-----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, ImBPr7khkJeilyGsrJPIoRgwgZRIIpbbYzqHdaNv/oPZ+Gg3UT/2thSzY/4Y57Ez w5HSg+RiE1MoS/nuQdr0KQ== 0000750334-97-000014.txt : 19971115 0000750334-97-000014.hdr.sgml : 19971115 ACCESSION NUMBER: 0000750334-97-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XX L P CENTRAL INDEX KEY: 0000750334 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330050225 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14007 FILM NUMBER: 97717227 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 LB 70 STREET 2: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHMARK INCOME INVESTORS LTD DATE OF NAME CHANGE: 19920413 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 September 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 0-14007 -------- MCNEIL REAL ESTATE FUND XX, L.P. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 33-0050225 - -------------------------------------------------------------------------------- (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 REAL ESTATE FUND XX, L.P. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- BALANCE SHEETS (Unaudited)
September 30, December 31, 1997 1996 --------------- -------------- ASSETS - ------- Real estate investments: Land..................................................... $ 392,000 $ 699,697 Buildings and improvements............................... 3,862,084 6,192,970 -------------- ------------- 4,254,084 6,892,667 Less: Accumulated depreciation.......................... (1,224,101) (1,435,080) -------------- ------------- 3,029,983 5,457,587 Mortgage loan investments, net of allowance of $792,013 at September 30, 1997 and December 31, 1996........................................ 3,302,969 3,404,553 Mortgage loan investment - affiliate........................ 733,900 733,900 Cash and cash equivalents .................................. 4,620,991 3,188,257 Cash segregated for security deposits....................... 30,221 54,950 Interest and other accounts receivable...................... 88,994 74,629 Escrow deposits............................................. 120,716 153,977 Deferred borrowing costs, net of accumulated amorti- zation of $56,485 and $45,275 at September 30, 1997 and December 31, 1996, respectively............. 105,009 116,219 Prepaid expenses and other assets........................... 4,200 5,034 -------------- ------------- $ 12,036,983 $ 13,189,106 ============== ============= LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ------------------------------------------ Mortgage note payable, net.................................. $ 2,679,526 $ 2,715,909 Accounts payable and other accrued expenses................. 50,614 97,230 Accrued property taxes...................................... 104,545 130,957 Payable to affiliates....................................... 145,717 40,962 Deferred revenue............................................ 158,884 163,852 Security deposits and deferred rental revenue............... 27,808 43,782 -------------- ------------- 3,167,094 3,192,692 -------------- ------------- Partners' equity (deficit): Limited partners - 60,000 limited partnership units authorized; 49,512 limited partnership units issued and outstanding at September 30, 1997 and December 31, 1996...................................... 9,167,517 10,315,277 General Partner.......................................... (297,628) (318,863) -------------- ------------- 8,869,889 9,996,414 -------------- ------------- $ 12,036,983 $ 13,189,106 ============== =============
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 XX, L.P. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------------- --------------------------------- 1997 1996 1997 1996 -------------- --------------- -------------- -------------- Revenue: Rental revenue................ $ 308,473 $ 338,728 $ 966,384 $ 1,047,295 Interest income on mortgage loan investments............ 80,065 73,221 210,317 215,078 Interest income on mortgage loan investment - affiliate. 15,473 15,473 45,915 46,083 Other interest income......... 50,624 44,304 120,424 137,618 Gain on disposition of real estate...................... 1,962,280 - 1,962,280 - ------------- ------------- ------------- ------------- Total revenue............... 2,416,915 471,726 3,305,320 1,446,074 ------------- ------------- ------------- ------------- Expenses: Interest...................... 61,553 62,348 185,528 187,847 Depreciation.................. 33,287 85,185 178,311 254,539 Property taxes................ 39,406 36,302 128,645 121,278 Personnel costs............... 38,539 37,009 116,001 107,733 Utilities..................... 22,647 24,054 62,286 61,985 Repairs and maintenance....... 33,783 32,955 103,091 95,005 Property management fees - affiliates........... 14,944 16,358 47,767 50,174 Other property operating expenses.................... 26,610 25,366 72,884 68,207 General and administrative.... 25,749 48,879 82,213 96,964 General and administrative - affiliates.................. 73,197 67,848 205,132 235,784 ------------- ------------- ------------- ------------- Total expenses.............. 369,715 436,304 1,181,858 1,279,516 ------------- ------------- ------------- ------------- Net income....................... $ 2,047,200 $ 35,422 $ 2,123,462 $ 166,558 ============= ============= ============= ============= Net income allocable to limited partners........... $ 2,026,728 $ 35,068 $ 2,102,227 $ 164,892 Net income allocable to General Partner............ 20,472 354 21,235 1,666 ------------- ------------- ------------- ------------- Net income....................... $ 2,047,200 $ 35,422 $ 2,123,462 $ 166,558 ============= ============= ============= ============= Net income per limited partnership unit.............. $ 40.94 $ .71 $ 42.46 $ 3.33 ============= ============= ============= ============= Distributions per limited partnership unit.............. $ 50.49 $ 12.12 $ 65.64 $ 24.24 ============= ============= ============= =============
