-----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, KXaeRcpal95Hfh1GG/8A0hxT3HCjNgp6Xebbg27H7UWY4vj9f6y1pTkMOEi6MI60 I4RyyAte8tzQkxj+kjNH+A== 0000756427-95-000015.txt : 19951119 0000756427-95-000015.hdr.sgml : 19951119 ACCESSION NUMBER: 0000756427-95-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XXIV LP CENTRAL INDEX KEY: 0000756427 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 742339537 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14267 FILM NUMBER: 95590539 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 2: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHMARK EQUITY PARTNERS 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, 1995 ----------------------------- 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 0-14267 MCNEIL REAL ESTATE FUND XXIV, L.P. - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) California 74-2339537 - ------------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (214) 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 XXIV, L.P. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------ -------------------- BALANCE SHEETS (Unaudited) September 30, December 31, 1995 1994 ---------- ---------- ASSETS - ------ Real estate investments: Land..................................................... $ 7,039,867 $ 7,039,867 Buildings and improvements............................... 29,557,765 29,272,835 ---------- ---------- 36,597,632 36,312,702 Less: Accumulated depreciation and amortization......... (12,079,385) (11,061,009) ---------- ---------- 24,518,247 25,251,693 Cash and cash equivalents................................... 2,507,048 1,720,161 Cash segregated for security deposits....................... 91,942 85,851 Accounts receivable, net of allowance for doubtful accounts of $77,044 at September 30, 1995 and December 31, 1994........................................ 461,793 401,525 Prepaid expenses and other assets, net...................... 199,195 215,741 ---------- ---------- $27,778,225 $27,674,971 ========== ========== LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ----------------------------------------- Mortgage note payable....................................... $ 5,562,893 $ 5,660,558 Accounts payable and accrued expenses....................... 506,566 194,613 Payable to affiliates - General Partner..................... 69,079 38,716 Advances from affiliates.................................... 642,581 642,581 Deferred gain............................................... 1,700 17,000 Security deposits and deferred rental income................ 153,824 87,413 ---------- ---------- 6,936,643 6,640,881 ---------- ---------- Partners' equity (deficit): Limited partners - 40,000 limited partnership units authorized and outstanding at September 30, 1995 and December 31, 1994............................. 20,849,339 21,039,922 General Partner.......................................... (7,757) (5,832) ---------- ---------- 20,841,582 21,034,090 ---------- ---------- $27,778,225 $27,674,971 ========== ==========
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 XXIV, L.P. STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ---------------------------- ---------------------------- 1995 1994 1995 1994 --------- --------- --------- --------- Revenue: Rental revenue................ $1,021,347 $1,037,290 $3,096,514 $3,179,842 Interest...................... 33,500 20,210 88,652 45,926 Property tax refund........... 9,709 - 35,142 - --------- --------- --------- - Total revenue............... 1,064,556 1,057,500 3,220,308 3,225,768 --------- --------- --------- --------- Expenses: Interest...................... 114,681 88,353 323,958 283,413 Depreciation and amortization................ 343,764 318,530 1,018,376 948,884 Property taxes................ 124,463 112,590 374,435 345,791 Personnel costs............... 67,504 72,599 221,565 203,956 Utilities..................... 53,322 49,594 147,188 157,207 Repairs and maintenance....... 112,657 88,151 303,870 335,455 Property management fees - affiliates........... 60,126 58,930 177,202 178,205 Other property operating expenses.................... 64,508 75,058 184,702 207,095 General and administrative.... 114,289 12,218 179,644 43,557 General and administrative - affiliates.................. 159,016 148,689 481,876 460,639 --------- --------- --------- --------- Total expenses.............. 1,214,330 1,024,712 3,412,816 3,164,202 --------- --------- --------- --------- Net income (loss)................ $ (149,774) $ 32,788 $ (192,508) $ 61,566 ========= ========= ========= ========= Net income (loss) allocable to limited partners........... $ (148,276) $ 32,460 $ (190,583) $ 60,950 Net income (loss) allocable to General Partner............ (1,498) 328 (1,925) 616 --------- --------- --------- --------- Net income (loss)................ $ (149,774) $ 32,788 $ (192,508) $ 61,566 ========= ========= ========= ========= Net income (loss) per limited partnership unit.............. $ (3.71) $ .81 $ (4.76) $ 1.52 ========= ========= ========= =========
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 XXIV, L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Nine Months Ended September 30, 1995 and 1994 Total General Limited Partners' Partner Partners Equity -------- ---------- ---------- Balance at December 31, 1993.............. $(5,177) $21,104,778 $21,099,601 Net income................................ 616 60,950 61,566 ------ ---------- ---------- Balance at September 30, 1994............. $(4,561) $21,165,728 $21,161,167 ====== ========== ========== Balance at December 31, 1994.............. $(5,832) $21,039,922 $21,034,090 Net loss.................................. (1,925) (190,583) (192,508) ------ ---------- ---------- Balance at September 30, 1995............. $(7,757) $20,849,339 $20,841,582 ====== ========== ==========
