1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended MARCH 31, 2001
Commission File Number 0-13112
REAL ESTATE ASSOCIATES LIMITED VI
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3778627
9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CA. 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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 [ ]
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2001
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets,
March 31, 2001 and December 31, 2000 ............................. 1
Consolidated Statements of Operations,
Three Months Ended, March 31, 2001 and 2000....................... 2
Consolidated Statement of Partners' Deficiency
Three Months Ended March 31, 2001 ................................ 3
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2001 and 2000 ....................... 4
Notes to Consolidated Financial Statements ............................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation ............................... 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ...................................................... 13
Item 6. Exhibits and Reports on Form 8-K ....................................... 13
Signatures ...................................................................... 14
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
MARCH 31, 2001 AND DECEMBER 31, 2000
ASSETS
2001 2000
(Unaudited) (Audited)
----------- -----------
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 553,072 $ 541,072
CASH AND CASH EQUIVALENTS (Note 1) 3,013,759 3,197,380
----------- -----------
TOTAL ASSETS $ 3,566,831 $ 3,738,452
=========== ===========
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Notes payable and amounts due for partnership
interests (Notes 3 and 6) $ 1,765,000 $ 1,765,000
Accrued interest payable (Notes 3 and 6) 2,099,001 2,064,801
Accounts payable 17,253 16,429
----------- -----------
3,881,254 3,846,230
----------- -----------
COMMITMENTS AND CONTINGENCIES (Notes 2, 4 and 5)
PARTNERS' EQUITY (DEFICIENCY):
General partners (354,333) (352,267)
Limited partners 39,910 244,489
----------- -----------
(314,423) (107,778)
----------- -----------
TOTAL LIABILITIES AND PARTNERS' DEFICIENCY $ 3,566,831 $ 3,738,452
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)
2001 2000
--------- ---------
INTEREST AND OTHER INCOME $ 40,738 $ 38,285
--------- ---------
OPERATING EXPENSES:
Management fees - general partner (Note 4) 51,608 51,608
General and administrative (Note 4) 41,647 57,707
Interest (Note 3) 34,200 34,200
--------- ---------
127,455 143,515
--------- ---------
LOSS FROM PARTNERSHIP OPERATIONS (86,717) (105,230)
--------- ---------
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) 12,000 12,000
WRITE-OFF OF ADVANCES TO PARTNERSHIPS (Note 2) (131,928) --
--------- ---------
NET LOSS $(206,645) $ (93,230)
========= =========
NET LOSS PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ (12) $ (6)
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
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REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIENCY
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(Unaudited)
General Limited
Partners Partners Total
--------- --------- ---------
PARTNERSHIP INTERESTS 16,810
=========
EQUITY (DEFICIENCY),
January 1, 2001 $(352,267) $ 244,489 $(107,778)
Net loss for the three months
ended March 31, 2001 (2,066) (204,579) (206,645)
--------- --------- ---------
EQUITY (DEFICIENCY),
March 31, 2001 $(354,333) $ 39,910 $(314,423)
========= ========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
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REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)
2001 2000
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (206,645) $ (93,230)
Adjustments to reconcile net loss to net
cash used in operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (12,000) (12,000)
Increase in accrued interest payable 34,200 19,066
Increase in due from NAPICO -- (20,408)
Increase (decrease) in accounts payable 824 (1,128)
----------- -----------
Net cash used in operating activities (183,621) (107,700)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital contributions -- (22,010)
----------- -----------
Net cash used in invested activities -- (22,010)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (183,621) (129,710)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,197,380 3,312,395
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,013,759 $ 3,182,685
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the audited
annual financial statements; accordingly, the financial statements
included herein should be reviewed in conjunction with the financial
statements and related notes thereto contained in the annual report for
the year ended December 31, 2000 prepared by Real Estate Associates
Limited VI and Subsidiaries (the "Partnership"). Accounting measurements
at interim dates inherently involve greater reliance on estimates than at
year end. The results of operations for the interim periods presented are
not necessarily indicative of the results for the entire year.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting primarily of normal
recurring accruals) necessary to present fairly the financial position of
the Partnership at March 31, 2001 and the results of operations and
changes in cash flows for the three months then ended.
The general partners have a 1 percent interest in profits and losses of
the Partnership. The limited partners have the remaining 99 percent
interest which is allocated in proportion to their respective individual
investments. National Partnership Investments Corp. (NAPICO) is the
corporate general partner of the Partnership. Casden Properties Inc. owns
a 95.25% economic interest in NAPICO, with the balance owned by Casden
Investment Corporation ("CIC"). CIC, which is wholly owned by Alan I.
