-----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, R7F0UTmWazGakYfuQfEUhj8Fb5i+NlGD7J3bpiCcWcIv/sKhoR27vpczOqh25LSw Uy6g11n01TeqpzE4qezKLg== 0000783414-99-000006.txt : 19990519 0000783414-99-000006.hdr.sgml : 19990519 ACCESSION NUMBER: 0000783414-99-000006 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990518 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XXIII LP CENTRAL INDEX KEY: 0000783414 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330139793 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-15459 FILM NUMBER: 99629496 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 REALTY PARTNERS III LTD DATE OF NAME CHANGE: 19920413 10-Q/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 ------------------------------------------ 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 0-15459 ---------- MCNEIL REAL ESTATE FUND XXIII, L.P. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 33-0139793 - -------------------------------------------------------------------------------- (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 --- --- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- MCNEIL REAL ESTATE FUND XXIII, L.P. BALANCE SHEETS (Unaudited)
March 31, December 31, 1999 1998 ------------ ------------ ASSETS - ------ Real estate investments: Land ......................................................... $ 239,966 $ 239,966 Buildings and improvements ................................... 6,545,368 6,534,417 ----------- ----------- 6,785,334 6,774,383 Less: Accumulated depreciation .............................. (3,569,993) (3,488,340) ----------- ----------- 3,215,341 3,286,043 Cash and cash equivalents ....................................... 315,188 263,851 Cash segregated for security deposits ........................... 49,079 47,679 Accounts receivable and other assets ............................ 20,828 20,971 Escrow deposits ................................................. 118,192 91,267 ----------- ----------- $ 3,718,628 $ 3,709,811 =========== =========== LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ------------------------------------------ Mortgage note payable, net ...................................... $ 3,683,160 $ 3,692,420 Accounts payable and accrued expenses ........................... 93,248 100,291 Accrued property taxes .......................................... 74,584 47,083 Payable to affiliates - General Partner ......................... 547,530 521,770 Deferred gain on involuntary conversion ......................... 5,106 5,106 Security deposits and deferred rental revenue ................... 55,333 57,258 ----------- ----------- 4,458,961 4,423,928 ----------- ----------- Partners' equity (deficit): Limited partners - 45,000,000 Units authorized; 11,425,696 and 11,492,696 Units outstanding at March 31, 1999 and December 31, 1998, respectively (6,574,985 and 6,631,985 Current Income Units out- standing at March 31, 1999 and December 31, 1998, respectively; 4,850,711 and 4,860,711 Growth/Shelter Units outstanding at March 31, 1999 and December 31, 1998, respectively) .................................... (5,590,144) (5,564,190) General Partner .............................................. 4,849,811 4,850,073 ----------- ----------- (740,333) (714,117) ----------- ----------- $ 3,718,628 $ 3,709,811 =========== ===========
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 XXIII, L.P. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, --------------------------- 1999 1998 --------- --------- Revenue: Rental revenue ...................................... $ 376,648 $ 348,623 Interest ............................................ 2,276 4,230 --------- --------- Total revenue ..................................... 378,924 352,853 --------- --------- Expenses: Interest ............................................ 84,161 84,778 Depreciation ........................................ 81,653 73,957 Property taxes ...................................... 27,501 29,001 Personnel expenses .................................. 47,059 55,106 Utilities ........................................... 27,322 32,015 Repairs and maintenance ............................. 43,607 35,386 Property management fees - affiliates ............... 18,503 17,483 Other property operating expenses ................... 17,059 15,338 General and administrative .......................... 20,318 18,907 General and administrative - affiliates ............. 37,957 33,647 --------- --------- Total expenses .................................... 405,140 395,618 --------- --------- Net loss ............................................... $ (26,216) $ (42,765) ========= ========= Net loss allocated to limited partners - Current Income Units ..................... $ (2,360) $ (3,849) Net loss allocated to limited partners - Growth/Shelter Units ..................... (23,594) (38,488) Net loss allocated to General Partner .................. (262) (428) --------- --------- Net loss ............................................... $ (26,216) $ (42,765) ========= ========= Net loss per thousand limited partnership units: Current Income Units ................................ $ (.36) $ (.58) ========= ========= Growth/Shelter Units ................................ $ (4.86) $ (7.92) ========= =========
