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 March 31, 1997
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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 0-12915
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McNEIL REAL ESTATE FUND XIV, LTD.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2822299
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (972) 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
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McNEIL REAL ESTATE FUND XIV, LTD.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
BALANCE SHEETS
(Unaudited)
March 31, December 31,
1997 1996
--------------- ---------------
ASSETS
- ------
Real estate investments:
Land..................................................... $ 4,663,828 $ 4,663,828
Buildings and improvements............................... 36,030,636 35,944,879
-------------- --------------
40,694,464 40,608,707
Less: Accumulated depreciation.......................... (19,420,398) (18,951,741)
-------------- --------------
21,274,066 21,656,966
Assets held for sale, net 7,953,683 7,942,855
Cash and cash equivalents................................... 1,287,894 1,903,902
Cash segregated for security deposits....................... 428,053 399,366
Accounts receivable......................................... 461,750 385,721
Prepaid expenses and other assets........................... 160,655 173,908
Escrow deposits............................................. 727,960 681,430
Deferred borrowing costs, net of accumulated
amortization of $370,169 and $346,255 at
March 31, 1997, and December 31, 1996,
respectively............................................. 1,020,823 1,044,737
-------------- --------------
$ 33,314,884 $ 34,188,885
============== ==============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------
Mortgage notes payable, net................................. $ 27,303,653 $ 27,423,689
Accounts payable............................................ 70,218 103,747
Accrued interest............................................ 196,014 197,124
Accrued property taxes...................................... 191,244 100,981
Other accrued expenses...................................... 59,531 82,329
Payable to affiliates - General Partner..................... 605,346 1,388,371
Security deposits and deferred rental revenue............... 420,944 411,318
-------------- --------------
28,846,950 29,707,559
-------------- --------------
Partners' equity (deficit):
Limited partners - 100,000 limited partnership
units authorized; 86,534 limited partnership
units outstanding...................................... 7,648,141 7,648,141
General Partner.......................................... (3,180,207) (3,166,815)
-------------- --------------
4,467,934 4,481,326
-------------- --------------
$ 33,314,884 $ 34,188,885
============== ==============
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 XIV, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
-----------------------------------
1997 1996
--------------- ---------------
Revenue:
Rental revenue........................................... $ 2,426,731 $ 2,302,657
Interest................................................. 38,154 29,984
-------------- --------------
Total revenue.......................................... 2,464,885 2,332,641
-------------- --------------
Expenses:
Interest................................................. 662,123 675,387
Depreciation and amortization............................ 468,657 572,099
Property taxes........................................... 193,176 200,950
Personnel expenses....................................... 276,946 254,906
Utilities................................................ 126,096 120,046
Repair and maintenance................................... 246,970 284,734
Property management fees - affiliates.................... 117,357 112,192
Other property operating expenses........................ 136,727 131,331
General and administrative............................... 31,051 23,820
General and administrative - affiliates.................. 61,151 80,942
-------------- --------------
Total expenses......................................... 2,320,254 2,456,407
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Net income (loss)........................................... $ 144,631 $ (123,766)
============== ==============
Net income (loss) allocated to limited partners............. $ - $ (122,528)
Net income (loss) allocated to General Partner.............. 144,631 (1,238)
-------------- --------------
Net income (loss)........................................... $ 144,631 $ (123,766)
============== ==============
Net loss per limited partnership unit....................... $ - $ (1.42)
============== ==============
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 XIV, LTD.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended March 31, 1997 and 1996
Total
Partners'
General Limited Equity
Partner Partners (Deficit)
--------------- --------------- ---------------
Balance at December 31, 1995.............. $ (2,546,836) $ 7,766,250 $ 5,219,414
Net loss.................................. (1,238) (122,528) (123,766)
Management Incentive Distribution......... (145,007) - (145,007)
------------- ------------- -------------
Balance at March 31, 1996................. $ (2,693,081) $ 7,643,722 $ 4,950,641
============= ============= =============
Balance at December 31, 1996.............. $ (3,166,815) $ 7,648,141 $ 4,481,326
Net income................................ 144,631 - 144,631
Management Incentive Distribution......... (158,023) - (158,023)
------------- ------------- -------------
Balance at March 31, 1997................. $ (3,180,207) $ 7,648,141 $ 4,467,934
============= ============= =============
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 XIV, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase in Cash and Cash Equivalents
Three Months Ended
March 31,
-----------------------------------
1997 1996
---------------- ---------------
Cash flows from operating activities:
Cash received from tenants............................... $ 2,325,641 $ 2,241,353
