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 0-13408
CENTURY PROPERTIES FUND XX
(Exact name of small business issuer as specified in its charter)
California 94-2930770
(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)
CENTURY PROPERTIES FUND XX
STATEMENT OF NET LIABILITIES IN LIQUIDATION
(unaudited)
(in thousands, except unit data)
March 31, 2001
Assets
Cash and cash equivalents $ 506
Receivables and deposits, net of allowance for
uncollectible accounts of $54 16
Debt trustee escrow 1,874
Investment property 5,481
7,877
Liabilities
Tenant security deposit liabilities 34
Accrued property taxes 23
Other liabilities 122
Non-recourse promissory notes (Note A) 8,229
Estimated costs during the period of liquidation 86
8,494
Net liabilities in liquidation $ (617)
See Accompanying Notes to Financial Statements
b)
CENTURY PROPERTIES FUND XX
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(Unaudited)
(in thousands)
Three Months Ended March 31, 2001
Net liabilities in liquidation at beginning of period $(1,154)
Changes in net liabilities in liquidation attributed to:
Decrease in cash and cash equivalents (730)
Decrease in receivables and deposits (65)
Increase in debt trustee escrow 747
Increase in investment properties 671
Decrease in accounts payable 50
Increase in tenant security deposit liabilities (3)
Decrease in accrued property taxes 66
Increase in other liabilities (16)
Increase in Non-Recourse Promissory Notes and interest (97)
Increase in estimated costs during the period of liquidation (86)
Net liabilities in liquidation at end of period $ (617)
See Accompanying Notes to Financial Statements
c)
CENTURY PROPERTIES FUND XX
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
As of December 31, 1999, Century Properties Fund XX (the "Partnership" or
"Registrant") adopted the liquidation basis of accounting due to the imminent
loss of its remaining investment properties.
Pursuant to the terms of the Notes, the Partnership was required to pay interest
at a rate of 4% per annum on the Notes, and accrue the additional 4% per annum
due on the Notes. The Notes are secured by all of the Partnership's properties.
The Notes, which had a balance of principal and accrued interest of
approximately $8,229,000 at March 31, 2001, matured on November 30, 1998. The
Partnership was in default under the Nonrecourse Promissory Notes. Fox Capital
Management Corporation ("FCMC" or the "Managing General Partner"), the general
partner of the Partnership's general partner, previously contacted the indenture
trustee for the Notes and certain holders of the Notes regarding this default.
On October 28, 1999 the Partnership entered into a forbearance agreement with
the indenture trustee for a period of 390 days. In turn, the Partnership agreed
to (a) deliver to the indenture trustee for the benefit of the note holders all
of the accumulated cash of the Partnership, less certain reserves and
anticipated operating expenses, (b) market all of its properties for sale, (c)
deliver all cash proceeds from any sales to the indenture trustee until the
notes are fully satisfied and (d) comply with the reporting requirements under
the indenture. At the expiration of the forbearance period, the Partnership had
not sold all of its properties or satisfied the Nonrecourse Promissory Notes.
With the consent of the indenture trustee, the forbearance period has been
extended to August 31, 2001. Based on current market conditions, it is unlikely
that the sale of the Partnership's remaining asset will generate sufficient
proceeds to pay off the Nonrecourse Promissory Notes in full. If the Partnership
cannot sell its property for sufficient value, in accordance with the terms of
the forbearance agreement, it is likely that the Partnership will lose its
remaining property through delivery to an auctioneer who would sell the asset
for the benefit of the Note holders. Upon the sale or disposal of the last
property, the Partnership is expected to terminate. The Managing General Partner
is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a
publicly traded real estate investment trust.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements at December 31,
1999, to the liquidation basis of accounting. Consequently, assets have been
valued at estimated net realizable value and liabilities are presented at their
estimated settlement amounts. The valuation of assets and liabilities
necessarily requires many estimates and assumptions and there are substantial
uncertainties in carrying out the liquidation. The actual realization of assets
and settlement of liabilities could be higher or lower than amounts indicated
and is based upon the Managing General Partner's estimates as of the date of the
financial statements.
Included in liabilities in the statement of net liabilities in liquidation as of
March 31, 2001 is approximately $86,000 of costs, net of income, that the
Managing General Partner estimates will be incurred during the period of
liquidation based on the assumption that the liquidation process will be
completed by September 30, 2001. Because the success in realization of assets
and the settlement of liabilities is based on the Managing General Partner's
best estimates, the liquidation period may be shorter than projected or it may
be extended beyond the projected period.
Note B - 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 certain payments
to affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following transactions with affiliates of the Managing General Partner were
incurred during the three month periods ended March 31, 2001 and 2000:
2001 2000
(in thousands)
Property management fees $ -- $ 41
Reimbursement for services of affiliates 25 34
During the three months ended March 31, 2000, affiliates of the Managing General
Partner were entitled to receive 5% of gross receipts from the Partnership's
residential properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $41,000 for the
three months ended March 31, 2000. The Partnership had no residential properties
in 2001. For the Partnership's commercial properties, these services were
provided by an unrelated party for the three month periods ended March 31, 2001
and 2000.
Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $25,000 and $34,000 for the
three months ended March 31, 2001 and 2000, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 3,678 limited partnership
units in the Partnership representing 5.95% 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 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 its
affiliation with the Managing General Partner.