Casden, owns 95% of the voting common stock of NAPICO.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of
America.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Real Estate
Associates Limited VI and its majority-owned general partnerships. All
significant intercompany accounts and transactions have been eliminated
in consolidation.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
METHOD OF ACCOUNTING FOR INVESTMENT IN THE UNCONSOLIDATED LIMITED
PARTNERSHIPS
The investments in unconsolidated limited partnerships are accounted for
on the equity method. Acquisition, selection and other costs related to
the acquisition of the projects are capitalized as part of the investment
account and are being amortized on a straight line basis over the
estimated lives of the underlying assets, which is generally 30 years.
NET LOSS PER LIMITED PARTNERSHIP INTEREST
Net loss per limited partnership interest was computed by dividing the
limited partners' share of net loss by the number of limited partnership
interests outstanding during the period. The number of limited
partnership interests was 16,810 for the periods presented.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of unrestricted cash and bank
certificates of deposit with maturities of three months or less.
Restricted cash consist of tenants' security and escrow deposits and
mortgage impounds. The Partnership has its cash and cash equivalents on
deposit primarily with two high credit quality financial institutions.
Such cash and cash equivalents are in excess of the FDIC insurance limit.
INCOME TAXES
No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the liability of the individual
partners.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. If
the sum of the expected future cash flows is less than the carrying
amount of the assets, the Partnership recognizes an impairment loss.
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of March 31, 2001, the Partnership holds limited partnership interests
in 20 limited partnerships. In addition, the Partnership holds a general
partner interest in REA III, which in turn, holds limited partner
interests in 3 additional limited partnerships. In total, therefore, the
Partnership holds interests, either directly or indirectly through REA
III, in 23 partnerships which owned as of March 31, 2001, residential low
income rental projects consisting of 1,369 apartment units. The mortgage
loans of these projects are payable to or insured by various governmental
agencies.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIP (CONTINUED)
The Partnership, as a limited partner, is entitled to between 90 percent
and 99 percent of the profits and losses of the limited partnerships it
has invested in directly. The Partnership is also entitled to 99.9
percent of the profits and losses of REA III. REA III holds a 99 percent
interest in each of the limited partnerships in which it has invested.
Equity in losses of unconsolidated limited partnerships is recognized in
the financial statements until the limited partnership investment account
is reduced to a zero balance or to a negative amount equal to further
capital contributions required. Losses incurred after the limited
partnership investment account is reduced to zero are not recognized.
Distributions from the unconsolidated limited partnerships are accounted
for as a return of capital until the investment balance is reduced to
zero. Subsequent distributions received are recognized as income.
The following is a summary of the investment in unconsolidated limited
partnerships for the three months ended March 31, 2001:
Balance, beginning of period $ 541,072
Equity in income of limited partnerships 13,000
Amortization of acquisition costs (1,000)
---------
Balance, end of period $ 553,072
=========
The following are unaudited combined estimated statements of operations
for the three months ended March 31, 2001 and 2000 of the unconsolidated
limited partnerships in which the Partnership has investments:
Three months Three months
ended ended
March 31, 2001 March 31, 2000
-------------- --------------
Revenues:
Rental and other $ 2,474,000 $ 2,482,000
----------- -----------
Expenses:
Depreciation 403,000 401,000
Interest 647,000 669,000
Operating expenses 1,534,000 1,519,000
----------- -----------
Total expenses 2,584,000 2,589,000
----------- -----------
Net loss $ (110,000) $ (107,000)
=========== ===========
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIP (CONTINUED)
NAPICO, or one of its affiliates, is the general partner and property
management agent for certain of the limited partnerships included above.
Under recent adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis on the
existing terms. In connection with renewals of the HAP Contracts under
such new law and policy, the amount of rental assistance payments under
renewed HAP Contracts will be based on market rentals instead of above
market rentals, which was generally the case under existing HAP
Contracts. The payments under the renewed HAP Contracts may not be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service requirements
of existing loans insured by the Federal Housing Administration of HUD
("FHA") unless such mortgage loans are restructured. In order to address
the reduction in payments under HAP Contracts as a result of this new
policy, the Multi-family Assisted Housing Reform and Affordability Act of
1997 ("MAHRAA"), which was adopted in October 1997, provides for the
restructuring of mortgage loans insured by the FHA with respect to
properties subject to the Section 8 program. Under MAHRAA, an FHA-insured
mortgage loan can be restructured into a first mortgage loan which will
be amortized on a current basis and a low interest second mortgage loan
payable to FHA which will only be payable on maturity of the first
mortgage loan. This restructuring results in a reduction in annual debt
service payable by the owner of the FHA-insured mortgage loan and is
expected to result in an insurance payment from FHA to the holder of the
FHA-insured loan due to the reduction in the principal amount. MAHRAA
also phases out project-based subsidies on selected properties serving
families not located in rental markets with limited supply, converting
such subsidies to a tenant-based subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness
under MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
On December 30, 1998, after obtaining the consents of the limited
partners, the Partnership sold its limited partnership interests in 10
local limited partnerships to affiliates of Casden Properties Inc. The
sale resulted in cash proceeds to the Partnership of $1,397,081, which
was collected in 1999. In March 1999, the Partnership made cash
distributions of $2,769,110 to the limited partners and $27,971 to the
general partners, primarily using proceeds from the sale of the
partnership interests.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 3 - NOTES PAYABLE AND AMOUNTS DUE FOR PARTNERSHIP INTERESTS
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from the
operating partnership. The purchase of these interests provides for
additional cash payments of approximately $325,000 based upon specified
events as outlined in the purchase agreements. Such amounts have been
recorded as liabilities. In addition, the Partnership is obligated on
non-recourse notes payable of $1,440,000 which bear interest at 9.5 or 10
percent per annum and have principal maturities ranging from December
1999 to December 2012. Notes payable and related accrued interest payable
aggregating $1,330,738 became payable on December 31, 2000. Management is
in process of attempting to negotiate extensions of the maturity dates on
these notes payable.
The notes and related interest are payable from cash flow generated from
operations of the related rented properties as defined in the notes.
These obligations are collateralized by the Partnership's investments in
the limited partnerships. Unpaid interest is due at maturity of the
notes.
Maturity dates of the notes payable and related accrued interest are as
follows:
Accrued
Years Ending December 31, Notes Interest
------------------------- ----------- -----------
2001 $ 520,000 $ 810,738
2002 -- --
2003 -- --
2004 -- --
2005 750,000 929,521
Thereafter 170,000 358,742
----------- -----------
$ 1,440,000 $ 2,099,001
=========== ===========
NOTE 4 - MANAGEMENT FEES AND EXPENSES DUE TO GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to NAPICO for an annual
management fee of approximately .4 percent of the original invested
assets of the limited partnerships. Invested assets are defined as the
costs of acquiring project interests, including the proportionate amount
of the mortgage loans related to the Partnership's interests in the
capital accounts of the respective partnerships. This fee was
approximately $52,000 and $52,000 for the three months ended March 31,
2001 and 2000, respectively.
The Partnership reimburses NAPICO for certain expenses. The reimbursement
to NAPICO was approximately $5,700 and $10,000 for the three months ended
March 31, 2001 and 2000, respectively, and is included in general and
administrative expenses.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 5 - CONTINGENCIES
On August 27, 1998, two investors holding an aggregate of eight units of
limited partnership interests in Real Estate Associates Limited III (an
affiliated partnership in which NAPICO is the managing general partner)
and two investors holding an aggregate of five units of limited
partnership interest in the Partnership commenced an action in the United
States District Court for the Central District of California against the
Partnership, NAPICO and certain other affiliated entities. The complaint
alleges that the defendants breached their fiduciary duty to the limited
partners of certain NAPICO managed partnerships and made 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. The plaintiffs seek equitable relief, as well as
compensatory damages and litigation related costs. On August 4, 1999, one
investor holding one unit of limited partnership interest in Housing
Programs Limited commenced a virtually identical action in the United
States District Court for the Central District of California against the
Partnership, NAPICO and certain other affiliated entities. The second
action has been subsumed in the first action, which has been certified as
a class action. The managing general partner of such NAPICO managed
Partnerships and the other defendants believe that the plaintiffs' claims
are without merit and intend to contest the actions vigorously.
The corporate general partner of the Partnership is involved in various
lawsuits and have also been named defendants in other lawsuits arising
from transactions in the ordinary course of business. In the opinion of
management and the corporate general partner, the claims will not result
in any material liability to the Partnership.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to
estimate that value. The notes payable and amounts due for partnership
interests are collateralized by the Partnership's investments in investee
limited partnerships and are payable only out of cash distributions from
investee partnerships. The operations generated by the investee limited
partnerships, which account for the Partnership's primary source of
revenues, are subject to various government rules, regulations and
restrictions which make it impracticable to estimate the fair value of
the notes and related accrued interest payable. The carrying amount of
other assets and liabilities reported on the balance sheets that require
such disclosure approximates fair value due to their short-term maturity.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
ITEM 2. MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary sources of funds include interest income on
short term investments and distributions from limited partnerships in
which the Partnership has invested. It is not expected that any of the
local limited partnerships in which the Partnership has invested will
generate cash flow sufficient to provide for distributions to limited
partners in any material amount. The Partnership made a distribution to
investors in March 31, 1999, previously using proceeds from the
disposition of its investments in certain limited partnerships.
RESULTS OF OPERATIONS
Partnership revenues consist primarily of interest income earned on
certificates of deposit and other temporary investment of funds not
required for investment in local partnerships.
Operating expenses consist primarily of recurring general and
administrative expenses and professional fees for services rendered to
the Partnership. In addition, an annual Partnership management fee in an
amount equal to .4 percent of invested assets is payable to the corporate
general partner.
The Partnership accounts for its investments in the local limited
partnerships on the equity method, thereby adjusting its investment
balance by its proportionate share of the income or loss of the local
limited partnerships. Losses incurred after the limited partnership
investment account is reduced to zero are not recognized in accordance
with the equity accounting method.
Distributions received from limited partnerships are recognized as return
of capital until the investment balance has been reduced to zero or to a
negative amount equal to future capital contributions required.
Subsequent distributions received are recognized as income.
Except for certificates of deposit and money market funds, the
Partnership's investments are entirely from interests in other limited
and general partnerships owning government assisted projects. Funds
temporarily not required for such investments in projects are invested
providing interest income as reflected in the statement of operations.
These funds can be converted to cash to meet obligations as they arise.
The Partnership intends to continue investing available funds in this
manner.
Under recent adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis on the
existing terms. In connection with renewals of the HAP Contracts under
such new law and policy, the amount of rental assistance payments under
renewed HAP Contracts will be based on market rentals instead of above
market rentals, which was generally the case under existing HAP
Contracts. The payments under the renewed HAP Contracts may not be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service requirements
of existing loans insured by the
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
ITEM 2. MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Federal Housing Administration of HUD ("FHA") unless such mortgage loans
are restructured. In order to address the reduction in payments under HAP
Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 ("MAHRAA"), which was
adopted in October 1997, provides for the restructuring of mortgage loans
insured by the FHA with respect to properties subject to the Section 8
program. Under MAHRAA, an FHA-insured mortgage loan can be restructured
into a first mortgage loan which will be amortized on a current basis and
a low interest second mortgage loan payable to FHA which will only be
payable on maturity of the first mortgage loan. This restructuring
results in a reduction in annual debt service payable by the owner of the
FHA-insured mortgage loan and is expected to result in an insurance
payment from FHA to the holder of the FHA-insured loan due to the
reduction in the principal amount. MAHRAA also phases out project-based
subsidies on selected properties serving families not located in rental
markets with limited supply, converting such subsidies to a tenant-based
subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness
under MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
On December 30, 1998, after obtaining the consents of the limited
partners, the Partnership sold its limited partnership interests in 10
local limited partnerships to affiliates of Casden Properties Inc. The
sale resulted in cash proceeds to the Partnership of $1,397,081, which
was collected in 1999. In March 2000, the Partnership made cash
distributions of $2,769,110 to the limited partners and $27,971 to the
general partners, primarily using proceeds from the sale of the
partnership interests.
Notes payable and related accrued interest payable aggregating $1,330,738
became payable on December 31, 2000. Management is in process of
attempting to negotiate extensions of the maturity dates on these notes
payable.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership interests in Real Estate Associates Limited III (an affiliated
partnership in which NAPICO is the managing general partner) and two investors
holding an aggregate of five units of limited partnership interest in the
Partnership commenced an action in the United States District Court for the
Central District of California against the Partnership, NAPICO and certain other
affiliated entities. The complaint alleges that the defendants breached their
fiduciary duty to the limited partners of certain NAPICO managed partnerships
and made 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. The plaintiffs seek equitable relief, as
well as compensatory damages and litigation related costs. On August 4, 1999,
one investor holding one unit of limited partnership interest in Housing
Programs Limited commenced a virtually identical action in the United States
District Court for the Central District of California against the Partnership,
NAPICO and certain other affiliated entities. The second action has been
subsumed in the first action, which has been certified as a class action. The
managing general partner of such NAPICO managed partnerships and the other
defendants believe that the plaintiffs' claims are without merit and intend to
contest the actions vigorously.
The Partnership's general partner is involved in various lawsuits. None of these
lawsuits are related to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required per the provision of item 6 of regulation
S-K and no reports on Form 8-K were filed during the quarter ended
March 31, 2001.
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REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
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.
REAL ESTATE ASSOCIATES LIMITED VI AND
SUBSIDIARIES (a California limited partnership)
By: National Partnership Investments
Corp., General Partner
/s/ BRUCE NELSON
----------------------------------------
Bruce Nelson
President
Date: MAY 15, 2001
----------------------------------------
/s/ BRIAN H. SHUMAN
----------------------------------------
Brian H. Shuman
Chief Financial Officer
Date: MAY 15, 2001
----------------------------------------
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