Cash paid to suppliers................................... (863,006) (817,612)
Cash paid to affiliates.................................. (163,100) (200,123)
Interest received........................................ 38,154 29,984
Interest paid............................................ (604,127) (617,360)
Property taxes paid and escrowed......................... (141,301) (140,550)
-------------- --------------
Net cash provided by operating activities................... 592,261 495,692
-------------- --------------
Cash flows from investing activities:
Additions to real estate investments..................... (96,585) (68,302)
-------------- --------------
Cash flows from financing activities:
Principal payments on mortgage notes
payable................................................ (155,228) (142,520)
Management incentive distribution paid................... (956,456) -
--------------- --------------
Net cash used in financing activities....................... (1,111,684) (142,520)
-------------- --------------
Net increase (decrease) in cash and cash equivalents........ (616,008) 284,870
Cash and cash equivalents at beginning of
period................................................... 1,903,902 1,417,948
-------------- --------------
Cash and cash equivalents at end of period.................. $ 1,287,894 $ 1,702,818
============== ==============
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 XIV, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Income (Loss) to Net Cash Provided by
Operating Activities
Three Months Ended
March 31,
------------------------------------
1997 1996
--------------- ----------------
Net income (loss)........................................... $ 144,631 $ (123,766)
-------------- --------------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization............................ 468,657 572,099
Amortization of deferred borrowing costs................. 23,914 23,914
Amortization of discounts on mortgage
notes payable.......................................... 35,192 35,130
Changes in assets and liabilities:
Cash segregated for security deposits.................. (28,687) (23,860)
Accounts receivable.................................... (76,029) (49,627)
Prepaid expenses and other assets...................... 13,253 10,489
Escrow deposits........................................ (46,530) 29,313
Accounts payable....................................... (33,529) (61,112)
Accrued interest....................................... (1,110) (1,017)
Accrued property taxes................................. 90,263 102,697
Other accrued expenses................................. (22,798) (23,901)
Payable to affiliates - General Partner................ 15,408 (6,989)
Security deposits and deferred rental
revenue.............................................. 9,626 12,322
-------------- --------------
Total adjustments.................................... 447,630 619,458
-------------- --------------
Net cash provided by operating activities................... $ 592,261 $ 495,692
============== ==============
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 XIV, LTD.
Notes to Financial Statements
(Unaudited)
March 31, 1997
NOTE 1.
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McNeil Real Estate Fund XIV, Ltd. (the "Partnership") is a limited partnership
organized under the laws of the State of California to invest in real property.
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 ("Amended
Partnership Agreement") that was adopted September 20, 1991. The principal place
of business for the Partnership and the General Partner is 13760 Noel Road,
Suite 600, 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 three months ended March 31, 1997 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1997.
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, 1996, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate Fund XIV, Ltd., c/o The Herman Group, 2121 San Jacinto
St., 26th Floor, Dallas, Texas 75201.
NOTE 3.
- -------
The Partnership pays property management fees equal to 5% of the gross rental
receipts of the Partnership's properties to McNeil Real Estate Management, Inc.
("McREMI"), an affiliate of the General Partner, for providing property
management services for the Partnership's residential and commercial properties
and leasing services for its residential properties. McREMI may also choose to
provide leasing services for the Partnership's commercial properties, in which
case McREMI will receive property management fees from such commercial
properties equal to 3% of the property's gross rental receipts plus leasing
commissions based on the prevailing market rate for such services where the
property is located.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
Under terms of the Amended Partnership Agreement, the Partnership is paying a
Management Incentive Distribution ("MID") to the General Partner. The maximum
MID is calculated as 1% of the tangible asset value of the Partnership. The
maximum MID percentage decreases subsequent to 1999. Tangible asset value is
determined by using the greater of (i) an amount calculated by applying a
capitalization rate of 9% to the annualized net operating income of each
property or (ii) a value of $10,000 per apartment unit for residential property
and $50 per gross square foot for commercial property to arrive at the property
tangible asset value. The property tangible asset value is then added to the
book value of all other assets excluding intangible items.
MID will be paid to the extent of the lesser of the Partnership's excess cash
flow, as defined, or net operating income, as defined (the "Entitlement
Amount"), and may be paid (i) in cash, unless there is insufficient cash to pay
the distribution in which event any unpaid portion not taken in Units will be
deferred and is payable, without interest, from the first available cash and/or
(ii) in Units. A maximum of 50% of the MID may be paid in Units. The number of
Units issued in payment of the MID is based on the greater of $50 per Unit or
the net tangible asset value, as defined, per Unit.
Any amount of the MID that is paid to the General Partner in Units will be
treated as if cash is distributed to the General Partner and is then contributed
to the Partnership by the General Partner. The MID represents a return of equity
to the General Partner for increasing cash flow, as defined, and accordingly is
treated as a distribution.
Compensation, reimbursements and distributions paid to or accrued for the
benefit of the General Partner and its affiliates are as follows:
Three Months Ended
March 31,
-----------------------
1997 1996
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Property management fees - affiliates................. $ 117,357 $ 112,192
Charged to general and administrative - affiliates:
Partnership administration......................... 61,151 80,942
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$ 178,508 $ 193,134
========= =========
Charged to General Partner's deficit:
Management Incentive Distribution.................. $ 158,023 $ 145,007
========= =========
NOTE 4.
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On October 1, 1996, the Partnership placed Country Hills Plaza, Midvale Plaza
and Redwood Plaza on the market for sale. Consequently, these three properties
are shown as assets held for sale on the accompanying financial statements. In
accordance with the Financial Accounting Standards Board's Statement of
Financial Accounting Standards no. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," the Partnership
ceased recording depreciation charges on these three properties effective
October 1, 1996.
NOTE 5.
- -------
On April 8, 1997, subsequent to the end of the first quarter, the Partnership
sold Country Hills Plaza to an unaffiliated purchaser for a cash sales price of
$6,610,000. Cash proceeds from this transaction, as well as the gain on sale are
detailed below.
Gain on Sale Cash Proceeds
------------ -------------
Cash sales price............................ $ 6,610,000 $ 6,610,000
Selling costs............................... (185,306) (185,306)
Mortgage discount written off............... (397,559)
Straight-line rent receivables written off.. (26,828)
Basis of real estate sold................... (3,791,948)
----------
Gain on sale................................ $ 2,208,359
==========
Proceeds from sale of real estate........... 6,424,694
Retirement of mortgage note................. (2,231,438)
----------
Net cash proceeds........................... $ 4,193,256
==========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The Partnership was formed to acquire, operate and ultimately dispose of a
portfolio of income-producing real properties. At March 31, 1997, the
Partnership owned four apartment properties and three shopping centers. All of
the Partnership's properties are subject to mortgage notes.
On April 8, 1997, subsequent to the end of the quarter, the Partnership sold
Country Hills Plaza to an unaffiliated purchaser. See short-term liquidity
below.
On October 1, 1996, the Partnership placed its three commercial properties,
County Hills Plaza, Midvale Plaza and Redwood Plaza, on the market for sale.
Consequently, the Partnership's investment in these three properties is shown as
assets held for sale on the accompanying financial statements. Proceeds from the
sale of the three properties will be used to first, repay the mortgage note
encumbering the property sold; second, pay any deferred payments due to the
General Partner or its affiliates; third, ensure that the Partnership maintains
an adequate level of cash reserves; and fourth, pay distributions to the Unit
holders.
RESULTS OF OPERATIONS
- ---------------------
For the quarter ended March 31, 1997, the Partnership reported net income of
$144,631, an increase of $268,397 from the loss of $123,766 reported for the
quarter ended March 31, 1996.
Revenues:
Rental revenue for the quarter ended March 31, 1997 increased $124,074 or 5.4%
over rental revenue earned during the first quarter of 1996. Rental revenue
increased at all four of the Partnership's residential properties. Increases in
base rental rates accounted for increases of between 3.6% and 5.2% at
Embarcadero Club Apartments, Thunder Hollow Apartments and Tanglewood Village
Apartments. Although base rental rates did not increase at Windrock Apartments,
rental revenue improved by 22%, the result of a significant increase in
occupancy at the El Paso property. The occupancy rate at Windrock Apartments
improved to 91% at March 31, 1997, up from 75% a year earlier.
Two of the Partnership's three commercial properties, Country Hills Plaza and
Midvale Plaza, reported no change in rental revenues for the first quarter of
1997 compared to the year earlier period. Rental revenue increased 6.3% at
Redwood Plaza for the quarter, the result of increased rental rates. Occupancy
rates for all three commercial properties remained at 100%.
Expenses:
Partnership expenses decreased $136,153 or 5.5% for the first quarter of 1997
compared to the first quarter of 1996. Decreased expenses were concentrated in
depreciation, repair and maintenance, and general and administrative expenses
paid to affiliates. These decreases were partially offset by an increase in
personnel expense.
