-----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, IycqjVZGxjtuTHbvThKdcC31aWdhGxK0qQbRcMSAemmInzCWCNAUjnpB6V4YUr3Z Kt0Jk+RfMq0DJrAJli5gwg== 0000778921-97-000006.txt : 19970814 0000778921-97-000006.hdr.sgml : 19970814 ACCESSION NUMBER: 0000778921-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XXV LP CENTRAL INDEX KEY: 0000778921 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330120335 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15446 FILM NUMBER: 97659376 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD SUITE 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: MCNEIL REAL ESTATE FUND XXV DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHMARK EQUITY PARTNERS II 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 June 30, 1997 ---------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to_____________ Commission file number 0-15446 -------- MCNEIL REAL ESTATE FUND XXV, L.P. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 33-0120335 - -------------------------------------------------------------------------------- (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 XXV, L.P. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- BALANCE SHEETS (Unaudited)
June 30, December 31, 1997 1996 --------------- -------------- ASSETS - ------ Real estate investments: Land..................................................... $ 5,524,462 $ 5,524,462 Buildings and improvements............................... 66,225,999 65,777,015 -------------- ------------- 71,750,461 71,301,477 Less: Accumulated depreciation and amortization......... (34,198,717) (32,569,829) -------------- ------------- 37,551,744 38,731,648 Cash and cash equivalents................................... 2,639,480 3,256,746 Cash segregated for security deposits....................... 313,319 314,762 Note receivable............................................. 60,000 344,225 Accounts receivable, net of allowance for doubtful accounts of $677,123 at June 30, 1997 and December 31, 1996........................................ 708,842 791,836 Escrow deposits............................................. 50,497 75,327 Deferred borrowing costs, net of accumulated amortization of $81,321 and $76,755 at June 30, 1997 and December 31, 1996, respectively............. 237,429 241,995 Prepaid expenses and other assets........................... 337,889 349,317 -------------- ------------- $ 41,899,200 $ 44,105,856 ============== ============= LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ------------------------------------------ Mortgage note payable....................................... $ 7,184,107 $ 7,381,507 Accounts payable and accrued expenses....................... 221,568 995,763 Accrued interest............................................ 61,364 178,277 Accrued property taxes...................................... 477,761 502,142 Payable to affiliates....................................... 88,565 146,998 Land lease obligation....................................... 227,061 246,332 Deferred gain............................................... 60,000 344,225 Security deposits and deferred rental revenue............... 371,763 329,291 -------------- ------------- 8,692,189 10,124,535 -------------- ------------- Partners' equity (deficit): Limited partners - 84,000,000 limited partnership units authorized; 82,943,685 limited partnership units issued and outstanding at June 30, 1997 and December 31, 1996.................................. 33,669,129 34,440,696 General Partner.......................................... (462,118) (459,375) -------------- ------------- 33,207,011 33,981,321 -------------- ------------- $ 41,899,200 $ 44,105,856 ============== =============
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 XXV, L.P. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, --------------------------------- --------------------------------- 1997 1996 1997 1996 -------------- --------------- -------------- -------------- Revenue: Rental revenue................ $ 2,355,776 $ 2,311,772 $ 4,570,896 $ 4,621,164 Interest...................... 34,244 62,177 73,681 118,307 ------------- ------------- ------------- ------------- Total revenue............... 2,390,020 2,373,949 4,644,577 4,739,471 ------------- ------------- ------------- ------------- Expenses: Interest...................... 205,998 215,344 417,013 431,480 Depreciation and amortization................ 840,998 729,947 1,628,888 1,600,568 Property taxes................ 205,343 192,537 410,686 431,038 Personnel costs............... 187,291 192,272 425,796 422,847 Utilities..................... 163,006 178,783 352,477 366,059 Repairs and maintenance....... 258,615 285,166 516,812 523,724 Property management fees - affiliates........... 140,285 141,952 267,391 270,081 Other property operating expenses.................... 195,051 192,741 400,552 386,527 General and administrative.... 