-----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, Ez5rdIh0Wsf7rJkNCVK31OZME38lkdPJyCGbEygG8tNLqQB0FsUhOPZ/CiQUtK05 zCCjLj6LN9+aRDhudjYQ9g== 0000064309-97-000008.txt : 19970814 0000064309-97-000008.hdr.sgml : 19970814 ACCESSION NUMBER: 0000064309-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL PACIFIC INVESTORS FUND 1972 CENTRAL INDEX KEY: 0000064309 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 946279375 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07162 FILM NUMBER: 97659029 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9724485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended June 30, 1997 ---------------------------------------------------- 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 0-7162 ------- McNeil PACIFIC INVESTORS FUND 1972 - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-6279375 - -------------------------------------------------------------------------------- (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 --- --- McNEIL PACIFIC INVESTORS FUND 1972 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- BALANCE SHEETS (Unaudited)
June 30, December 31, 1997 1996 --------------- ---------------- ASSETS - ------- Asset held for sale......................................... $ 6,317,970 $ 6,253,753 Cash and cash equivalents................................... 638,236 581,031 Cash segregated for security deposits....................... 57,829 57,204 Accounts receivable......................................... 631 4,147 Prepaid expenses and other assets........................... 30,161 23,694 Escrow deposits............................................. 90,233 33,232 Deferred borrowing costs, net of accumulated amortization of $51,934 and $47,607 at June 30, 1997 and December 31, 1996, respectively............................................. - 4,327 -------------- -------------- $ 7,135,060 $ 6,957,388 ============== ============== LIABILITIES AND PARTNERS' EQUITY - -------------------------------- Mortgage note payable....................................... $ 1,950,131 $ 2,023,577 Accrued interest............................................ 14,220 14,755 Accrued property taxes...................................... 58,736 - Other accrued expenses...................................... 4,847 24,346 Payable to affiliates - General Partner..................... 13,861 17,108 Security deposits and deferred rental revenue............... 58,791 58,081 -------------- -------------- 2,100,586 2,137,867 -------------- -------------- Partners' equity: Limited partners - 15,000 limited partnership units authorized; 13,752.5 limited partnership units issued and outstanding................................. 4,724,530 4,509,577 General Partner.......................................... 309,944 309,944 -------------- -------------- 5,034,474 4,819,521 -------------- -------------- $ 7,135,060 $ 6,957,388 ============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, --------------------------------- --------------------------------- 1997 1996 1997 1996 -------------- --------------- -------------- -------------- Revenue: Rental revenue................ $ 452,128 $ 425,396 $ 898,707 $ 816,345 Interest...................... 7,570 4,611 15,087 11,161 ------------- ------------- ------------- ------------- Total revenue............... 459,698 430,007 913,794 827,506 ------------- ------------- ------------- ------------- Expenses: Interest...................... 46,162 48,650 92,496 103,721 Depreciation.................. - 98,321 - 193,997 Property taxes................ 28,974 28,974 58,736 57,948 Personnel expenses............ 57,735 63,798 145,518 136,584 Utilities..................... 15,822 16,023 34,089 32,902 Repair and maintenance........ 99,930 73,441 192,459 160,546 Property management fees - affiliates........... 26,671 24,614 53,358 48,481 Other property operating expenses.................... 22,490 38,029 63,132 68,227 General and administrative.... 15,336 5,942 25,425 16,377 General and administrative - affiliates.................. 20,869 2,344 33,628 19,330 ------------- ------------- ------------- ------------- Total expenses.............. 333,989 400,136 698,841 838,113 ------------- ------------- ------------- ------------- Net income (loss)................ $ 125,709 $ 29,871 $ 214,953 $ (10,607) ============= ============= ============= ============= Net income (loss) allocated to limited partners........... $ 125,709 $ 29,871 $ 214,953 $ (10,607) Net income (loss) allocated to General Partner............ - - - - ------------- ------------- ------------- ------------- Net income (loss)................ $ 125,709 $ 29,871 $ 214,953 $ (10,607) ============= ============= ============= ============= Net income (loss) per limited partnership unit.............. $ 9.14 $ 2.17 $ 15.63 $ (0.77) ============= ============= ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF PARTNERS' EQUITY (Unaudited) For the Six Months Ended June 30, 1997 and 1996
