-----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, KOSOhgXiQ5QKL8ro5x9W8jjI3voL7rwbCu1ZeZw/ygfu18Qk4gz+/cowct0O2TM7 KaMi7CHmXYXKz9q2dIEBOw== 0000310303-98-000024.txt : 19981116 0000310303-98-000024.hdr.sgml : 19981116 ACCESSION NUMBER: 0000310303-98-000024 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES INCOME PROPERTIES LTD IV CENTRAL INDEX KEY: 0000763049 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953974194 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14283 FILM NUMBER: 98748971 BUSINESS ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET 17TH FLOOR CITY: DENVER STATE: CO ZIP: 80222 BUSINESS PHONE: 3037578101 MAIL ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET 17TH FLOOR CITY: DENVER STATE: CO ZIP: 80222 10QSB 1 FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period_________to_________ Commission file number 0-14283 ANGELES INCOME PROPERTIES, LTD. IV (Exact name of small business issuer as specified in its charter) California 95-3974194 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 1998 Assets Cash and cash equivalents $ 3,705 Receivables and deposits, net of $111 allowance for doubtful accounts 503 Restricted escrows 411 Other assets 749 Investment properties: Land $ 2,708 Buildings and related personal property 20,874 23,582 Less accumulated depreciation (13,376) 10,206 $ 15,574 Liabilities and Partners' Capital (Deficit) Liabilities: Accounts payable $ 77 Tenant security deposit liabilities 7 Accrued property taxes 122 Other liabilities 156 Mortgage note payable 15,096 Partners' Capital (Deficit): General partner's $ (1,136) Limited partners' (131,585 units issued and outstanding) 1,252 116 $ 15,574 See Accompanying Notes to Consolidated Financial Statements b) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended Nine Months Ended September 30, June 30, 1998 1997 1998 1997 Revenues: Rental income $ 1,115 $ 1,068 $ 3,178 $ 3,117 Other income 65 56 227 166 Total revenues 1,180 1,124 3,405 3,283 Expenses: Operating 428 455 1,347 1,264 General and administrative 228 90 339 275 Depreciation 271 261 807 774 Interest 378 381 1,134 1,146 Property taxes 50 55 149 163 Total expenses 1,355 1,242 3,776 3,622 Loss before equity in income of joint venture and extraordinary item (175) (118) (371) (339) Equity in income of joint venture -- 3 -- 9,180 (Loss) income before extraordinary item (175) (115) (371) 8,841 Equity in extraordinary gain on debt extinguishment of joint venture -- -- -- 4,925 Net (loss) income $ (175) $ (115) $ (371) $ 13,766 Net (loss) income allocated to general partner (2%) $ (3) $ (2) $ (7) $ 275 Net (loss) income allocated to limited partners(98%) (172) (113) (364) 13,491 $ (175) $ (115) $ (371) $ 13,766 Per limited partnership unit: (Loss) income before extraordinary item $ (1.31) $ (.86) $ (2.77) $ 65.85 Extraordinary gain -- -- -- 36.68 Net (loss) income $ (1.31) $ (.86) $ (2.77) $ 102.53 See Accompanying Notes to Consolidated Financial Statements c) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 131,800 $ 1 $ 65,900 $ 65,901 Partners' (deficit) capital at December 31, 1997 131,585 $ (1,129) $ 1,616 $ 487 Net loss for the nine months ended September 30, 1998 -- (7) (364) (371) Partners' (deficit) capital at September 30, 1998 131,585 $ (1,136) $ 1,252 $ 116 See Accompanying Notes to Consolidated Financial Statements
d) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, 1998 1997 Cash flows from operating activities: Net (loss) income $ (371) $13,766 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Equity in income of joint venture -- (9,180) Equity in extraordinary gain on debt extinguishment of joint venture -- (4,925) Depreciation 807 774 Amortization of loan costs and leasing commissions 87 77 Changes in accounts: Receivables and deposits 45 90 Other assets (60) (170) Accounts payable (60) (72) Tenant security deposit liabilities -- (2) Accrued property taxes (16) (11) Other liabilities (22) (13) Net cash provided by operating activities 410 334 Cash flows from investing activities: Property improvements and replacements (214) (278) Net withdrawals from (deposits to) restricted escrows 75 (130) Collection on advances to joint venture -- 457 Net cash (used in) provided by investing activities (139) 49 Cash flows used in financing activities Payments on mortgage note payable (125) (115) Net increase in cash and cash equivalents 146 268 Cash and cash equivalents at beginning of period 3,559 3,308 Cash and cash equivalents at end of period $ 3,705 $ 3,576 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,110 $ 1,121 See Accompanying Notes to Consolidated Financial Statements
e) ANGELES INCOME PROPERTIES, LTD. IV NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Angeles Income Properties, Ltd. IV (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Angeles Realty Corporation II ("ARC II" or the "General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 1998, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1997. Certain reclassifications have been made to the 1997 information to conform to the 1998 presentation. NOTE B - INVESTMENT IN JOINT VENTURE The Partnership had a 66.7% investment in Northtown Mall Partners ("Northtown"). The Partnership accounted for its investment in Northtown using the equity method of accounting. Under the equity method, the Partnership recorded its equity interest in earnings or losses of the joint venture. On May 12, 1997, the Partnership sold Northtown Mall to an affiliate of the lender. The economic closing of the sale of Northtown Mall was as of April 1, 1997. The sale resulted in net proceeds of approximately $1,200,000, after payment of closing costs. The gain on the sale amounted to approximately $16,243,000 and approximately $7,384,000 was recognized as extraordinary gain on early extinguishment of debt due to the full release of its non-recourse indebtedness of approximately $51,000,000 as stipulated by the sales agreement. The joint venture was dissolved in December 1997. The condensed profit and