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 0-14248
ANGELES PARTNERS XIV
(Exact name of small business issuer as specified in its charter)
California 95-3959771
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO 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 registrant 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 XIV
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 2001
Assets
Cash and cash equivalents $ 1,706
Receivables and deposits 398
Restricted escrows 121
Other assets 318
Investment properties:
Land $ 2,243
Buildings and related personal property 26,305
28,548
Less accumulated depreciation (20,193) 8,355
$ 10,898
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 64
Tenant security deposit liabilities 141
Accrued property taxes 388
Accrued interest (including $3,843 in default) 9,162
Due to affiliates (Note C) 1,714
Other liabilities 286
Notes payable, including $4,576 in default 29,298
Partners' Deficit
General partners $ (689)
Limited partners (43,421 units issued and
outstanding) (29,466) (30,155)
$ 10,898
See Accompanying Notes to Consolidated Financial Statements
b)
ANGELES PARTNERS XIV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2001 2000
Revenues:
Rental income $ 1,243 $ 1,210
Other income 89 49
Total revenues 1,332 1,259
Expenses:
Operating 447 379
General and administrative 76 52
Depreciation 348 335
Interest 883 847
Property taxes 110 105
Total expenses 1,864 1,718
Net loss $ (532) $ (459)
Net loss allocated to general partners (1%) $ (5) $ (5)
Net loss allocated to limited partners (99%) (527) (454)
$ (532) $ (459)
Net loss per limited partnership unit $(12.14) $(10.42)
See Accompanying Notes to Consolidated Financial Statements
c)
ANGELES PARTNERS XIV
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 44,390 $ 1 $ 44,390 $ 44,391
Partners' deficit at
December 31, 2000 43,421 $ (684) $(28,939) $(29,623)
Net loss for the three months
ended March 31, 2001 -- (5) (527) (532)
Partners' deficit
at March 31, 2001 43,421 $ (689) $(29,466) $(30,155)
See Accompanying Notes to Consolidated Financial Statements
d)
ANGELES PARTNERS XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
2001 2000
Cash flows from operating activities:
Net loss $ (532) $ (459)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation 348 335
Amortization of discounts and loan costs 8 8
Change in accounts:
Receivables and deposits (115) (128)
Other assets 11 13
Accounts payable (57) (116)
Tenant security deposit liabilities 7 7
Accrued property taxes 110 104
Accrued interest 514 472
Due to affiliates 54 27
Other liabilities 20 (178)
Net cash provided by operating activities 368 85
Cash flows from investing activities:
Property improvements and replacements (51) (47)
Net deposits to restricted escrows (27) (27)
Net cash used in investing activities (78) (74)
Cash flows used in financing activities:
Principal payments on notes payable (81) (74)
Net increase (decrease) in cash and cash equivalents 209 (63)
Cash and cash equivalents at beginning of period 1,497 1,210
Cash and cash equivalents at end of period $ 1,706 $ 1,147
Supplemental disclosure of cash flow information:
Cash paid for interest $ 347 $ 353
See Accompanying Notes to Consolidated Financial Statements
e)
ANGELES PARTNERS XIV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Going Concern
The accompanying consolidated financial statements have been prepared assuming
Angeles Partners XIV (the "Partnership" or "Registrant") will continue as a
going concern. The Partnership continues to incur recurring operating losses and
suffers from inadequate liquidity.
The Partnership has unsecured working capital loans in the amount of
approximately $4,576,000 plus related accrued interest of approximately
$3,843,000 that is in default at March 31, 2001 as a result of non-payment of
interest and principal upon its maturity in November 1997. These loans were
payable to Angeles Acceptance Pool, L.P. ("AAP"). During the year ended December
31, 2000, AAP transferred ownership of the loans to Saticoy Investments Company,
LLC ("Saticoy"), a wholly owned entity of The PNL Companies. This indebtedness
is recourse to the Partnership. The Partnership does not have the means with
which to satisfy this obligation and Saticoy has a judgment against the
Partnership for this debt.
