FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2001
[ ] 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 0-9704
ANGELES PARTNERS IX
(Exact name of small business issuer as specified in its charter)
California 95-3417137
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Partnership was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
ANGELES PARTNERS IX
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 2001
Assets
Cash and cash equivalents $ 582
Receivables and deposits 187
Restricted escrows 250
Other assets 316
Investment properties:
Land $ 1,442
Buildings and related personal property 27,721
29,163
Less accumulated depreciation (20,819) 8,344
$ 9,679
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 116
Tenant security deposit liabilities 116
Accrued property taxes 128
Other liabilities 264
Mortgage notes payable 14,271
Partners' Deficit
General partner $ (269)
Limited partners (19,975 units issued and
outstanding) (4,947) (5,216)
$ 9,679
See Accompanying Notes to Consolidated Financial Statements
b)
ANGELES PARTNERS IX
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2001 2000
Revenues:
Rental income $ 1,387 $ 1,908
Other income 101 83
Casualty gain 41 --
Total revenues 1,529 1,991
Expenses:
Operating 716 839
General and administrative 95 63
Depreciation 384 536
Interest 316 420
Property taxes 75 107
Total expenses 1,586 1,965
Net (loss) income $ (57) $ 26
Net (loss) income allocated to general partner (1%) $ (1) $ --
Net (loss) income allocated to limited partners (99%) (56) 26
$ (57) $ 26
Net (loss) income per limited partnership unit $ (2.80) $ 1.30
Distribution per limited partnership unit $ 19.32 $ --
See Accompanying Notes to Consolidated Financial Statements
c)
ANGELES PARTNERS IX
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 20,000 $ 1 $ 20,000 $ 20,001
Partners' deficit at
December 31, 2000 19,975 $ (262) $ (4,505) $ (4,767)
Distribution to partners (6) (386) (392)
Net loss for the three months
ended March 31, 2001 -- (1) (56) (57)
Partners' deficit
at March 31, 2001 19,975 $ (269) $ (4,947) $ (5,216)
See Accompanying Notes to Consolidated Financial Statements
d)
ANGELES PARTNERS IX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
2001 2000
Cash flows from operating activities:
Net (loss) income $ (57) $ 26
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Casualty gain (41) --
Depreciation 384 536
Amortization of loan costs and discounts 19 27
Change in accounts:
Receivables and deposits 9 250
Other assets (94) (75)
Accounts payable (96) 46
Tenant security deposit liabilities (3) 10
Accrued property taxes 75 (50)
Due to General Partner (285) --
Other liabilities 38 (75)
Net cash (used in) provided by operating activities (51) 695
Cash flows from investing activities:
Insurance proceeds received 45 --
Property improvements and replacements (137) (747)
Net deposits to restricted escrows (28) (63)
Net cash used in investing activities (120) (810)
Cash flows from financing activities:
Payments on mortgage notes payable (55) (72)
Distributions to partners (392) --
Net cash used in financing activities (447) (72)
Net decrease in cash and cash equivalents (618) (187)
Cash and cash equivalents at beginning of period 1,200 1,313
Cash and cash equivalents at end of period $ 582 $1,126
Supplemental disclosure of cash flow information:
Cash paid for interest $ 297 $ 392
Supplemental disclosure of non-cash activity:
Property improvements and replacements included in
accounts payable $ -- $ 200
At December 31, 1999 approximately $396,000 of property improvements and
replacements were included in accounts payable.
See Accompanying Notes to Consolidated Financial Statements
e)
ANGELES PARTNERS IX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Angeles Partners
IX (the "Partnership" or "Registrant") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Angeles Realty Corporation (the "General Partner" or "ARC"),
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. ARC is wholly owned by Apartment
Investment and Management Company ("AIMCO"). Operating results for the three
months ended March 31, 2001, are not necessarily indicative of the results that
may be expected for the year ending December 31, 2001. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Partnership's Annual Report on Form 10-KSB for the year ended December 31,
2000.
Principles of Consolidation
The financial statements include all of the accounts of the Partnership and its
99% owned partnership. The general partner of the consolidated partnership is
Angeles Realty Corporation. Angeles Realty Corporation may be removed as the
general partner of the consolidated partnership by the Registrant; therefore,
the consolidated partnership is controlled and consolidated by the Registrant.
All significant interpartnership balances have been eliminated.
Segment Reporting: Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosure about Segments of an Enterprise and Related Information" established
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. As defined in SFAS
No. 131, the Partnership has only one reportable segment. The General Partner
believes that segment-based disclosures will not result in a more meaningful
presentation than the consolidated financial statements as currently presented.
