UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1999

[ ] 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 0-12659

U.S. SHELTER CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 57-0769881
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

201 Lavinia Avenue
Greenville, SC 29601
(Address of principal executive office)(Zip code)

(864) 242-6631
(Registrant's telephone number)

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 [ ]

The registrant had 9,629,793 shares of Common Stock outstanding as of August 12,
1999.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

U.S. SHELTER CORPORATION

CONDENSED STATEMENTS OF NET ASSETS IN LIQUIDATION
JUNE 30, 1999 (UNAUDITED) AND DECEMBER 31, 1998
- --------------------------------------------------------------------------------

June 30, December 31,
1999 1998
(unaudited) (1)

ASSETS
Investment in common stock of
Insignia Financial Group, Inc. - New (Note 3) $3,219,038 $3,717,222
Investment in common stock of
Apartment Investment and
Management Company (Note 3) 4,704,809 --
Investment in preferred convertible class E
stock of Apartment Investment and
Management Company (Note 3) -- 4,515,998
Cash and cash equivalents 491,019 28,132
Dividends receivable (Note 3) -- 681,305
---------- ----------
Total Assets 8,414,866 8,942,657
---------- ----------

LIABILITIES

Estimated costs during period of liquidation
and accrued liabilities (Note 4) 368,842 942,302
Taxes payable (Note 5) 153,000 260,000
---------- ----------
Total Liabilities 521,842 1,202,302
---------- ----------

NET ASSETS IN LIQUIDATION $7,893,024 $7,740,355
========== ==========

(1) Derived from audited financial statements as of and for the year ended
December 31, 1998.

See notes to unaudited condensed financial statements.

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U.S. SHELTER CORPORATION

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION
THREE MONTHS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED)
- --------------------------------------------------------------------------------

1999 1998

Net Assets in Liquidation as of April 1 $ 8,342,256 $ 10,910,484
------------ ------------

Changes during the period:

Unrealized loss on common stock (376,976) (234,432)

Realized loss on sale of common stock -- (871)

Increase in estimated costs during period (153,000) --
of liquidation and accrued liabilities

Dividends and interest earned 73,744 --

Federal income tax benefit 7,000 --
------------ ------------

Net changes during the period (449,232) (235,303)
------------ ------------

Net Assets in Liquidation as of June 30 $ 7,893,024 $ 10,675,181
============ ============

See notes to unaudited condensed financial statements.

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U.S. SHELTER CORPORATION

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION
SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED)
- --------------------------------------------------------------------------------

1999 1998

Net Assets in Liquidation as of January 1 $ 7,740,355 $ 9,986,756
------------ ------------

Changes during the period:

Unrealized gain on common stock 182,774 709,296

Unrealized loss on preferred stock (53,399) --

Realized gain (loss) on sale of common stock 13,631 (871)

Increase in estimated costs during the period of (153,000) --
liquidation and accrued liabilities

Dividends and interest earned 155,663 --

Federal income tax benefit (expense) 7,000 (20,000)
------------ ------------

Net changes during the period 152,669 688,425
------------ ------------

Net Assets in Liquidation as of June 30 $ 7,893,024 $ 10,675,181
============ ============

See notes to unaudited condensed financial statements.

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U.S. SHELTER CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (LIQUIDATION BASIS)
SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (UNAUDITED)
- --------------------------------------------------------------------------------

1. OPERATIONS PRIOR TO PLAN OF LIQUIDATION AND THE COMPANY'S PLAN OF
LIQUIDATION

Prior to the sale of substantially all of the Company's operating assets
and the plan of liquidation, the Company operated in three segments:
property management and leasing, mortgage banking, and real estate
interests. The property management and leasing segment managed apartment
complexes and managed and leased commercial properties. The mortgage
banking segment originated loans on commercial properties. The real estate
interests segment sold real estate owned by the Company, held mortgage
loans issued in connection with sales of properties, and served as a
general partner in partnerships organized by the Company.