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 XX, L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Nine Months Ended September 30, 1997 and 1996
Total General Limited Partners' Partner Partners Equity --------------- -------------- --------------- Balance at December 31, 1995.............. $ (320,030) $ 11,399,658 $ 11,079,628 Net income................................ 1,666 164,892 166,558 Distributions............................. - (1,199,950) (1,199,950) ------------- ------------- ------------- Balance at September 30, 1996............. $ (318,364) $ 10,364,600 $ 10,046,236 ============= ============= ============= Balance at December 31, 1996.............. $ (318,863) $ 10,315,277 $ 9,996,414 Net income................................ 21,235 2,102,227 2,123,462 Distributions............................. - (3,249,987) (3,249,987) ------------- ------------- ------------- Balance at September 30, 1997............. $ (297,628) $ 9,167,517 $ 8,869,889 ============= ============= =============
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 XX, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Nine Months Ended September 30, ------------------------------------------- 1997 1996 ------------------- ---------------- Cash flows from operating activities: Cash received from tenants........................ $ 973,198 $ 1,054,770 Cash paid to suppliers............................ (485,988) (493,926) Cash paid to affiliates........................... (272,644) (307,090) Interest received................................. 325,966 345,346 Interest received from affiliates................. 36,665 36,665 Interest paid..................................... (168,562) (171,873) Property taxes paid............................... (24,100) (1,993) Property taxes escrowed........................... (97,044) (88,645) ----------------- -------------- Net cash provided by operating activities............ 287,491 373,254 ----------------- -------------- Cash flows from investing activities: Additions to real estate investments.............. (157,761) (42,041) Proceeds from disposition of real estate.......... 4,493,834 - Collection of principal on mortgage loan investments..................................... 101,584 99,399 ----------------- -------------- Net cash provided by investing activities............ 4,437,657 57,358 ----------------- -------------- Cash flows from financing activities: Principal payments on mortgage note payable....... (42,427) (39,117) Distributions paid................................ (3,249,987) (1,199,950) ----------------- -------------- Net cash used in financing activities................ (3,292,414) (1,239,067) ----------------- -------------- Net increase (decrease) in cash and cash equivalents....................................... 1,432,734 (808,455) Cash and cash equivalents at beginning of period............................................ 3,188,257 3,927,223 ----------------- -------------- Cash and cash equivalents at end of period........... $ 4,620,991 $ 3,118,768 ================= ==============
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 XX, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income to Net Cash Provided by Operating Activities
Nine Months Ended September 30, ---------------------------------------- 1997 1996 ---------------- --------------- Net income........................................... $ 2,123,462 $ 166,558 --------------- -------------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation...................................... 178,311 254,539 Amortization of deferred borrowing costs.......... 11,210 10,508 Amortization of discount on mortgage note payable......................................... 6,044 5,732 Gain on disposition of real estate................ (1,962,280) - Disposition fee payable to affiliate.............. (124,500) - Changes in assets and liabilities: Cash segregated for security deposits........... 24,729 2,658 Interest and other accounts receivable.......... (14,365) 2,003 Escrow deposits................................. 33,261 22,529 Prepaid expenses and other assets............... 834 1,119 Accounts payable and other accrued expenses...................................... (46,616) (63,049) Accrued property taxes.......................... (26,412) 7,069 Payable to affiliates........................... 104,755 (21,132) Deferred revenue................................ (4,968) (4,967) Security deposits and deferred rental revenue....................................... (15,974) (10,313) --------------- -------------- Total adjustments............................. (1,835,971) 206,696 --------------- -------------- Net cash provided by operating activities............ $ 287,491 $ 373,254 =============== ==============
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 XX, L.P. Notes to Financial Statements September 30, 1997 (Unaudited) NOTE 1. - ------- McNeil Real Estate Fund XX, L.P. (the "Partnership"), formerly known as Southmark Income Investors, Ltd., was organized on July 19, 1984 as a limited partnership under the provisions of the California Revised 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 ("McNeil"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 700, 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 nine months ended September 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 Real Estate Fund XX, L.P., c/o The Herman Group, 2121 San Jacinto St., 26th Floor, Dallas, Texas 75201. NOTE 3. - ------- Certain prior period amounts have been reclassified to conform with the current period presentation. NOTE 4. - ------- The Partnership pays property management fees equal to 5% of the gross rental receipts for its properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services. Under the terms of its partnership agreement, the Partnership pays a disposition fee to an affiliate of the General Partner equal up to 3% of the gross sales price for brokerage services performed in connection with the sale of the Partnership's properties, provided, however, that in no event shall all real estate commissions (including the disposition fee) paid to all persons exceed the amount customarily charged in similar arms-length transactions. The fee is due and payable at the time the sale closes. The Partnership incurred $124,500 of such fees during 1997 in connection with the sale of 1130 Sacramento Condominiums. This amount represents 2.65% of the gross sales price. These fees have not yet been paid by the Partnership and are included in payable to affiliates - General Partner on the Balance Sheets at September 30, 1997. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. The Partnership is paying an asset management fee which is payable to the General Partner. Through 1999, the asset management fee is calculated as 1% of the Partnership's tangible asset value. 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, (ii) a value of $10,000 per apartment unit or (iii) on 1130 Sacramento, the net book value of the property is used 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 fee percentage decreases subsequent to 1999. Compensation and reimbursements paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Nine Months Ended September 30, ---------------------- 1997 1996 --------- --------- Property management fees............................. $ 47,767 $ 50,174 Charged to gain on disposition of real estate: Disposition fees.................................. 124,500 - Charged to general and administrative - affiliates: Partnership administration........................ 83,087 113,098 Asset management fee.............................. 122,045 122,686 -------- -------- $ 377,399 $ 285,958 ======== ======== Payable to affiliates at September 30, 1997 and December 31, 1996 consisted primarily of unpaid property management fees, disposition fees (1997 only), Partnership general and administrative expenses and asset management fees and are due and payable from current operations. NOTE 5. - ------- The Partnership extended the maturity of its mortgage loan investment-affiliate from April 1, 1997 to September 1, 1997. The Partnership has verbally agreed to further extend the maturity to December 15, 1997. The borrowing partnership is currently attempting to refinance the mortgage loan. NOTE 6. - ------- 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. Since 1130 Sacramento Condominiums was placed on the market for sale, no depreciation was taken effective April 15, 1997. On August 1, 1997, the Partnership sold one of four units of 1130 Sacramento to an unaffiliated purchaser. The remaining three units were sold to the same purchaser on August 28, 1997. The cash purchase price for all four units was $4,700,000. Cash proceeds and the gain on disposition of real estate are detailed below: Gain on Sale Cash Proceeds ------------- ------------- Cash sales price.......................... $ 4,700,000 $ 4,700,000 Selling costs............................. (330,666) (206,166) ----------- Net cash proceeds......................... $ 4,493,834 =========== Carrying value............................ (2,407,054) ----------- Gain on disposition of real estate........ $ 1,962,280 =========== As discussed in Note 4, the Partnership incurred $124,500 of disposition fees payable to an affiliate of the General Partner in connection with the sale of 1130 Sacramento. These fees reduced the amount of the gain on disposition of real estate (they are included in selling costs, above). However, since the fees have not yet been paid, they did not reduce the amount of net cash proceeds from the sale. The net cash proceeds from the sale of 1130 Sacramento will be $4,369,334 after payment of the disposition fees. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- There has been no significant change in the operations of Sterling Springs Apartments; 1130 Sacramento Condominiums was sold in August 1997. The Partnership reported net income of $2,123,462 for the first nine months of 1997 as compared to $166,558 for the same period in 1996. Revenues in 1997 increased to $3,305,320 from $1,446,074 in 1996, while expenses were $1,181,858 in 1997 as compared to $1,279,516 in 1996. Net cash provided by operating activities was $287,491 for the nine months ended September 30, 1997. The Partnership expended $157,761 for capital improvements, made $42,427 in principal payments on its mortgage note payable and distributed $3,249,987 to the limited partners. After receiving proceeds from disposition of 1130 Sacramento of $4,493,834 and collecting $101,584 of principal on mortgage loan investments, cash and cash equivalents totaled $4,620,991 at September 30, 1997, a net increase of $1,432,734 from the balance at December 31, 1996. RESULTS OF OPERATIONS - --------------------- Revenue: Total revenue increased by $1,945,189 and $1,859,246 for the three and nine month periods ended September 30, 1997, respectively, as compared to the same periods in 1996. The increase was mainly due to a gain on the disposition of 1130 Sacramento, partially offset by a decrease in rental revenues and other interest income, as discussed below. Rental revenue for the three and nine months ended September 30, 1997 decreased by $30,255 and $80,911, respectively, as compared to the same periods in 1996. The decrease was mainly due to a decrease in rental revenue at 1130 Sacramento. One of the four condominium units was vacated in April 1997 and was sold at the beginning of August 1997. The remaining three units were sold at the end of August 1997. There was also a decline in rental rates in 1997. Other interest income increased by $6,320 and decreased by $17,194 for the three and nine month periods ended September 30, 1997, respectively, as compared to the same periods in 1996. The overall decrease was the result of a decrease in cash available for short-term investment in the first half of 1997, mainly due to the payment of distributions to limited partners. Cash available for short-term investment increased in the third quarter of 1997 due to proceeds received from the sale of 1130 Sacramento in August 1997. On August 1, 1997, the Partnership sold one of four units of 1130 Sacramento Condominiums to an unaffiliated purchaser. The remaining three units were sold to the same purchaser on August 28, 1997. The cash purchase price for all four units was $4,700,000. The Partnership recognized a gain on disposition of real estate of $1,962,280 as more fully discussed in Item 1, Note 6. Expenses: Total expenses for the three and nine month periods ended September 30, 1997 decreased by $66,589 and $97,658, respectively, as compared to the same periods in 1996. The decrease was mainly due to a decrease in depreciation expense and general and administrative expenses, as discussed below. Depreciation and amortization expense for the three and nine months ended September 30, 1997 decreased by $51,898 and $76,228, respectively, in relation to the same periods in 1996. The decrease was due to 1130 Sacramento Condominiums being classified as an asset held for sale by the Partnership effective April 15, 1997. In accordance with 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," the Partnership ceased recording depreciation on the asset at the time it was placed on the market for sale. General and administrative expenses decreased by $23,130 and $14,751 for the three and nine months ended September 30, 1997, respectively, in relation to the comparable periods in 1996. The decrease was mainly due to a decrease in costs incurred relating to evaluation and dissemination of information regarding an unsolicited tender offer. This decrease was partially offset by costs incurred for investor services which were paid to an unrelated third party in 1997. In 1996, such costs were paid to an affiliate of the General Partner and were included in general and administrative - affiliates on the Statements of Operations. General and administrative - affiliates increased by $5,349 for the three months and decreased by $30,652 for the nine months ended September 30, 1997, respectively, as compared to the same periods in 1996. The overall decrease was due to a decrease in overhead expenses allocated to the Partnership by McREMI, approximately $20,000 of which was due to investor services being performed by an unrelated third party in 1997. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership generated $287,491 of cash through operating activities for the first nine months of 1997 as compared to $373,254 generated during the first nine months of 1996. The decrease in 1997 was primarily due to a decrease in cash received from tenants (see discussion of decrease in rental revenue, above). The Partnership expended $157,761 and $42,041 for capital improvements to its properties during the first nine months of 1997 and 1996, respectively. The increase in 1997 was mainly due to exterior painting and carpentry work at Sterling Springs Apartments. In addition, the pool was resurfaced and a retaining wall was replaced at Sterling Springs. The exterior of 1130 Sacramento condominiums was also repainted and the parking lot was refurbished in 1997. The Partnership received net proceeds from the sale of 1130 Sacramento of $4,493,834 in August 1997. No such proceeds were received in 1996. The Partnership distributed $3,249,987 and $1,199,950 to the limited partners during the nine months ended September 30, 1997 and 1996, respectively. Short-term liquidity: At September 30, 1997, the Partnership held cash and cash equivalents of $4,620,991. This balance provides a reasonable level of working capital for the Partnership's immediate needs in operating its remaining property. In 1997, the operation of Sterling Springs Apartments, the Partnerships only remaining property, is expected to provide sufficient positive cash flow for normal operations. Management will perform routine repairs and maintenance on the property to preserve and enhance its value and competitiveness in the market. Capital improvements to the Partnership's property in 1997 are expected to be funded from operations of the property. For 1997, management expects that cash from operations of its property and principal and interest collections on the mortgage loan investments, along with the present balance of cash and cash equivalents held, will allow the Partnership to meet its obligations as they come due. Long-term liquidity: The Partnership's remaining property, Sterling Springs Apartments, is encumbered with mortgage debt. The mortgage on this property is not due until 2003. In the event that the Partnership acquires ownership of other properties through foreclosure, the cash and cash equivalent balances presently held will provide a source for the maintenance and improvement of the properties. Because the timing and number of properties which may be foreclosed is uncertain, there is no assurance that the balances presently held will be sufficient for needed capital improvements. At present, there are no commitments nor any known needs for improvements to the properties securing the Partnership's loans. The Partnership has no existing lines of credit from outside sources. Another possible source of funds is the sale of the Partnership's mortgage loan investments or properties securing the Partnership's mortgage loans. Such sales are possibilities only, and since the Partnership does not control the properties securing its loans, sales of those properties may occur only if initiated by the borrower or in the event of foreclosure by the Partnership. There is no assurance that any sales can be contracted or closed to coincide with the Partnership's future cash needs. For the long term, the Partnership will remain dependent on operations of the properties it owns or of the properties securing its loans as the primary source of debt repayment, until the properties can be sold. The Partnership has determined to begin orderly liquidation of all its assets. Although there can be no assurance as to the timing of the liquidation due to real estate market conditions, the general difficulty of disposing of real estate, and other general economic factors, it is anticipated that such liquidation would result in the dissolution of the Partnership followed by a liquidating distribution to the limited partners by December 1998. In this regard, the Partnership placed 1130 Sacramento Condominiums on the market for sale effective April 15, 1997. In August 1997, the Partnership sold all four of the condominium units to a non-affiliate for $4.7 million. 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. On October 31, 1997, the Plaintiffs filed a second consolidated and amended complaint. Defendants intend to file a demurrer to the second consolidated and amended complaint on or before December 1, 1997. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Document Description ------- -------------------- 4. Amended and Restated Limited Partnership Agreement dated March 30, 1992. (Incorporated by reference to the Current Report of the registrant on Form 8-K dated March 30, 1992, as filed on April 10, 1992). 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 weighted average number of limited partnership units outstanding. Per unit information has been computed based on 49,512 limited partnership units outstanding in 1997 and 1996. 27. Financial Data Schedule for the quarter ended September 30, 1997. (b) Reports on Form 8-K. A Form 8-K with respect to Item 2 dated August 28, 1997 was filed on October 22, 1997 regarding the sale of 1130 Sacramento Condominiums. MCNEIL REAL ESTATE FUND XX, L.P. 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 XX, L.P. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner November 13, 1997 By: /s/ Ron K. Taylor - ----------------- ------------------------------------------- Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) November 13 , 1997 By: /s/ Carol A. Fahs - ------------------ ------------------------------------------ Date Carol A. Fahs Vice President of McNeil Investors, Inc. (Principal Accounting Officer) EX-27 2
5 9-MOS DEC-31-1997 SEP-30-1997 4,620,991 0 88,994 0 0 0 4,254,084 (1,224,101) 12,036,983 0 2,679,526 0 0 0 8,869,889 12,036,983 966,384 3,305,320 530,674 708,985 287,345 0 185,528 2,123,462 0 2,123,462 0 0 0 2,123,462 0 0
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