Note B - Disposition of Investment Property
On July 20, 2000, The Pines of Northwest Crossing Apartments, located in
Houston, Texas, was sold to an unaffiliated third party for a gross sales price
of $9,500,000. The net proceeds realized by the Partnership were approximately
$9,338,000. Revenues from The Pines of Northwest Crossing Apartments included in
the accompanying consolidated statements of operations were approximately
$590,000 for the three months ended March 31, 2000.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for (i) certain payments to affiliates for
services and (ii) reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership.
The following amounts were paid to the General Partner and its affiliates for
the three months ended March 31, 2001 and 2000:
2001 2000
(in thousands)
Property management fees (included in
operating expenses) $ 79 $101
Reimbursement for services of affiliates
(included in investment properties and general
and administrative expenses) 69 64
During the three months ended March 31, 2001 and 2000, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $79,000 and $101,000 for the
three months ended March 31, 2001 and 2000, respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $69,000 and $64,000 for the
three months ended March 31, 2001 and 2000, respectively. Included in these
expenses for the three months ended March 31, 2000, is approximately $23,000 for
construction oversight reimbursements. No similar costs were incurred for the
three months ended March 31, 2001.
In connection with the sale of The Pines of Northwest Crossing Apartments in
July 2000, the General Partner earned a commission of 3% of the selling price or
$285,000. However, this fee is subordinate to the limited partners receiving a
preferred return, as specified in the Partnership Agreement. During the three
months ended March 31, 2001, the Partnership paid this fee. If the limited
partners have not received their preferred return when the Partnership
terminates, the General Partner will return this amount to the Partnership.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 12,813 limited partnership
units in the Partnership representing 64.15% of the outstanding units. A number
of these units were acquired pursuant to tender offers made by AIMCO or its
affiliates. It is possible that AIMCO or its affiliates will make one or more
additional offers to acquire additional limited partnership interests in the
Partnership for cash or in exchange for units in the operating partnership of
AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters, which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the General Partner. As a result of
its ownership of 64.15% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of its affiliation with
the General Partner.
Note D - Distributions
During the three months ended March 31, 2001, cash distributions of
approximately $392,000 (approximately $386,000 to the limited partners or $19.32
per limited partnership unit) were paid to the partners, of which approximately
$244,000 (approximately $240,000 to the limited partners or $12.01 per limited
partnership unit) was paid from operations and approximately $148,000
(approximately $146,000 to the limited partners or $7.31 per limited partnership
unit) was paid from the remaining proceeds from the sale of The Pines of
Northwest Crossing Apartments in July 2000. No cash distributions were paid to
the partners during the three months ended March 31, 2000. Subsequent to March
31, 2001, the General Partner approved and paid a distribution of approximately
$225,000 (approximately $223,000 to the limited partners or $11.16 per limited
partnership unit) from operations.
Note E - Casualty Event
In October 2000, a fire occurred at Forest River Apartments, which resulted in
damage to two apartment units. The property incurred damages of approximately
$51,000. Insurance proceeds of approximately $45,000 have been received during
the three months ended March 31, 2001. After writing off the undepreciated cost
of the damaged units, the Partnership realized a casualty gain of approximately
$41,000 from this event.
Note F - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging, among other things, the acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc. ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited partnership units; management of
the partnerships by the Insignia affiliates; and the Insignia Merger. The
plaintiffs seek monetary damages and equitable relief, including judicial
dissolution of the Partnership. On June 25, 1998, the General Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs filed an amended complaint. The General Partner filed demurrers to
the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the General Partner and its affiliates terminated the
proposed settlement. In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement. On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken from the order on October 5, 2000. On
December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann &
Bernstein LLP as new lead counsel for plaintiffs and the putative class.
Plaintiffs filed a third amended complaint on January 19, 2001. On March 2,
2001, the General Partner and its affiliates filed a demurrer to the third
amended complaint. The demurrer is scheduled to be heard on May 14, 2001. The
Court has also scheduled a hearing on a motion for class certification for
August 27, 2001. Plaintiffs must file their motion for class certification no
later than June 15, 2001. The General Partner does not anticipate that costs
associated with this case will be material to the Partnership's overall
operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussions of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership's investment properties consist of four apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 2001 and 2000:
Average Occupancy
Property 2001 2000
Panorama Terrace Apartments 93% 94%
Birmingham, Alabama
Forest River Apartments 98% 98%
Gadsden, Alabama
Village Green Apartments 93% 95%
Montgomery, Alabama
Rosemont Crossing Apartments 88% 95%
San Antonio, Texas
The General Partner attributes the decrease in occupancy at Rosemont Crossing
Apartments to the competitive market of the apartment industry in the San
Antonio area.
