UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended September 30, 1995 --------------------------------------------------- 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 0-8229 MCNEIL REAL ESTATE FUND V, LTD. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-6356980 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (214) 448-5800 --------------------------- Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ MCNEIL REAL ESTATE FUND V, LTD. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ---------------------------- BALANCE SHEETS (Unaudited) September 30, December 31, 1995 1994 ------------- ------------ ASSETS Real estate investments: Land..................................................... $11,022,353 $11,022,353 Buildings and improvements............................... 9,086,929 8,799,260 ---------- ---------- 20,109,282 19,821,613 Less: Accumulated depreciation.......................... (6,286,945) (5,897,942) ---------- ---------- 13,822,337 13,923,671 Cash and cash equivalents................................... 2,334,379 1,799,590 Cash segregated for security deposits....................... 143,957 145,245 Accounts receivable......................................... 4,875 4,326 Prepaid expenses and other asset............................ 77,942 31,953 Deferred borrowing costs (net of accumulated amortization of $26,859 and $20,326 at September 30, 1995 and December 31, 1994, respectively)............................................ 234,474 241,007 ---------- ---------- $16,617,964 $16,145,792 ========== ========== LIABILITIES AND PARTNERS' EQUITY Mortgage note payable....................................... $11,380,957 $11,424,420 Accounts payable............................................ 34,991 70,538 Accrued interest............................................ 72,498 63,663 Accrued property taxes...................................... 57,587 - Accrued expenses............................................ 73,416 21,617 Payable to affiliates - General Partner..................... 16,209 17,212 Security deposits and deferred rental income................ 146,119 147,926 ---------- ---------- 11,781,777 11,745,376 ---------- ---------- Partners' equity: Limited partners - 20,000 limited partnership units authorized; 18,223 limited partnership units outstanding...................................... 4,819,202 4,383,431 General Partner.......................................... 16,985 16,985 ---------- ---------- 4,836,187 4,400,416 ---------- ---------- $16,617,964 $16,145,792 ========== ========== The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ----------------------------- ----------------------------- 1995 1994 1995 1994 ---------- -------- ---------- ---------- Revenue: Rental revenue................ $1,000,943 $966,384 $3,050,958 $2,848,767 Interest...................... 31,593 12,407 85,381 38,725 Gain on legal settlement...... - - 4,398 - --------- ------- --------- --------- Total revenue............... 1,032,536 978,791 3,140,737 2,887,492 --------- ------- --------- --------- Expenses: Interest...................... 219,284 195,377 639,397 576,395 Depreciation.................. 138,281 123,312 389,003 345,018 Property taxes................ 57,586 64,761 171,229 194,283 Personnel expenses............ 83,689 81,190 251,952 240,952 Utilities..................... 68,430 49,773 212,648 177,511 Repairs and maintenance....... 120,267 116,639 333,334 326,332 Property management fees - affiliates........... 49,057 48,565 151,249 142,501 Other property operating expenses.................... 70,381 44,933 188,842 146,977 General and administrative.... 52,806 4,746 67,304 18,153 Partnership management fee......................... - 15,000 15,000 30,000 --------- ------- --------- --------- Total expenses.............. 859,781 744,296 2,419,958 2,198,122 --------- ------- --------- --------- Net income....................... $ 172,755 $234,495 $ 720,779 $ 689,370 ========= ======= ========= ========= Net income allocable to limited partners.............. $ 172,755 $234,495 $ 720,779 $ 689,370 Net income allocable to General Partner............... - - - - --------- ------- --------- --------- Net income....................... $ 172,755 $234,495 $ 720,779 $ 689,370 ========= ======= ========= ========= Net income per limited partnership unit.............. $ 9.48 $ 12.86 $ 39.55 $ 37.83 ========= ======= ========= ========== Distributions per limited partnership unit.............. $ - $ 15.64 $ 15.64 $ 31.28 ========= ======= ========= ========== The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF PARTNERS' EQUITY (Unaudited) For the Nine Months Ended September 30, 1995 and 1994 Total General Limited Partners' Partner Partners Equity -------- ---------- ---------- Balance at December 31, 1993.............. $16,985 $3,978,206 $3,995,191 Net income................................ - 689,370 689,370 Distributions............................. - (570,008) (570,008) ------ --------- --------- Balance at September 30, 1994............. $16,985 $4,097,568 $4,114,553 ====== ========= ========= Balance at December 31, 1994.............. $16,985 $4,383,431 $4,400,416 Net income................................ - 720,779 720,779 Distributions............................. - (285,008) (285,008) ------ --------- --------- Balance at September 30, 1995............. $16,985 $4,819,202 $4,836,187 ====== ========= ========= The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents Nine Months Ended September 30, ---------------------------------- 1995 1994 ---------- ---------- Cash flows from operating activities: Cash received from tenants........................ $3,049,002 $2,852,792 Cash received from legal settlement............... 4,398 - Cash paid to suppliers............................ (1,082,929) (956,940) Cash paid to affiliates........................... (167,252) (160,158) Interest received................................. 85,381 38,725 Interest paid..................................... (624,029) (564,433) Property taxes paid............................... (113,642) (132,406) --------- --------- Net cash provided by operating activities............ 1,150,929 1,077,580 --------- --------- Net cash used in investing activities: Additions to real estate investments.............. (287,669) (304,471) --------- --------- Cash flows from financing activities: Principal payments on mortgage note payable....... (43,463) (203,854) Distributions..................................... (285,008) (570,008) --------- --------- Net cash used in financing activities................ (328,471) (773,862) --------- --------- Net increase (decrease) in cash and cash equivalents....................................... 534,789 (753) Cash and cash equivalents at beginning of year.............................................. 1,799,590 1,542,656 --------- --------- Cash and cash equivalents at end of year............. $2,334,379 $1,541,903 ========= ========= The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income to Net Cash Provided by Operating Activities Nine Months Ended September 30, ---------------------------------- 1995 1994 ---------- ---------- Net income........................................... $ 720,779 $ 689,370 --------- --------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation...................................... 389,003 345,018 Amortization of deferred borrowing costs.......... 6,533 13,067 Changes in assets and liabilities: Cash segregated for security deposits........... 1,288 (17,615) Accounts receivable............................. (549) 4,401 Prepaid expenses and other assets............... (45,989) (43,957) Accounts payable................................ (35,547) (16,088) Accrued interest................................ 8,835 (1,104) Accrued property taxes.......................... 57,587 61,877 Accrued expenses................................ 51,799 3,720 Payable to affiliates - General Partner......... (1,003) 12,343 Security deposits and deferred rental income........................................ (1,807) 26,548 --------- --------- Total adjustments............................. 430,150 388,210 --------- --------- Net cash provided by operating activities............ $1,150,929 $1,077,580 ========= ========= The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND V, LTD. Notes to Financial Statements (Unaudited) September 30, 1995 NOTE 1. - ------- McNeil Real Estate Fund V, Ltd. (the "Partnership") was organized September 12, 1974 as a limited partnership under the provisions of the California Uniform Limited Partnership Act. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil. The Partnership is governed by an agreement of limited partnership dated September 12, 1974 (the "Partnership Agreement"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the nine months ended September 30, 1995 are not necessarily indicative of the results to be expected for the year ending December 31, 1995. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund V, Ltd. c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - ------- Certain reclassifications have been made to prior period amounts to conform with current year presentation. NOTE 4. - ------- The Partnership pays property management fees equal to 5% of gross rental receipts of Sycamore Valley, the Partnership's residential property, to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing management and leasing services. As compensation for administering the affairs of the Partnership, the General Partner receives a partnership management fee equal to 5% of cash from operations, as defined, but only if the limited partners receive distributions of cash from operations equal to a 6% per annum non-cumulative return on their adjusted invested capital. In addition, the General Partner is entitled to receive a subordinated incentive fee. This fee is equal to 10% of the remaining cash from sales and refinancings in excess of the cost of all Partnership properties, as defined. The cash from sales or refinancing distributed to the limited partners has exceeded the subordination requirement. The Partnership is obligated to pay commissions for real estate brokerage services to an affiliate of the General Partner in connection with the sale of the Partnership's property. Such commissions shall not exceed the lesser of (i) the normal and competitive rate for similar services in the locality where the services are performed, (ii) 50% of the standard commission or (iii) one-half of the total acquisition fees which could have been paid to the General Partner under the terms of the Partnership Agreement. Compensation and reimbursements paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Nine Months Ended September 30, ------------------------------- 1995 1994 -------- -------- Property management fees............................. $151,249 $142,501 Partnership management fees.......................... 15,000 30,000 ------- ------- $166,249 $172,501 ======= ======= NOTE 