AIMCO and its affiliates own 8,831 Nonrecourse Promissory Notes representing
8.95% of the outstanding notes.
Note C - 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 financial statements as currently presented.
Note D - Sale of Investment Properties
On March 27, 2000, the Partnership sold Linpro Park to an unaffiliated party for
$9,500,000. The net sales proceeds of approximately $9,002,000 were directly
wired to the Indenture Trustee as required by the forbearance agreement.
Note E - 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 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 Partnership from time to time.
The discussion of the Partnership'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 operations. 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 remaining investment property is a business park. The
following table sets forth the average occupancy of the property for the three
months ended March 31, 2001 and 2000:
Average Occupancy
Property 2001 2000
Highland Park Commerce Center (1) 79% 84%
Charlotte, North Carolina
(1) The decrease in occupancy at Highland Park Commerce Center is due to the
loss of tenants over the past twelve months occupying 6,914 square feet,
which represents approximately 6.54% of the total space. The Partnership
recently entered into a contract to sell Highland Park Commerce Center to
an unrelated third party. The sale, which is conditioned upon the
purchaser completing its due diligence review of the property and other
customary conditions, is expected to close, if at all, during third
quarter 2001. There can be no assurance, however, that the sale will be
consummated, or if consummated, on what terms or in what time frame.
As of December 31, 1999, Century Properties Fund XX (the "Partnership" or
"Registrant") adopted the liquidation basis of accounting due to the imminent
loss of its remaining investment properties. Pursuant to the terms of the Notes,
the Partnership was required to pay interest at a rate of 4% per annum on the
Notes, and accrue the additional 4% per annum due on the Notes. The Notes are
secured by all of the Partnership's properties. The Notes, which had a balance
of principal and accrued interest of approximately $8,229,000 at March 31, 2001,
matured on November 30, 1998. The Partnership was in default under the
Nonrecourse Promissory Notes. The Managing General Partner had previously
contacted the indenture trustee and entered a forbearance agreement on October
28, 1999. In turn, the Partnership agreed to (a) deliver to the indenture
trustee for the benefit of the note holders all of the accumulated cash of the
Partnership, less certain reserves and anticipated operating expenses, (b)
market all of its properties for sale, (c) deliver all cash proceeds from any
sales to the indenture trustee until the notes are fully satisfied and (d)
comply with the reporting requirements under the indenture. At the expiration of
the forbearance period, the Partnership had not sold all of its properties or
satisfied the Nonrecourse Promissory Notes. With the consent of the indenture
trustee, the forbearance period has been extended to August 31, 2001. Based on
current market conditions, it is unlikely that the sale of the Partnership's
remaining asset will generate sufficient proceeds to pay off the Nonrecourse
Promissory Notes in full. If the Partnership cannot sell its property for
sufficient value, in accordance with the terms of the forbearance agreement, it
is likely that the Partnership will lose its remaining property through delivery
to an auctioneer who would sell the asset for the benefit of the Note holders.
Upon the sale or disposal of the last property, the Partnership is expected to
terminate.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements at December 31,
1999 to the liquidation basis of accounting. Consequently, assets have been
valued at estimated net realizable value and liabilities are presented at their
estimated settlement amounts. The valuation of assets and liabilities
necessarily requires many estimates and assumptions and there are substantial
uncertainties in carrying out the liquidation. The actual realization of assets
and settlement of liabilities could be higher or lower than amounts indicated
and is based upon the Managing General Partner's estimates as of the date of the
financial statements.
Included in liabilities in the statement of net liabilities in liquidation as of
March 31, 2001 is approximately $86,000 of costs, net of income, that the
Managing General Partner estimates will be incurred during the period of
liquidation based on the assumption that the liquidation process will be
completed by September 30, 2001. Because the success in realization of assets
and the settlement of liabilities is based on the Managing General Partner's
best estimates, the liquidation period may be shorter than projected or it may
be extended beyond the projected period.
On March 27, 2000, the Partnership sold Linpro Park to an unaffiliated party for
$9,500,000. The net sales proceeds of approximately $9,002,000 were directly
wired to the Indenture Trustee as required by the forbearance agreement.
Highland Park Commerce Center
During the three months ended March 31, 2001, the Partnership completed
approximately $17,000 in capital improvements at Highland Park Commerce Center
consisting of tenant improvements. These improvements were funded from operating
cash flow. The property is currently being marketed for sale; therefore, no
funds have been budgeted for capital improvements for the year 2001. Capital
improvements will be made as necessary until the property is sold. The
Partnership recently entered into a contract to sell Highland Park Commerce
Center to an unrelated third party. The sale, which is conditioned upon the
purchaser completing its due diligence review of the property and other
customary conditions, is expected to close, if at all, during third quarter
2001. There can be no assurance, however, that the sale will be consummated, or
if consummated, on what terms or in what time frame.
In light of the maturity of the Notes, no distributions were made to the limited
partners for the three months ended March 31, 2001 and 2000.
The following is a general description of the tax consequences that may result
to a limited partner upon the sale of the Partnership's remaining property. Each
limited partner should consult with his or her own tax advisor to determine his
or her particular tax consequences. The taxable gain and income resulting from
the sale of the Partnership's property will pass through to the limited
partners, and will likely result in income tax liability to the limited partners
without any distribution of cash from the Partnership.
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 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.
CENTURY PROPERTIES FUND XX
By: FOX PARTNERS III
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION
Its 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: