<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2000
------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number: 000-21470
-----------------
N'TANDEM TRUST
-------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-6109499
------------------------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6160 So. Syracuse Way, Greenwood Village, Colorado 80111
---------------------------------------------------------
(Address of principal executive offices)
303) 741-3707
-----------------------
(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 ( )
--- ---
At May 1, 2000, the issuer had 109,308 Common Shares of Beneficial Interest and
98,073 Preferred Shares of Beneficial Interest outstanding.
Transitional small business disclosure format (check one): Yes [ ] No [X]
<PAGE>
TABLE OF CONTENTS
PART I
------
Page
----
Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II
-------
Item 3. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE 14
<PAGE>
PART I
------
Certain matters discussed under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this Quarterly
Report on Form 10-QSB/A may constitute forward-looking statements for purposes
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as such involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of N'Tandem Trust to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements.
1
<PAGE>
Item 1. Financial Statements
-------
N'TANDEM TRUST
--------------
CONSOLIDATED BALANCE SHEET
--------------------------
<TABLE>
<CAPTION>
ASSETS March 31, 2000
------ ----------------------
<S> <C>
Property held for investment, net $ 43,321,800
Investments in joint ventures and limited partnerships 5,262,800
Cash and cash equivalents 807,000
Restricted cash 708,100
Deferred financing costs, net 829,300
Other assets 790,300
----------------------
Total Assets $ 51,719,300
======================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Mortgage notes payable $ 27,057,600
Line of credit 2,170,100
Note payable to Chateau Communities, Inc. 19,972,400
Accounts payable 11,400
Accrued expenses 421,300
Other liabilities 1,884,600
Due to general partners and affiliates 620,500
----------------------
Total Liabilities 52,137,900
----------------------
Shareholders' Equity:
Preferred shares of beneficial interest, $0.01 par value; unlimited
Shares authorized; 98,073 shares issued and outstanding 2,121,700
Common shares of beneficial interest, $0.01 par value; unlimited
Shares authorized; 109,308 shares issued and outstanding 2,401,400
Dividends in excess of accumulated earnings (4,941,700)
----------------------
Total Shareholders' Equity (418,600)
----------------------
Total Liabilities and Shareholders' Equity $ 51,719,300
======================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
N'TANDEM TRUST
--------------
CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------------
2000 1999
------------------ ------------------
<S> <C> <C>
REVENUES
--------
Rent and utilities $ 1,779,100 $ 734,600
Equity in earnings (losses) of joint ventures and limited
partnerships (34,700) (8,300)
Other 55,500 38,300
------------------ ------------------
1,799,900 764,600
------------------ ------------------
COSTS AND EXPENSES
------------------
Property operating expenses 840,600 396,900
Interest 1,138,700 301,500
Depreciation 482,800 159,200
Advisory fee 138,500 49,100
General and administrative:
Related parties - 7,900
Other 34,800 13,100
------------------ ------------------
2,635,400 927,700
------------------ ------------------
Net loss $ (835,500) $ (163,100)
------------------ ------------------
Preferred dividends paid $ (36,800) $ (36,800)
------------------ ------------------
Net loss attributable to common shares $ (872,300) $ (199,900)
================== ==================
Basic and diluted loss per common share $ (7.98) $ (1.83)
================== ==================
Dividends per common share $ 0.38 $ 0.38
================== ==================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
N'TANDEM TRUST
--------------
CONSOLIDATED STATEMENTS OF STATEMENTS OF CASH FLOWS
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------
2000 1999
----------------- ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ (835,500) $ (163,100)
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation 482,800 159,200
Equity in (earnings) losses of joint ventures
and limited partnerships 34,700 8,300
Joint ventures' cash distributions (34,700) (8,300)
Amortization of deferred financing costs 27,500 3,000
Changes in operating assets and liabilities:
Increase in other assets (74,500) (4,300)
Decrease in accounts payable - (7,000)
(Decrease) increase in accrued expenses (119,400) 262,000
Decrease in other liabilities (45,900) (1,300)
Increase in due to advisor and affiliates 203,300 97,500
------------ ------------
Net cash (used in) provided by operating activities (361,700) 346,000
------------ ------------
Cash flows from investing activities:
Increase in property held for investment (195,700) (153,600)
Increase in escrow accounts (572,000)
Joint ventures' and limited partnerships' cash distributions 147,000 10,700
------------ ------------
Net cash used in investing activities (620,700) (142,900)
------------ ------------
Cash flows from financing activities:
Dividends paid (77,800) (77,800)
Proceeds from mortgages payable 20,300,000 -
Proceeds from line of credit 4,400,000
Repayment from line of credit (17,229,900) -
Principal payments (2,066,000)
Loan origination fees (609,400) -
Repayment of note due to Chateau Communities, Inc. (3,540,200) -
------------ ------------
Net cash provided by (used in) financing activities 1,176,700 (77,800)
------------ ------------
Net increase (decrease) in cash and cash equivalents 194,300 125,300
Cash and cash equivalents at beginning of period 612,700 26,300
------------ ------------
Cash and cash equivalents at end of period $ 807,000 $ 151,600
============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
N'TANDEM TRUST
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. THE TRUST
---------
N'Tandem Trust, an unincorporated business trust (the "Trust"), was formed in
November 1991 under the laws of the State of California. The Trust was
organized to invest in existing, substantially developed and occupied
manufactured home communities. The sponsor and advisor of the Trust is The
Windsor Corporation, a California corporation (the "Advisor"). The Trust was
funded through a public offering of common shares of beneficial interest (the
"Common Shares") and preferred shares of beneficial interest, which commenced in
April 1992 and terminated in April 1993. At March 31, 2000, the Trust's
portfolio was comprised of twelve wholly-owned and seven partially-owned
manufactured home communities located in seven states.
The Trust operates so as to qualify as a real estate investment trust (a "REIT")
under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended
(the "Code"). As a REIT, the Trust is required to distribute at least 95% of
its REIT taxable income.
On October 23, 1998, at the 1998 Annual Meeting of Shareholders, the Trust's
shareholders approved, among other things, (i) the conversion of the Trust from
a finite-life entity to an infinite-life entity; and (ii) the amendment and
restatement of the Trust's Declaration of Trust (the "Amended Declaration") and
the adoption of By-laws for the Trust (collectively, the "Organizational
Amendments"). The principal purposes of the Organizational Amendments were to
convert the Trust from a finite-life to an infinite-life entity and to remove
various restrictions, limitations and other requirements contained in the
Trust's previous Declaration of Trust which are not typically found in the more
modern organizational documents of leading REITs. The Amended Declaration also
provided for changing the name of the Trust from "Windsor Real Estate Investment
Trust 8" to "N'Tandem Trust."
As a result of the approval of the Organizational Amendments, the Trust now
intends to move forward with certain transactions and to effect certain changes
including the following: (i) the Trust will complete its restructuring as an
"umbrella partnership" REIT in order to facilitate tax-free and/or tax-deferred
acquisitions of additional properties, (ii) the Trust will continue implementing
a growth-oriented business plan (the "Business Plan") intended to cause the
Trust to attain greater size and asset diversity; and (iii) if successful in the
implementation of the Business Plan, the Trust anticipates that it will seek to
list the Common Shares on a national securities exchange or NASDAQ and, if
deemed appropriate, raise additional capital through underwritten public
offerings and private offerings of the Common Shares or other securities of the
Trust.
Additionally, Chateau Communities, Inc., a publicly traded REIT which is one of
the largest owner/operators of manufactured home communities in the United
States ("Chateau"), has announced that the Trust will be a primary vehicle
through which Chateau will make investments in manufactured home communities
that do not fit the core asset type typical of the existing Chateau portfolio,
which is characterized by large, stable, institutional-quality, full amenitized
properties. The Trust will employ higher levels of leverage than Chateau and
will focus primarily on "lower profile assets," meaning properties that (i) are
typically not part of a portfolio of manufactured housing community properties;
(ii) are located in tertiary demographic and geographic markets; (iii) are not
managed by a nationally known manufactured home community operator; (iv) may be
smaller and are likely to have fewer amenities; and (v) have a greater
proportion of single-section homes than the typical Chateau community. The
Trust believes that its affiliation with Chateau will benefit the Trust by
providing it with access to Chateau's national organization, management team and
investment and management philosophies. Through its affiliation with Chateau,
the Trust believes that it will be exposed to a wider range of acquisition
opportunities as a result of Chateau's national organization and knowledge of
the manufactured housing community industry
5
<PAGE>
and will benefit from Chateau's expertise in effectively and efficiently
managing properties. At March 31, 2000, Chateau held 9.8% of the Trust's
outstanding shares.
The Trust believes that significant opportunities exist to acquire additional
properties that fit the investment objectives and guidelines set forth in its
Business Plan. During 1999, the Trust, through its limited partnership
subsidiary, N'Tandem Properties, L.P., acquired six wholly-owned manufactured
home communities and partial ownership interests in six other manufactured home
communities (together, the "1999 Acquisitions"). In addition, the Trust has
negotiated to acquire, in separate transactions, the manufactured home
communities and joint venture interests of Windsor Park Properties 3, A
California Limited Partnership ("Windsor 3"), and Windsor Park Properties 6, A
California Limited Partnership ("Windsor 6"). On March 22, 2000, separate
consent solicitation statements describing the respective terms of each of the
proposed acquisitions (the "Proposed Transactions") were sent to the limited
partners of Windsor 3 and Windsor 6. The consummation of each of the proposed
acquisitions is subject to the satisfaction of several conditions, including the
separate approval of a majority-in-interest of the respective limited partners
of Windsor 3 and Windsor 6. On April 28, 2000, the Proposed Transactions were
approved by the limited partners in each of Windsor 3 and Windsor 6. It is
anticipated that the Proposed Transactions will close around May 31, 2000 and
that liquidating distributions will be paid to the limited partners around June
30, 2000. The purchase price for the assets of each of Windsor 3 and Windsor 6
will be paid by the Trust in cash. It is anticipated that all of the funds
required by the Trust to complete the proposed acquisitions will be supplied by
Chateau in exchange for the issuance by the Trust of an unsecured promissory
note. Pursuant to the terms of the proposed acquisitions, this promissory note
will be in a principal amount of $16,926,700 and will bear interest at an annual
rate of 1% per annum above the prime rate established by Bank One, N.A.
The Trust anticipates that it will focus on acquisitions where the Trust
believes there is substantial opportunity to improve operational and financial
results or where for some reason, because of poor management or otherwise, a
property is operating substantially below its potential. The Trust anticipates
that the funds required to implement its Business Plan are likely to come from
(i) additional investments from Chateau or unaffiliated third parties and (ii)
traditional mortgage financing or refinancing or sales of equity and debt
securities. In addition, the Trust will seek to engage in consolidation and
acquisition transactions with other owners of manufactured home communities,
which meet the Trust's property and acquisition criteria, using its equity
securities or limited partner units of N'Tandem Properties, L.P. to facilitate
such transactions.
NOTE 2. BASIS OF PRESENTATION
---------------------
The balance sheet at March 31, 2000 and the related statements of operations for
the three months ended March 31, 2000 and 1999 and the statements of cash flows
for the three months ended March 31, 2000 and 1999 are unaudited. However, in
the opinion of the Advisor, they contain all adjustments, of a normal recurring
nature, necessary for a fair presentation of such financial statements. Interim
results are not necessarily indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB/A
and do not contain certain information included in the Trust's annual financial
statements and notes on Form 10-KSB for the year ended December 31, 1999.
Certain reclassifications of prior year information have been made to conform
with current year presentation.
6
<PAGE>
NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
------------------------------------------------------
The Trust's investments in joint ventures and limited partnerships consist of
interests in seven and three manufactured home communities at March 31, 2000 and
1999, respectively. The combined condensed results of operations of the joint
venture and limited partnership properties for the three months ended March 31,
2000 and 1999 are as follows:
Results of Operations 2000 1999
--------------------- ------------ ----------
Property revenues $ 1,090,600 $ 315,600
------------ ----------
Expenses:
Property operating 555,000 181,000
Interest 252,700 100,400
Depreciation 210,300 70,200
General and Administrative 2,100 2,100
------------ ----------
1,020,100 353,700
------------ ----------
Net income (loss) $ 70,500 $ (38,100)
============ ==========
NOTE 5. BASIC AND DILUTED LOSS PER COMMON SHARE
---------------------------------------
Basic and diluted loss per Common Share is calculated and based on the weighted
average number of Common Shares outstanding during the period and income or loss
available to the holders of Common Shares. The weighted average number of
Common Shares outstanding during the three months ended March 31, 2000 and 1999
was 109,308.
NOTE 6. DEBT
----
The following table sets forth certain information regarding the Trust's
outstanding indebtedness at March 31, 2000.
Interest Maturity Principal
Rate Date Balance
-----------------------------------------
Mortgage notes 8.69% 2003 $ 6,757,600
8.56% 2005 20,300,000
Promissory note 8.75% 2006 864,800 (1)
Line of credit 7.12% 2001 2,170,100
Unsecured notes to Chateau 10.00% 2001 19,972,400
---------------
$ 50,064,900
===============
___________________________
(1) Amount included in Other liabilities
7
<PAGE>
On March 31, 2000, the Trust obtained $20.3 million of mortgage financing from
SunAmerica Life Insurance Company ("SunAmerica") secured by seven of the Trust's
wholly-owned properties. The loans bear interest at 8.56% and mature on March
31, 2005. Escrow reserves of $626,600 were established with SunAmerica as part
of the financing, including a $250,000 holdback for South Pointe Village to be
released upon the attainment of certain operating results by the end of 2000 and
a $322,000 capital improvement escrow for the South Pointe Village property
which will be released upon completion of certain improvements, expected to be
completed by the end of 2000. The net proceeds from the financing were used to
pay down $17.2 million on the Trust's line of credit and pay off an existing
mortgage of $2,050,000.
NOTE 7. RELATED PARTY TRANSACTIONS
---------------------------
Advisory fee expense represents a fee payable to the Advisor for management of
the Trust's business. The fee is computed based on invested and uninvested asset
levels and is subject to certain subordination provisions. Advisory fee expense
for the three months ended March 31, 2000 and 1999 was $138,500 and $49,100,
respectively.
Chateau and/or its predecessor has been providing property management services
to the Trust since 1992. For this service, Chateau is paid a property
management fee, which is based on a percentage of actual gross receipts of the
properties. The total management fees paid to Chateau were $79,500 and $26,000
for the three months ended March 31, 2000 and 1999, respectively. In addition,
certain direct expenses are paid by Chateau on behalf of the Trust and then
reimbursed by the Trust. These amounts were $191,200 and $69,100 for the three
months ended March 31, 2000 and 1999, respectively.
In conjunction with the SunAmerica financing, N'Tandem recorded a $203,000
subordination fee payable to Chateau.
For additional information concerning the Trust's relationship and transactions
with Chateau, see Note 1.
8
<PAGE>
Item 2.
-------
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Form 10-QSB/A.
Three months ended March 31, 2000 as compared to three months ended March 31,
-----------------------------------------------------------------------------
1999
----
Results of Operations
---------------------
The results of operations for the three months ended March 31, 2000 and 1999 are
not directly comparable due to the purchase of the six wholly-owned manufactured
home communities and partial ownership interests in six other manufactured home
communities during 1999 (together, the "1999 Acquisitions"). The Trust incurred
a net loss of $835,500 and $163,100 for the three months ended March 31, 2000
and 1999, respectively. The net loss per Common Share was $7.98 in 2000
compared to a net loss of $1.83 in 1999.
As a result of the 1999 Acquisitions, all major revenue and expense categories
increased in the first quarter of 2000, specifically rent and utilities revenue,
property operating costs, advisory fee expense and depreciation.
Equity in earnings (losses) of joint ventures and limited partnerships, which
represents the Trust's share of the net income (loss) of seven manufactured home
communities held by joint ventures and limited partnerships, increased from a
loss of $8,300 in 1999 to a loss of $34,800 in 2000.
Interest expense increased from $301,500 in 1999 to $1,138,700 in 2000, due to
the 1999 Acquisitions.
Advisory fee expense represents a fee payable to the Advisor for management of
the Trust's business. The fee is computed based on invested and uninvested asset
levels and is subject to certain subordination provisions. Advisory fee expense
increased from $49,100 in 1999 to $138,500 for the first quarter of 2000, due to
the 1999 Acquisitions.
General and administrative expenses increased from $21,000 in 1999 to $34,800 in
2000 due mainly to an increase in professional fees.
Liquidity and Capital Resources
-------------------------------
The Trust's principal sources of liquidity during the three months ended March
31, 2000 and 1999 were its cash flow generated from the operation of its
communities, distributions from investments in joint ventures and limited
partnerships, and financing activities. Net cash used in operating activities
was $361,700 for the three months ended March 31, 2000 and the net cash provided
by operating activities was $346,000 for the three months ended March 31, 1999.
The reduction in operating cash was related to managing working capital
requirements. Net cash used in investing activities was $620,700 and $142,900
for the three months ended March 31, 2000 and 1999, respectively. The increase
in cash used in investing activities was primarily due to the establishment of
restricted escrow accounts related to the SunAmerica mortgages. Net cash
provided by financing activities was $1,176,700 for the three months ended
March 31, 2000 and the net cash used in financing activities was $77,800 for the
three months ended March 31, 1999. The increase in cash provided by financing
activities was related to proceeds received from the SunAmerica financing net of
the pay down of the line of credit and mortgage note payable. As of March 31,
2000, the Trust's cash and restricted cash amounted to approximately $807,000.
9
<PAGE>
The Trust's primary uses of its capital resources during the same periods were
for cash distributions to shareholders, payment of advisory and management fees,
and debt service. To maintain its qualification as a REIT under the Code, the
Trust is required to distribute to its shareholders at least 95% of its "Real
Estate Investment Trust Taxable Income" as defined in the Code. The Trust
declared a quarterly distribution on its Common Shares of $.38 per share in each
of the first quarters of 2000 and 1999. In addition, the Trust paid quarterly
distributions on its Preferred Shares of $.38 per share in each of the first
quarters of 2000 and 1999. Future distributions on the Common Shares will be
determined based on actual results of operations and cash available for
distribution.
The Trust's principal long-term liquidity requirements will be the repayment of
principal on its outstanding mortgage debt and the acquisition of additional
properties in connection with the implementation of the Trust's Business Plan.
At March 31, 2000, the Trust's total mortgage debt, including its proportionate
share of joint venture and limited partnership debt, was $32,827,800, consisting
of fixed rate and variable rate debt. In addition, the Trust had $19,972,400 of
unsecured notes payable to Chateau at March 31, 2000. The average rate of
interest on the fixed rate and variable rate debt was 8.61% and 8.98%,
respectively, at March 31, 2000. The Trust and affiliated entities are jointly
and severally liable for the full amounts of the loans obtained jointly.
On March 31, 2000, the Trust obtained $20.3 million of mortgage financing from
SunAmerica Life Insurance Company, secured by seven of the Trust's wholly-owned
properties. The loans bear interest at 8.56% and mature March 31, 2005. The
net proceeds from the financing were used to pay down $17.2 million on the
Trust's line of credit and pay off an existing mortgage of $2,050,000.
During 1999, the Trust, through its limited partnership subsidiary, N'Tandem
Properties, L.P., acquired six wholly-owned manufactured home communities and
partial ownership interests in six other manufactured home communities
(together, the "1999 Acquisitions"). In addition, the Trust has negotiated to
acquire, in separate transactions, the manufactured home communities and joint
venture interests of Windsor Park Properties 3, A California Limited Partnership
("Windsor 3"), and Windsor Park Properties 6, A California Limited Partnership
("Windsor 6"). On March 22, 2000, separate consent solicitation statements
describing the respective terms of each of the proposed acquisitions (the
"Proposed Transactions") were sent to the limited partners of Windsor 3 and
Windsor 6. The consummation of each of the proposed acquisitions is subject to
the satisfaction of several conditions, including the separate approval of a
majority-in-interest of the respective limited partners of Windsor 3 and Windsor
6. On April 28, 2000, the Proposed Transactions were approved by the limited
partners in each of Windsor 3 and Windsor 6. It is anticipated that the Proposed
Transactions will close around May 31, 2000 and that liquidating distributions
will be paid to the limited partners around June 30, 2000. The purchase price
for the assets of each of Windsor 3 and Windsor 6 will be paid by the Trust in
cash. It is anticipated that all of the funds required by the Trust to complete
the proposed acquisitions will be supplied by Chateau in exchange for the
issuance by the Trust of an unsecured promissory note. Pursuant to the terms of
the proposed acquisitions, this promissory note will be in a principal amount of
$16,926,700 and will bear interest at an annual rate of 1% per annum above the
prime rate established by Bank One, N.A.
The future sources of liquidity for the Trust will be provided from property
operations, cash reserves and distributions from investments in joint ventures
and limited partnerships. The Trust expects to meet its short-term liquidity
requirements, including capital expenditures, administration expenses, advisory
fees, debt service, and distributions to shareholders, from cash flow provided
from property operations and distributions from investments in joint ventures
and limited partnerships. The Trust intends to fund the repayment of its
mortgage debt with equity or other debt financings, including public financings.
In addition, future acquisitions of properties will be funded through
investments by Chateau or by other third parties in the Trust or with equity or
other debt financings, including public financings. The availability of such
investments or such financings will influence the Trust's decision to proceed
with, and the pace of, future acquisition activities.
10
<PAGE>
Inflation
---------
All of the leases or terms of tenants' occupancies at the properties allow for
at least annual rental adjustments. In addition, all of the leases are month-
to-month and enable the Trust to seek market rentals upon reletting the sites.
Such leases generally minimize the risk to the Trust of any adverse effect of
inflation.
11
<PAGE>
PART II
-------
Item 3. LEGAL PROCEDINGS
----------------
In connection with the Trust's acquisition of one wholly-owned manufactured home
community and partial ownership interests in six other manufactured home
communities (together, the "Acquired Properties") from Windsor Park Properties
4, A California Limited Partnership ("Windsor 4"), a purported class action and
derivative complaint (the "Complaint") entitled Ira Gaines, on behalf of himself
and others similarly situated, as plaintiff, vs. The Windsor Corporation, John
A. Coseo Jr., C.G. Kellogg, Gary P. McDaniel and Steven G. Waite, as defendants,
and Windsor 4, as nominal defendant (collectively, the "Defendants"), was filed
on May 10, 1999 in the Superior Court of the State of California, County of San
Diego. The Complaint asserted causes of action alleging the following: (i)
wrongful failure to liquidate timely Windsor 4 in that its term expired on
December 31, 1997 thus allegedly tying up the limited partners' money for longer
than was contemplated or allowed under the Windsor 4 agreement of limited
partnership, (ii) breach of fiduciary duty owed by the Defendants to the limited
partners and Windsor 4 by allegedly failing to take steps to assure the entire
fairness of the transaction and that the selling prices for Windsor 4's assets
fairly and adequately represented their present value; and (iii) breach of the
Windsor 4 agreement of limited partnership by allegedly proposing to sell
partnership assets to a sponsor of Windsor 4 without prior consent of the
limited partners.
On December 3, 1999, the plaintiff, also a limited partner of Windsor 3 and
Windsor 6, amended the Complaint, in response to the Proposed Transactions, by
filing an amended purported class action and derivative complaint (the "Amended
Complaint"), on behalf of himself and other similarly situated limited partners,
against the Defendants in the Superior Court of the State of California, County
of San Diego. In addition to the original allegations set forth in the
Complaint concerning Windsor 4, the Amended Complaint also alleges generally
breach of fiduciary duty and contractual duties owed by the Defendants to
Windsor 3 and Windsor 6 and their limited partners by allegedly failing to take
steps to ensure the entire fairness of the Proposed Transactions by proposing to
sell the partnerships' assets at prices that were improperly discounted from the
appraisal values and without taking steps to seek out alternative purchases or
otherwise maximize value to the limited partners. The Complaint and the Amended
Complaint both sought monetary damages, an award of expenses, dissolution of
Windsor 4, and the appointment of an independent liquidating trustee to
liquidate Windsor 4's assets.
Although the Defendants dispute each claim set forth in the Complaint and
Amended Complaint, they concluded that the further defense of this action would
be protracted, expensive and distracting to their operations. To that end, on
February 17, 2000, the Defendants executed a settlement agreement with the
plaintiff and the class he sought to represent providing for the total payment
of more than $1 million plus the costs of administering the settlement fund
(including the mailing of notice to class members), in return for releases from
all actual and potential claims concerning the management or operation of
Windsor 3, Windsor 4 and Windsor 6 against all of the Defendants and any
affiliated persons or entities. On May 2, 2000, the Superior Court approved the
settlement and entered a Final Order and Judgment discharging all claims and
enjoining the class from commencing suit at any time on any claim related to the
operation or management of Windsor 3, Windsor 4 and Windsor 6. As a result of
indemnification obligations of the Company, and subject to potential D&O
insurance reimbursements, the settlement amount will be funded by the Company.
The Company believes that the resolution of the lawsuit will facilitate the
consummation of the Proposed Transactions with Windsor 3 and Windsor 6.
12
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
a) Exhibits and Index of Exhibits
3.1) Amended and Restated Declaration of Trust*
3.2) By-laws of the Company**
10.1) 1998 Equity Compensation Plan***
10.2) Investment Agreement by and between Windsor Real Estate
Investment Trust 8 and Chateau Communities, Inc.****
21) List of Subsidiaries*****
27) Financial Data Schedule
_______________________
* Filed as Appendix A to the Trust's Proxy Statement for its 1998 Annual
Meeting of Shareholders filed with the Commission on September 17, 1998.
** Filed as Appendix B to the Trust's Proxy Statement for its 1998 Annual
Meeting of Shareholders filed with the Commission on September 17, 1998.
*** Filed as an attachment the Trust's Proxy Statement for its 1998 Annual
Meeting of Shareholders filed with the Commission on September 17, 1998.
**** Filed as Exhibit 7.1 to Schedule 13D (Amendment No. 2) of Chateau
Communities, Inc. filed with the Commission on December 18, 1998.
***** Filed as Exhibit 21 to the Trust's Annual Report on Form 10-KSB/A for the
year ended December 31, 1998.
b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURE
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.
N'TANDEM TRUST
By /s/ Gary P. McDaniel
----------------------------------
GARY P. MCDANIEL
Trustee
Date: July 25, 2000
14