Depreciation expense decreased 18.1% for the first quarter of 1997 as compared
to the year earlier quarter. The Partnership ceased depreciating its investment
in its three commercial properties effective October 1, 1996, the date the
Partnership placed these properties on the market for sale. Properties being
marketed for sale are classified as "assets held for sale." Accounting
regulations specify that depreciation on assets held for sale should cease
effective the date the properties are placed on the market for sale.
Repair and maintenance expenses decreased 13.3% for the first quarter of 1997 as
compared to the year earlier quarter. The entire decrease can be attributed to a
decrease in snow removal expenses at Thunder Hollow Apartments. Expenses
totaling $41,000 were incurred as a result of severe winter weather at the
Pennsylvania property during the first quarter of 1996. The comparable amount
for 1997 was only $4,000. All other repair and maintenance expenses were
comparable to the year earlier quarter.
General and administrative expenses paid to affiliates decreased 25% for the
first quarter of 1997 as compared to the year earlier quarter. The decrease is
due, in part, to decreased charges for investor services, which, beginning in
1997, are provided by a third party vendor instead of by affiliates of the
General Partner.
Costs allocated to the Partnership by affiliates of the General Partner
decreased compared to the year earlier quarter.
Personnel expenses increased $22,040 or 8.6% for the first quarter of 1997 as
compared to the same quarter of 1996. Although all of the Partnership's
properties recorded increased personnel expense, one property sustained almost
half of the total increase. Personnel expenses at Windrock Apartments increased
$10,926 or 42% due to an adjustment to the property's workers' compensation
insurance premiums. The Partnership's other properties recorded normal increases
in personnel expenses, generally in line with cost of living increases.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flow from operations increased $96,569 or 19.5% for the first quarter of
1997 compared to the year earlier quarter. Performance of the Partnership's
properties continues to improve. Windrock Apartments, which had not been
contributing to the improved Partnership performance, appears to have turned
around, and is now generating increasing amounts of cash flow. Cash flow from
Partnership operations for the first quarter of 1997 was more than adequate to
fund selected capital improvements and to repay the scheduled principal payments
on the Partnership's mortgage debt. Furthermore, the General Partner anticipates
that operations for the balance of 1997 will continue to provide more than
enough cash flow to fund needed capital improvements and debt service payments.
The improving cash position of the Partnership allowed the General Partner to
continue payment of the Management Incentive Distribution ("MID"). The
Partnership paid $956,456 of MID during the first quarter of 1997, in addition
to the $500,000 payment made during the third quarter of 1996. MID payments had
been suspended since the beginning of 1994 to increase the Partnership's cash
reserves. An additional $505,000 of MID is still owed to the General Partner.
Short-term liquidity:
At March 31, 1997, the Partnership held $1,287,894 of cash and cash equivalents,
down $616,008 from the balance at the end of 1996. The General Partner considers
this level of cash reserves to be adequate to meet the Partnership's operating
needs for the balance of 1997. The General Partner anticipates that cash
generated from operations for the remainder of 1997 will be sufficient to fund
the Partnership's budgeted capital improvements and debt service requirements.
On April 8, 1997, the Partnership sold its investment in Country Hills Plaza.
The sale provided approximately $4.19 million of additional working capital for
the Partnership. The General Partner intends to use the sales proceeds to pay
the remaining balance of MID owed to the General Partner, and to distribute the
balance of the sales proceeds to the limited partners.
In addition to the sale of Country Hills Plaza, the Partnership has placed
Midvale Plaza and Redwood Plaza on the market for sale. Proceeds from the sale
of these properties will be used to retire the related mortgage notes payable,
provide for adequate level of cash reserves for the Partnership, and distribute
any remaining proceeds to the limited partners. Although the General Partner
anticipates being able to successfully sell Midvale Plaza and Redwood Plaza,
there can be no assurance that any sale of Partnership properties will provide
sufficient cash for additional distributions to the limited partners.
Long-term liquidity:
While the present outlook for the Partnership's liquidity is favorable, market
conditions may change and property operations can deteriorate. In that event,
the Partnership would require other sources of working capital. No such other
sources have been identified, and the Partnership has no established lines of
credit. Other possible actions to resolve working capital deficiencies include
refinancing or renegotiating terms of existing loans, deferring major capital
expenditures on Partnership properties except where improvements are expected to
enhance the competitiveness or marketability of the properties, or arranging
working capital support from affiliates. No affiliate support has been required
in the past, and there is no assurance that support from affiliates would be
provided in the future, since neither the General Partner nor any affiliates
have any obligation in this regard.