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 XXIV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Increase in Cash and Cash Equivalents Nine Months Ended September 30, --------------------------------- 1995 1994 --------- --------- Cash flows from operating activities: Cash received from tenants........................ $3,077,873 $3,132,792 Cash paid to suppliers............................ (945,852) (935,304) Cash paid to affiliates........................... (628,715) (934,068) Interest received................................. 88,652 45,926 Interest paid..................................... (296,578) (260,946) Property taxes paid............................... (161,040) (268,751) Property tax refund............................... 35,142 - --------- --------- Net cash provided by operating activities............ 1,169,482 1,079,649 --------- --------- Cash flows from investing activities: Additions to real estate investments.............. (284,930) (421,452) --------- --------- Cash flows from financing activities: Principal payments on mortgage note payable......................................... (97,665) (165,264) --------- --------- Net increase in cash and cash equivalents....................................... 786,887 492,933 Cash and cash equivalents at beginning of period............................................ 1,720,161 1,435,591 --------- --------- Cash and cash equivalents at end of period........... $2,507,048 $1,928,524 ========= =========
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 XXIV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities Nine Months Ended September 30, --------------------------------- 1995 1994 --------- --------- Net income (loss).................................... $ (192,508) $ 61,566 -------- --------- Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization..................... 1,018,376 948,884 Amortization of deferred borrowing costs.......... 23,309 23,309 Amortization of deferred gain..................... (15,300) (15,300) Changes in assets and liabilities: Cash segregated for security deposits........... (6,091) (8,203) Accounts receivable, net........................ (60,268) (15,855) Prepaid expenses and other assets, net.......... (6,763) 7,725 Accounts payable and accrued expenses........... 311,953 78,265 Payable to affiliates - General Partner......... 30,363 4,776 Security deposits and deferred rental income........................................ 66,411 (5,518) --------- --------- Total adjustments............................. 1,361,990 1,018,083 --------- --------- Net cash provided by operating activities............ $1,169,482 $1,079,649 ========= =========
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 XXIV, L.P. Notes to Financial Statements September 30, 1995 (Unaudited) NOTE 1. - ------ McNeil Real Estate Fund XXIV, L.P. (the "Partnership"), formerly known as Southmark Equity Partners, Ltd., was organized on October 19, 1984, as a limited partnership under the provisions of the California Revised Limited Partnership Act to acquire and operate commercial and residential properties. 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, 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 nine months ended September 30, 1995 are not necessarily indicative of the results to be expected for the year ending December 31, 1995. 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, 1994, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XXIV, L.P., c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - ------ The Partnership pays property management fees equal to 5% of the gross rental receipts for its residential properties and 6% of gross rental receipts for its commercial 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 also choose to provide leasing services for the Partnership's commercial properties, in which case McREMI will receive property management fees from such commercial properties equal to 3% of the property's gross rental receipts plus leasing 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. 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 or (ii) a value of $10,000 per apartment unit for residential properties and $50 per gross square foot for commercial properties 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 or its affiliates are as follows: Nine Months Ended September 30, ------------------------------- 1995 1994 ------- ------- Property management fees............................. $177,202 $178,205 Charged to general and administrative - affiliates: Partnership administration........................ 231,537 217,064 Asset management fee.............................. 250,339 243,575 ------- ------- $659,078 $638,844 ======= =======