loss statements for the three and nine months ended September 30, 1997, for Northtown are as follows (in thousands): Three Months Ended Nine Months Ended September 30, 1997 September 30, 1997 Revenues $ 12 $ 2,739 Costs and expenses (6) (3,527) (Loss) gain on sale of investment property (5) 16,243 Net income before extraordinary item 1 15,455 Extraordinary gain on early extinguishment of debt -- 7,384 Net income $ 1 $ 22,839 The Partnership's equity in the income of the joint venture was approximately $3,000 and $9,180,000 for the three and nine months ended September 30, 1997, respectively. For the nine months ended September 30, 1997, the Partnership recognized approximately $4,925,000 in equity in extraordinary gain on debt extinguishment of joint venture related to the sale of Northtown Mall. NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for certain payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following amounts were incurred by the General Partner and affiliates during the nine months ended September 30, 1998 and 1997 (in thousands): 1998 1997 Property management fees (included in operating expenses) $101 $98 Lease commissions (included in other assets and operating expenses) 51 77 Reimbursement for services of affiliates (included in operating expenses and general and administrative expenses) 115 144 Included in reimbursement for services of affiliates above is approximately $27,500 for consulting performed by an affiliate of the General Partner for the nine months ended September 30, 1998. In addition, approximately $1,000 of construction oversight reimbursements were paid to the General Partner and its affiliates during the nine months ended September 30, 1998. For the period from January 1, 1997 to August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the General Partner but with an insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the master policy. The agent assumed the financial obligations to the affiliate of the General Partner which received payment on these obligations from the agent. The amount of the Partnership's insurance premiums that accrued to the benefit of the affiliate of the General Partner by virtue of the agent's obligations was not significant. In August 1998, an affiliate of the General Partner (the "Purchaser") commenced a tender offer for limited partnership interests in the Partnership. The Purchaser offered to purchase up to 50,000 of the outstanding units of limited partnership interest in the Partnership, at $75.00 per Unit, net to the seller in cash. This offer has been extended until November 16, 1998. NOTE D - TRANSFER OF CONTROL; SUBSEQUENT EVENT On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and into Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control of the General Partner. In addition, AIMCO also acquired approximately 51% of the outstanding common shares of beneficial interest of Insignia Properties Trust ("IPT"), the sole shareholder of the General Partner. Also, effective October 1, 1998, IPT and AIMCO entered into an Agreement and plan of Merger pursuant to which IPT is to be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The IPT Merger requires the approval of the holders of a majority of the outstanding IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned by it in favor of the IPT Merger and has granted an irrevocable limited proxy to unaffiliated representatives of IPT to vote the IPT Shares acquired by AIMCO and its subsidiaries in favor of the IPT Merger. As a result of AIMCO's ownership and its agreement, the vote of no other holder of IPT is required to approve the merger. The General Partner does not believe that this transaction will have a material effect on the affairs and operations of the Partnership. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two commercial properties. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 1998 and 1997: Average Occupancy Property 1998 1997 Factory Merchants Mall 95% 96% Pigeon Forge, Tennessee Eastgate Market Place 98% 82% Walla Walla, Washington (1) (1) The occupancy at Eastgate Market Place increased as a result of the move in of an anchor tenant in November 1997. The Partnership realized a net loss of approximately $175,000 and $371,000 for the three and nine month periods ended September 30, 1998, versus a net loss of approximately $115,000 for the three month and net income of approximately $13,766,000 for the nine month periods ended September 30, 1997. The decrease in net income is primarily attributable to the sale of Northtown Mall during the second quarter of 1997. Loss before equity income of joint venture increased for the three and nine months ended September 30, 1998, as compared to the same period in 1997 due to increases in general and administrative and depreciation expenses. Also contributing to the increase in net loss for the nine month period was an increase in operating expenses; however, for the three month period, operating expenses decreased compared to the corresponding period in 1997. Partially offsetting the increase in net loss was an increase in revenues for the three and nine month periods ended September 30, 1998. Rental revenue increased for the three and nine month periods ended September 30, 1998, compared to the same periods in 1997, primarily as a result of an increase in occupancy at Eastgate Market Place which was partially offset by a slight decrease at Factory Merchants Mall. The increase in occupancy at Eastgate Market Place can be attributed to the addition of an anchor tenant in the fourth quarter of 1997. The decrease in rental income at Factory Merchants Mall results from an increase in temporary tenants that pay rent based upon a percentage of sales which is below market rent. In addition, reimbursement for common area maintenance decreased as a result of the temporary tenants not being required to pay fees for common area maintenance. The increase in other income for the three and nine month periods ended September 30, 1998, as compared