The Partnership realized a net loss of approximately $532,000 for the three
months ended March 31, 2001. The Managing General Partner expects the
Partnership to continue to incur such losses from operations. The Partnership
generated cash from operations of approximately $368,000 during the three months
ended March 31, 2001; however, this was primarily the result of not paying
interest of approximately $514,000 on its unsecured indebtedness and, to a
lesser extent, not paying $54,000 for services provided by affiliates.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or amounts and classifications of
liabilities that may result from these uncertainties.
Note B - Basis of Presentation
The accompanying unaudited consolidated financial statements of the Partnership
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. The Managing General Partner of the
Partnership is an affiliate of Apartment Investment and Management Company
("AIMCO"). In the opinion of the Managing General Partner, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month period
ended March 31, 2001, are not necessarily indicative of the results that may be
expected for the fiscal 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 fiscal year ended
December 31, 2000.
Principles of Consolidation
The consolidated financial statements include all of the accounts of the
Partnership and its 99% limited partnership interest in Waterford Square
Apartments, Ltd. The general partner of the consolidated partnership is the
Managing General Partner. The Managing General Partner may be removed by the
Registrant; therefore, this 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 Managing General
Partner believes that segment-based disclosures will not result in a more
meaningful presentation than the consolidated financial statements as currently
presented.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing 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 payments were paid or accrued to the Managing General Partner and
affiliates during each of the three months ended March 31, 2001 and 2000:
2001 2000
(in thousands)
Property management fees (included in
operating expense) $ 72 $ 69
Reimbursement for services of affiliates (included
in general and administrative expenses) 54 28
Due to affiliate 1,714 1,482
During the three months ended March 31, 2001 and 2000 affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from both of the
Registrant's residential properties as compensation for providing property
management services. The Registrant paid to such affiliates approximately
$72,000 and $69,000 for the three months ended March 31, 2001 and 2000,
respectively.
Affiliates of the Managing General Partner were to receive reimbursements of
accountable administrative expenses amounting to approximately $54,000 and
$28,000 for the three months ended March 31, 2001 and 2000, respectively. The
Partnership owed the affiliates approximately $1,714,000 and $1,482,000 at March
31, 2001 and 2000, respectively.
In November 1992, AAP, a Delaware limited partnership which controlled the
working capital loans previously provided by Angeles Capital Investment, Inc.
("ACII"), was organized. Angeles Corporation ("Angeles") is the 99% limited
partner of AAP and Angeles Acceptance Directives, Inc. ("AAD"), which was
wholly-owned by IPT, and was, until April 14, 1995, the 1% general partner of
AAP. On April 14, 1995, as part of a settlement of claims between affiliates of
the General Partner and Angeles, AAD resigned as general partner of AAP and
simultaneously received a 0.5% limited partner interest in AAP. An affiliate of
Angeles now serves as the general partner of AAP.
The AAP working capital loans funded the Partnership's operating deficits in
prior years. Total indebtedness was approximately $4,576,000, plus accrued
interest of approximately $3,843,000, at March 31, 2001, with monthly interest
accruing at prime plus two percent. Upon maturity on November 25, 1997, the
Partnership did not have the means with which to satisfy this maturing debt
obligation. Total interest expense for this loan was approximately $132,000 and
$121,000 for the three months ended March 31, 2001 and 2000, respectively.
During the year ended December 31, 2000, AAP transferred ownership of the loans
to Saticoy, a wholly owned entity of the PNL Companies, which is an unrelated
party.