5. - ------- The Partnership filed claims with the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the "Bankruptcy Court") against Southmark for damages relating to improper overcharges, breach of contract and breach of fiduciary duty. The Partnership settled these claims in 1991, and such settlement was approved by the Bankruptcy Court. An Order Granting Motion to Distribute Funds to Class 8 Claimants dated April 14, 1995 was issued by the Bankruptcy Court. In accordance with the Order, in May 1995 the Partnership received in full satisfaction of its claims, $3,325 in cash, and common and preferred stock in the reorganized Southmark currently valued at approximately $1,100, which amounts represent the Partnership's pro-rata share of Southmark assets available for Class 8 Claimants. The Partnership sold the Southmark common and preferred stock in May for $1,073, which combined with the cash proceeds from Southmark, resulted in a gain on legal settlement of $4,398. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- The Partnership was formed to acquire, operate and ultimately dispose of a portfolio of income-producing real properties. At September 30, 1995, the Partnership owned one apartment property which is subject to a mortgage note. RESULTS OF OPERATIONS - --------------------- Revenue: Total Partnership revenues increased by $253,245 or 9% and $53,745 or 5%, respectively, for the nine months and three months ended September 30, 1995. Rental revenue and interest income increased $202,191 or 7% and $46,656 or 120%, respectively. Rental revenue for the first nine months of 1995 was $3,050,958 as compared to $2,848,767 for the same period in 1994. The increase in rental revenue for the nine months ended September 30, 1995 is due to an increase in the average occupancy rate and a reduction in discounts and concessions at Sycamore Valley. The average occupancy rate increased to 95% in 1995 up from 91% for the same period in 1994. Interest income for the nine months and three months ended September 30, 1995 increased by $46,656 and $19,186, respectively. This increase is due the increase in cash being invested in interest-bearing accounts and an increase in the interest rates. The Partnership also recognized a gain on legal settlement of $4,398 as a result of the settlement with Southmark received in 1995. Expenses: Total Partnership expenses increased by $221,836 or 10% the first nine months of 1995 as compared to the same period in 1994. The most significant increases occurred in mortgage interest, depreciation, utilities, other property operating expenses, and general and administrative expenses. The total increase in expense was offset by decreases in property tax expense. Interest expense for the nine months and three months ended September 30, 1995, increased $63,002 or 11% and $23,907 or 12% as compared to 1994, respectively. The increase is due to an increase in the index used to calculate interest expense on the mortgage. The mortgage note interest rate increased from 6.5% at September 30, 1994 to 7.7% at September 30, 1995. Depreciation expense for the nine months ended September 30, 1995 increased by $43,985 or 13% as compared to the same period in 1994. This increase is due to capital improvements made at the property. As of September 30, 1995, the Partnership made $287,669 in capital improvements for the year. Property tax expense decreased by $23,054 or 12% and $7,175 or 11% for the nine months and three months ended September 30, 1995 as compared to the same period in 1994. The decrease is due to 1994 supplemental taxes on land purchased in 1993. These supplemental taxes were not incurred in 1995. Utility expense increased $35,137 or 20% and $18,657 or 37% for the nine and three months ended September 30, 1995 as compared to the same period in 1994. The increase is primarily due to an increase in gas rates of 7% and aging boilers at the property. These boilers are currently being replaced and utility rates should level off for the remaining portion of the year. Other property operating expenses increased $41,865 or 28% and $25,448 or 57% for the nine and three months ended September 30, 1995 as compared to 1994 due to the increase in earthquake insurance for Sycamore Valley. This increase was partially offset by decreases in bad debt and advertising expenses. General and administrative expenses increased $49,151 and $48,060 for the nine and three months ended September 30, 1995 as compared to the same period last year, respectively. The increase was due to costs incurred by the Partnership in the third quarter of 1995 to evaluate and disseminate information regarding an unsolicited tender offer as discussed in Item 5 - Other Information. Partnership management fee decreased by $15,000 or 50% for the nine months ended September 30, 1995 due to the timing of the limited partners distribution, the basis for computing such fees. The distribution, which was scheduled for August 1995, was not paid until October 1995. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership's primary source of cash flows is from operating activities, which generated $1,150,929 for the first nine months of 1995 as compared to $1,077,580 in 1994. The increase in 1995 was partially due to the increase in cash received from tenants and the reduction in the property taxes paid. The Partnership expended $287,669 and $304,471 for capital improvements to Sycamore Valley in 1995 and 1994, respectively. The Partnership distributed $285,008 and $570,008 to the limited partners in 1995 and 1994, respectively. Principal payments on the mortgage note payable declined by $160,391 in 1995 as compared to the same period last year. This decline is due to the reduction in the mortgage payment and the increase in the interest rate. Short Term Liquidity: At September 30, 1995, the Partnership held $2,334,379 of cash, up $534,789 since December 31, 1994. This balance provides for the working capital needs of the Partnership and allows for distributions to the limited partners. During 1995, operations from Sycamore Valley are expected to provide positive cash flow from operations. Management will perform routine repairs and maintenance on the property to preserve and enhance its value in the market. Long Term Liquidity: McNeil has established a revolving credit facility not to exceed $5,000,000 in the aggregate which will be available on a "first-come, first-served" basis to the Partnership and other affiliated partnerships if certain conditions are met. Borrowings under the facility may be used to fund deferred maintenance, refinancing obligations and working capital needs. There is no assurance that the partnership will receive funds under the facility because no amounts will be reserved for any particular partnership. As of September 30, 1995, $2,362,004 remained available for borrowing under the facility; however, additional funds could become available as other partnerships repay existing borrowings. If operations should deteriorate and present resources not be adequate for current needs, the Partnership has no established lines of credit on which to draw for its working capital needs other than any available portion of the $5,000,000 revolving credit facility discussed above, and thus would require other sources of working capital. No such other sources have been identified. Distributions: During 1995, the limited partners received a cash distribution of $258,008. The distribution consisted of funds from operations Any cash not required for current operations is expected to continue to be distributed to the Partners on the semi-annual schedule presently followed. The distribution scheduled for August was paid in October 1995 in the amount of $475,000. Distributions will be subject to maintenance of adequate levels of cash reserves, and such distributions will only be available from cash generated from operations. PART II. OTHER INFORMATION ITEM 3. LEGAL PROCEEDINGS - ------- ----------------- 1) HCW Pension Real Estate Fund, Ltd. et al. v. Ernst & Young, BDO Seidman et al (Case #92-06560-A). This suit was filed on behalf of the Partnership and other affiliated partnerships (the "Affiliated Partnerships") on May 26, 1992, in the 14th Judicial District Court of Dallas County. The petition sought recovery against the Partnership's former auditors, BDO Seidman, for negligence and fraud in failing to detect and/or report overcharges of fees/expenses by Southmark, the former general partner. The former auditors asserted counterclaims against the Affiliated Partnerships based on alleged fraudulent misrepresentations made to the auditors by the former management of the Affiliated Partnerships (Southmark) in the form of client representation letters executed and delivered to the auditors by Southmark management. The counterclaims sought recovery of attorneys' fees and costs incurred in defending this action. The original petition also alleged causes of action against certain former officers and directors of the Partnership's original general partner for breach of fiduciary duty, fraud and conspiracy relating to the improper assessment and payment of certain administrative fees/expenses. On January 11, 1994 the allegations against the former officers and directors were dismissed. The trial court granted summary judgment in favor of Ernst & Young and BDO Seidman on the fraud and negligence claims based on the statute of limitations. The Affiliated Partnerships appealed the summary judgment to the Dallas Court of Appeals. In August 1995, the Appeals Court upheld all of the summary judgments in favor of BDO Seidman. In exchange for the plaintiff's agreement not to file any motions for rehearing or further appeals, BDO Seidman agreed that it will not pursue the counterclaims against the Partnership. 2) High River Limited Partnership vs. McNeil Partners, L.P., McNeil Investors, Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., Robert A. McNeil and Carole J. McNeil (L95012) - High River ("HR") filed this action in the United States District Court for the Southern District of New York against McNeil Partners, McNeil Investors and Mr. and Mrs. McNeil requesting, among other things, names and addresses of the Partnership's limited partners. The District Court issued a preliminary injunction against the Partnerships requiring them to commence mailing materials relating to High River tender offer materials on August 14, 1995. On August 18, 1995, McNeil Partners, McNeil Investors, the Partnerships, and Mr. and Mrs. McNeil filed an Answer and Counterclaim. The Counterclaim principally asserts (1) the HR tender offers have been undertaken in violation of the federal securities laws, on the basis of material, non-public, and confidential information, and (2) that the HR offer documents omit and/or misrepresent certain material information about the HR tender offers. The counterclaim seeks a preliminary and permanent injunction against the continuation of the HR tender offers and, alternatively, ordering corrective disclosure with respect to allegedly false and misleading statements contained in the tender offer documents. The High River tender offer expired on October 6, 1995. The Defendants believe that the action is moot and expect the matter to be dismissed shortly. 