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 XXIII, L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Three Months Ended March 31, 1999 and 1998
Total General Limited Partners' Partner Partners Equity (Deficit) ------------ ------------ ---------------- Balance at December 31, 1997 ........... $ 4,851,535 $(5,419,474) $ (567,939) Net loss: General Partner ..................... (428) -- (428) Current Income Units ................ -- (3,849) (3,849) Growth/Shelter Units ................ -- (38,488) (38,488) ----------- ----------- ----------- Total net loss .................... (428) (42,337) (42,765) ----------- ----------- ----------- Balance at March 31, 1998 .............. $ 4,851,107 $(5,461,811) $ (610,704) =========== =========== =========== Balance at December 31, 1998 ........... $ 4,850,073 $(5,564,190) $ (714,117) Net loss: General Partner ..................... (262) -- (262) Current Income Units ................ -- (2,360) (2,360) Growth/Shelter Units ................ -- (23,594) (23,594) ----------- ----------- ----------- Total net loss .................... (262) (25,954) (26,216) ----------- ----------- ----------- Balance at March 31, 1999 .............. $ 4,849,811 $(5,590,144) $ (740,333) =========== =========== ===========
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 XXIII, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Three Months Ended March 31, ----------------------------- 1999 1998 ---------- ----------- Cash flows from operating activities: Cash received from tenants ....................... $ 371,766 $ 365,986 Cash paid to suppliers ........................... (160,620) (172,630) Cash paid to affiliates .......................... (30,700) (17,631) Interest received ................................ 2,276 4,230 Interest paid .................................... (79,440) (80,453) Property taxes paid and escrowed ................. (26,925) (37,941) --------- --------- Net cash provided by operating activities ........... 76,357 61,561 --------- --------- Cash flows from investing activities: Additions to real estate investments ............. (10,951) (10,372) --------- --------- Cash flows from financing activities: Principal payments on mortgage note payable ........................................ (14,069) (13,055) --------- --------- Net increase in cash and cash equivalents ........... 51,337 38,134 Cash and cash equivalents at beginning of period ........................................... 263,851 308,271 --------- --------- Cash and cash equivalents at end of period .......... $ 315,188 $ 346,405 ========= =========
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 XXIII, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Loss to Net Cash Provided by Operating Activities
Three Months Ended March 31, ---------------------------- 1999 1998 ---------- ---------- Net loss ..................................................... $ (26,216) $ (42,765) --------- --------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation .............................................. 81,653 73,957 Amortization of discount on mortgage note payable ............................................ 4,809 4,406 Changes in assets and liabilities: Cash segregated for security deposits ................... (1,400) (375) Accounts receivable and other assets .................... 143 2,994 Escrow deposits ......................................... (26,925) 6,735 Accounts payable and accrued expenses ................... (7,043) (14,587) Accrued property taxes .................................. 27,501 (15,675) Payable to affiliates - General Partner ................. 25,760 33,499 Security deposits and deferred rental revenue ............................................... (1,925) 13,372 --------- --------- Total adjustments ..................................... 102,573 104,326 --------- --------- Net cash provided by operating activities .................... $ 76,357 $ 61,561 ========= =========
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 XXIII, L.P. Notes to Financial Statements (Unaudited) March 31, 1999 NOTE 1. - ------- McNeil Real Estate Fund XXIII, L.P. (the "Partnership"), formerly known as Southmark Realty Partners III, Ltd., was organized on March 4, 1985 as a limited partnership under provisions of the California Revised Limited Partnership Act to acquire and operate 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 three months ended March 31, 1999, are not necessarily indicative of the results to be expected for the year ending December 31, 1999. 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, 1998, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate XXIII, L.P., c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240. NOTE 3. - ------- The Partnership pays property management fees equal to 5% of the gross rental receipts for its property to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management and leasing services. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. The Partnership incurs asset management fees which are 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 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. Total accrued but unpaid asset management fees in the amount of $311,057 were outstanding at March 31, 1999. The fee percentage decreases to .75% in 2000, .50% in 2001 and .25% thereafter. Compensation and reimbursements paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Three Months Ended March 31, ------------------------- 1999 1998 ----------- ---------- Property management fees...................... $ 18,503 $ 17,483 Charged to general and administrative - affiliates: Partnership administration................. 