to the same period in 1997 is attributable to an increase in fees collected at Factory Merchants Mall for lease cancellations, as well as an increase in interest income due to larger cash balances in interest-bearing accounts. Operating expenses increased for the nine month period ended September 30, 1998, primarily as a result of an increase in advertising to attract tenants and shoppers to Factory Merchants Mall and professional fees paid to assess the possible redevelopment of the property. This increase in operating expenses was partially offset by a decrease in maintenance expenses at Factory Merchants Mall due to parking lot repairs performed in June 1997. For the three month period ended September 30, 1998, operating expenses decreased, as compared to the same period in 1997, due primarily to a reduction in property administration expenses. General and administrative expenses increased due to an increase in legal fees related to litigation concerning a prior investment in a joint venture (see Part II. Other Information, "Item 1. Legal Proceedings"). Depreciation expenses increased for the three and nine month periods ended September 30, 1998, as a result of additional depreciable assets placed in service resulting from tenant improvement projects at Eastgate Market Place. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. At September 30, 1998, the Partnership held cash and cash equivalents of approximately $3,705,000, as compared to approximately $3,576,000 at September 30, 1997. The increase in cash and cash equivalents for the nine month period ended September 30, 1998, was approximately $146,000 compared to an increase of approximately $268,000 for the corresponding period in 1997. Net cash provided by operating activities increased primarily due to a decrease in cash used in other assets as a result of a change in the timing of insurance payments and a decrease in lease commissions. Net cash used in investing activities increased in 1998 due to the absence of the collection of advances to the joint venture in 1997. Net cash used in financing activities increased as a result of an increase in mortgage principal payments. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state and local legal and regulatory requirements. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The General Partner is currently assessing the need for capital improvements at each of the Partnership's properties. To the extent that additional capital improvements are required, the Partnership's distributable cash flow, if any, may be adversely affected, at least in the short term. The mortgage indebtedness of approximately $15,096,000, which is secured by the Factory Merchants Mall investment property, matures in October 2006 and carries a stated interest rate of 9.75%. The General Partner will attempt to refinance such indebtedness or sell the property prior to such maturity date. If the property cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing the property through foreclosure. The Partnership's Eastgate Market Place is currently unencumbered. There were no cash distributions in the first nine months of 1998 or 1997. Future cash distributions will depend on the levels of net cash generated from operations, refinancings, property sales and the availability of cash reserves. The Partnership's distribution policy will be reviewed on a quarterly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations to permit distributions to its partners in 1998 or subsequent periods. Transfer of Control; Subsequent Event On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and into Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control of the General Partner. In addition, AIMCO also acquired approximately 51% of the outstanding common shares of beneficial interest of Insignia Properties Trust ("IPT"), the sole shareholder of the General Partner. Also, effective October 1, 1998, IPT and AIMCO entered into an Agreement and plan of Merger pursuant to which IPT is to be merged with and into AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The IPT Merger requires the approval of the holders of a majority of the outstanding IPT Shares. AIMCO has agreed to vote all of the IPT Shares owned by it in favor of the IPT Merger and has granted an irrevocable limited proxy to unaffiliated representatives of IPT to vote the IPT Shares acquired by AIMCO and its subsidiaries in favor of the IPT Merger. As a result of AIMCO's ownership and its agreement, the vote of no other holder of IPT is required to approve the merger. The General Partner does not believe that this transaction will have a material effect on the affairs and operations of the Partnership. Year 2000 General Description of the Year 2000 Issue and the Nature and Effects of the Year 2000 on Information Technology (IT) and Non-IT Systems The Year 2000 Issue is the result of computer programs being written using two digits rather than four to define the applicable year. The Partnership is dependent upon the General Partner and its affiliates for management and administrative services ("Managing Agent"). Any computer programs or hardware that have date-sensitive software or embedded chips may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. The Managing Agent has determined that it will be required to modify or replace significant portions of its software and certain hardware so that those systems will properly utilize dates beyond December 31, 1999. The Managing Agent presently believes that with modifications or replacements of existing software and certain hardware, the Year 2000 Issue can be mitigated. However, if such modifications and replacements are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Managing Agent and the Partnership. Status of Progress in Becoming Year 2000 Compliant The Managing Agent's plan to resolve the Year 2000 Issue involves the following four phases: assessment, remediation, testing and implementation. To date, the Managing Agent has fully completed its assessment