June 30, 2000, as
compared to the six months ended June 30, 1999, was primarily a result of
changes in income and expenses as described in "Results of Operations" below and
changes in the Partnership's working capital.
Other sources and uses of capital included the following during the six
months ended June 30, 2000.
During the six months ended June 30, 2000, the Partnership sold its
Property in Cleveland, Tennessee, to a third party, for $806,460 and received
net sales proceeds of $791,450, resulting in a total gain of $147,633 for
financial reporting purposes. This Property was originally acquired by the
Partnership in December 1992, and had a cost of approximately $622,800,
excluding acquisition fees and miscellaneous acquisition expenses; therefore,
the Partnership sold the Property for approximately $168,700 in excess of its
original purchase price. In April 2000, the Partnership reinvested the net sales
proceeds, along with additional funds, in a Property in Pooler, Georgia. The
transaction relating to the sale of the Property in Cleveland, Tennessee and the
reinvestment of the net sales proceeds was structured to qualify as a like-kind
exchange transaction for federal income tax purposes. However, the Partnership
will distribute amounts sufficient to enable the limited partners to pay federal
and state income taxes, if any (at a level reasonably assumed by the general
partners), resulting from the sale.
In July 2000, the Partnership sold its Property in Bradenton, Florida
to an unrelated third party for approximately $1,227,900, resulting in a gain of
approximately $106,800 for financial reporting purposes. The Partnership intends
to use the net sales proceeds to pay liabilities of the Partnership, to reinvest
in an additional Property or to distribute to the limited partners.
Currently, rental income from the Partnership's Properties and any net
sales proceeds from the sale of Properties, pending reinvestment in additional
Properties, are invested in money market accounts or other short-term, highly
liquid investments, such as demand deposit accounts at commercial banks and
certificates of deposit with less than a 30-day maturity date, pending the
Partnership's use of such funds to pay Partnership expenses or to make
distributions to the partners. At June 30, 2000, the Partnership had $1,714,155
invested in such short-term investments, as compared to $1,870,366 at December
31, 1999. The funds remaining at June 30, 2000, after payment of distributions
and other liabilities, will be used to meet the Partnership's working capital
and other needs.
Short-Term Liquidity
The Partnership's short-term liquidity requirements consist primarily
of the operating expenses of the Partnership.
The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who meet specified
financial standards minimizes the Partnership's operating expenses. The general
partners believe that the leases will continue to generate cash flow in excess
of operating expenses.
The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.
Total liabilities of the Partnership decreased to $1,216,290 at June
30, 2000, from $1,230,051 at December 31, 1999, primarily as a result of a
decrease in accounts payable and rents paid in advance at June 30, 2000, as
compared to December 31, 1999. The decrease in liabilities at June 30, 2000 was
partially offset by an increase in due to related parties at June 30, 2000, as
compared to December 31, 1999. The general partners believe that the Partnership
has sufficient cash on hand to meet its current working capital needs.
The Partnership generally distributes cash from operations remaining
after the payment of operating expenses of the Partnership, to the extent that
the general partners determine that such funds are available for distribution.
Based on current and, for the six months ended June 30, 1999, anticipated future
cash from operations, the Partnership declared distributions to the limited
partners of $1,912,504 for each of the six months ended June 30, 2000 and 1999
($956,252 for each of the quarters ended June 30, 2000 and 1999). This
represents distributions for each applicable six months of $0.43 per unit ($0.21
per unit for each applicable quarter). No distributions were made to the general
partners for the quarters and six months ended June 30, 2000 and 1999. No
amounts distributed to the limited partners for the six months ended June 30,
2000 and 1999 are required to be or have been treated by the Partnership as a
return of capital for purposes of calculating the limited partners' return on
their adjusted capital contributions. The Partnership intends to continue to
make distributions of cash available for distribution to the limited partners on
a quarterly basis.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
<PAGE>
Results of Operations
During the six months ended June 30, 1999, the Partnership owned and
leased 43 wholly owned Properties (which included one Property sold in May 1999)
and during the six months ended June 30, 2000, the Partnership owned and leased
43 wholly owned Properties (which included one Property sold in March 2000), to
operators of fast-food and family-style restaurant chains. In connection
therewith, during the six months ended June 30, 2000 and 1999, the Partnership
earned $2,005,207 and $1,983,206, respectively, in rental income from operating
leases and earned income from direct financing leases from these Properties,
$1,002,969 and $1,001,988 of which was earned during the quarters ended June 30,
2000 and 1999, respectively. The increase in rental and earned income during the
six months ended June 30, 2000 was primarily due to the fact that during the six
months ended June 30, 2000, the Partnership collected and recognized as income
approximately $55,600 in past due rental amounts relating to Long John Silver's,
Inc. which filed for bankruptcy during 1998 and rejected the leases relating to
three of the eight Properties it leased. As of June 30, 2000, the Partnership
had sold two of the Properties for which the leases had been rejected and had
entered into a lease with a new tenant for the remaining Property for which the
lease had been rejected. In addition, rental and earned income increased
approximately $13,800 and $27,600 during the quarter and six months ended June
30, 2000, respectively, as compared to the quarter and six months ended June 30,
1999, due to the Partnership recognizing rental income on this re-leased
Property. During 1999, Long John Silver's, Inc. assumed and affirmed its five
remaining leases and the Partnership has continued receiving rental payments
relating to these leases. However, the increase in rental and earned income was
partially offset by a decrease of $7,200 and $14,400 for the quarter and six
months ended June 30, 2000, respectively, due to the Partnership granting Long
John Silver's, Inc. rent concessions on three of the affirmed leases.