Total General Limited Partners' Partner Partners Equity -------------- -------------- --------------- Balance at December 31, 1995.............. $ 309,944 $ 4,405,038 $ 4,714,982 Net loss.................................. - (10,607) (10,607) ------------- ------------- ------------- Balance at June 30, 1996.................. $ 309,944 $ 4,394,431 $ 4,704,375 ============= ============= ============= Balance at December 31, 1996.............. $ 309,944 $ 4,509,577 $ 4,819,521 Net income................................ - 214,953 214,953 ------------- ------------- ------------- Balance at June 30, 1997.................. $ 309,944 $ 4,724,530 $ 5,034,474 ============= ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Six Months Ended June 30, ----------------------------------- 1997 1996 --------------- --------------- Cash flows from operating activities: Cash received from tenants....................... $ 901,228 $ 817,642 Cash paid to suppliers........................... (485,509) (441,517) Cash paid to affiliates.......................... (90,233) (68,517) Interest received................................ 15,087 11,161 Interest paid.................................... (88,704) (93,336) Property taxes paid and escrowed................. (57,001) (49,469) ------------- ------------- Net cash provided by operating activities........... 194,868 175,964 ------------- ------------- Cash flows from investing activities: Additions to real estate investments............. (64,217) (99,139) ------------- ------------- Cash flows from financing activities: Principal payments on mortgage notes payable........................................ (73,446) (67,314) ------------- ------------- Net increase in cash and cash equivalents........... 57,205 9,511 Cash and cash equivalents at beginning of period........................................ 581,031 523,389 ------------- ------------- Cash and cash equivalents at end of period.......... $ 638,236 $ 532,900 ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities
Six Months Ended June 30, ----------------------------------- 1997 1996 -------------- --------------- Net income (loss)................................... $ 214,953 $ (10,607) ------------- ------------- Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation..................................... - 193,997 Amortization of deferred borrowing costs......... 4,327 5,193 Changes in assets and liabilities: Cash segregated for security deposits.......... (625) (12,701) Accounts receivable............................ 3,516 3,380 Prepaid expenses and other assets.............. (6,467) 10 Escrow deposits................................ (57,001) (49,469) Accounts payable............................... - (16,095) Accrued interest............................... (535) 5,192 Accrued property taxes......................... 58,736 57,948 Other accrued expenses......................... (19,499) (12,130) Payable to affiliates - General Partner........ (3,247) (706) Security deposits and deferred rental revenue...................................... 710 11,952 ------------- ------------- Total adjustments............................ (20,085) 186,571 ------------- ------------- Net cash provided by operating activities........... $ 194,868 $ 175,964 ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL PACIFIC INVESTORS FUND 1972 Notes To Financial Statements (Unaudited) June 30, 1997 NOTE 1. - ------- McNeil Pacific Investors Fund 1972 (the "Partnership") is a limited partnership organized under the laws of the State of California to invest in real property. 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 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 six months ended June 30, 1997, are not necessarily indicative of the results to be expected for the year ending December 31, 1997. 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, 1996, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Pacific Investors Fund 1972, c/o The Herman Group, 2121 San Jacinto St., 26th Floor, Dallas, Texas 75201. NOTE 3. - ------- The Partnership pays property management fees equal to 6% of the gross rental receipts of the Partnership's property to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management and leasing services for the Partnership's property. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. The General Partner is entitled to receive a partnership management fee equal to 9.5% of distributions of cash from operations when distributable cash from operations is distributed to the limited partners. No partnership management fees were incurred or paid during the six month periods ended June 30, 1997 and 1996. The General Partner is entitled to receive a sales commission as compensation for selling Partnership property equal to the lesser of 4% of the sales price of the property sold or the customary fee charged by independent real estate brokers in the area where the property is located. The General Partner is also entitled to a distribution of cash from sales and refinancings and cash from working capital reserves equal to 9.5% of such distributions. No such distributions were paid to the partners during 1997 or 1996. Compensation and reimbursements accrued for the benefit of the General Partner and its affiliates are as follows: Six Months Ended June 30, ---------------------- 1997 1996 --------- --------- Property management fees - affiliates............... $ 53,358 $ 48,481 Charged to general and administrative - affiliates: Partnership administration....................... 