14,713 12,674 Asset management fee....................... 23,244 20,973 ---------- --------- $ 56,460 $ 51,130 ========== ========= Payable to affiliates - General Partner at March 31, 1999, and December 31, 1998, consists primarily of unpaid asset management fees and reimbursable costs that are due and payable from current operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- The Partnership's net loss for the first quarter of 1999 decreased to $26,216 from $42,765 for the first quarter of 1998. Operations at Harbour Club II Apartments are providing sufficient cash flow to pay the property's operating expenses, debt service on the related mortgage note, and limited capital improvements. However, the property is in need of major capital improvements in order to compete effectively in its local market. The Partnership does not have sufficient cash reserves to fund the needed capital improvements, nor does the property generate sufficient cash flow from operations to fund such capital improvements. RESULTS OF OPERATIONS - --------------------- Revenue: The Partnership's rental revenue increased $28,025 or 8.0% for the first quarter of 1999 as compared to the first quarter of 1998. The Partnership increased base rental rates at Harbour Club II Apartments by an average 1.8% at the beginning of 1999. Vacancy, concessions and other rental losses also decreased for the first quarter of 1999, amplifying the effects of the increased base rental rates. Expenses: Partnership expenses increased $9,522 or 2.4% for the first quarter of 1999 as compared to the first quarter of 1998. Increases in depreciation and repairs and maintenance were partially offset by decreased personnel and utility expenses. Depreciation expense increased $7,696 or 10.4% for the first quarter of 1999. The Partnership added approximately $302,000 of capital improvements over the past twelve months that are being depreciated over lives ranging from 5 to 10 years. The new capital improvements are the source of the increase in depreciation expense. Repair and maintenance expense increased $8,221 or 23% for the first quarter of 1999. The Partnership incurred increased snow removal expenses during the first quarter that accounted for the increase in repair and maintenance expense. Personnel expenses decreased $8,047 or 14.6% for the first quarter of 1999 due to a decrease in employee benefit costs as compared to the first quarter of 1998. Utilities expense decreased $4,693 or 14.7% for the first quarter of 1999. Due to decreased first quarter 1999 vacancy losses discussed above, the Partnership incurred decreased utility expenses for vacant units. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership's operating activities provided $76,357 of cash for the first quarter of 1999, a 24% increase over cash flow provided by operating activities for the first quarter of 1998. The Partnership increased cash received from tenants and decreased cash paid to suppliers and cash paid for property taxes. Cash used for investing and financing activities did not significantly change for the first quarter of 1999 as compared to the first quarter of 1998. The Partnership continues to invest minimal amounts into capital improvements at Harbour Club II Apartments and to pay down the mortgage note as called for by terms of the mortgage note agreement. Short-term liquidity: The Partnership's balance of cash and cash equivalents totaled to $315,188 at March 31, 1999, an increase of $51,337 from the balance of cash and cash equivalents at the beginning of the year. The General Partner considers the Partnership's cash reserves adequate for anticipated operations for the remainder of 1999. Operating activities at Harbour Club II Apartments for 1999 are expected to provide sufficient cash flow for operating expenses, debt service payments, and limited capital improvements. However, Harbour Club II Apartments is in need of extensive capital improvements to enable the property to compete effectively in the local market. Projected cash flows from operations will not be adequate to fund such extensive capital improvements. To date, the Partnership has been unable to secure financing for the needed capital improvements. The Partnership has no established lines of credit from outside sources. In the past, the General Partner, at its discretion, has advanced funds to the Partnership to fund working capital requirements. The General Partner is not obligated to advance funds to the Partnership and there is no assurance that the Partnership will receive any additional funds. Long-term liquidity: The long-term operating viability of Harbour Club II Apartments is dependent on the Partnership's ability to fund substantial capital improvements to the property. If the Partnership does not liquidate, as contemplated below, it will seek to obtain additional financing to allow the completion of the extensive capital improvements, which will enable the Partnership to raise rental rates at the property to market rates. Harbour Club II Apartments is part of a four-phase apartment complex located in Belleville, Michigan. Phases I