of all information systems that could be significantly affected by the Year 2000, and has begun the remediation, testing and implementation phase on both hardware and software systems. Assessments are continuing in regards to embedded systems in operating equipment. The Managing Agent anticipates having all phases complete by June 1, 1999. In addition to the areas the Partnership is relying on the Managing Agent to verify compliance with, the Partnership has certain operating equipment, primarily at the property sites, which needed to be evaluated for Year 2000 compliance. The focus of the General Partner was to the security systems, elevators, heating-ventilation-air-conditioning systems, telephone systems and switches, and sprinkler systems. The General Partner is currently engaged in the identification of all non-compliant operational systems, and is in the process of estimating the costs associated with any potential modifications or replacements needed to such systems in order for them to be Year 2000 compliant. It is not expected that such costs would have a material adverse affect upon the operations of the Partnership. Risk Associated with the Year 2000 The General Partner believes that the Managing Agent has an effective program in place to resolve the Year 2000 issue in a timely manner and has appropriate contingency plans in place for critical applications that could affect the Partnership's operations. To date, the General Partner is not aware of any external agent with a Year 2000 issue that would materially impact the Partnership's results of operations, liquidity or capital resources. However, the General Partner has no means of ensuring that external agents will be Year 2000 compliant. The General Partner does not believe that the inability of external agents to complete their Year 2000 resolution process in a timely manner will have a material impact on the financial position or results of operations of the Partnership. However, the effect of non-compliance by external agents is not readily determinable. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Partnership, along with other affiliates, has been named in a suit brought by a company which owned a 20% interest ("Plaintiff") in an investment property, the W.T. Waggoner Building, which was sold in 1995. The W. T. Waggoner Building was sold by a Joint Venture in which the Partnership held a 43% interest ("Fort Worth"). The Joint Venture was dissolved subsequent to the sale in 1995. The Plaintiff is suing for breach of contract and negligence for mismanagement of the property. The General Partner believes that there is no merit in this suit and intends to vigorously defend it. In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia and entities which were, at the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain general partner entities, past tender offers by Insignia Affiliates as well as a recently announced agreement between Insignia and AIMCO. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The General Partner has filed demurrers to the amended complaint which are scheduled to be heard on January 8, 1999. The General Partner believes the action to be without merit and intends to vigorously defend it. On July 30, 1998, certain entities claiming to own limited partnership interests in certain limited partnerships whose general partners were, at the time, affiliates of Insignia filed a complaint entitled Everest Properties, LLC, et. al. v. Insignia Financial Group, Inc., et. al. in the Superior Court of the State of California, county of Los Angeles. The action involves 44 real estate limited partnerships (including the Partnership) in which the plaintiffs allegedly own interests and which Insignia Affiliates allegedly manage or control (the "Subject Partnerships"). The complaint names as defendants Insignia, several Insignia Affiliates alleged to be managing partners of the Subject Partnerships, the Partnership and the General Partner. Plaintiffs allege that they have requested from, but have been denied by each of the Subject Partnerships, lists of their respective limited partners for the purpose of making tender offers to purchase up to 4.9% of the limited partner units of each of the Subject Partnerships. The complaint also alleges that certain of the defendants made tender offers to purchase limited partner units in many of the Subject Partnerships, with the alleged result that plaintiffs have been deprived of the benefits they would have realized from ownership of the additional units. The plaintiffs assert eleven causes of action, including breach of contract, unfair business practices, and violations of the partnership statutes of the states in which the Subject Partnerships are organized. Plaintiffs seek compensatory, punitive and treble damages. The General Partner filed an answer to the complaint on September 15, 1998. The General Partner believes the claims to be without merit and intends to defend the action vigorously. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The General Partner believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition or operations of the Partnership. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: No reports were filed during the quarter ended September 30, 1998. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGELES INCOME PROPERTIES, LTD. IV By: Angeles Realty Corporation II General Partner By: /s/Patrick Foye Patrick Foye Executive Vice President By: /s/Timothy R. Garrick Timothy R. Garrick Vice President, Accounting (Duly Authorized Officer) Date: November 13, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Income Properties, Ltd. IV 1998 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000763049 ANGELES INCOME PROPERTIES, LTD. IV 1,000 9-MOS DEC-31-1998 SEP-30-1998 3,705 0 0 0 0 0 23,582 13,376 15,574 0 15,096 0 0 0 116 15,574 0 3,405 0 0 2,642 0 1,134 0 0 0 0 0 0 (371) (2.77) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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