33,628 19,330 -------- -------- $ 86,986 $ 67,811 ======== ======== NOTE 4. - ------- On October 1, 1996, the General Partner placed the Partnership's only remaining property, Palm Bay Apartments, on the market for sale. Consequently, Palm Bay Apartments is classified as an Asset Held for Sale on the accompanying financial statements. In 1996, the Partnership adopted the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement requires the cessation of depreciation on assets held for sale. Accordingly, no depreciation charges have been incurred since October 1, 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- Net income of the Partnership has increased in recent periods. Net income for the six months ended June 30, 1997 increased $225,560 to $214,953 as compared to a $10,604 loss for the six months ended June 30, 1996. For the year ended December 31, 1996, net income increased $390,425 to $104,539 as compared to a $285,886 loss reported for the year ended December 31, 1995. For the most recent quarter, net income increased $95,838 to $125,709 as compared to $29,871 of net income for the second quarter of 1996. The capital improvement program begun shortly after the Partnership repossessed the Palm Bay Apartments has allowed the Partnership (I) to improve the physical condition of the Property, (ii) to improve the tenant profile of the Property, and (iii) to improve the occupancy rate at the Property. Accomplishment of these three steps has allowed the Partnership to begin implementing selected rental rate increases at Palm Bay Apartments. In May 1997, the Partnership increased base rental rates at Palm Bay Apartments by an average of 4%. Since the sale of Pacesetter Apartments on March 17, 1994, the focus of the Partnership's efforts has been directed to the renovation program at Palm Bay Apartments. Since repossession Palm Bay Apartments, the Partnership has completed capital renovation projects totaling $1,876,570. Occupancy rates have improved from 63% shortly after the Partnership repossessed Palm Bay Apartments to 95% at June 30, 1997. On October 1, 1996, the General Partner decided to begin marketing Palm Bay Apartments for sale. This decision was based on favorable market conditions, the improved performance of Palm Bay Apartments, and the June 1, 1997 maturity of the Palm Bay mortgage note. On May 22, 1997, the Partnership entered into an amended agreement to sell Palm Bay Apartments to an unaffiliated purchaser for a cash purchase price of $6,750,000. Consummation of the sale is subject to the satisfaction of certain conditions, including the approval of the limited partners of the Partnership to the sale of Palm Bay Apartments. Proxy solicitation materials were mailed to the limited partners on July 14, 1997. The General Partner scheduled an August 12, 1997 meeting of the limited partners. At that meeting, the limited partners approved the sale of Palm Bay Apartments and the dissolution of the Partnership. The sale is scheduled to close by September 2, 1997. As the Partnership's last real estate asset, a sale of Palm Bay Apartments would also begin the process of dissolving the Partnership and, after establishing reserves for contingencies and winding up expenses, distributing all remaining Partnership funds to the partners. RESULTS OF OPERATIONS - --------------------- Revenues: Rental revenues at Palm Bay Apartments increased 6.3% and 10.1% for the quarter and six months ended June 30, 1997 as compared to the same periods of 1996. Most of the increase in rental revenue was obtained by improving the occupancy rate of the Orlando property. Vacancy losses decreased 36%, and other rental discounts and concessions decreased 40%. The occupancy rate at June 30,1997 improved to 95.1% from 94.2% at December 31, 1996. The occupancy rate at June 30, 1996 was 95.1%. The Partnership also increased base rental rates an average of 4% for the property's units. Although small rental rate increases have been implemented, most of the increase in rental revenues is from improved occupancy rates at the property. Expenses: Partnership expenses decreased $139,272 or 16.6% for the six months ended June 30, 1997 as compared to the six months ended June 30, 1996. In accordance with accounting standards, the Partnership ceased depreciating Palm Bay Apartments after deciding to sell the property in October 1996. Thus, no depreciation is recorded for the second quarter of 1997 as opposed to $193,997 of depreciation during the second quarter of 1996. Excluding depreciation, expenses increased $54,725 or 8.5% for the six months ended June 30, 