On December 31, 1990, the Company obtained shareholder approval and the
Company completed the sale of substantially all of its assets (except
Malibu Savings Bank, a wholly-owned subsidiary of the Company) to Insignia
Financial Group, Inc. ("Insignia"). On November 27, 1991, the Company
filed a certificate of dissolution with the Secretary of the State of
Delaware. The Delaware Chancery Court ordered the Company's existence to
continue for the sole purpose of winding up its affairs, including the
prosecution and defense of suits by or against it, the discharge of its
liabilities and the distribution to its shareholders of any remaining
assets.

On January 11, 1991, the Office of Thrift Supervision declared Malibu
Savings Bank insolvent, placed it into receivership, and appointed the
Resolution Trust Company ("RTC") as conservator. Accordingly, Malibu
Savings Bank ceased to exist as a subsidiary of the Company.

Subsequent to commencement of dissolution, the Company's activities have
involved winding up the Company's affairs, including the defense and
settlement of various claims against the Company. The Company commenced
liquidation activities in 1991 and management will attempt to implement a
distribution to shareholders subject to the following conditions being
met, and subject to the approval of the Delaware Chancery Court (the
"Court"). These conditions are: (1) finalizing an agreement with a law
firm for defense and indemnification of certain liabilities (see Note 4),
and (2) any other matters required to be accomplished by the Court prior
to the distribution. It is the Company's intention to complete the
liquidation during the third quarter of fiscal 1999. There were no
distributions to shareholders under the plan of liquidation in the six
months ended June 30, 1999 and 1998, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND USE OF ESTIMATES - As a result of the
dissolution of the Company commenced on November 27, 1991, the Company
changed its basis of accounting from a going-concern basis to the
liquidation basis of accounting. Under the liquidation basis of
accounting, assets and liabilities are stated at their estimated net
realizable value and estimated costs through the liquidation are provided
to the extent reasonably determinable. All costs incurred in the six
months ended June 30, 1999 and 1998, respectively, have been charged to
the liability account, Estimated Costs During Period of Liquidation, that
was initially established upon adoption of the liquidation basis of
accounting. During the three months ended June 30,

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1999 a net provision of $153,000 for net additional estimated costs during
the period of liquidation was recorded due to the Company's reassessment
of estimated costs to liquidate.

As a result of the change in the Company's basis of accounting from the
going-concern basis to the liquidation basis, assets in all years have
been valued at estimated net realizable value, and liabilities in all
years have been reflected at their estimated settlement amounts including
estimated costs to be incurred during the period of liquidation. The
valuation of assets and liabilities is based on management's estimates and
assumptions as of the date of the financial statements; actual realization
of the assets and settlement of liabilities could be higher or lower than
the amounts indicated. There are a number of important factors which could
cause actual results to differ from the estimates, including the
settlement amount of claims and other liabilities to be paid in the
liquidation, the amounts to be received for assets which have not yet been
sold, and the time period and actual costs necessary to complete the plan
of liquidation.

The interim financial data as of and for the six months ended June 30,
1999 and 1998 are unaudited and are presented on the liquidation basis of
accounting in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles
for complete financial statements. In management's opinion, all
adjustments (consisting only of adjustments of a normal, recurring nature)
necessary for a fair presentation have been included. The December 31,
1998 financial information was derived from audited financial statements,
but excludes certain disclosures included in the Company's audit report.

These financial statements should be read in conjunction with the audited
financial statements and notes thereto for the year ended December 31,
1998, as well as the other information included in the Company's annual
report filed on Form 10-K. The statements of changes in net assets in
liquidation for the interim periods presented are not necessarily
indicative of the results for the year ending December 31, 1999 or any
other interim period.

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid
investments with an original maturity of three months or less when
purchased to be cash equivalents.

3. INVESTMENTS

In September 1998, as a result of the proposed merger of the residential
property management operations of Insignia with Apartment Investment and
Management Company ("AIMCO"), Insignia shareholders approved the spin-off
and distribution by Insignia to its stockholders of all of the outstanding
common stock of Insignia/ESG Holdings, Inc., a subsidiary of Insignia
("Holdings"). Holdings includes primarily the commercial real estate
service, residential brokerage, and mortgage banking operations of
Insignia. As a result of this distribution, each holder of shares of Class
A common stock of Insignia received two shares of Holdings common stock
for each three shares of Insignia common stock held. The shares of
Insignia common stock continued to represent issued and outstanding shares
of Insignia common stock ("Class A New common stock").