The increase in rental and earned income was also partially offset by a
decrease of approximately $17,500 and $23,000 during the quarter and six months
ended June 30, 2000, respectively, as a result of the sale of the Property in
Cleveland, Tennessee in March 2000, as described in "Capital Resources." Rental
and earned income increased approximately $25,500 during the quarter and six
months ended June 30, 2000 due to the reinvestment of the net sales proceeds in
a Property in Pooler, Georgia in April 2000, as described in "Capital
Resources."
The increase in rental and earned income was partially offset by a
decrease of approximately $4,000 and $30,600 during the quarter and six months
ended June 30, 2000, respectively, as compared to the quarter and six months
ended June 30, 1999, due to the fact that during the quarter and six months
ended June 30, 2000, the Partnership established an allowance for doubtful
accounts for past due rental amounts relating to three Properties in accordance
with the Partnership's policy. No such allowance was recorded during the quarter
and six months ended June 30, 1999. The general partners will continue to pursue
collection of past due rental amounts relating to these Properties and will
recognize such amounts as income if collected.
The increase in rental and earned income during the quarter and six
months ended June 30, 2000 was also offset by a decrease in rental and earned
income of approximately $8,200 and $13,800, respectively, due to the fact that
the lease relating to the Property in St. Ann, Missouri was amended to provide
for rent reductions from January 2000 through the end of the lease term. The
Partnership does not believe that the rent reductions will have a material
adverse effect on the results of operations of the Partnership.
In addition, during the six months ended June 30, 2000 and 1999, the
Partnership owned and leased six and five Properties, respectively, indirectly
through joint venture arrangements. In connection therewith, during the six
months ended June 30, 2000 and 1999, the Partnership earned $160,259 and
$190,206, respectively, $82,187 and $119,068 of which was earned during the
quarters ended June 30, 2000 and 1999, respectively. The decrease in net income
earned by joint ventures was partially due to the fact that during the quarter
and six months ended June 30, 1999, Middleburg Joint Venture, in which the
Partnership owns an 87.54% interest, collected and recognized as income past due
rental amounts for which the joint venture had previously established an
allowance for doubtful accounts. The decrease in net income earned by joint
ventures during the quarter and six months ended June 30, 2000 was partially
offset by an increase due to the fact that in November 1999, the Partnership
reinvested the net sales proceeds from the 1999 sale of the Property in
Morganton, North Carolina in Bossier City Joint Venture.
Operating expenses, including depreciation and amortization expense,
were $447,513 and $443,631 during the six months ended June 30, 2000 and 1999,
respectively, $209,453 and $231,662 of which were incurred during the quarters
ended June 30, 2000 and 1999, respectively. The increase in operating expenses
during the six months ended June 30, 2000, as compared to the six months ended
June 30, 1999, was partially attributable to, and the decrease during the
quarter ended June 30, 2000, as compared to the quarter ended June 30, 1999, was
partially offset by an increase in administrative expenses for servicing the
Partnership and its Properties. In addition, the increase in operating expenses
during the six months ended June 30, 2000, was partially due to, and the
decrease during the quarter ended June 30, 2000, was partially offset by, an
increase in depreciation expense relating to the fact that subsequent to June
30, 1999, the Partnership reclassified the leases for its Properties in
Asheville, North Carolina and Clarksville, Tennessee from direct financing
leases to operating leases due to lease amendments. In addition, the increase in
operating expenses during the six months ended June 30, 2000, was partially
offset by, and the decrease during the quarter ended June 30, 2000, was
partially due to, the fact that the Partnership incurred less transaction costs
relating to the general partners retaining financial and legal advisors to
assist them in evaluating and negotiating the proposed merger with CNL American
Properties Fund, Inc. ("APF") due to the termination of the proposed merger, as
described below in "Termination of Merger."
As a result of the sale of the Property in Cleveland, Tennessee, as
described above in "Capital Resources," the Partnership recorded a gain of
$147,633 for financial reporting purposes during the six months ended June 30,
2000. As a result of the sale of the Property in Morganton, North Carolina in
May 1999, the Partnership recorded a gain of $74,714 for financial reporting
purposes during the quarter and six months ended June 30, 1999.
Termination of Merger
On March 1, 2000, the general partners and APF mutually agreed to
terminate the Agreement and Plan of Merger (the "Merger") entered into in March
1999. The general partners are continuing to evaluate strategic alternatives for
the Partnership, including alternatives to provide liquidity to the limited
partners.