1997. Increases in repair and maintenance, general and administrative, and general and administrative expenses paid to affiliates were partially offset by decreased interest expense. Repair and maintenance expenses increased $31,913 or 19.9% for the first six months of 1997 as compared to the first six months of 1996. Costs incurred for replacement of appliances and floor coverings were expensed in 1997 as opposed to being capitalized in 1996. The 1997 costs did not meet the Partnership's capitalization criteria and were, therefore, expensed. General and administrative expenses increased $9,048 or 55% for the first six months of 1997 as compared to the first six months of 1996. Beginning in 1997, the Partnership began incurring charges for investor services, which are now provided by a third party vendor instead of by affiliates of the General Partner. General and administrative expenses paid to affiliates of the General Partner increased $14,298 or 74% for the first six months of 1997 as compared to the first six months of 1996. As discussed in the preceding paragraph, the Partnership's costs for investor relations are reported in general and administrative instead of general and administrative paid to affiliates beginning in 1997. However, the Partnership incurred increased costs relating to the proposed sale of Palm Bay Apartments and the anticipated liquidation of the Partnership. Interest expense decreased $11,225 or 10.8% in the first six months of 1997 as compared to the first six months of 1996. Interest expense on the Palm Bay mortgage note continues to decrease as the balance of the note is paid down through monthly debt service payments. Approximately half of the decrease is attributable to a one-time adjustment that increased interest expense in 1996. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash generated by Partnership operating activities increased to $194,868 for the six months ended June 30, 1997, a 10.7% increase over the $175,964 generated by operating activities for the first six months of 1996. The capital renovation projects undertaken at Palm Bay Apartments during the past three years have enabled the Partnership to improve the condition of Palm Bay Apartments, to improve the tenant profile of Palm Bay Apartments, and finally to improve the occupancy rate of Palm Bay Apartments. These steps, all beginning with the capital renovation program, now all Palm Bay Apartments to compete effectively with other apartment communities in the surrounding area. For the balance of 1997, cash flow from operations is projected to be sufficient to pay for current operating expenses, budgeted capital improvements, and repayment of the Palm Bay mortgage note through monthly debt service payments. With the renovation of Palm Bay Apartments now complete, and net operating income restored to acceptable levels, the Partnership is now in a position to dispose of its investment in Palm Bay Apartment profitably. The Partnership's investing activities since the March 17, 1994 sale of Pacesetter Apartments have been limited to renovating Palm Bay Apartments. Capital expended for capital improvements at Palm Bay Apartments totaled $212,261 and $440,906 for the years ended December 31, 1996 and 1995, respectively. An additional $64,217 was expended for capital improvements during the first six months of 1997. Financing activities since the sale of Pacesetter Apartments have been limited to repayment of the Palm Bay mortgage note through regularly scheduled monthly debt-service payments. Such payments totaled $137,627 and $126,137 for the years ended December 31, 1996 and 1995, respectively. An additional $73,446 of principal payments occurred during he first six months of 1997. Liquidity: The Palm Bay mortgage note was scheduled to mature on June 1, 1997. The General Partner discussed the impending maturity of the mortgage note and the prospects for the sale of Palm Bay Apartments with the holder of the mortgage note. Pursuant to those discussions, the holder of the mortgage note executed a forbearance letter on May 16, 1997, stating that the mortgage note holder will forbear from exercising its rights under the loan documents until September 1, 1997 so long as the Partnership continues paying monthly debt service payments as in the past. This agreement effectively extends the date the Partnership will have to payoff the mortgage note until September 1, 1997. If the sale of Palm Bay Apartments is consummated as scheduled on September 2, 1997, approximately $1,924,929 of sales proceeds will be required to payoff the Palm Bay mortgage note. The holder of the mortgage note has indicated informally that the forbearance letter will be honored until September 2, 1997. The Partnership does not have and will not have adequate cash reserves to pay off the Palm Bay mortgage note before September 1, 1997 unless the Partnership can successfully sell Palm Bay Apartments before that date. Should the Partnership be required to pay off the Palm Bay mortgage note prior to the sale of Palm Bay