Payable to affiliates - General Partner at September 30, 1995 and December 31, 1994 consisted primarily of unpaid property management fees, Partnership general and administrative expenses and asset management fees and are due and payable from current operations. 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 the Partnership's properties since December 31, 1994. The Partnership reported net loss for the first nine months of 1995 of $192,508 as compared to net income of $61,566 for the first nine months of 1994. Revenues were $3,220,308 in 1995, down from $3,225,768 for the same period in 1994. Expenses increased to $3,412,816 in 1995, from $3,164,202 in 1994. Net cash provided by operating activities was $1,169,482 for the first nine months of 1995, an increase from the $1,079,649 provided during the first nine months of 1994. After principal payments on the Partnership's mortgage note payable of $97,665 and capital improvements of $284,930, cash and cash equivalents at September 30, 1995 were $2,507,048 up by $786,887 since December 31, 1994. RESULTS OF OPERATIONS - --------------------- Revenue: Total revenue increased by $7,056 and decreased by $5,460 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The change in the three and nine months was primarily due to a decrease in rental revenue, an increase in interest income and a property tax refund, as discussed below. Rental revenue decreased by $15,943 and $83,328 for three and nine months ended September 30, 1995, respectively, in relation to the respective periods in 1994. The decrease was mainly due to a decrease of approximately $96,000 at Southpointe Plaza Shopping Center due to a decrease in common area maintenance costs billed to tenants and a decrease in occupancy from 90% at September 30, 1994 to 85% at September 30, 1995. In addition, there was a decrease in occupancy at Island Plaza from 84% at the end of the third quarter of 1994 to 79% at the end of the same quarter in 1995. These decreases were partially offset by increases in rental revenue as a result of higher rental rates at Pine Hills and Sleepy Hollow apartments. In addition there was an increase in rental revenue at Towne Center due to a large tenant occupying previously vacant space in the third quarter of 1994. Interest income increased by $13,290 and $42,726 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The increase was due to a greater amount of cash available for short-term investment in 1995. The partnership held approximately $2.5 million of cash and cash equivalents at September 30, 1995, as compared to $1.9 million at September 30, 1994. In addition, there was an increase in interest rates earned on invested cash in 1995. In 1995, the Partnership received $35,142 in refunds of prior years' property taxes for Southpointe Plaza, River Bay Plaza and Springwood Plaza shopping centers. No such refunds were received in 1994. Expenses: Total expenses increased by $189,618 and $248,614 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The increase was primarily the result of an increase in general and administrative expenses, as discussed below. Interest expense increased $26,328 and $40,545 for the three and nine months ended September 30, 1995, respectively, due to an increase in the adjustable interest rate on the Southpointe Plaza mortgage note payable. Repairs and maintenance expense increased by $24,506 for the quarter and decreased by $31,585 for the nine months ended September 30, 1995, as compared to the same periods in 1994. The overall decrease was partially due to a decrease in exterminating expense. Pine Hills and Sleepy Hollow Apartments were both completely exterminated in the second quarter of 1994. In addition, there was a decrease in the replacement of carpet and appliances at Pine Hills and Sleepy Hollow Apartments, which were expensed in the first half of 1994. Other property operating expenses decreased by $10,550 and $22,393 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The decrease was mainly due to decreased advertising and leasing commissions recognized, mainly at Southpointe Plaza Shopping Center, which were paid in an effort to increase occupancy in 1994. General and administrative expenses increased by $102,071 and $136,087 for the three and nine months ended September 30, 1995, respectively, as compared to the same periods in 1994. The increase was mainly due to expenses incurred in the third quarter of 1995 relating to evaluation and dissemination of information regarding an unsolicited tender offer as discussed in Item 5 - Other Information. In addition, there was an increase in expenses incurred in connection with a lawsuit involving a tenant's lease at Southpointe Plaza Shopping Center. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership's primary source of cash flows is from operating activities which generated $1,169,482 of cash in the first nine months of 1995 as compared to $1,079,649 for the same period in 1994. The Partnership expended $284,930 and $421,452 for additions to its real estate investments in the first nine months of 1995 and 1994, respectively. The decrease in 1995 was mainly due to fewer tenant improvements being performed at Southpointe Plaza Shopping Center. Short-term liquidity: - -------------------- At September 30, 1995, the Partnership held cash and cash equivalents of $2,507,048. This balance provides a reasonable level of working capital for the Partnership's immediate needs in operating its properties. For the remainder of 1995, Partnership properties are expected to provide positive cash flow from operations after payment of debt service and capital improvements. The Partnership has budgeted $436,000 for necessary capital improvements for all properties in 1995 which is expected to be funded from available cash reserves or from operations of the properties. The present cash balance is believed to provide an adequate reserve for property operations. At the present time, the Partnership anticipates making distributions to the limited partners in the foreseeable future. Management is currently reviewing cash requirements to determine the amount and timing of such distributions. Long-term liquidity: - ------------------- Only one property, Southpointe Plaza Shopping Center, is encumbered with mortgage debt. The Partnership will attempt to obtain refinancing or extension of the mortgage note when it matures in 1997. While