32,178 34,908 83,659 77,299 General and administrative - affiliates.................. 216,570 234,061 415,619 461,617 ------------- ------------- ------------- ------------- Total expenses.............. 2,445,335 2,397,711 4,918,893 4,971,240 ------------- ------------- ------------- ------------- Net loss......................... $ (55,315) $ (23,762) $ (274,316) $ (231,769) ============= ============= ============= ============= Net loss allocable to limited partners........... $ (54,762) $ (23,524) $ (271,573) $ (229,451) Net loss allocable to General Partner............ (553) (238) (2,743) (2,318) ------------- ------------- ------------- ------------- Net loss......................... $ (55,315) $ (23,762) $ (274,316) $ (231,769) ============= ============= ============= ============= Net loss per thousand limited partnership units..... $ (.66) $ (.28) $ (3.27) $ (2.73) ============= ============= ============= ============= Distributions per thousand limited partnership units..... $ - $ - $ 6.03 $ - ============= ============= ============= =============
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 XXV, L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Six Months Ended June 30, 1997 and 1996
Total General Limited Partners' Partner Partners Equity (Deficit) --------------- -------------- ---------------- Balance at December 31, 1995.............. $ (433,599) $ 37,898,581 $ 37,464,982 Net loss.................................. (2,318) (229,451) (231,769) ------------- ------------- ------------- Balance at June 30, 1996.................. $ (435,917) $ 37,669,130 $ 37,233,213 ============= ============= ============= Balance at December 31, 1996.............. $ (459,375) $ 34,440,696 $ 33,981,321 Net loss.................................. (2,743) (271,573) (274,316) Distributions............................. - (499,994) (499,994) ------------- ------------- ------------- Balance at June 30, 1997.................. $ (462,118) $ 33,669,129 $ 33,207,011 ============= ============= =============
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 XXV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Six Months Ended June 30, ----------------------------------------- 1997 1996 ----------------- ---------------- Cash flows from operating activities: Cash received from tenants........................ $ 4,688,821 $ 4,719,929 Cash paid to suppliers............................ (2,551,759) (1,584,362) Cash paid to affiliates........................... (741,443) (753,523) Interest received................................. 73,681 118,307 Interest paid..................................... (529,360) (290,284) Property taxes paid and escrowed.................. (391,557) (530,337) --------------- -------------- Net cash provided by operating activities............ 548,383 1,679,730 --------------- -------------- Cash flows from investing activities: Additions to real estate investments.............. (448,984) (877,281) --------------- -------------- Cash flows from financing activities: Principal payments on mortgage note payable....... (197,400) - Payments on capitalized land lease obligation...................................... (19,271) (11,835) Distributions paid................................ (499,994) - --------------- -------------- Net cash used in financing activities................ (716,665) (11,835) --------------- -------------- Net increase (decrease) in cash and cash equivalents.................................. (617,266) 790,614 Cash and cash equivalents at beginning of period............................................ 3,256,746 3,987,381 --------------- -------------- Cash and cash equivalents at end of period........... $ 2,639,480 $ 4,777,995 =============== ==============
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 XXV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Loss to Net Cash Provided by Operating Activities
Six Months Ended June 30, ----------------------------------------- 1997 1996 ----------------- ---------------- Net loss............................................. $ (274,316) $ (231,769) --------------- -------------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization..................... 1,628,888 1,600,568 Amortization of deferred borrowing costs.......... 4,566 4,566 Changes in assets and liabilities: Cash segregated for security deposits........... 1,443 (1,765) Accounts receivable, net........................ 82,994 90,707 Escrow deposits................................. 24,830 611,658 Prepaid expenses and other assets............... 11,428 65,770 Accounts payable and accrued expenses........... (774,195) 35,907 Accrued interest................................ (116,913) (358,095) Accrued property taxes.......................... (24,381) (124,178) Payable to affiliates........................... (58,433) (21,825) Security deposits and deferred rental revenue....................................... 42,472 8,186 --------------- -------------- Total adjustments............................. 822,699 1,911,499 --------------- -------------- Net cash provided by operating activities............ $ 548,383 $ 1,679,730 =============== ==============