In October 1998, Insignia completed its merger with AIMCO, and on October
7, 1998, shareholders of Insignia Class A New common stock received AIMCO
cumulative preferred convertible Class E shares in exchange for shares of
Insignia Class A New common stock at a rate of approximately 0.262 AIMCO
cumulative preferred convertible Class E shares per share of Insignia
Class A New common stock. Accordingly, the Company received 122,054 shares
of AIMCO preferred stock at that time.

In November 1998, Holdings reassumed the original corporate name, Insignia
Financial Group, Inc. Holdings shares also reassumed Insignia's original
New York Stock Exchange trading symbol, IFS, and trading of the former
Holdings' common shares under Insignia's original trading symbol commenced
on

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November 2, 1998. The name and trading symbol of Holdings common stock
changed at that time. The shares of the former Holdings common stock are
included in the statements of net assets in liquidation at June 30, 1999
and December 31, 1998 as "Insignia Financial Group, Inc. - New" common
stock.

On December 21, 1998, AIMCO declared a one-time special dividend of $5.582
per share of its preferred convertible Class E stock. This dividend was
payable on January 15, 1999 to the stockholders of record on December 31,
1998 and was accrued by the Company as a dividend receivable at December
31, 1998. Upon payment of this one-time special dividend, each share of
the Series E cumulative preferred convertible stock automatically
converted into one share of AIMCO Class A common stock.

The Company owned 306,575 shares of Insignia Financial Group, Inc. - New
common at June 30, 1999 and December 31, 1998. The closing market price
was $10.50 and $12.125 per share at June 30, 1999 and December 31, 1998,
respectively.

The Company owned 110,054 shares of AIMCO Class A common stock at June 30,
1999 and 122,054 shares of AIMCO cumulative preferred convertible Class E
stock at December 31, 1998. The closing market price of the AIMCO Class A
common stock was $42.75 per share at June 30, 1999 and the closing market
price of the AIMCO cumulative preferred convertible Class E stock was $37
per share at December 31, 1998.

Realized and unrealized gains and losses are included in the accompanying
statements of changes in net assets in liquidation.

4. ESTIMATED COSTS DURING PERIOD OF LIQUIDATION AND ACCRUED LIABILITIES

The Company commenced liquidation activities in 1991 and provided an
estimate of the costs to liquidate the Company at that time. The actual
amount of this liability may vary significantly depending on the length of
time required to complete the plan of liquidation and complexities which
may arise in disposing of the remaining assets. The remaining estimated
costs to liquidate at June 30, 1999 and December 31, 1998, represent known
liabilities and estimated legal, accounting, and other fees necessary to
liquidate and distribute the remaining assets, if any, of the Company.
During the three months ended June 30, 1999 a net provision of $153,000
for net additional estimated costs during the period of liquidation was
recorded due to the Company's reassessment of estimated costs to
liquidate.

Included in the estimated costs to liquidate at June 30, 1999 is an
accrual for $175,000 which represents the cost of a proposed agreement
between the Company and a law firm whereby the law firm would agree to
defend the Company and to indemnify the Company from and against claims or
other costs arising after distribution of the remaining net assets to the
Company's shareholders (the "Proposed Defense and Indemnification
Agreement"). The terms of the Proposed Defense and Indemnification
Agreement would expire on December 31, 2003. Management expects that the
Proposed Defense and Indemnification Agreement will be finalized during
the third quarter of fiscal 1999. Members of the law firm, which is a
party to the proposed agreement, are also shareholders in the Company.

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5. TAXES PAYABLE

Taxes payable consist of the following:

June 30, December 31,
1999 1998
-------- --------
Federal income taxes payable $153,000 $160,000
State and local taxes payable -- 100,000
-------- --------
$153,000 $260,000
======== ========

The Federal income taxes payable, as described below, represents estimated
alternative minimum income taxes payable upon the sale of the Company's
investments.

The resolution of certain state and local taxes claimed in prior years by
various state and local taxing authorities is expected by management to be
assumed by a law firm in accordance with the terms of the Proposed Defense
and Indemnification Agreement discussed in Note 4. Accordingly, the
liability for such claims was reduced to zero at June 30, 1999.

No other taxes have been provided for Federal and state income tax
purposes due to the availability of net operating loss carryforwards of
approximately $15.2 million for Federal purposes and $14.9 million for
state purposes at both June 30, 1999 and December 31, 1998. These net
operating loss carryforwards are available to offset future income, with
certain limitations, and begin to expire in 2003. Alternative minimum
income taxes are expected to be payable under the alternative minimum
income tax provisions of the Internal Revenue Code because only a portion
of the Federal net operating loss carryforwards can be utilized to offset
alternative minimum taxable income. Although the payment of Federal
alternative minimum income tax usually gives rise to a credit against
future regular Federal income tax liabilities, the liquidation position of
the Company makes it unlikely that any deferred tax asset created by the
payment of the alternative minimum income tax will ever be realized.
Therefore, the Company has not recorded a deferred tax asset related to
the payment of Federal alternative minimum tax.

6. LITIGATION

The Company was one of several defendants in a lawsuit filed by
Metropolitan Life Insurance Company ("MetLife"). In the action, MetLife
sought damages for siding installed on apartment buildings it owns in West
Palm Beach, Florida. According to the complaint, MetLife purchased the
property from the Company in 1989 and claimed breach of warranty against
the Company based on allegedly defective work and improper materials. The
action was filed in July 1996 and was settled in March 1999. The Company's
share of the settlement was $625,000. Such amount, net of a $215,000
reduction in estimated legal fees, was provided as additional Estimated
Costs During Period of Liquidation at December 31, 1998 (see Note 4).

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7. COMMON STOCK OF THE COMPANY

As described in Note 1, the Company has adopted the liquidation basis of
accounting. Accordingly, the presentation of per share data in the
accompanying statements of changes in net assets in liquidation has been
omitted.

For all periods presented, the Company had 20,000,000 authorized shares of
common stock, $1 par value and 9,629,793 shares of common stock issued and
outstanding.

********

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with the
Company's financial statements and the notes thereto.

The Company sold substantially all of its assets to Insignia Financial
Group, Inc. on December 31, 1990, and on November 27, 1991 filed a Certificate
of Dissolution with the Delaware Secretary of State. As a result, the Company
changed its basis of accounting from a going-concern basis to a liquidation
basis. During the period ended June 30, 1999, the Company's activities have been
limited to continuing its winding up and liquidation. Management believes that
the liquidation of the Company will be finalized during the third quarter of
fiscal 1999.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

The Company's net assets in liquidation were $7,893,024 at June 30,
1999, compared to $7,740,355 at December 31, 1998, representing an increase in
net assets in liquidation of $152,669 during the six month period. This is
primarily attributable to dividends received from the Apartment Investment and
Management Company Class A common stock (the "AIMCO Stock") during the six
months ended June 30, 1999 and unrealized gains on the Company's investment in
common stock.

Realized and unrealized gains and losses on investment securities are
included in determining net assets under the liquidation basis of accounting.
For financial reporting purposes, the Company adjusts its investment in stocks
to market value at the end of each financial reporting period. At June 30, 1999,
the Company's principal assets are the Insignia Stock and the AIMCO Stock. The
AIMCO Stock, formerly AIMCO cumulative convertible Class E preferred stock until
its conversion to Class A common stock during January 1999, was obtained by the
Company in October 1998 as a result of the merger of the residential property
management operations of Insignia with AIMCO.

The common stock of Insignia held by the Company at June 30, 1999
relates primarily to the commercial real estate services brokerage and mortgage
banking operations of Insignia which were spun-off by Insignia during late 1998.
The Company owned 306,575 shares of the Insignia Stock at June 30, 1999 and
December 31, 1998. The closing price per share of the Insignia Stock at June 30,
1999 and December 31, 1998 was $10.50 and $12.12, respectively. The Company
recorded an unrealized loss on the Insignia Stock of $498,184 for the six months
ended June 30, 1999 compared to an unrealized gain on Insignia Stock of $709,296
for the six months ended June 30, 1998 due primarily to market fluctuations in
the price of the Insignia Stock.