Results of Operations
The Registrant's net loss for the three months ended March 31, 2001 was
approximately $57,000, compared to net income of approximately $26,000 for the
three months ended March 31, 2000. The increase in net loss is primarily due to
the sale during 2000 of The Pines at Northwest Crossing. On July 20, 2000, The
Pines of Northwest Crossing Apartments, located in Houston, Texas, was sold to
an unaffiliated third party for a gross sales price of $9,500,000. The net
proceeds realized by the Partnership were approximately $9,338,000. Excluding
the impact of the operating results of The Pines of Northwest Crossing
Apartments for the three months ended March 31, 2000, the Registrant's net loss
for the three months ended March 31, 2000 was approximately $8,000. The increase
in net loss is due to an increase in total expenses, which was partially offset
by an increase in total revenues. Total expenses increased primarily due to
increases in operating expenses and general and administrative expenses. The
increase in operating expenses is primarily due to increases in utility expenses
and salaries and related benefits at the Partnership's remaining investment
properties. General and administrative expenses increased primarily due to an
increase in the costs of services included in the management reimbursements to
the General Partner as allowed under the Partnership Agreement. Also included in
general and administrative expenses at both March 31, 2001 and 2000 are costs
associated with the quarterly and annual communications with investors and
regulatory agencies and the annual audit required by the Partnership Agreement.
The increase in total expenses was partially offset by a slight decrease in
depreciation expense. The decrease in depreciation expense is due primarily to
fixed assets placed into service in previous years becoming fully depreciated in
2001, which more than offset recent capital improvements performed at each of
the Partnership's remaining investment properties. Interest expense and property
tax expense remained relatively constant for the comparable periods.
Excluding the revenues from The Pines of Northwest Crossing Apartments, total
revenues increased due to increases in other income, rental income and the
recognition of a casualty gain during the three months ended March 31, 2001.
Other income increased primarily due to increases in interest income, and cable
television fees. Rental income increased primarily due to increases in the
average rental rates at all four of the Partnership's remaining investment
properties. The increase in rental income was partially offset by decreases in
occupancy at Panorama Terrace Apartments, Village Green Apartments, and Rosemont
Crossing Apartments. The casualty gain is a result of an October 2000 fire which
occurred at Forest River Apartments. Two apartment units were damaged with a
cost of repairs of approximately $51,000. Insurance proceeds of approximately
$45,000 were received in 2001 to cover these damages. After writing off the
undepreciated cost of the damaged units, the Partnership recognized a casualty
gain of approximately $41,000.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment properties to assess
the feasibility of increasing rents, maintaining or increasing occupancy levels
and protecting the Partnership from increases in expenses. As part of this plan,
the General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, due to changing market conditions, which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.
Liquidity and Capital Resources
At March 31, 2001, the Partnership had cash and cash equivalents of
approximately $582,000 compared to approximately $1,126,000 at March 31, 2000.
The decrease in cash and cash equivalents of approximately $618,000 for the
three months ended March 31, 2001, from the Partnership's calendar year end, is
due to approximately $447,000 of cash used in financing activities and
approximately $120,000 of cash used in investing activities, and approximately
$51,000 of cash used in operating activities. Cash used in investing activities
consisted of property improvements and replacements, and to a lesser extent, net
deposits to escrow accounts maintained by the mortgage lender, which was
partially offset by the receipt of insurance proceeds related to the casualty at
Forest River Apartments. Cash used in financing activities consisted of
distributions to partners and payments of principal made on the mortgages
encumbering the Registrant's properties. The Partnership invests its working
capital reserves in interest bearing accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the various properties to adequately maintain the
physical assets and other operating needs of the Partnership and to comply with
Federal, state, and local legal and regulatory requirements. Capital
improvements planned for each of the Partnership's properties are detailed
below.
Panorama Terrace Apartments: For 2001 the Partnership has budgeted approximately
$62,000 for capital improvements, consisting primarily of floor covering,
appliance, and air conditioning unit replacements. The Partnership completed
approximately $38,000 in capital expenditures at Panorama Terrace Apartments as
of March 31, 2001, consisting primarily of floor covering replacement. These
improvements were funded from operations.
Forest River Apartments: For 2001 the Partnership has budgeted approximately
$76,000 for capital improvements, consisting primarily of floor covering,
appliance, and air conditioning unit replacements. The Partnership completed
approximately $44,000 in capital expenditures at Forest River Apartments as of
March 31, 2001, consisting primarily of floor covering and appliance replacement
and construction costs related to the repair of two units damaged in a fire.