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 XXV, L.P. Notes to Financial Statements June 30, 1997 (Unaudited) NOTE 1. - ------- McNeil Real Estate Fund XXV, L.P. (the "Partnership"), formerly known as Southmark Equity Partners II, Ltd., was organized on February 15, 1985 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 600, LB70, Dallas, Texas, 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the six months ended June 30, 1997 are not necessarily indicative of the results to be expected for the year ending December 31, 1997. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1996, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XXV, 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 residential property 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 property 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: Six Months Ended June 30, ------------------------- 1997 1996 ---------- ---------- Property management fees..................... $ 267,391 $ 270,081 Charged to general and administrative expense: Partnership administration................ 84,327 126,773 Asset management fee...................... 331,292 334,844 --------- --------- $ 683,010 $ 731,698 ========= ========= Payable to affiliates at June 30, 1997 and December 31, 1996 consisted primarily of unpaid property management fees, Partnership general and administrative expenses and asset management fees and are due and payable from current operations. NOTE 5. - ------- In October 1992, the Partnership restructured a lease with a major tenant of Kellogg Office Building. In connection with the restructuring, the tenant signed a promissory note in the amount of $500,000 and the Partnership recorded a deferred gain as a result of this transaction. The deferred gain was amortized as payments on the note were received. The tenant defaulted on the note and no payments were received in 1996 or 1995. The balance of the note and the corresponding deferred gain were $344,225 at December 31, 1996. In July 1997, the Partnership received $60,000 in full settlement of the promissory note. The Partnership reduced the note receivable and corresponding deferred gain to $60,000 on the Balance Sheet at June 30, 1997. NOTE 6. - ------- Effective January 1, 1993, the Partnership ceased making regularly scheduled debt service and escrow payments on the mortgage note payable secured by Harbour Club I Apartments. In lieu of the aforementioned payments, the Partnership was funding debt service with the excess cash flow of the property. The Partnership had been notified that the mortgage note payable was in default. Effective January 23, 1997, the mortgage note payable was sold by the United States Department of Housing and Urban Development to an unaffiliated lender. In July 1997, the mortgage note was brought current after the Partnership made all delinquent payments and late charges. Regular monthly mortgage payments were resumed in July 1997. NOTE 7. - ------- 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 Northwest Plaza was placed on the market for sale, no depreciation will be taken effective August 1, 1997. 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, 1996. The Partnership reported a net loss of $274,316 for the first six months of 1997 as compared to $231,769 for the first six months of 1996. Revenue in 1997 decreased slightly to $4,644,577 from $4,739,471 in 1996, and expenses dropped to $4,918,893 from $4,971,240. Net cash provided by operating activities was $548,383 for the six months ended June 30, 1997. The Partnership expended $448,984 for capital improvements, $197,400 for principal payments on its mortgage note payable and $19,271 for payments on the capitalized land lease obligation. After distributions of $499,994 to the limited partners, cash and cash equivalents totaled $2,639,480 at June 30, 1997, a net decrease of $617,266 from the balance at December 31, 1996. Effective January 1, 1993, the Partnership ceased making regularly scheduled debt service and escrow payments on the mortgage note payable secured by Harbour Club I Apartments. In lieu of the aforementioned payments, the Partnership was funding debt service with the excess cash flow of the property. The Partnership had been notified that the mortgage note payable was in default. Effective January 23, 1997, the mortgage note payable was sold by the United States Department of Housing and Urban Development to an unaffiliated lender. In July 1997, the mortgage note was brought current after all the delinquent payments and late charges were paid. Regular monthly mortgage payments were resumed in July 1997. RESULTS