the outlook for maintenance of adequate levels of liquidity is favorable, should operations deteriorate and present cash resources become insufficient to fund current needs, the Partnership would require other sources of working capital. No such sources have been identified. The Partnership has no established lines of credit from outside sources. Other possible actions to resolve cash deficiencies include refinancings, deferral of capital expenditures on Partnership properties except where improvements are expected to increase the competitiveness and marketability of the properties, arranging financing from affiliates or the ultimate sale of the properties. Sales and refinancings are possibilities only, and there are at present no plans for any such sales or refinancings. The General Partner has established a revolving credit facility not to exceed $5,000,000 in the aggregate which is available on a "first-come, first-served" basis to the Partnership and other affiliated partnerships if certain conditions are met. Borrowings under the facility may be used to fund deferred maintenance, refinancing obligations and working capital needs. There is no assurance that the Partnership will receive any funds under the facility because no amounts are reserved for any particular partnership. As of September 30, 1995, $2,362,004 remained available for borrowing under the facility; however, additional funds could become available as other partnerships repay existing borrowings. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------ ----------------- 1) Martha Hess, et. al. v. Southmark Equity Partners II, Ltd., Southmark Income Investors, Ltd., Southmark Equity Partners, Ltd. (presently known as McNeil Real Estate Fund XXIV, L.P.), Southmark Realty Partners III, Ltd., and Southmark Realty Partners II, Ltd., et al. ("Hess"); Kotowski v. Southmark Equity Partners, Ltd. and Donald Arceri v. Southmark Income Investors, Ltd. These cases were previously pending in the Illinois Appellate Court for the First District ("Appellate Court"), as consolidated case no. 90-107. Consolidated with these cases are an additional 14 matters against unrelated partnership entities. The Hess case was filed on May 20, 1988, by Martha Hess, individually and on behalf of a putative class of those similarly situated. The original, first, second and third amended complaints in Hess sought rescission, pursuant to the Illinois Securities Act, of over $2.7 million of principal invested in five Southmark (now McNeil) partnerships, and other relief including damages for breach of fiduciary duty and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The original, first, second and third amended complaints in Hess were dismissed against the defendant-group because the Appellate Court held that they were not the proper subject of a class action complaint. Hess was, thereafter, amended a fourth time to state causes of action against unrelated partnership entities. Hess went to judgment against that unrelated entity and the judgment, along with the prior dismissal of the class action, was appealed. The Hess appeal was decided by the Appellate Court during 1992. The Appellate Court affirmed the dismissal of the breach of fiduciary duty and consumer fraud claims. The Appellate Court did, however, reverse in part, holding that certain putative class members could file class action complaints against the defendant-group. Although leave to appeal to the Illinois Supreme Court was sought, the Illinois Supreme Court refused to hear the appeal. The effect of the denial is that the Appellate Court's opinion remains standing. On June 15, 1994, the Appellate Court issued its mandate sending the case back to trial court. In late January 1995, the plaintiffs filed a Motion to File an Amended Consolidated Class Action Complaint, which amends the complaint to name McNeil Partners, L.P. as the successor general partner to Southmark Investment Group. In February 1995, the plaintiffs filed a Motion for Class Certification. In September 1995, the court granted the plaintiffs' Motion to File an Amended Complaint, to Consolidate and for Class Certification. The defendants have answered the complaint and have plead that the plaintiffs did not give timely notice of their right to rescind within six months of knowing that right. The ultimate outcome of this litigation cannot be determined at this time. 2) High River Limited Partnership vs. McNeil Partners, L.P., McNeil Investors, Inc., McNeil Pacific Investors 1972, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., Robert A. McNeil and Carole J. McNeil (L95012). High River Limited Partnership ("High River") filed this action in the United States District Court for the Southern District of New York against McNeil Partners, L.P., McNeil Investors, Inc. and Mr. and Mrs. McNeil requesting, among other things, names and addresses of the limited partners of the ten partnerships listed above (the "Funds"). The district court issued a preliminary injunction against the Funds requiring them to commence mailing materials relating to High River tender offer materials on August 14, 1995. On August 18, 1995, McNeil Partners, L.P., McNeil Investors, Inc., the Funds, and Mr. and Mrs. McNeil filed an Answer and Counterclaim. The counterclaim principally asserted that (1) the High River tender offers were undertaken in violation of the federal securities laws, on the basis of material, non-public, and confidential information, and (2) that the High River offer documents omitted and/or misrepresented certain material information about the High River tender offers. The counterclaim sought a preliminary and permanent injunction against the continuation of the High River tender offers and, alternatively, ordering corrective disclosure with respect to allegedly false and misleading statements contained in the tender offer documents. The High River tender offer expired on October 6, 1995. The defendants believe that the action is moot and expect the matter to be dismissed shortly. 