Apartments, the General Partner will attempt to arrange interim financing from an affiliate of the General Partner or from a third party. The General Partner does not anticipate unusual difficulties securing temporary financing given the high level of equity the Partnership has in Palm Bay Apartments and the Partnership's decision to sell Palm Bay Apartments. However, such temporary financing, if needed, is not assured. At June 30, 1997, the Partnership held $638,236 of cash and cash equivalents, up $57,205 from the balance at the end of 1996. Except for the impending maturity of the Palm Bay mortgage note, the General Partner considers the Partnership's cash reserves adequate for anticipated Partnership operations for the balance of 1997, or until Palm Bay Apartments is sold. Furthermore, the General Partner believes that operations at Palm Bay Apartments will generate sufficient cash flow to pay the operating expenses of Palm Bay Apartments, pay the required monthly debt service payments on the Palm Bay mortgage note, and provide funds to make necessary capital improvement to Palm Bay Apartments. Although there can be no assurance as to the timing of any sale or liquidation, it is anticipated that such liquidation would result in distributions to the partners of the net cash proceeds from the sale of Palm Bay Apartments, subject to cash reserve requirements (including an estimated reserve of $200,000 to provide for legal fees and potential costs, expenses and losses from ongoing litigation), to be followed by a dissolution of the Partnership. Distributions: Distributions to partners have been suspended as part of the General Partner's policy of maintaining adequate cash reserves. Distributions to limited partners will remain suspended until Palm Bay Apartments is sold and all liabilities of the Partnership are either paid or provided for. If the sale of Palm Bay Apartments closes as expected on September 2, 1997, the Partnership anticipates distributing available sales proceeds to the partners by the end of 1997. 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 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., et al. - 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 fourteen 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. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------- --------------------------------------------------- On August 12, 1997, at a special meeting of limited partners, the Partnership's limited partners approved a proposal to amend the Restated Certificate and Agreement of Limited Partnership to authorize the General Partner to sell Palm Bay Apartments. This proposal was approved by 9,038.92 affirmative votes. 15 votes against the proposal were cast. At the August 12, 1997 special meeting, limited partners also approved a proposal to authorize the General Partner to liquidate the Partnership. This second proposal was approved by 9,038.92 affirmative votes. 15 votes against the proposal were cast. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 3. Restated Certificate and Agreement of Limited Partnership dated of March 8, 1972. (1) 4. Amendment to Restated Certificate and Agreement of Limited Partnership dated March 30, 1992. (2) 11. Statement regarding computation of net income per limited partnership unit: Net income per limited partnership unit is computed by dividing net income allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 13,752.5 limited partnership units outstanding in 1997 and 1996. 27. Financial Data Schedule for the quarter ended June 30, 1997. (1) Incorporated by reference to the Annual Report of Registrant on Form 10-K for the period ended December 31, 1990, as filed on March 29, 1991. (2) Incorporated by reference to the Current Report on Form 8-K filed by the Registrant with the Securities and Exchange Commission on April 10, 1992. (b) Reports on Form 8-K. On June 6, 1997, the Partnership filed a Current Report on Form 8-K to report the signing of a Real Estate Sales Agreement to sell Palm Bay Apartments to an unaffiliated purchaser. The sale is subject to the satisfaction of certain conditions, including the approval of the limited partners of the Partnership to the sale of Palm Bay Apartments. The sale is scheduled to close during the third quarter of 1997. McNEIL PACIFIC INVESTORS FUND 1972 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 PACIFIC INVESTORS FUND 1972 By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner August 13, 1997 By: /s/ Ron K. Taylor - --------------- ------------------------------------------ Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) August 13, 1997 By: /s/ Brandon K. Flaming - --------------- ----------------------------------------- Date Brandon K. Flaming Vice President of McNeil Investors, Inc. (Principal Accounting Officer) EX-27 2
5 6-MOS DEC-31-1997 JUN-30-1997 638,236 0 0 0 0 0 0 0 7,135,060 0 1,950,131 0 0 0 0 7,135,060 898,707 913,794 0 0 606,345 0 92,496 0 0 214,953 0 0 0 214,953 0 0
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