3) Robert Lewis vs. McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil et al - In the District Court of Dallas County, Texas, A-14th Judicial District, Cause No. 95-08535 (Class Action) Plaintiff, Robert Lewis, is a limited partner with McNeil Pacific Investors Fund 1972, McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd. Plaintiff brings this action on his own behalf and as a class action on behalf of the class of all limited partners of McNeil Pacific Investors Fund 1972, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real Estate Fund XXV, Ltd. (the "Partnerships") as of August 4, 1995. Plaintiff alleges that McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil and other senior officers (collectively, the "Defendants") breached their fiduciary duties by, among other things, (1) failing to attempt to sell the properties owned by the Partnerships ("Properties") and extending the lives of the Partnerships indefinitely, contrary to the Partnerships' business plans, (2) paying distributions to themselves and generating fees for their affiliates, (3) refusing to make significant distributions to the class members, despite the fact that the Partnerships have positive cash flows and substantial cash balances, and (4) failing to take steps to create an auction market for Partnership equity interests, despite the fact that a third party bidder filed tender offers for approximately forty-five percent (45%) of the outstanding units of each of the Partnerships. Plaintiff also claims that Defendants have breached the Partnership Agreements by failing to take steps to liquidate the Properties and by their alteration of the Partnerships' primary purposes, their acts in contravention of these agreements, and their use of the Partnership assets for their own benefit instead of for the benefit of the Partnerships. The Defendants deny that there is any merit to Plaintiff's allegations and intend to vigorously defend this action. 4) James F. Schofield, Gerald C. Gillett and Donna S. Gillett vs. McNeil Partners, L.P., McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P. et al - Superior Court of the State of California for the County of Los Angeles, Case No. BC133799 (Class and Derivative Action Complaint) and United States District Court, Southern District of New York, Case No. 95CIV.6711 (Class and Derivative Action Complaint) These are corporate/securities class and derivative actions brought in state and federal court by limited partners of each of the nine (9) limited partnerships that are named as Nominal Defendants as listed above ("Partnerships"). Plaintiffs allege that Defendants McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and four (4) of their senior officers and/or directors have breached their fiduciary duties. Specifically, Plaintiffs allege that Defendants have caused the Partnerships to enter into several wasteful transactions that have no business purpose or benefit to the Partnerships and which have rendered such units highly illiquid and artificially depressed the prices that are available for units on the limited resale market. Plaintiffs also allege that Defendants have engaged in a course of conduct to prevent the acquisition of units by Carl Icahn by disseminating false, misleading and inadequate information. Plaintiffs further allege that Defendants have acted to advance their own personal interests at the expense of the Partnerships' public unit holders by failing to sell Partnership properties and failing to make distributions to unitholders and, thereby, have breached the Partnership Agreements. The Defendants deny that there is any merit to Plaintiff's allegations and intend to vigorously defend these actions. 5) Alfred Napoletano vs. McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P. - Superior Court of the State of California, County of Los Angeles, Case No. BC133849 (class action complaint) Plaintiff brings this class action on behalf of a class of all persons and entities who are current owners of units and/or are limited partners in one or more of the partnerships referenced above ("Partnerships"). Plaintiff alleges that Defendants have breached their fiduciary duties to the class members by, among other things, (1) taking steps to prevent the consummation of the High River tender offers, (2) failing to take steps to maximize unitholders' or limited partners' values, including failure to liquidate the properties owned by the Partnerships, (3) managing the Partnerships so as to extend indefinitely the present fee arrangements, and (4) paying itself and entities owned and controlled by the general partner excessive fees and reimbursements of general and administrative expenses. The Defendants deny that there is any merit to Plaintiff's allegations and intend to vigorously defend this action. 