The Partnership has determined to begin an orderly liquidation of all the
Partnership's assets. Although there can be no assurance as to the timing of any
liquidation, it is anticipated that such liquidation would result in
distributions to the limited partners of the cash proceeds from the sale of the
Partnership's properties, subject to cash reserve requirements, as they are sold
with the last property disposition before December 2001, followed by a
dissolution of the Partnership. In this regard, the Partnership sold Country
Hills Plaza on April 8, 1997, and has placed two of its six properties on the
market for sale.
None of the Partnership's remaining mortgage notes mature before the expected
dissolution of the Partnership.
Income Allocations and Distributions:
Terms of the Amended Partnership Agreement specify that net losses for financial
reporting purposes are allocated 99% to the limited partners and 1% to the
General Partner. Net income for financial reporting purposes is allocated to the
General Partner in an amount equal to the greater of (a) 1% of net income or (b)
the cumulative amount of the MID paid for which no income allocation has
previously been made; any remaining net income is allocated to the limited
partners. Therefore, for the three month periods ended March 31, 1997 and 1996,
$144,631 and ($1,238), respectively, were allocated to the General Partner. No
income or loss was allocated to the limited partners for the quarter ended March
31, 1997. An allocation of net loss of ($122,528) was allocated to the limited
partners for the quarter ended March 31, 1996.
With the exception of the MID, distributions to Partners have been suspended
since 1986 as a part of the General Partner's policy of maintaining adequate
cash reserves. However, the General Partner intends to distribute proceeds from
the sale of the Partnership's commercial properties to the Unit holders, after
repaying the related mortgage indebtedness. The Partnership recorded MID of
$158,023 for the first three months of 1997. The Partnership resumed MID
payments during the third quarter of 1996. MID payments had been suspended since
the beginning of 1994. The General Partner will continue to monitor the cash
reserves and working capital requirements of the Partnership to ensure that cash
flows and balances will support continued MID payments and distributions of net
sales proceeds to Unit holders.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil,
Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd.,
McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate
Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII, 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).
The action involves purported class and derivative actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their fiduciary duties and certain obligations under the respective Amended
Partnership Agreement. Plaintiffs allege that Defendants have rendered such
Units highly illiquid and artificially depressed the prices that are available
for Units on the resale market. Plaintiffs also allege that Defendants engaged
in a course of conduct to prevent the acquisition of Units by an affiliate of
Carl Icahn by disseminating purportedly false, misleading and inadequate
information. Plaintiffs further allege that Defendants 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.
On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs are suing for breach of fiduciary duty, breach of contract and an
accounting, alleging, among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive, that these fees should
be reduced retroactively and that the respective Amended Partnership Agreements
governing the Partnerships are invalid.
Defendants filed a demurrer to the consolidated and amended complaint and a
motion to strike on February 14, 1997, seeking to dismiss the consolidated and
amended complaint in all respects. A hearing on Defendant's demurrer and motion
to strike was held on May 5, 1997. The Court granted Defendants' demurrer,
dismissing the consolidated and amended complaint with leave to amend.
Plaintiffs have until May 27, 1997 to file a second amended complaint, unless
otherwise agreed to by the parties.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits.
Exhibit
Number Description
------- -----------
4. Amended and Restated Limited Partnership
Agreement dated September 20, 1991. (1)
11. Statement regarding computation of net loss per
limited partnership unit: net loss per limited
partnership unit is computed by dividing net
loss allocated to the limited partners by the
number of limited partnership units
outstanding. Per unit information has been
computed based on 86,534 limited partnership
units outstanding in 1997 and 1996.
27. Financial Data Schedule for the quarter ended
March 31, 1997.
(1) Incorporated by reference to the Annual Report of Registrant, on
Form 10-K for the period ended December 31, 1991, as filed on March
30, 1992.
(b) Reports on Form 8-K. The Partnership filed a report on Form 8-K on April
26, 1997, reporting the sale of Country Hills Plaza to an unaffiliated
purchaser.
McNEIL REAL ESTATE FUND XIV, 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 XIV, Ltd.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
May 15, 1997 By: /s/ Ron K. Taylor
- ------------ -----------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
May 15, 1997 By: /s/ Brandon K. Flaming
- ------------ -----------------------------------------
Date Brandon K. Flaming
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)