These improvements were funded primarily from operations, replacement reserves
and insurance proceeds.
Village Green Apartments: For 2001 the Partnership has budgeted approximately
$156,000 for capital improvements, consisting primarily of floor covering and
appliance replacement, furniture upgrades, and electrical and plumbing
improvements. The Partnership completed approximately $34,000 in capital
expenditures at Village Green Apartments as of March 31, 2001, consisting
primarily of floor covering and appliance replacement. These improvements were
funded primarily from operations and replacement reserves.
Rosemont Crossing Apartments: For 2001 the Partnership has budgeted
approximately $373,000 for capital improvements, consisting primarily of floor
covering and appliance replacements, HVAC upgrades and interior and exterior
building improvements. The Partnership completed approximately $21,000 in
capital expenditures at Rosemont Crossing Apartments as of March 31, 2001,
consisting primarily of floor covering replacement. These improvements were
funded primarily from operations.
The additional capital expenditures will be incurred only if cash is available
from operations and Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $14,271,000, net of discounts, is being amortized
over periods ranging from approximately 29 to 30 years with balloon payments due
in 2002 and 2003. The General Partner may attempt to refinance such indebtedness
and/or sell the properties prior to such maturity dates. If the properties
cannot be refinanced or sold for a sufficient amount, the Partnership will risk
losing such properties through foreclosure.
During the three months ended March 31, 2001, cash distributions of
approximately $392,000 (approximately $386,000 of which was paid to the limited
partners or $19.32 per limited partnership unit) were paid to the partners, of
which approximately $244,000 (approximately $240,000 to the limited partners or
$12.01 per limited partnership unit) was paid from operations and approximately
$148,000 (approximately $146,000 to the limited partners or $7.31 per limited
partnership unit) was paid from the remaining proceeds from the sale of The
Pines of Northwest Crossing Apartments in July 2000. No cash distributions were
paid to the partners during the three months ended March 31, 2000. Subsequent to
March 31, 2001, the General Partner approved and paid a distribution of
approximately $225,000 (approximately $223,000 to the limited partners or $11.16
per limited partnership unit) from operations. Future cash distributions will
depend on the levels of net cash generated from operations, the availability of
cash reserves, and the timing of debt maturities, refinancings and/or property
sales. The Partnership's distribution policy is reviewed on a quarterly basis.
There can be no assurance, however, that the Partnership will generate
sufficient funds from operations after required capital improvement
expenditures, to permit any additional distributions to its partners in 2001 or
subsequent periods. In addition, the Partnership may be restricted from making
distributions until the amount in the reserve account maintained by the mortgage
lender is equal to a minimum of $200 and a maximum of $400 per apartment unit at
Forest River Apartments and Rosemont Crossing Apartments for a total of
approximately $93,000 to $186,000. As of March 31, 2001, the balance in the
reserve account is approximately $171,000.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 12,813 limited partnership
units in the Partnership representing 64.15% of the outstanding units. A number
of these units were acquired pursuant to tender offers made by AIMCO or its
affiliates. It is possible that AIMCO or its affiliates will make one or more
additional offers to acquire additional limited partnership interests in the
Partnership for cash or in exchange for units in the operating partnership of
AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters, which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the General Partner. As a result of
its ownership of 64.15% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the General Partner because of its affiliation with
the General Partner.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging, among other things, the acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc. ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited partnership units; management of
the partnerships by the Insignia affiliates; and the Insignia Merger. The
plaintiffs seek monetary damages and equitable relief, including judicial
dissolution of the Partnership. On June 25, 1998, the General Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs filed an amended complaint. The General Partner filed demurrers to
the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the General Partner and its affiliates terminated the
proposed settlement. In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement. On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken from the order on October 5, 2000. On
December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann &
Bernstein LLP as new lead counsel for plaintiffs and the putative class.
Plaintiffs filed a third amended complaint on January 19, 2001. On March 2,
2001, the General Partner and its affiliates filed a demurrer to the third
amended complaint. The demurrer is scheduled to be heard on May 14, 2001. The
Court has also scheduled a hearing on a motion for class certification for
August 27, 2001. Plaintiffs must file their motion for class certification no
later than June 15, 2001. The General Partner does not anticipate that costs
associated with this case will be material to the Partnership's overall
operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
None.
b) No reports on Form 8-K were filed during the quarter ended
March 31, 2001.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS IX
By: Angeles Realty Corporation
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date: May 7, 2001