3) Robert Lewis vs. McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil, et al - In the District Court of Dallas County, Texas, A-14th Judicial District, Cause No. 95-08535 (Class Action). The plaintiff, Robert Lewis, is a limited partner with McNeil Pacific Investors Fund 1972, McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd. The plaintiff brings this action on his own behalf and as a class action on behalf of the class of all limited partners of McNeil Pacific Investors Fund 1972, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real Estate Fund XXV, L.P as of August 4, 1995. The plaintiff alleges that McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil, and other senior officers (collectively, the "Defendants") breached their fiduciary duties by, amoung other things, (1) failing to attempt to sell the properties owned by the Funds (the "Properties") and extending the lives of the Funds indefinitely, contrary to the Funds' business plans, (2) paying distributions to themselves and generating fees for their affiliates, (3) refusing to make significant distributions to the class members, despite the fact that the Funds have positive cash flows and substantial cash balances, and (4) failing to take steps to create an auction market for Fund equity interests, despite the fact that a third party bidder filed tender offers for approximately forty-five percent (45%) of the outstanding units of each of the Funds. The plaintiff also claims that the Defendants have breached the partnership agreements by failing to take steps to liquidate the Properties and by their alteration of the Funds' primary purposes, their acts in contravention of these agreements, and their use of the Fund assets for their own benefit instead of for the benefit of the Funds. The Defendants deny that there is any merit to the plaintiff's allegations and intend to vigorously defend this action. 4) James F. Schofield, Gerald C. Gillett and Donna S. Gillett vs. McNeil Partners, L.P., McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil, Carole J. McNeil, et al, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P. - Superior Court of the State of California for the County of Los Angeles, Case No. BC133799 (Class and Derivative Action Complaint), United States District Court, Southern District of New York, Case No. 95CIV.6711 (Class and Derivative Action Complaint). These are corporate/securities class and derivative actions brought in state and federal court by limited partners of each of the nine limited partnerships that are named as Nominal Defendants as listed above (the "Nine Funds"). The plaintiffs allege that defendants McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and four of their senior officers and/or directors have breached their fiduciary duties. Specifically, the plaintiffs allege that the defendants have caused the Nine Funds to enter into several wasteful transactions that have no business purpose or benefit to the Nine Funds and which have rendered such units highly illiquid and artificially depressed the prices that are available for units on the limited resale market. The plaintiffs also allege that the defendants have engaged in a course of conduct to prevent the acquisition of units by Carl Icahn by disseminating false, misleading and inadequate information. The plaintiffs further allege that the defendants have acted to advance their own personal interests at the expense of the Nine Funds' public unit holders by failing to sell partnership properties and failing to make distributions to unitholders and, thereby, have breached the partnership agreements. The defendants deny that there is any merit to the plaintiffs' allegations and intend to vigorously defend these actions. 5) Alfred Napoletano vs. McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P. - Superior Court of the State of California, County of Los Angeles, Case No. BC133849 (class action complaint). The plaintiff brings this class action on behalf of a class of all persons and entities who are current owners of units and/or are limited partners in one or more of the partnerships referenced above (the "Funds"). The plaintiff alleges that the defendants have breached their fiduciary duties to the class members by, among other things, (1) taking steps to prevent the consummation of the High River tender offers, (2) failing to take steps to maximize unitholders' or limited partners' values, including failure to liquidate the properties owned by the Funds, (3) managing the Funds so as to extend indefinitely the present fee arrangements, and (4) paying itself and entities owned and controlled by the general partner excessive fees and reimbursements of general and administrative expenses. The defendants deny that there is any merit to the plaintiff's allegations and intend to vigorously defend this action. 