-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ACudzRrzxRUKJQ7yevWKJnUF0Lg+A/CZ/WkZXIKBYIGyGM0a9bBvI43eoTOwMkcp ISj4wYT/w4xJW6/OHQtnVQ== 0000351708-99-000005.txt : 19990519 0000351708-99-000005.hdr.sgml : 19990519 ACCESSION NUMBER: 0000351708-99-000005 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990518 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XII LTD CENTRAL INDEX KEY: 0000351708 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942717957 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-10743 FILM NUMBER: 99629427 BUSINESS ADDRESS: STREET 1: 13760 NOEL ROAD, STE 700 STREET 2: LB70, CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 STREET 2: LB70 CITY: DALLAS STATE: TX ZIP: 75240 10-Q/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 ------------------------------------------- OR [ ] 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 0-10743 ---------- MCNEIL REAL ESTATE FUND XII, LTD. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-2717957 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (972) 448-5800 ----------------------------- 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 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 - ------- -------------------- MCNEIL REAL ESTATE FUND XII, LTD. BALANCE SHEETS (Unaudited)
March 31, December 31, 1999 1998 ------------- ------------- ASSETS - ------ Real estate investments: Land ....................................................... $ 4,534,618 $ 4,534,618 Buildings and improvements ................................. 59,731,595 59,614,889 ------------ ------------ 64,266,213 64,149,507 Less: Accumulated depreciation and amortization ........... (40,634,973) (39,854,829) ------------ ------------ 23,631,240 24,294,678 Cash and cash equivalents ..................................... 2,304,383 2,135,190 Cash segregated for security deposits ......................... 321,806 320,540 Accounts receivable ........................................... 188,438 198,842 Prepaid expenses and other assets ............................. 98,788 103,546 Escrow deposits ............................................... 1,514,098 1,295,584 Deferred borrowing costs, net of accumulated amorti- zation of $516,722 and $491,761 at March 31, 1999 and December 31, 1998, respectively ................... 1,334,695 1,359,656 ------------ ------------ $ 29,393,448 $ 29,708,036 ============ ============ LIABILITIES AND PARTNERS' DEFICIT - --------------------------------- Mortgage notes payable ........................................ $ 37,344,725 $ 37,449,291 Accounts payable .............................................. 9,921 -- Accrued expenses .............................................. 255,796 252,497 Accrued interest .............................................. 254,620 255,330 Accrued property taxes ........................................ 824,873 684,333 Deferred gain - land condemnation ............................. 297,754 297,754 Deferred gain - fire damage ................................... 50,880 50,880 Advance from Southmark ........................................ 42,716 42,177 Advances from affiliates - General Partner .................... 35,348 34,746 Payable to affiliates - General Partner ....................... 4,174,196 4,255,518 Security deposits and deferred rental revenue ................. 335,586 325,586 ------------ ------------ 43,626,415 43,648,112 ------------ ------------ Partners' deficit: Limited partners - 240,000 limited partnership units authorized; 229,666 limited partnership units issued and outstanding at March 31, 1999 and December 31, 1998 ........................................ (4,211,855) (3,834,776) General Partner ............................................ (10,021,112) (10,105,300) ------------ ------------ (14,232,967) (13,940,076) ------------ ------------ $ 29,393,448 $ 29,708,036 ============ ============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XII, LTD. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, ------------------------------- 1999 1998 ------------ ----------- Revenue: Rental revenue ....................................... $ 3,211,348 $ 4,169,057 Interest ............................................. 25,159 17,059 ----------- ----------- Total revenue ...................................... 3,236,507 4,186,116 ----------- ----------- Expenses: Interest ............................................. 816,878 1,193,972 Interest - affiliates ................................ 602 654 Depreciation and amortization ........................ 780,144 760,041 Property taxes ....................................... 238,753 300,780 Personnel expenses ................................... 327,081 463,150 Utilities ............................................ 315,916 369,326 Repair and maintenance ............................... 402,509 439,372 Property management fees - affiliates ................ 160,216 201,019 Other property operating expenses .................... 134,450 205,230 General and administrative ........................... 96,702 248,175 General and administrative - affiliates .............. 66,614 65,194 ----------- ----------- Total expenses ..................................... 3,339,865 4,246,913 ----------- ----------- Net loss ................................................ $ (103,358) $ (60,797) =========== =========== Net loss allocable to limited partners .................. $ (377,079) $ (57,757) Net income (loss) allocable to General Partner .......... 273,721 (3,040) ----------- ----------- Net loss ................................................ $ (103,358) $ (60,797) =========== =========== Net loss per limited partnership unit ................... $ (1.64) $ (.25) =========== ===========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XII, LTD. STATEMENTS OF PARTNERS' DEFICIT (Unaudited) For the Three Months Ended March 31, 1999 and 1998
