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): November 24, 2003
HOUSING PROGRAMS LIMITED
(Exact Name of Registrant as Specified in Its Charter)
California 0-13808 95-3906167
(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.
As previously disclosed, on August 27, 1998, two investors holding an aggregate
of eight units of limited partnership interest in Real Estate Associates Limited
III (an affiliated partnership in which National Partnership Investments Corp.
("NAPICO") is the corporate general partner) and two investors holding an
aggregate of five units of limited partnership interests in Real Estate
Associates Limited VI (another affiliated partnership in which NAPICO is the
corporate general partner) commenced an action against the Partnership, NAPICO
and certain other defendants. The claims included, but were not limited to,
claims for breaches of fiduciary duty to the limited partners of certain
NAPICO-managed partnerships and violations of securities laws by making
materially false and misleading statements in the consent solicitation
statements sent to the limited partners of such partnerships relating to
approval of the transfer of partnership interests in limited partnerships,
owning certain of the properties, to affiliates of Casden Properties, Inc.,
organized by an affiliate of NAPICO. On August 4, 1999, one investor holding one
unit of limited partnership interest in the Partnership commenced a virtually
identical action against the Partnership, NAPICO and certain other entities. The
second action was subsumed in the first action, and was certified as a class
action.
On April 29, 2003, the court entered judgment against NAPICO and certain other
defendants in the amount of approximately $25.2 million for violations of
securities laws and against NAPICO for approximately $67.3 million for breaches
of fiduciary duty, both amounts plus interest of approximately $25.6 million,
and for punitive damages against NAPICO in the amount of $2.6 million.
On August 11, 2003, Apartment Investment and Management Company ("AIMCO") and
NAPICO entered into a Stipulation of Settlement (the "Stipulation of
Settlement") with the plaintiff class (the "Plaintiffs") and their counsel
relating to the settlement of the litigation. The principal terms of the
Stipulation of Settlement include, among other things (1) payments in both cash
($29 million) and stock ($19 million) by Alan I. Casden, on behalf of himself,
NAPICO and other defendants, to the Plaintiffs, (2) guaranteed payments in an
aggregate amount of $35 million ($7 million per year for 5 years), plus
interest, by NAPICO to the Plaintiffs, (3) a release of claims of all parties
associated with the litigation and (4) joint agreement by the parties to request
that a new judgment be entered in the litigation to, among other things, expunge
the judgment originally entered against NAPICO and the other defendants. On
September 24, 2003, Battle Fowler, LLP filed a request to intervene to challenge
the portion of the Stipulation of Settlement that would lead to expungement of
the judgment originally entered on April 29, 2003 against NAPICO and the other
defendants. All parties to the Stipulation of Settlement opposed this request to
intervene, and following a hearing on November 10, 2003, the court denied Battle
Fowler, LLP's request. On November 24, 2003, the court granted final approval of
the Stipulation of Settlement. The Stipulation of Settlement will become
effective after the period to appeal has lapsed or, if an appeal has been taken,
the appeal has run its course. The period to appeal expires on December 24,
2003.
In connection with the Stipulation of Settlement, on August 12, 2003, 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, among other things, that (1) NAPICO will
voluntarily discontinue the action it commenced on May 13, 2003 against the
former shareholders of Casden Properties, Inc. and other indemnitors in the
Casden Merger, (2) Alan I. Casden and certain related entities will resolve
certain pending claims for indemnification made by NAPICO, AIMCO and their
affiliates, (3) AIMCO or an affiliate will provide $25 million of the $29
million in cash that Alan I. Casden is obligated to provide under the Stipulaton
of Settlement in exchange for 531,915 shares of AIMCO Class A Common Stock owned
by The Casden Company, and (4) The Casden Company will promise to pay to NAPICO
an aggregate amount of $35 million ($7 million per year for 5 years), plus
interest, on a secured, nonrecourse basis. The Casden Company can prepay its
obligation set forth in item (4) above in shares of AIMCO Class A Common Stock
having a value based on the greater of $47 per share or the market value of such
shares at the time of payment. The Settlement Agreement is expected to close at
the same time that the Stipulation of Settlement becomes effective.
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.
HOUSING PROGRAMS LIMITED
By: National Partnership Investments Corp.
Corporate General Partner
By: /s/Brian H. Shuman
Brian H. Shuman
Senior Vice President and
Chief Financial Officer
Date: November 26, 2003