and III of the complex are owned by partnerships affiliated with the General Partner. Phase IV is owned by an unaffiliated entity. McREMI managed all four phases of the complex until December 1992, when the property management agreement between McREMI and Phase IV was canceled. As previously announced, the Partnership has retained PaineWebber, Incorporated as its exclusive financial advisor to explore alternatives to maximize the value of the Partnership, including, without limitation, a transaction in which limited partnership interests in the Partnership are converted into cash. During the last full week of March, the Partnership entered into a 45 day exclusivity agreement with a well-financed bidder with whom it had commenced discussions with respect to a sale transaction. The Partnership and such party have made significant progress in negotiating the terms of a proposed transaction and are continuing to have intensive discussions with respect to a transaction. In light on these continuing negotiations, the exclusivity agreement has been extended for an additional 21 days until June 4, 1999. It is possible that the General Partner and its affiliates will receive non-cash consideration for their ownership interests in connection with any such transaction. There can be no assurance regarding whether any such agreement will be reached nor the terms thereof. Distributions: To maintain adequate cash balances of the Partnership, distributions to Current Income Unit holders were suspended in 1988. There have been no distributions to Growth/Shelter Unit holders. Distributions to Unit holders will remain suspended for the foreseeable future. The General Partner will continue to monitor the cash reserves and working capital needs of the Partnership to determine when cash flows will support distributions to the Unit holders. Forward-Looking Information: Within this document, certain statements are made as to the expected occupancy trends, financial condition, results of operations, and cash flows of the Partnership for periods after March 31, 1999. All of these statements are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical and involve risks and uncertainties. The Partnership's actual occupancy trends, financial condition, results of operations, and cash flows for future periods may differ materially due to several factors. These factors include, but are not limited to, the Partnership's ability to control costs, make necessary capital improvements, negotiate the sale or refinancing of its property, and respond to changing economic and competitive factors. YEAR 2000 DISCLOSURE - -------------------- State of readiness - ------------------ The year 2000 problem is the result of computer programs being written using two digits rather than four to define the applicable year. Any programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in major systems failure or miscalculations. Management has assessed its information technology ("IT") infrastructure to identify any systems that could be affected by the year 2000 problem. The IT used by the Partnership for financial reporting and significant accounting functions was made year 2000 compliant during recent systems conversions. The software utilized for these functions is licensed by third party vendors who have warranted that their systems are year 2000 compliant. Management is in the process of evaluating the mechanical and embedded technological systems at the various properties. Management has inventoried all such systems and queried suppliers, vendors and manufacturers to determine year 2000 compliance. Based on this review, management believes these systems are substantially compliant. In circumstances of non-compliance management will work with the vendor to remedy the problem or seek alternative suppliers who will be in compliance. Management believes that the remediation of any outstanding year 2000 conversion issues will not have a material or adverse effect on the Partnership's operations. However, no estimates can be made as to the potential adverse impact resulting from the failure of third party service providers and vendors to be year 2000 compliant. Cost - ---- The cost of IT and embedded technology systems testing and upgrades is not expected to be material to the Partnership. Because all the IT systems have been upgraded over the last three years, all such systems were compliant, or made compliant at no additional cost by third party vendors. Management anticipates the costs of assessing, testing, and if necessary replacing embedded technology components will be less than $50,000. Such costs will be funded from operations of the Partnership. Risks - ----- Ultimately, the potential impact of the year 2000 issue will depend not only on the corrective measures the Partnership undertakes, but also on the way in which the year 2000 issue is addressed by government agencies and entities that provide services or supplies to the Partnership. Management has not determined the most likely worst case scenario to the Partnership. As management studies the findings of its property systems assessment and testing, management will develop a better understanding of what would be the worst case scenario. Management believes that progress on all areas is proceeding and that the Partnership will experience no adverse effect as a result of the year 2000 issue. However, there is no assurance that this will be the case. Contingency plans - ----------------- Management is developing contingency plans to address potential year 2000 non-compliance of IT and embedded technology systems. Management believes that failure of any IT system could have an adverse impact on operations. However, management believes that alternative systems are available that could be utilized to minimize such impact. Management believes that any failure in the embedded technology systems could have an adverse impact on that property's performance. Management will assess these risks and develop plans to mitigate possible failures by July 1999. 