OF OPERATIONS - --------------------- Revenue: Total Partnership revenue increased by $16,071 for the three months ended June 30, 1997 and decreased by $94,894 for the six months ended June 30, 1997, as compared to the same periods in 1996. The overall decrease was due to a decrease in interest income and a decrease in rental revenue in the first quarter of 1997, as discussed below. Rental revenue increased by $44,004 for the three months and decreased by $50,268 for the six months ended June 30, 1997, as compared to the same periods in 1996. The overall decrease was mainly due to decreases of approximately $63,000 and $52,000 at Northwest Plaza Office Building and Fidelity Plaza Shopping Center, respectively. The decrease at Northwest Plaza was primarily the result of decreased occupancy from 98% at June 30, 1996 to 89% at June 30, 1997. The decrease at Fidelity Plaza was partially due to a tenant paying an approximately $29,000 lease termination fee in the first quarter of 1996. No such fee was received in the first half of 1997. In addition, there was a decrease in the average occupancy rate in the first half of 1997 as compared to the first half of 1996. These decreases were partially offset by increases of approximately $45,000 and $29,000 at Kellogg Building and Harbour Club I Apartments due to increased rental rates in 1997. The increase for the quarter ended June 30, 1997 was mainly due to the Partnership receiving an approximately $45,000 lease termination fee from a tenant at Century Park Office Building. Interest income decreased by $27,933 and $44,626 for the three and six months ended June 30, 1997, respectively, as compared to the same periods in 1996 due to a lower amount of cash available for short-term investment in 1997. The Partnership held $2.6 million of cash and cash equivalents at June 30, 1997 as compared to $4.8 million at June 30, 1996. Expenses: Total expenses increased by $47,624 and decreased by $52,347 for the three and six months ended June 30, 1997, respectively, as compared to the same periods in 1996. The overall decrease was primarily due to a decrease in general and administrative - affiliates, as discussed below. General and administrative - affiliates decreased by $17,491 for the three months and $45,998 for the six months ended June 30, 1997, as compared to the same periods in 1996. The decrease was mainly due to a decrease in overhead expenses allocated to the Partnership by McREMI, which was partially due to investor services being performed by an unrelated third party in 1997. In the first half of 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. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash flow provided by operating activities was $548,383 for the first six months of 1997 as compared to $1,679,730 provided during the same period in 1996. The decrease in cash provided by operating activities in 1997 was mainly due to an increase in cash paid to suppliers and interest paid, partially offset by a decrease in property taxes paid and escrowed. In February 1997, the Partnership was required to pay the plaintiffs' attorneys $690,000 for legal expenses for a lawsuit relating to the rescission of limited partnership units. In 1997, defaulted interest of $184,000 was paid in addition to the required monthly cash flow payment on the mortgage secured by Harbour Club I. Property taxes paid and escrowed decreased due to the timing of the payments of invoices for Northwest Plaza. The Partnership expended $448,984 and $877,281 for additions to its real estate investments during the six months ended June 30, 1997 and 1996, respectively. A greater amount was spent in 1996 at Harbour Club I for paving, roofing and hallway upgrades, and at Fidelity Plaza for lighting. During the six months ended June 30, 1997, the Partnership made $197,400 in principal payments on its mortgage note payable secured by Harbour Club I to cure the default. No such principal payments were made in 1996. The Partnership distributed $499,994 to the limited partners in the first half of 1997. No such distributions were paid to the limited partners in the first half of 1996. Short-term liquidity: At June 30, 1997, the Partnership held cash and cash equivalents of $2,639,480. This balance provides a reasonable level of working capital for the Partnership's immediate needs in operating its properties. For the remainder of 1997, Partnership properties are expected to provide positive cash flow from operations after payment of debt service and capital improvements. Only one property, Harbour Club I Apartments, is encumbered with mortgage debt and another property, Fidelity Plaza, is encumbered with lease obligations. In July 1997, the mortgage note of Harbour Club I was brought current after making all the delinquent payments and late charges. Regular monthly mortgage payments were resumed in July 1997. The Partnership has budgeted