6) Warren Heller vs. McNeil Partners, L.P., McNeil Investors, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P. - Superior Court of the State of California, County of Los Angeles, Case No. BC133957 (class action complaint). The plaintiff brings this class action on behalf of a class of all persons and entities who are current owners of units and/or are limited partners in one or more of the Funds referenced above. The plaintiff alleges that the defendants have breached their fiduciary duties to the class members by, among other things, (1) taking steps to prevent the consummation of the High River tender offers, (2) failing to take steps to maximize unitholders' or limited partners' values, including failure to liquidate the properties owned by the Funds, (3) managing the Funds so as to extend indefinitely the present fee arrangements, and (4) paying itself and entities owned and controlled by the general partner excessive fees and reimbursements of general and administrative expenses. The defendants deny that there is any merit to the plaintiff's allegations and intend to vigorously defend this action. 7) High River Limited Partnership v. McNeil Partners L.P., McNeil Investors, Inc., McNeil Pacific Investors 1972, McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., Robert A. McNeil and Carole J. McNeil - United States District Court for the Southern District of New York, (Case No. 95 Civ. 9488) (Second Action). On November 7, 1995, High River commenced a second complaint which alleges, inter alia, that McNeil's Schedule 14D-9 filed in connection with the High River tender offers was materially false and misleading, in violation of Sections 14(d) and 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. Section 78n(d) and (e), and the SEC Regulations promulgated thereunder; and that High River further alleges that McNeil has wrongfully refused to admit High River as a limited partner to the Funds. Additionally, High River purports to assert claims derivatively on behalf of Funds IX, XI, XV, XXIV and XXV, for breach of contract and breach of fiduciary duty, asserting that McNeil has charged these Funds excessive fees. High River's complaint seeks, inter alia, preliminary injunctive relief requiring McNeil to admit High River as a limited partner in each of the ten Funds and to transfer the tendered units of interest in the Funds to High River; an unspecified award of damages payable to High River and an additional unspecified award of damages payable to certain of the Funds; an order that defendants must discharge their fiduciary duties and must account for all fees they have received from certain of the Funds; and attorneys' fees. The defendants deny that there is any merit to the plaintiff's allegations and intend to vigorously defend this action. ITEM 5. OTHER INFORMATION - ------ ----------------- As previously disclosed, on an unsolicited basis, High River, a partnership controlled by Carl Icahn, announced that it had commenced an offer to purchase 18,000 units of limited partnership interest in the Partnership (approximately 45% of the Partnership's units) at $150.00 per unit. The tender offer was originally due to expire on August 31, 1995. In connection therewith, the parties entered into certain negotiations and discussions regarding, among other things, possible transactions between the parties and their affiliates, McNeil Partners, L.P., McNeil Investors, Inc., and McREMI. On September 19, 1995, the parties having not reached any resolution on the terms of the proposed transactions, McNeil Partners, L.P. terminated the parties' discussion. High River had extended its offer several times until the final expiration date of October 6, 1995. On October 11, 1995 High River announced that based on preliminary information furnished by the depositary for the tender offer, approximately 15,072 limited partnership units of the Partnership were tendered and not withdrawn prior to the expiration of the tender offer. On October 12, 1995, McNeil Partners, L.P. announced that it would continue to explore potential avenues to enhance the value of the Partnership units, which may include, among other things, asset sales, refinancings of Partnership properties followed by distributions or tender offers for units of limited partnership. There can be no assurance that any such plans will develop or that any such transactions will be consummated. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------ -------------------------------- (a) Exhibits. Exhibit Number 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). 4.1 Amendment No. 1 to the Amended and Restated Limited Partnership Agreement of McNeil Real Estate Fund XXIV, L.P. dated June 1995 (incorporated by reference to the Quarterly Report of the registrant on Form 10-Q for the period ended June 30,1995, as filed on August 14, 1995). 11. Statement regarding computation of NetIncome 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 40,000 limited partnership units outstanding in 1995 and 1994.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended September 30, 1995. MCNEIL REAL ESTATE FUND XXIV, 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 XXIV, L.P. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner November 13, 1995 By: /s/ Donald K. Reed - ---------------------------------- ---------------------------------------- Date Donald K. Reed President and Chief Executive Officer November 13, 1995 By: /s/ Robert C. Irvine - ---------------------------------- ---------------------------------------- Date Robert C. Irvine Chief Financial Officer of McNeil Investors, Inc. Principal Financial Officer November 13, 1995 By: /s/ Carol A. Fahs - ---------------------------------- ----------------------------------------- Date Carol A. Fahs Chief Accounting Officer of McNeil Real Estate Management, Inc.
EX-27 2 FDS
5 9-MOS DEC-31-1995 SEP-30-1995 2,507,048 0 538,837 (77,044) 0 0 36,597,632 (12,079,385) 27,778,225 0 5,562,893 0 0 0 0 27,778,225 3,096,514 3,220,308 0 0 3,088,858 0 323,958 0 0 (192,508) 0 0 0 (192,508) 0 0
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