UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 11, 2003
REAL ESTATE ASSOCIATES LIMITED VII
(Exact Name of Registrant as Specified in Its Charter)
California 0-13810 95-3290316
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification
Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Registrant's telephone number, including area code (864) 239-1000
N/A
(Former address, if changed since last report)
Item 5. Other Events.
On August 11, 2003, National Partnership Investments Corp. ("NAPICO"), the
corporate general partner of the Registrant, entered into a Stipulation of
Settlement (the "Stipulation of Settlement") with the plaintiff class (the
"Plaintiffs") and their counsel relating to the settlement of In Re Real Estate
Associates Limited Partnership Litigation (the "REAL Litigation"). The
Stipulation of Settlement remains subject to the preliminary and final approval
of the court as well as the approval of the Plaintiffs. Pursuant to the
Stipulation of Settlement, within two days after receiving the court's
preliminary approval of the proposed settlement, Alan I. Casden, on behalf of
himself, NAPICO and other defendants in the REAL Litigation, is responsible for
depositing $29 million into an escrow account for the benefit of the Plaintiffs.
Upon final court approval, approval by the Plaintiffs and the lapse of any time
to appeal the court approval of the settlement, the following shall occur:
1. Alan I. Casden, on behalf of himself, NAPICO and other defendants in
the REAL Litigation, will transfer to an agent for the Plaintiffs
shares of common stock ("Class A Common Stock") of Apartment
Investment and Management Company ("AIMCO") owned by certain
affiliates of Alan I. Casden with an aggregate market value of $19
million, subject to certain transfer restrictions, or at Alan I.
Casden's option, $19 million in cash.
2. NAPICO will issue an aggregate of $35 million in promissory notes
for the benefit of the Plaintiffs. An aggregate of $7 million of
notes are to be repaid each year. The notes will bear interest based
on applicable rates of U.S. Treasury bills with similar maturities.
The notes will be guaranteed by AIMCO Properties, L.P., an affiliate
of AIMCO.
3. The parties to the Stipulation of Settlement will release each other
and related parties from any and all claims associated with the REAL
Litigation and the Plaintiffs' investment in the Registrant and the
other affiliated partnerships.
4. The $29 million in the escrow account established by Alan I. Casden
will be released to the Plaintiffs.
Pursuant to the Stipulation of Settlement, upon final approval of the settlement
by the court, the parties shall jointly request that a new judgment be entered
in the REAL Litigation that will, among other things, expunge the judgment
originally entered against NAPICO and the other defendants on April 29, 2003.
On August 12, 2003, in connection with the proposed settlement pursuant to the
Stipulation of Settlement, NAPICO and AIMCO executed a Settlement Agreement (the
"Settlement Agreement") with the prior shareholders of Casden Properties Inc.
The principal terms of the Settlement Agreement include:
1. That NAPICO will voluntarily discontinue the action it commenced on
May 13, 2003 against the former shareholders of Casden Properties
Inc. and other indemnitors in AIMCO's March 2002 acquisition of
Casden Properties Inc. (the "Casden Merger").
2. That Alan I. Casden and certain related entities will resolve
certain pending claims for indemnification made by NAPICO, AIMCO and
their affiliates. These claims include indemnification related to
the REAL Litigation and certain other matters in connection with the
Casden Merger.
3. AIMCO, or an affiliate, will deposit $25 million of the $29 million
that Alan I. Casden is responsible for depositing into the escrow
account for the benefit of the Plaintiffs pursuant to the terms of the
Stipulation of Settlement. In connection with this deposit by AIMCO,
The Casden Company will transfer to AIMCO 531,915 shares of AIMCO
Class A Common Stock owned by The Casden Company, which shares are to
be held in escrow by AIMCO until final approval of the Stipulation of
Settlement by the court and the Plaintiffs. Upon such approval, AIMCO
will become the owner of the 531,915 shares. If final approval by the
court and the Plaintiffs is not obtained, the $25 million deposited by
AIMCO into the escrow account will be returned to AIMCO and AIMCO will
return to The Casden Company the 531,915 shares.
4. The Casden Company will promise to pay an aggregate amount of $35
million on a secured, nonrecourse basis to NAPICO. The Casden Company
will be obligated to repay an aggregate of $7 million of the
obligation each year. The obligation to repay the $35 million will
bear the same interest and mature on the same schedule as the
promissory notes issued by NAPICO to the plaintiffs pursuant to the
Stipulation of Settlement. Payment of these obligations will be
secured by (i) a pledge of 744,681 shares of AIMCO Class A Common
Stock owned by Alan I. Casden or an affiliated entity, plus up to
60,000 additional shares for accrued interest, and (ii) cash proceeds
of recoveries or settlements that Alan I. Casden or any of his
affiliates, or any of the former shareholders of Casden Properties
Inc., receive in connection with or related to the REAL Litigation
(collectively, "Recoveries"). The payment obligations to NAPICO will
be required to be prepaid with any Recoveries received. Payment may be
made in cash or in shares of AIMCO Class A Common Stock, except
payments with respect to Recoveries must be made in cash.
SIGNATURE
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 hereunto duly authorized.
REAL ESTATE ASSOCIATES LIMITED VII
(a California limited partnership)
By: National Partnership Investments Corp.
Corporate General Partner
By: /s/Brian H. Shuman
Brian H. Shuman
Senior Vice President and
Chief Financial Officer
Date: August 13, 2003