Total General Limited Partners' Partner Partners Deficit ------------- ------------- ------------- Balance at December 31, 1997 ............... $(10,163,672) $(10,579,935) $(20,743,607) Net loss ................................... (3,040) (57,757) (60,797) Management Incentive Distribution .......... (225,558) -- (225,558) ------------ ------------ ------------ Balance at March 31, 1998 .................. $(10,392,270) $(10,637,692) $(21,029,962) ============ ============ ============ Balance at December 31, 1998 ............... $(10,105,300) $ (3,834,776) $(13,940,076) Net income (loss) .......................... 273,721 (377,079) (103,358) Management Incentive Distribution .......... (189,533) -- (189,533) ------------ ------------ ------------ Balance at March 31, 1999 .................. $(10,021,112) $ (4,211,855) $(14,232,967) ============ ============ ============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XII, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Three Months Ended March 31, -------------------------------- 1999 1998 ------------ ------------ Cash flows from operating activities: Cash received from tenants ....................... $ 3,238,574 $ 4,078,873 Cash paid to suppliers ........................... (1,350,639) (1,872,349) Cash paid to affiliates .......................... (184,957) (201,987) Interest received ................................ 25,159 17,059 Interest paid .................................... (792,088) (1,157,458) Property taxes paid .............................. (232,856) (359,895) ----------- ----------- Net cash provided by operating activities ........... 703,193 504,243 ----------- ----------- Cash used in investing activities: Additions to real estate investments and assets held for sale ........................... (116,706) (107,883) ----------- ----------- Cash flows from financing activities: Principal payments on mortgage notes payable ........................................ (104,566) (175,370) Management Incentive Distribution paid ........... (312,728) -- ----------- ----------- Net cash used in financing activities ............... (417,294) (175,370) ----------- ----------- Net increase in cash and cash equivalents ........... 169,193 220,990 Cash and cash equivalents at beginning of period ........................................... 2,135,190 1,423,658 ----------- ----------- Cash and cash equivalents at end of period .......... $ 2,304,383 $ 1,644,648 =========== ===========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XII, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Loss to Net Cash Provided by Operating Activities
Three Months Ended March 31, ---------------------------- 1999 1998 ---------- ---------- Net loss ............................................... $(103,358) $ (60,797) --------- --------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization ....................... 780,144 760,041 Amortization of deferred borrowing costs ............ 24,961 37,168 Net interest added on advances from affiliates - General Partner ...................... 602 654 Net interest added on advances from Southmark ......................................... 539 585 Changes in assets and liabilities: Cash segregated for security deposits ............. (1,266) (7,589) Accounts receivable ............................... 10,404 (61,386) Prepaid expenses and other assets ................. 4,758 8,536 Escrow deposits ................................... (218,514) (286,520) Accounts payable .................................. 9,921 (60) Accrued expenses .................................. 3,299 (49,269) Accrued interest .................................. (710) (1,239) Accrued property taxes ............................ 140,540 131,213 Payable to affiliates - General Partner ........... 41,873 64,226 Security deposits and deferred rental revenue ......................................... 10,000 (31,320) --------- --------- Total adjustments ............................... 806,551 565,040 --------- --------- Net cash provided by operating activities .............. $ 703,193 $ 504,243 ========= =========
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XII, LTD. Notes to Financial Statements (Unaudited) March 31, 1999 NOTE 1. - ------- McNeil Real Estate Fund XII, Ltd. (the "Partnership") was organized February 2, 1981 as a limited partnership organized under the provisions of the California Uniform Limited Partnership Act. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil. The Partnership is governed by an amended and restated limited partnership agreement, dated September 6, 1991 (the "Amended Partnership Agreement"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the three months ended March 31, 1999 are not necessarily indicative of the results to be expected for the year ending December 31, 1999. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1998, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XII, Ltd., c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240. NOTE 3. - ------- The Partnership pays property management fees equal to 5% of the gross rental receipts of the Partnership's properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services for the Partnership's residential and commercial properties and leasing services for its residential properties. McREMI may choose to provide leasing services for the Partnership's commercial properties, in which case McREMI will receive a property management fee from such commercial properties equal to 3% of the property's gross rental receipts plus commissions based on the prevailing market rate for such services where the property is located. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. Affiliates of the General Partner have advanced funds to the Partnership to meet working capital requirements. These advances accrue interest at a rate equal to the prime lending rate plus 1%. Under terms of the Amended Partnership Agreement, the Partnership is paying a Management Incentive Distribution ("MID") to the General Partner. The maximum MID is calculated as 1% of the tangible asset value of the Partnership. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property or (ii) a value of $10,000 per apartment unit for residential property and $50 per gross square foot for commercial property to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. The maximum MID percentage decreases to .75% in 2000, .50% in 2001 and .25% thereafter. MID will be paid to the extent of the lesser of the Partnership's excess cash flow, as defined, or net operating income, as defined, and may be paid (i) in cash, unless there is insufficient cash to pay the distribution in which event any unpaid portion not taken in limited partnership ("Units") will be deferred and is payable, without interest, from the first available cash and/or (ii) in Units. A maximum of 50% of the MID may be paid in Units. The number of Units issued in payment of the MID is based on the greater of $50 per Unit or the net tangible asset value, as defined, per Unit. Any amount of the MID that is paid to the General Partner in Units will be treated as if cash is distributed to the General Partner and is then contributed to the Partnership by the General Partner. The MID represents a return of equity to the General Partner for increasing cash flow, as defined, and accordingly is treated as a distribution. Compensation, reimbursements and distributions paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Three Months Ended March 31, ---------------------- 1999 1998 --------- --------- Property management fees - affiliates................ $ 160,216 $ 201,019 Interest - affiliates................................ 602 654 Charged to general and administrative affiliates: Partnership administration........................ 66,614 65,194 -------- -------- $ 227,432 $ 266,867 ======== ======== Charged to General Partner's deficit: MID............................................... $ 189,553 $ 225,558 ======== ======== NOTE 4. - ------- The Partnership has become aware of the presence of certain solvent based contamination in ground water under a portion of the Lodge at Aspen Grove. The source of the contamination is related to a documented release of solvents from underground storage tanks located at a Colorado Department of Transportation ("CDOT") facility nearby. The Partnership has been informed that CDOT, as the responsible party, has agreed to remediate the property to comply with state and federal standards. CDOT has submitted a corrective action plan to the Colorado Department of Public Health and Environment and implementation of the plan is ongoing. The Partnership is unable to estimate impairment, if any, to the property at this time. However, due to the existence and involvement of the responsible party, the Partnership does not believe that this event has a material impact on the accompanying financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- The Partnership is engaged in diversified real estate activities, including the ownership, operation and management of residential and commercial real estate and other real estate related assets. At March 31, 1999, the Partnership owned four apartment properties and one shopping center. Four of the Partnership's properties are subject to mortgage notes. Rental revenues increased at four of the Partnership's five properties. The properties reporting the largest increases in rental revenue, on a percentage basis, were The Lodge at Aspen Grove Apartments and Brendon Way Apartments. These increases were partially offset by a decrease in contingent rent billed on Plaza Westlake as compared to the prior year. RESULTS OF OPERATIONS - --------------------- Revenue: Partnership rental revenues decreased $957,709 or 23% for the three months ended March 31, 1999 as compared to the same period last year. Excluding the effects of the sale of Channingway Apartments in April 1998, Partnership revenues decreased $22,514 for the three months ended March 31, 1999. Interest income increased $8,100 for the three months ended March 31, 1999 as compared to the same period last year due to an increase in cash balances being invested in interest bearing accounts. Expenses: Partnership expenses decreased $907,048 or 21% for the three months ended March 31, 1999 as compared to the same period last year. Excluding the effects of the sale of Channingway Apartments, Partnership expenses decreased $164,514 or 4% for the three months ended March 31, 1999. Repairs and maintenance (excluding Channingway Apartments) increased $71,194 for the three months ended March 31, 1999 as compared to the same period last year. This increase is primarily due to an increase in snow removal at Brendon Way Apartments and Plaza Westlake. Other property operating expense (excluding Channingway Apartments) decreased $23,146 or 11% for the three months ended March 31, 1999 as compared to the same period last year. This decrease is due to a reduction in the property insurance expense for all the properties. General and administrative expenses decreased $151,473 for the three months ended March 31, 1999 as compared to the same period last year. The decrease was mainly due to decreased costs incurred to explore alternatives to maximize the value of the Partnership (see Liquidity and Capital Resources). All other remaining expense categories remained comparable to the same period last year. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- During the first three months of 1999, the Partnership provided $703,193 in cash from operations as compared to $504,243 in cash from operations in 1998. The $198,950 increase can be attributed to the decreases in cash paid to suppliers, interest and property taxes paid offset by the decrease in cash received from tenants in the first three months of 1999 as compared to the same period in 1998. The Partnership expended $116,706 and $107,883 for capital improvements to its properties for the three months ended March 31, 1999 and 1998, respectively. Total principal payments on mortgage notes payable were $104,566 for the three months ended March 31, 1999 as compared to $175,370 for the same period in 1998. During the first quarter of 1999, the Partnership also paid $312,728 in MID to the General Partner. Short-term liquidity: At March 31, 1999, the Partnership held cash and cash equivalents of $2,304,383. The General Partner believes that anticipated operating results for 1999 will be sufficient to fund the Partnership's budgeted $1.2 million in capital improvements for 1999 and to repay the current portion of the Partnership's mortgage notes. Long-term liquidity: For the long-term, property operations will remain the primary source of funds. In this regard, the General Partner expects that the capital improvements made by the Partnership during the past will yield improved cash flow from property operations in the future. If the Partnership's cash position deteriorates, the General Partner may elect to defer certain of the capital improvements, except where such improvements are expected to increase the competitiveness or marketability of the Partnership's properties. As previously announced, the Partnership has retained PaineWebber, Incorporated as its exclusive financial advisor to explore alternatives to maximize the value of the Partnership, including, without limitation, a transaction in which limited partnership interests in the Partnership are converted into cash. During the last full week of March, the Partnership entered into a 45 day exclusivity agreement with a well-financed bidder with whom it had commenced discussions with respect to a sale transaction. The Partnership and such party have made significant progress in negotiating the terms of a proposed transaction and are continuing to have intensive discussions with respect to a transaction. In light on these continuing negotiations, the exclusivity agreement has been extended for an additional 21 days until June 4, 1999. It is possible that the General Partner and its affiliates will receive non-cash consideration for their ownership interests in connection with any such transaction. There can be no assurance regarding whether any such agreement will be reached nor the terms thereof. Income (loss) allocation and distributions: Terms of the Amended Partnership Agreement specify that income (loss) before depreciation is allocated to the General Partner to the extent of MID paid in cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and the General Partner, respectively. Therefore, for the three months ended March 31, 1999 and 1998, $273,271 and $(3,040), respectively, was allocated to the General Partner. The limited partners received loss allocations of $(377,079) and $(57,757) for the three months ended March 31, 1999 and 1998, respectively. Forward-Looking Information: Within this document, certain statements are made as to the expected occupancy trends, financial condition, results of operations, and cash flows of the Partnership for periods after March 31, 1999. All of these statements are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical and involve risks and uncertainties. The Partnership's actual occupancy trends, financial condition, results of operations, and cash flows for future periods may differ materially due to several factors. These factors include, but are not limited to, the Partnership's ability to control costs, make necessary capital improvements, negotiate sales or refinancings of its properties, and respond to changing economic and competitive factors. YEAR 2000 DISCLOSURE - -------------------- State of readiness The year 2000 problem is the result of computer programs being written using two digits rather than four to define the applicable year. Any programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in major systems failure or miscalculations. Management has assessed its information technology ("IT") infrastructure to identify any systems that could be affected by the year 2000 problem. The IT used by the Partnership for financial reporting and significant accounting functions was made year 2000 compliant during recent systems conversions. The software utilized for these functions is licensed by third party vendors who have warranted that their systems are year 2000 compliant. Management is in the process of evaluating the mechanical and embedded technological systems at the various properties. Management has inventoried all such systems and queried suppliers, vendors and manufacturers to determine year 2000 compliance. Based on this review, management believes these systems are substantially compliant. In circumstances of non-compliance management will work with the vendor to remedy the problem or seek alternative suppliers who will be in compliance. Management believes that the remediation of any outstanding year 2000 conversion issues will not have a material or adverse effect on the Partnership's operations. However, no estimates can be made as to the potential adverse impact resulting from the failure of third party service providers and vendors to be year 2000 compliant. Cost - ---- The cost of IT and embedded technology systems testing and upgrades is not expected to be material to the Partnership. Because all the IT systems have been upgraded over the last three years, all such systems were compliant, or made compliant at no additional cost by third party vendors. Management anticipates the costs of assessing, testing, and if necessary replacing embedded technology components will be less than $50,000. Such costs will be funded from operations of the Partnership. Risks - ----- Ultimately, the potential impact of the year 2000 issue will depend not only on the corrective measures the Partnership undertakes, but also on the way in which the year 2000 issue is addressed by government agencies and entities that provide services or supplies to the Partnership. Management has not determined the most likely worst case scenario to the Partnership. As management studies the findings of its property systems assessment and testing, management will develop a better understanding of what would be the worst case scenario. Management believes that progress on all areas is proceeding and that the Partnership will experience no adverse effect as a result of the year 2000 issue. However, there is no assurance that this will be the case. Contingency plans - ----------------- Management is developing contingency plans to address potential year 2000 non-compliance of IT and embedded technology systems. Management believes that failure of any IT system could have an adverse impact on operations. However, management believes that alternative systems are available that could be utilized to minimize such impact. Management believes that any failure in the embedded technology systems could have an adverse impact on that property's performance. Management will assess these risks and develop plans to mitigate possible failures by July 1999. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger, Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P., McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate Fund XXIII, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund XXVII, L.P., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P., - Superior Court of the State of California for the County of Los Angeles, Case No. BC133799 (Class and Derivative Action Complaint). The action involves purported class and derivative actions brought by limited partners of each of the limited partnerships that were named as nominal defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of their senior officers and/or directors (collectively, the "Defendants") breached their fiduciary duties and certain obligations under the respective Amended Partnership Agreement. Plaintiffs allege that Defendants have rendered such Units highly illiquid and artificially depressed the prices that are available for Units on the resale market. Plaintiffs also allege that Defendants engaged in a course of conduct to prevent the acquisition of Units by an affiliate of Carl Icahn by disseminating purportedly false, misleading and inadequate information. Plaintiffs further allege that Defendants acted to advance their own personal interests at the expense of the Partnerships' public unit holders by failing to sell Partnership properties and failing to make distributions to unitholders. On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint. Plaintiffs are suing for breach of fiduciary duty, breach of contract and an accounting, alleging, among other things, that the management fees paid to the McNeil affiliates over the last six years are excessive, that these fees should be reduced retroactively and that the respective Amended Partnership Agreements governing the Partnerships are invalid. Defendants filed a demurrer to the consolidated and amended complaint and a motion to strike on February 14, 1997, seeking to dismiss the consolidated and amended complaint in all respects. A hearing on Defendant's demurrer and motion to strike was held on May 5, 1997. The Court granted Defendants' demurrer, dismissing the consolidated and amended complaint with leave to amend. On October 31, 1997, the Plaintiffs filed a second consolidated and amended complaint. The case was stayed pending settlement discussions. A Stipulation of Settlement dated September 15, 1998 has been signed by the parties. Preliminary Court approval was received on October 6, 1998. A hearing for Final Approval of Settlement, initially scheduled for December 17, 1998, has been continued to July 2, 1999. Because McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P. would be part of the transaction contemplated in the settlement and Plaintiffs claim that an effort should be made to sell the McNeil Partnerships, Plaintiffs have included allegations with respect to McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P. in the third consolidated and amended complaint. Plaintiff's counsel intends to seek an order awarding attorney's fees and reimbursements of their out-of-pocket expenses. The amount of such award is undeterminable until final approval is received from the court. Fees and expenses shall be allocated amongst the Partnerships on a pro rata basis, based upon tangible asset value of each such partnership, less total liabilities, calculated in accordance with the Amended Partnership Agreements for the quarter most recently ended. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 3.3 Amended and Restated Partnership Agreement, dated September 6, 1991 (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1991). 11. Statement regarding computation of net loss per limited partnership unit: net loss per limited partnership unit is computed by dividing net loss allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 229,666 limited partnership units outstanding in 1999 and 1998. 27. Financial Data Schedule for the quarter ended March 31, 1999. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1999. McNEIL REAL ESTATE FUND XII, LTD. 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: McNEIL REAL ESTATE FUND XII, Ltd. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner May 18, 1999 By: /s/ Ron K. Taylor - -------------- --------------------------------------------- Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) May 18, 1999 By: /s/ Brandon K. Flaming - -------------- --------------------------------------------- Date Brandon K. Flaming Vice President of McNeil Investors, Inc. (Principal Accounting Officer) EX-27 2
5 3-MOS DEC-31-1999 MAR-31-1999 2,304,383 0 188,438 0 0 0 64,266,213 (40,634,973) 29,393,448 0 37,344,725 0 0 0 0 29,393,448 3,211,348 3,236,507 0 0 2,522,385 0 817,480 0 0 (103,358) 0 0 0 (103,358) 0 0
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