Angeles Mortgage Investment Trust ("AMIT") provided financing (the "AMIT Loans")
to the Partnership. Pursuant to a series of transactions, affiliates of the
Managing General Partner acquired ownership interests in AMIT. On September 17,
1998, AMIT was merged with and into Insignia Properties Trust ("IPT"), the
entity which controlled the Managing General Partner. Effective February 26,
1999, IPT was merged into AIMCO. Thus, AIMCO is the current holder of the AMIT
loans. The principal balances on the AMIT Loans total approximately $7,291,000
at March 31, 2001, accrue interest at rates of 12% to 12.5% per annum and are
recourse to the Partnership. Two of the three notes totaling $2,526,000
originally matured in March 1998. The Managing General Partner negotiated with
AMIT to extend this indebtedness and in the second quarter of 1998, executed an
extension through March 2002. The remaining note with a principal balance of
approximately $4,765,000 matures in March 2003. Total interest expense on the
AMIT Loans was approximately $382,000 and $351,000 for the three months ended
March 31, 2001 and 2000, respectively. Accrued interest was approximately
$5,203,000 at March 31, 2001.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 10,418 limited partnership
units in the Partnership representing 23.99% of the outstanding units. 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 Managing General Partner. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of their
affiliation with the Managing General Partner.
Note D - 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 Managing 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 Managing General Partner
filed a motion seeking dismissal of the action. In lieu of responding to the
motion, the plaintiffs filed an amended complaint. The Managing 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 Managing 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 Managing 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 Managing 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 OPERATIONS
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
discussion 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 two 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
Waterford Square Apartments 95% 98%
Huntsville, Alabama
Fox Crest Apartments 97% 98%
Waukegan, Illinois
The Managing General Partner attributes the decrease in occupancy at Waterford
Square Apartments to a soft market. Increased concessions has allowed the
property to remain competitive.
Results from Operations
The Partnership's net loss for the three months ended March 31, 2001 was
approximately $532,000 compared to a net loss of approximately $459,000 for the
corresponding period in 2000. The increase in net loss for the three months
ended March 31, 2001 was primarily due to an increase in total expenses which
was partially offset by an increase in total revenues. The increase in total
revenues was due to an increase in both rental income and other income. Rental
income increased due primarily to increased average rental rates at both
Waterford Square Apartments and Fox Crest Apartments, which more than offset the
decrease in occupancy, as noted above, at both of the Partnership's properties.
Other income increased due to increased interest income due to higher average
cash balances in interest bearing accounts and increased cable television income
at both of the Partnership's properties.
The increase in total expenses for the three month period ended March 31, 2001
was primarily the result of increases in operating, depreciation, interest, and
general and administrative expenses. The increase in operating expenses was due
to increases in administrative and maintenance salaries at both properties and
increases in interior painting at both properties. The increase in depreciation
expense is due to capital improvements and replacements made at the properties
over the past year. Interest expense increased due to interest accruing on the
defaulted Saticoy notes.
General and administrative expenses increased primarily due to an increase in
the cost of services provided by the Managing General Partner and its affiliates
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.
As part of the ongoing business plan of the Partnership, the Managing General
Partner continues to monitor the rental market environment of each 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 Managing 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 Managing General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At March 31, 2001, the Registrant had cash and cash equivalents of approximately
$1,706,000 as compared to approximately $1,147,000 at March 31, 2000. Cash and
cash equivalents increased approximately $209,000 for the period ended March 31,
2001 from the Registrant's year ended December 31, 2000 and is primarily due to
approximately $78,000 of cash used in investing activities and approximately
$81,000 of cash used in financing activities, partially offset by approximately
$368,000 of cash provided by operating activities. Cash used in investing
activities consisted of property improvements and replacements and net deposits
to restricted escrows. Cash used in financing activities consisted of payments
of principal on the mortgages encumbering the Registrant's properties. The
Registrant invests its working capital reserves in interest bearing accounts.
The accompanying consolidated financial statements have been prepared assuming
the Partnership will continue as a going concern. The Partnership continues to
incur recurring operating losses and suffers from inadequate liquidity. Recourse
indebtedness of approximately $4,576,000 plus accrued interest of approximately
$3,843,000 is in default at March 31, 2001, as a result of nonpayment of
interest and principal upon its maturity in November 1997. These loans were
payable to Angeles Acceptance Pool, L.P. ("AAP"). During the year ended December
31, 2000, AAP transferred ownership of the loans to Saticoy Investments Company,
LLC ("Saticoy"), a wholly owned entity of The PNL Companies. This indebtedness
is recourse to the Partnership. The Partnership does not have the means with
which to satisfy this obligation and Saticoy has a judgment against the
Partnership for this debt.