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 XXIII, 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., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P., - 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 limited partnerships that were named as nominal defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of their senior officers and/or directors (collectively, the "Defendants") breached their fiduciary duties and certain obligations under the respective Amended Partnership Agreement. Plaintiffs allege that Defendants have rendered such Units highly illiquid and artificially depressed the prices that are available for Units on the resale market. Plaintiffs also allege that Defendants engaged in a course of conduct to prevent the acquisition of Units by an affiliate of Carl Icahn by disseminating purportedly false, misleading and inadequate information. Plaintiffs further allege that Defendants acted to advance their own personal interests at the expense of the Partnerships' public unit holders by failing to sell Partnership properties and failing to make distributions to unitholders. On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint. Plaintiffs are suing for breach of fiduciary duty, breach of contract and an accounting, alleging, among other things, that the management fees paid to the McNeil affiliates over the last six years are excessive, that these fees should be reduced retroactively and that the respective Amended Partnership Agreements governing the Partnerships are invalid. Defendants filed a demurrer to the consolidated and amended complaint and a motion to strike on February 14, 1997, seeking to dismiss the consolidated and amended complaint in all respects. A hearing on Defendant's demurrer and motion to strike was held on May 5, 1997. The Court granted Defendants' demurrer, dismissing the consolidated and amended complaint with leave to amend. On October 31, 1997, the Plaintiffs filed a second consolidated and amended complaint. The case was stayed pending settlement discussions. A Stipulation of Settlement dated September 15, 1998 has been signed by the parties. Preliminary Court approval was received on October 6, 1998. A hearing for Final Approval of Settlement, initially scheduled for December 17, 1998, has been continued to July 2, 1999. Because McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P. would be part of the transaction contemplated in the settlement and Plaintiffs claim that an effort should be made to sell the McNeil Partnerships, Plaintiffs have included allegations with respect to McNeil Real Estate Fund XXIII, L.P., Hearth Hollow Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P. in the third consolidated and amended complaint. Plaintiff's counsel intends to seek an order awarding attorney's fees and reimbursements of their out-of-pocket expenses. The amount of such award is undeterminable until final approval is received from the court. Fees and expenses shall be allocated amongst the Partnerships on a pro rata basis, based upon tangible asset value of each such partnership, less total liabilities, calculated in accordance with the Amended Partnership Agreements for the quarter most recently ended. 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). 11. Statement regarding computation of Net Income (Loss) per Thousand Limited Partnership Units: Net income (loss) per thousand limited partner units is computed by dividing net income (loss) allocated to the limited partners by the weighted average number of limited partnership units outstanding expressed in thousands. Per unit information has been computed based on 6,575 and 6,632 Current Income Units (in thousands) outstanding in 1999 and 1998, respectively, and 4,851 and 4,861 Growth/Shelter Units (in thousands) outstanding in 1999 and 1998, respectively. 27. Financial Data Schedule for the quarter ended March 31, 1999. b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1999. MCNEIL REAL ESTATE FUND XXIII, 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 XXIII, L.P. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner May 18, 1999 By: /s/ Ron K. Taylor - -------------- --------------------------------------------- Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) May 18, 1999 By: /s/ Carol A. Fahs - -------------- --------------------------------------------- Date Carol A. Fahs Vice President of McNeil Investors, Inc. (Principal Accounting Officer) EX-27 2
5 3-MOS DEC-31-1999 MAR-31-1999 315,188 0 0 0 0 0 6,785,334 (3,569,993) 3,718,628 0 3,683,160 0 0 0 0 3,718,628 376,648 378,924 0 0 320,979 0 84,161 (26,216) 0 0 0 0 0 (26,216) 0 0
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