approximately $1,416,000 for necessary capital improvements for all properties in 1997 which is expected to be funded from available cash reserves or from operations of the properties. Additional efforts to maintain and improve Partnership liquidity have included continued attention to property management activities. The objective has been to obtain maximum occupancy rates while holding expenses to levels necessary to maximize cash flows. The Partnership has made capital expenditures on its properties where improvements were expected to increase the competitiveness and marketability of the properties. Long-term liquidity: While the outlook for maintenance of adequate levels of liquidity is favorable, should operations deteriorate and present cash resources be insufficient for 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. 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 1999. In this regard, the Partnership has placed Northwest Plaza on the market for sale effective August 1, 1997. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger, Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P., McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund XXVII, L.P., et al. - Superior Court of the State of California for the County of Los Angeles, Case No. BC133799 (Class and Derivative Action Complaint). The action involves purported class and derivative actions brought by limited partners of each of the fourteen limited partnerships that were named as nominal defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of their senior officers and/or directors (collectively, the "Defendants") breached their fiduciary duties and certain obligations under the respective Amended Partnership Agreement. Plaintiffs allege that Defendants have rendered such Units highly illiquid and artificially depressed the prices that are available for Units on the resale market. Plaintiffs also allege that Defendants engaged in a course of conduct to prevent the acquisition of Units by an affiliate of Carl Icahn by disseminating purportedly false, misleading and inadequate information. Plaintiffs further allege that Defendants acted to advance their own personal interests at the expense of the Partnerships' public unit holders by failing to sell Partnership properties and failing to make distributions to unitholders. On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint. Plaintiffs are suing for breach of fiduciary duty, breach of contract and an accounting, alleging, among other things, that the management fees paid to the McNeil affiliates over the last six years are excessive, that these fees should be reduced retroactively and that the respective Amended Partnership Agreements governing the Partnerships are invalid. Defendants filed a demurrer to the consolidated and amended complaint and a motion to strike on February 14, 1997, seeking to dismiss the consolidated and amended complaint in all respects. A hearing on Defendant's demurrer and motion to strike was held on May 5, 1997. The Court granted Defendants' demurrer, dismissing the consolidated and amended complaint with leave to amend. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 4. Amended and Restated Limited Partnership Agreement dated March 26, 1992 (incorporated by reference to the Current Report of the registrant on Form 8-K dated March 26, 1992, as filed on April 9, 1992). 4.1 Amendment No. 1 to the Amended and Restated Limited Partnership Agreement of McNeil Real Estate Fund XXV, 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 Net Loss per Thousand Limited Partnership Units: Net loss per thousand limited partnership units is computed by dividing net loss allocated to the limited partners by the weighted average number of limited partnership units outstanding expressed in thousands. Per thousand unit information has been computed based on 82,944 and 83,895 weighted average thousand limited partnership units outstanding in 1997 and 1996, respectively. 27. Financial Data Schedule for the quarter ended June 30, 1997. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended June 30, 1997. MCNEIL REAL ESTATE FUND XXV, 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 XXV, L.P. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner August 13, 1997 By: /s/ Ron K. Taylor - --------------- ------------------------------------------- Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) August 13, 1997 By: /s/ Carol A. Fahs - --------------- ------------------------------------------ Date Carol A. Fahs Vice President of McNeil Investors, Inc. (Principal Accounting Officer) EX-27 2
5 6-MOS DEC-31-1997 JUN-30-1997 2,639,480 0 1,385,965 (677,123) 0 0 71,750,461 (34,198,717) 41,899,200 0 7,184,107 0 0 0 33,207,011 41,899,200 4,570,896 4,644,577 2,373,714 4,002,602 499,278 0 417,013 (274,316) 0 (274,316) 0 0 0 (274,316) 0 0
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