No other sources of additional financing have been identified by the
Partnership, nor does the Managing General Partner have any other plans to
remedy the liquidity problems the Partnership is currently experiencing. The
Managing General Partner anticipates that the Fox Crest Apartments and Waterford
Square Apartments will generate sufficient cash flows during 2001 to meet all
property operating expenses, property debt service requirements and to fund
capital expenditures. However, these cash flows will be insufficient to provide
debt service for the unsecured Partnership indebtedness. If the Managing General
Partner is unsuccessful in its efforts to restructure these loans, then it may
be forced to liquidate the Partnership.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or amounts and classifications of liabilities that may
result from these uncertainties.
With respect to the Partnership's two apartment complexes, 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 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
Registrant's properties are detailed below.
Waterford Square Apartments
The Partnership has budgeted, but is not limited to, approximately $136,000 of
capital improvements at Waterford Square Apartments for 2001 consisting
primarily of carpet and vinyl replacements, water heater replacements,
appliances, and air conditioning unit replacements. As of March 31, 2001, the
property has spent approximately $31,000 on capital improvements consisting
primarily of carpet and vinyl replacements, light fixtures, clubhouse
renovations, and appliances. These improvements were funded from operating cash
flow.
Fox Crest Apartments
The Partnership has budgeted, but is not limited to, approximately $227,000 of
capital improvements at Fox Crest Apartments for 2001 consisting primarily of
flooring replacements, roof replacement and water heater replacements. As of
March 31, 2001, the property has spent approximately $20,000 on capital
improvements consisting primarily of carpet and tile replacements, cabinet and
countertop replacements, maintenance equipment, and roof replacements. These
improvements were funded from operating cash flow.
The additional capital improvements planned for 2001 at the Partnership's
properties will be made only to the extent of cash available from operations and
Partnership reserves.
The existing first mortgage indebtedness, working capital loans and amounts due
to AMIT are thought to be in excess of the value of the properties. (Pursuant to
a series of transactions, affiliates of the Managing General Partner acquired
ownership interests in AMIT as follows: On September 17, 1998, AMIT was merged
with and into IPT and effective February 26, 1999, IPT was merged into AIMCO.
Accordingly, AIMCO is the current holder of the AMIT loans.) Two AMIT Notes in
the aggregate amount of approximately $2,526,000 plus related accrued interest
of approximately $1,095,000 mature in March 2002; these notes are recourse to
the Partnership only. These loans require monthly payments of excess cash flow,
as defined in the terms of the promissory notes. The Partnership's other
remaining note to AMIT for approximately $4,765,000, plus accrued interest at
12.5% per annum compounded monthly, is due March 2003 and does not require any
payments until maturity. Accrued interest on this note as of March 31, 2001 is
approximately $4,108,000. The first mortgage loan encumbering Waterford Square
Apartments, which is guaranteed by HUD, is scheduled to mature in November 2027.
Likewise, the first mortgage loan encumbering Fox Crest Apartments is scheduled
to mature in May 2003, at which time a balloon payment of $5,445,000 is due. The
Registrant is current in its payments on both of these mortgages. The Managing
General Partner will 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 Registrant will risk losing such properties
through foreclosure.
There were no distributions made for either of the three month periods ended
March 31, 2001 or 2000. 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 Registrant's
distribution policy is reviewed on an annual basis. However, based on the
current default under the working capital loans, it is unlikely that a
distribution will be made by the Registrant in the foreseeable future.
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 Managing 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 Managing General Partner
filed a motion seeking dismissal of the action. In lieu of responding to the
motion, the plaintiffs filed an amended complaint. The Managing 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 Managing 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 Managing 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 Managing 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) Reports on Form 8-K:
None 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 XIV
By: Angeles Realty Corporation II
Managing 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: