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
0-26216
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CNL Income Fund XV, Ltd.
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(Exact name of registrant as specified in its charter)
Florid 59-3198888
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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 5-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 12
Part II
Other Information 13-15
<PAGE>
CNL INCOME FUND XV, 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 and allowance for loss on land
and building $ 23,286,692 $ 23,263,676
Net investment in direct financing leases, less
allowance for loss in carrying value of $52,501
in 2000 6,147,177 6,236,233
Investment in joint ventures 3,642,833 3,095,152
Cash and cash equivalents 953,446 1,660,363
Receivables, less allowance for doubtful
accounts of $31,027 and $13,085, respectively 31,689 97,068
Prepaid expenses 24,950 14,988
Lease costs, less accumulated amortization of
$2,364 and $1,479, respectively 18,875 19,760
Accrued rental income less allowance for doubtful
accounts of $3,130 in 2000 1,766,958 1,686,740
------------------- -------------------
$ 35,872,620 $ 36,073,980
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 38,164 $ 122,999
Accrued and escrowed real estate taxes payable 32,251 28,352
Distributions payable 800,000 800,000
Due to related parties 145,473 60,991
Rents paid in advance and deposits 93,229 25,763
------------------- -------------------
Total liabilities 1,109,117 1,038,105
Partners' capital 34,763,503 35,035,875
------------------- -------------------
$ 35,872,620 $ 36,073,980
=================== ===================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND XV, 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 $ 649,561 $ 594,419 $ 1,305,022 $ 1,188,465
Earned income from direct financing leases 169,683 209,566 315,537 419,728
Interest and other income 12,688 9,010 55,147 20,114
------------ ------------ ------------- -------------
831,932 812,995 1,675,706 1,628,307
------------ ------------ ------------- -------------
Expenses:
General operating and administrative 51,954 34,365 97,767 74,682
Professional services 5,703 13,617 18,747 22,221
Management fees to related party 8,883 8,093 17,934 16,144
Real estate taxes 8,784 8,030 15,174 16,720
State and other taxes 61 9,114 35,848 30,305
Depreciation and amortization 85,165 75,048 165,657 150,547
Transaction costs 29,753 74,477 76,153 107,297
------------ ------------ ------------- -------------
190,303 222,744 427,280 417,916
------------ ------------ ------------- -------------
Income Before Equity in Earnings of Joint Ventures
and Provision for Loss on Building and Net
Investment in Direct Financing Lease 641,629 590,251 1,248,426 1,210,391
Equity in Earnings of Joint Ventures 68,070 62,027 131,703 123,928
Provision for Loss on Building and Net Investment
in Direct Financing Lease (52,501 ) (132,446 ) (52,501 ) (132,446 )
------------ ------------ ------------- -------------
Net Income $ 657,198 $ 519,832 $ 1,327,628 $ 1,201,873
============ ============ ============= =============
Allocation of Net Income:
General partners $ 6,847 $ 5,996 $ 13,551 $ 12,817
Limited partners 650,351 513,836 1,314,077 1,189,056
------------ ------------ ------------- -------------
$ 657,198 $ 519,832 $ 1,327,628 $ 1,201,873
============ ============ ============= =============
Net Income Per Limited Partner Unit $ 0.16 $ 0.13 $ 0.33 $ 0.30
============ ============ ============= =============
Weighted Average Number of Limited Partner
Units Outstanding 4,000,000 4,000,000 4,000,000 4,000,000
============ ============ ============= =============
See accompanying note to condensed financial statements.