6) Warren Heller vs. McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P. - Superior Court of the State of California, County of Los Angeles, Case No. BC133957 (class action complaint) Plaintiff brings this class action on behalf of a class of all persons and entities who are current owners of units and/or are limited partners in one or more of the partnerships referenced above ("Partnerships"). Plaintiff alleges that Defendants have breached their fiduciary duties to the class members by, among other things, (1) taking steps to prevent the consummation of the High River tender offers, (2) failing to take steps to maximize unitholders' or limited partners' values, including failure to liquidate the properties owned by the Partnerships, (3) managing the Partnerships so as to extend indefinitely the present fee arrangements, and (4) paying itself and entities owned and controlled by the general partner excessive fees and reimbursements of general and administrative expenses. The Defendants deny that there is any merit to Plaintiff's allegations and intend to vigorously defend this action. 7) High River Limited Partnership v. McNeil Partners L.P., McNeil Investors, Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., Robert A. McNeil and Carole J. McNeil - United States District Court for the Southern District of New York, (Case No. 95 Civ. 9488) (Second Action). On November 7, 1995, High River commenced a second complaint which alleges, inter alia, that McNeil's Schedule 14D-9 filed in connection with the High River tender offers was materially false and misleading, in violation of Sections 14(d) and 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. Section 78n(d) and (e), and the SEC Regulations promulgated thereunder; and that High River further alleges that McNeil has wrongfully refused to admit High River as a limited partner to the Funds. Additionally, High River purports to assert claims derivatively on behalf of Funds IX, XI, XV, XXIV and XXV, for breach of contract and breach of fiduciary duty, asserting that McNeil has charged these Partnerships excessive fees. High River's complaint seeks, inter alia, preliminary injunctive relief requiring McNeil to admit High River as a limited partner in each of the ten Partnerships and to transfer the tendered units of interest in the Partnerships to High River; an unspecified award of damages payable to High River and an additional unspecified award of damages payable to certain of the Partnerships; an order that defendants must discharge their fiduciary duties and must account for all fees they have received from certain of the Partnerships; and attorneys' fees. The Defendants deny that there is any merit to Plaintiff's allegations and intend to vigorously defend this action. ITEM 5. OTHER INFORMATION - ------- ----------------- As previously disclosed, on an unsolicited basis, High River Limited Partnership ("High River"), a partnership controlled by Carl Icahn, announced that it had commenced an offer to purchase 8,200 units of limited partnership interest in the Partnership (approximately 45% of the Partnership's units) at $400 per unit. The tender offer was originally due to expire on August 31, 1995. In connection therewith, the parties entered into certain negotiations and discussions regarding, among other things, possible transactions between the parties and their affiliates, McNeil Partners, McNeil Investors, and McREMI. On September 19, 1995, the parties having not reached any resolution on the terms of the proposed transactions, McNeil Partners terminated the parties' discussion. High River had extended its offer several times until the final expiration date of October 6, 1995. On October 11, 1995 High River announced that based on preliminary information furnished by the depositary for the tender offer, approximately 608 units of the Partnership were tendered and not withdrawn prior to the expiration of the tender offer. On October 12, 1995, McNeil Partners announced that it would continue to explore potential avenues to enhance the value of the Partnership units, which may include, among other things, asset sales, refinancings of Partnership properties followed by distributions or tender offers for units of limited partnership. There can be no assurance that any such plans will develop or that any such transactions will be consummated. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 4. Partnership Agreement dated September 12, 1974 and amended and restated January 31, 1975. (1) 11. Statement regarding computation of Net Income per limited partnership unit: Net income per limited partnership unit is computed by dividing net income allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 18,223 limited partnership units outstanding in 1995 and 1994. 27. Financial Data Schedule for the quarter ended September 30, 1995. (1) Incorporated by reference to the Annual Report of McNeil Real Estate Fund V, Ltd. on Form 10-K for the period ended December 31, 1990, as filed with the Securities and Exchange Commission on March 29, 1991. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended September 30, 1995. McNEIL REAL ESTATE FUND V, LTD. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: McNEIL REAL ESTATE FUND V, LTD. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner November 13, 1995 By: /s/ Donald K. Reed - ------------------------ ------------------------------------------------- Date Donald K. Reed President and Chief Executive Officer November 13, 1995 By: /s/ Robert C. Irvine - ------------------------ ------------------------------------------------- Date Robert C. Irvine Chief Financial Officer of McNeil Investors, Inc. Principal Financial Officer November 13, 1995 By: /s/ Brandon K. Flaming - ------------------------ ------------------------------------------------- Date Brandon K. Flaming Chief Accounting Officer of McNeil Real Estate Management, Inc.