Dismissal of Legal Action
As described in greater detail in Part II, Item 1. "Legal Proceedings,"
in 1999, two groups of limited partners in several CNL Income Funds filed
purported class action suits against the general partners and APF alleging,
among other things, that the general partners had breached their fiduciary
duties in connection with the proposed Merger. These actions were later
consolidated into one action. On April 25, 2000, the judge in the consolidated
action issued an order dismissing the action without prejudice, with each party
to bear its own costs and attorneys' fees.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No material changes in the Partnership's market risk occurred from
December 31, 1999 through June 30, 2000. Information regarding the Partnership's
market risk at December 31, 1999 is included in its Annual Report on Form 10-K
for the year ended December 31, 1999.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On May 11, 1999, four limited partners in several CNL Income
Funds served a derivative and purported class action lawsuit
filed April 22, 1999 against the general partners and APF in
the Circuit Court of the Ninth Judicial Circuit of Orange
County, Florida, alleging that the general partners breached
their fiduciary duties and violated provisions of certain of
the CNL Income Fund partnership agreements in connection with
the proposed merger. The plaintiffs sought unspecified damages
and equitable relief. On July 8, 1999, the plaintiffs filed an
amended complaint which, in addition to naming three
additional plaintiffs, included allegations of aiding and
abetting and conspiring to breach fiduciary duties, negligence
and breach of duty of good faith against certain of the
defendants and sought additional equitable relief. As amended,
the caption of the case was Jon Hale, Mary J. Hewitt, Charles
A. Hewitt, Gretchen M. Hewitt, Bernard J. Schulte, Edward M.
and Margaret Berol Trust, and Vicky Berol v. James M. Seneff,
Jr., Robert A. Bourne, CNL Realty Corporation, and CNL
American Properties Fund Inc., Case No. CIO-99-0003561.
On June 22, 1999, a limited partner of several CNL Income
Funds served a purported class action lawsuit filed April 29,
1999 against the general partners and APF, Ira Gaines,
individually and on behalf of a class of persons similarly
situated, v. CNL American Properties Fund, Inc., James M.
Seneff, Jr., Robert A. Bourne, CNL Realty Corporation, CNL
Fund Advisors, Inc., CNL Financial Corporation a/k/a CNL
Financial Corp., CNL Financial Services, Inc. and CNL Group,
Inc., Case NO. CIO-99-3796, in the Circuit Court of the Ninth
Judicial Circuit of Orange County, Florida, alleging that the
general partners breached their fiduciary duties and that APF
aided and abetted their breach of fiduciary duties in
connection with the proposed merger.
The plaintiff sought unspecified damages and equitable relief.
On September 23, 1999, Judge Lawrence Kirkwood entered an
order consolidating the two cases under the caption In re: CNL
Income Funds Litigation, Case No. 99-3561. Pursuant to this
order, the plaintiffs in these cases filed a consolidated and
amended complaint on November 8, 1999. On December 22, 1999,
the general partners and CNL Group, Inc. filed motions to
dismiss and motions to strike. On December 28, 1999, APF and
CNL Fund Advisors, Inc. filed motions to dismiss. On March 6,
2000, all of the defendants filed a Joint Notice of Filing
Form 8-K Reports and Suggestion of Mootness.
On April 25, 2000, Judge Kirkwood issued a Stipulated Final
Order of Dismissal of Consolidated Action, dismissing the
action without prejudice, with each party to bear its own
costs and attorneys' fees.
Item 2. Changes in Securities. Inapplicable.
Item 3. Default upon Senior Securities. Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders. Inapplicable.
Item 5. Other Information. Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-43278-01 on Form S-11 and
incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-43278-01 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership of
CNL Income Fund XII, Ltd. (Included as Exhibit 4.2 to
Form 10-K filed with the Securities and Exchange
Commission on April 15, 1993, and incorporated herein by
reference.)
10.1 Management Agreement between CNL Income Fund XII, Ltd.
and CNL Investment Company (Included as Exhibit 10.1 to
Form 10-K filed with the Securities and Exchange
Commission on April 15, 1993, and incorporated herein by
reference.)
10.2 Assignment of Management Agreement from CNL Investment
Company to CNL Income Fund Advisors, Inc. (Included as
Exhibit 10.2 to Form 10-K filed with the Securities and
Exchange Commission on March 31, 1995, and incorporated
herein by reference.)
10.3 Assignment of Management Agreement from CNL Income Fund
Advisors, Inc. to CNL Fund Advisors, Inc. (Included as
Exhibit 10.3 to Form 10-K filed with the Securities and
Exchange Commission on April 1, 1996, and incorporated
herein by reference.)
27 Financial Data Schedule (Filed herewith.)
<PAGE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June
30, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 10th day of August, 2000.
By: CNL INCOME FUND XII, LTD.
General Partner
By: /s/JAMES M. SENEFF, JR.
----------------------------------
JAMES M. SENEFF, JR.
Chief Executive Officer
(Principal Executive Officer)
By: /s/ROBERT A. BOURNE
----------------------------------
ROBERT A. BOURNE
President and Treasurer
(Principal Financial and
Accounting Officer)