<PAGE>
CNL INCOME FUND XV, 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 $ 174,788 $ 145,629
Net income 13,551 29,159
------------------------- ------------------
188,339 174,788
------------------------- ------------------
Limited partners:
Beginning balance 34,861,087 35,320,271
Net income 1,314,077 2,740,816
Distributions ($0.40 and $0.80 per limited partner
unit, respectively) (1,600,000 ) (3,200,000 )
------------------------- ------------------
34,575,164 34,861,087
------------------------- ------------------
Total partners' capital $ 34,763,503 $ 35,035,875
========================= ==================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND XV, 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 $1,679,453 $1,468,759
---------------- ----------------
Cash Flows from Investing Activities:
Additions to land and buildings on operating
leases (749,500 ) --
Proceeds from sale of land and building 562,130 --
Investment in joint venture (599,000 ) --
---------------- ----------------
Net cash used in investing activities (786,370 ) --
---------------- ----------------
Cash Flows from Financing Activities:
Distributions to limited partners (1,600,000 ) (1,600,000 )
---------------- ----------------
Net cash used in financing activities (1,600,000 ) (1,600,000 )
---------------- ----------------
Net Decrease in Cash and Cash Equivalents (706,917 ) (131,241 )
Cash and Cash Equivalents at Beginning of Period 1,660,363 1,214,444
---------------- ----------------
Cash and Cash Equivalents at End of Period $ 953,446 $1,083,203
================ ================
Supplemental Schedule of Non-Cash Financing
Activities:
Distributions declared and unpaid at end of
period $ 800,000 $ 800,000
================ ================
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
CNL INCOME FUND XV, 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 XV, Ltd. (the "Partnership") for the year ended December
31, 1999.
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 $ 14,925,839 $ 15,200,352
Buildings 9,955,370 9,606,254
------------------- -------------------
24,881,209 24,806,606
Less accumulated depreciation (1,486,107) (1,345,651)
------------------- -------------------
23,395,102 23,460,955
Less allowance for loss on land and
building (108,410) (197,279)
------------------- -------------------
$ 23,286,692 $ 23,263,676
=================== ===================
</TABLE>
<PAGE>
CNL INCOME FUND XV, 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 December 1999, the Partnership entered into a new lease for the
property in Mentor, Ohio, with a new tenant to operate the property as
a Bennigan's restaurant. In connection therewith, the Partnership
agreed to pay up to $749,500 in renovation costs, all of which had been
incurred and paid as of June 30, 2000.
In January 2000, the Partnership sold its property in Lexington, North
Carolina, to an unrelated third party for $599,500 and received net
sales proceeds of $562,130, resulting in a loss of $88,869 for
financial reporting purposes, which the Partnership recorded at
December 31, 1999, as an allowance for loss on building.
3. Net Investment In Direct Financing Leases:
At June 30, 2000, the Partnership established an allowance for
impairment in carrying value in the amount of $52,501 for its property
in Bartlesville, Oklahoma. The allowance represented the difference
between the carrying value of the net investment in the direct
financing lease at June 30, 2000, and the estimated net realizable
value of the net investment in the direct financing lease at June 30,
2000.
4. Investment in Joint Ventures:
In June 2000, the Partnership used the net sales proceeds it received
from the sale of the Property in Lexington, North Carolina, to enter
into a joint venture arrangement, TGIF Pittsburgh Joint Venture, with
CNL Income Fund VII, Ltd., CNL Income Fund XVI, Ltd. and CNL Income
Fund XVIII, Ltd., each a Florida limited partnership and an affiliate
of the general partners, to purchase and hold one restaurant property.
The Partnership accounts for its investment using the equity method
since the Partnership shares control with affiliates. As of June 30,
2000, the Partnership owned a 23.62% interest in the profits and losses
of the joint venture.
Wood-Ridge Real Estate Joint Venture owns and leases six properties and
Duluth Joint Venture owns and leases one property to operators of
national fast food or family-style restaurants. The Partnership and
affiliates, as tenants-in-common in two separate tenancy in common
arrangements, each own and lease one property to an operator of
national fast food or family-style restaurants.
<PAGE>
CNL INCOME FUND XV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2000 and 1999
4. Investment in Joint Ventures - Continued:
The following presents the combined, condensed financial information
for all of the Partnership's investments in joint ventures and
properties held as tenants-in-common at:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------------ ------------------
<S> <C>
Land and buildings on operating
leases, less accumulated
depreciation $ 9,802,685 $ 7,029,635
Net investment in direct financing
lease 811,379 816,789
Cash 45,364 31,017
Prepaid expenses 502 1,458
Receivables -- 28,700
Lease costs, less accumulated
amortization 17,772 19,279
Accrued rental income 206,913 178,331
Liabilities 399,025 30,024
Partners' capital 10,485,590 8,075,185
Revenues 418,518 817,713
Net income 341,454 677,126
</TABLE>
The Partnership recognized income totaling $131,703 and $123,928 during
the six months ended June 30, 2000 and 1999, respectively, from these
joint ventures and properties held as tenants-in-common, $68,070 and
$62,027 of which was earned during the quarters ended June 30, 2000 and
1999, respectively.
5. 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.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund XV, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on September 2, 1993, to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurants, as well as land 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
generally are triple-net leases, with the lessee responsible for all repairs and
maintenance, property taxes, insurance and utilities. As of June 30, 2000, the
Partnership owned 50 Properties, which included interests in eight Properties
owned by a joint venture in which the Partnership is a co-venturer and two
Properties owned with affiliates of the general partners as tenants-in-common.
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 $1,679,453 and
$1,468,759 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 the Partnership's working capital.
Other sources and uses of capital included the following during the six
months ended June 30, 2000.
In December 1999, the Partnership entered into a new lease with a new
tenant for its Property in Mentor, Ohio, to operate the Property as a Bennigan's
restaurant. In connection therewith, the Partnership committed to fund up to
$749,500 for renovation costs, all of which had been incurred and paid as of
June 30, 2000.
In January 2000, the Partnership sold its Property in Lexington, North
Carolina, for $599,500 and received net sales proceeds of $562,130, resulting in
a loss of $88,869 for financial reporting purposes, which the Partnership
recorded as an allowance for loss on Property at December 31, 1999. In June
2000, the Partnership used the net sales proceeds it received from the sale of
this Property, to enter into a joint venture arrangement, TGIF Pittsburgh Joint
Venture, with CNL Income Fund VII, Ltd., CNL Income Fund XVI, Ltd. and CNL
Income Fund XVIII, Ltd., each a Florida limited partnership and an affiliate of
the general partners, to hold one restaurant property. As of June 30, 2000, the
Partnership owned a 23.62% interest in the profits and losses of the joint
venture.
Currently, rental income from the Partnership's Properties, and any net
sales proceeds held by the Partnership 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 and to make
distributions to the partners. At June 30, 2000, the Partnership had $953,446
invested in such short-term investments, as compared to $1,660,363 at December
31, 1999. The decrease in cash and cash equivalents at June 30, 2000 was
primarily attributable to the payment of renovation costs for the Partnership's
Property in Mentor, Ohio during the six months ended June 30, 2000. The funds
remaining at June 30, 2000, will be used to pay distributions and other
liabilities.
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 generally 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, including distributions payable,
increased to $1,109,117 at June 30, 2000, from $1,038,105 at December 31, 1999,
primarily as a result of an increase in due to related parties and rents paid in
advance and deposits at June 30, 2000 as compared to December 31, 1999. The
increase was partially offset by a decrease in accounts payable at June 30, 2000
as compared to December 31, 1999. Liabilities at June 30, 2000, to the extent
they exceed cash and cash equivalents at June 30, 2000, will be paid from future
cash from operations or in the event the general partners elect to make capital
contributions or loans, from future general partner contributions or loans.
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 limited partners
of $1,600,000 for each of the six months ended June 30, 2000 and 1999 ($800,000
for each applicable quarter). This represents distributions for each applicable
six months of $0.40 per unit ($0.20 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.
Results of Operations
During the six months ended June 30, 1999, the Partnership owned and
leased 42 wholly owned Properties (including one Property sold in November 1999)
and during the six months ended June 30, 2000, the Partnership owned and leased
41 wholly owned Properties (including one Property sold in January 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 $1,620,559 and $1,608,193, respectively, in rental income from operating
leases and earned income from direct financing leases from these Properties, of
which $819,244 and $803,985 was earned during the quarters ended June 30, 2000
and 1999, respectively. The increase in rental and earned income during the
quarter and six months ended June 30, 2000, as compared to the quarter and six
months ended June 30, 1999, was primarily due to the fact that in 1998, Long
John Silver's, Inc. filed for bankruptcy, rejected the leases relating to four
of the eight Properties it leased and discontinued making rental payments to the
Partnership. Subsequently, two of the four Properties with rejected leases were
sold and one was re-leased to a new tenant. As of June 30, 2000, the remaining
Property whose lease was rejected remained vacant. The general partners are
currently seeking either a new tenant or purchaser for the vacant Property. The
Partnership will not recognize any rental and earned income from this vacant
Property until a new tenant for this Property is located or until the Property
is sold and the proceeds from such sale are reinvested in an additional
Property. The lost revenues resulting from this Property could have an adverse
effect on the results of operations of the Partnership if the Partnership is not
able to re-lease the Property in a timely manner. In 1999, Long John Silver's,
Inc. assumed and affirmed its four remaining leases and the Partnership has
continued to receive rental payments relating to these four leases. The increase
in rental and earned income during the six months ended June 30, 2000, was
partially due to the fact that the Partnership received approximately $73,700 in
bankruptcy proceeds relating to the Properties whose leases were rejected in
1998, as described above.