At the date of the conversion of the AIMCO cumulative convertible Class
E preferred stock during January 1999, the Company received an equivalent number
of shares of AIMCO Common Class A Stock. The Company recorded an unrealized loss
on preferred stock of $53,399 at that time. After the conversion into common
stock, the Company sold 12,000 shares of the AIMCO Stock in order to pay a legal
settlement during the six month period ended June 30, 1999 (see further
discussion regarding settlement below). The Company owned 110,054 shares of the
AIMCO Stock at June 30, 1999. The Company recorded an unrealized gain on AIMCO
common stock of $680,959 from the date of conversion through June 30, 1999.

The Company earns dividends on its investment in AIMCO Stock, which is
reflected in the six months ended June 30, 1999. No dividends were earned by the
Company in the six months ended June 30, 1998 as the Company's investment in
AIMCO began in the fourth quarter of 1998.

The Company provided for estimated costs to liquidate effective
beginning in fiscal year 1991, when the Company changed its basis of accounting
from a going-concern basis to the liquidation basis.

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Accordingly, estimated costs through the liquidation period were provided at
that time and all costs since then have been charged against such liability.

The Company was one of several defendants in a lawsuit named by
Metropolitan Life Insurance Company ("MetLife"). In the action, MetLife sought
damages for siding installed on apartment buildings it owns in West Palm Beach,
Florida. According to the complaint, MetLife purchased the property from the
Company in 1989 and claimed breach of warranty against the Company based on
allegedly defective work and improper materials. The action was filed in July
1996 and was settled during March 1999. The Company provided $625,000 during the
three months ended December 31, 1998 due to the settlement of this matter,
offset by a reduction in estimated legal fees of $215,000 to defend the lawsuit.
See "Legal Proceedings."

During the six months ended June 30, 1999, the Company recorded a net
provision of $153,000 for net additional estimated costs during the period of
liquidation due to the Company's reassessment of those costs.

QUARTER ENDED JUNE 30, 1999 COMPARED TO QUARTER ENDED JUNE 30, 1998

The Company's net assets in liquidation were $7,893,024 at June 30,
1999, compared to $8,342,256 at March 31, 1999, representing a decrease in net
assets in liquidation of $449,232 during the three month period. This is
primarily attributable to unrealized losses on the Company's investment in
common stock during the three months ended June 30, 1999.

Realized and unrealized gains and losses on investment securities are
included in determining net assets under the liquidation basis of accounting.
For financial reporting purposes, the Company adjusts its investment in stocks
to market value at the end of each financial reporting period. At June 30, 1999,
the Company's principal assets are common stock of Insignia Financial Group, Inc
- - New (the "Insignia Stock") and Apartment Investment and Management Company
Class A common stock (the "AIMCO Stock"). The AIMCO Stock, formerly AIMCO
cumulative convertible Class E preferred stock until its conversion to Class A
common stock during January 1999, was obtained by the Company in October 1998 as
a result of the merger of the residential property management operations of
Insignia with AIMCO.

The common stock of Insignia held by the Company at June 30, 1999
relates primarily to the commercial real estate services brokerage and mortgage
banking operations of Insignia which were spun-off by Insignia during late 1998.
The Company owned 306,575 shares of the Insignia Stock at June 30, 1999 and
March 31, 1999. The closing price per share of the Insignia Stock at June 30,
1999 and March 31, 1999 was $10.50 and $14.06, respectively. The Company
recorded an unrealized loss on the Insignia Stock of $1,092,327 for the three
months ended June 30, 1999 compared to an unrealized loss on Insignia Stock of
$234,432 for the three months ended June 30, 1998, due primarily to market
fluctuations in the price of the Insignia Stock.