The increase in rental and earned income was also due to the fact that
during the quarter and six months ended June 30, 2000, the Partnership collected
and recognized as income amounts for which it had previously established an
allowance for doubtful accounts for its Property in Huntsville, Texas.
The increase in rental and earned income was partially offset by a
decrease due to the fact that in December 1999, the Partnership terminated the
lease with the tenant of the Property in Mentor, Ohio. In December 1999, the
Partnership re-leased the Property to a new tenant, from which rental payments
commenced in March 2000, and renovated the property into a Bennigan's
restaurant, as described above in "Capital Resources."
In addition, the increase in rental and earned income was partially
offset by the fact that during the quarter and six months ended June 30, 2000,
the tenant of the Property in Greer, South Carolina defaulted under the terms of
its lease and discontinued operations of the restaurant. As a result, the
Partnership established an allowance for doubtful accounts of approximately
$16,200 for past due rental amounts. The general partners will continue to
pursue collection of rental amounts relating to this Property and will recognize
such amounts as income if collected.
During the six months ended June 30, 2000 and 1999, the Partnership
also owned and leased six Properties indirectly through one joint venture
arrangement and two Properties as tenants-in-common with affiliates of the
general partners. During the six months ended June 30, 2000, the Partnership
owned and leased two additional Properties indirectly through joint venture
arrangements. In connection therewith, during the six months ended June 30, 2000
and 1999, the Partnership earned $131,703 and $123,928, respectively,
attributable to net income earned by these joint ventures, $68,070 and $62,027
of which was earned during the quarters ended June 30, 2000 and 1999,
respectively.
Operating expenses, including depreciation and amortization expense,
were $427,280 and $417,916 during the six months ended June 30, 2000 and 1999,
respectively, $190,303 and $222,744 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 was partially due to, and the decrease
in operating expenses during the quarter ended June 30, 2000 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, as compared to the six months ended June 30,
1999, was partially attributable to, and the decrease in operating expenses for
the quarter ended June 30, 2000, was partially offset by, an increase in
depreciation expense due to the fact that during December 1999, the Partnership
reclassified the lease for the building for its Property in Mentor, Ohio from a
direct financing lease to an operating lease due to the new lease entered into
in December 1999, as described in "Capital Resources." The increase in operating
expenses during the six months ended June 30, 2000 was partially offset by, and
the decrease in operating expenses for the quarter ended June 30, 2000 was
primarily 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."
During the quarter and six months ended June 30, 2000, the Partnership
established an allowance for impairment in the carrying value of its Property in
Bartlesville, Oklahoma of $52,501. The allowance represented the difference
between the carrying value and the estimated net realizable value of the lease
at June 30, 2000. As of June 30, 1999, the Partnership had recorded a provision
for loss on building in the amount of $132,446 for financial reporting purposes
relating to its Long John Silver's Property in Gastonia, North Carolina, the
lease for which was rejected by the tenant in June 1998, as described above. The
tenant of this Property filed for bankruptcy and discontinued the payment of
rents. The impairment represented the difference between the carrying value and
the estimated net realizable value of the Property at 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
Not applicable.
<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 XV, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-69968 on Form S-11 and
incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XV, Ltd. (Included as Exhibit 4.1 to
Registration Statement No. 33-69968 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership of
CNL Income Fund XV, Ltd. (Included as Exhibit 4.2 to Form
10-K filed with the Securities and Exchange Commission on
March 30, 1995, incorporated herein by reference.)
10.1 Management Agreement between CNL Income Fund XV, Ltd. and
CNL Investment Company (Included as Exhibit 10.1 to Form
10-K filed with the Securities and Exchange Commission on
March 30, 1996, 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 30, 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 11th day of August, 2000.
CNL INCOME FUND XV, LTD.
By: CNL REALTY CORPORATION
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)