At the date of the conversion of the AIMCO cumulative convertible Class
E preferred stock during January 1999, the Company received an equivalent number
of shares of AIMCO Common Class A Stock. The Company recorded an unrealized loss
on preferred stock of $53,399 at that time. After the conversion into common
stock, the Company sold 12,000 shares of the AIMCO Stock in order to pay a legal
settlement during the three month period ended March 31, 1999 (see further
discussion regarding settlement below). The Company owned 110,054 shares of the
AIMCO Stock at March 31, 1999 and June 30, 1999. The Company recorded an
unrealized gain on AIMCO common stock of $715,351 for the quarter ended June 30,
1999.

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The Company earns dividends on its investment in AIMCO Stock, which is
reflected in the three months ended June 30, 1999. No dividends were earned by
the Company in the three months ended June 30, 1998 as the Company's investment
in AIMCO began in the fourth quarter of 1998.

The Company provided for estimated costs to liquidate effective
beginning in fiscal year 1991, when the Company changed its basis of accounting
from a going-concern basis to the liquidation basis. Accordingly, estimated
costs through the liquidation period were provided at that time and all costs
since then have been charged against such liability.

During the three months ended June 30, 1999, the Company recorded a net
provision of $153,000 for net additional estimated costs during the period of
liquidation due to the Company's reassessment of those costs.

LIQUIDITY AND CAPITAL RESOURCES

The Company has no short-term or long-term debt facilities available.
Cash used to pay the costs of winding up and liquidation comes primarily from
proceeds on the sale of investments held by the Company.

YEAR 2000 COMPLIANCE

The inability of computers, software, and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
two-digit year is commonly referred to as the "Year 2000 Compliance" issue. As
the year 2000 approaches, such systems may be unable to accurately process
certain databased information.

The Company is in a state of liquidation and management expects that
the Company will be liquidated during the third quarter of fiscal 1999. The
Company's accounting records consist primarily of manual accounting records;
furthermore, the Company does not use any computer-based operating systems
(other than basic word processing functions) to conduct any of its liquidation
activities.

The Company has no dependencies on vendors or third parties such that
the Year 2000 could have any material adverse effect on the Company's
activities. The Company does have significant investments (relative to the
Company's financial statements) in AIMCO Stock and Insignia Stock, both of whose
securities are traded on national exchanges. Accordingly, both AIMCO and
Insignia disclose their Year 2000 Compliance progress in their respective
filings on Form 10-K and Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company does not invest in derivative financial instruments.
However, at June 30, 1999, the Company had significant investments in the Class
A common stock of Apartment Investment and Management Company ("AIMCO Stock")
and in the common stock of Insignia Financial Group, Inc.

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("Insignia Stock"). The Company has reflected these investments in its financial
statements at fair value, as required by the liquidation basis of accounting.
The fair value of the AIMCO Stock was $4,704,809 and the fair value of the
Insignia stock was $3,219,038 at June 30, 1999, based on closing market prices
on national exchanges at that date. These investments are not held by the
Company for trading purposes. These investments are subject to market
fluctuations, however, and the Company believes fluctuations in the value of
these investments could have a material effect on the Company's financial
condition and changes in financial condition.

The Company does not face other types of market risk.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company was one of several defendants in a lawsuit filed by
Metropolitan Life Insurance Company ("MetLife"). In the action, MetLife sought
damages for siding installed on apartment buildings it owns in West Palm Beach,
Florida. According to the complaint, MetLife purchased the property from the
Company in 1989 and claimed breach of warranty against the Company based on
allegedly defective work and improper materials. The action was filed in July
1996 and was settled in March 1999. The Company's share of the settlement was
$625,000. Such amount, net of a $215,000 reduction in estimated legal fees, was
provided as additional Estimated Costs During Period of Liquidation at December
31, 1998.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) List of Exhibits.

27 Financial Data Schedule.

(b) Reports on Form 8-K.

No reports on Form 8-K were filed during the period.

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SIGNATURES

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 thereunto duly authorized, on August 12, 1999.

U.S. SHELTER CORPORATION

By: /s/ William D. Richardson
---------------------------------------
William D. Richardson
Sole Director and President*

* There are no officers of the registrant other than the President.

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