SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 11, 2003
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
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(Exact name of registrant as specified in its charter)
MARYLAND 1-13232 84-1259577
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
4582 SOUTH ULSTER STREET PARKWAY
SUITE 1100, DENVER, CO 80237
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 757-8101
NOT APPLICABLE
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(Former name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS
Apartment Investment and Management Company ("AIMCO") has provided the
following regarding litigation known as IN RE REAL ESTATE ASSOCIATES LIMITED
PARTNERSHIP LITIGATION (the "REAL Litigation"). AIMCO is not a party to the REAL
Litigation. AIMCO does not believe that the ultimate outcome of the REAL
Litigation will have a material adverse effect on AIMCO's consolidated financial
position or results of operations taken as a whole.
On August 11, 2003, AIMCO and National Partnership Investments Corp.
("NAPICO"), an affiliate of AIMCO, entered into a Stipulation of Settlement (the
"Stipulation of Settlement") with the plaintiff class (the "Plaintiffs") and
their counsel relating to the settlement of the REAL Litigation. The Stipulation
of Settlement remains subject to the preliminary and final approval of the court
as well as the approval of the Plaintiffs. Pursuant to the Stipulation of
Settlement, within two days after receiving the court's preliminary approval of
the proposed settlement, Alan I. Casden, on behalf of himself, NAPICO and other
defendants in the REAL Litigation, is responsible for depositing $29 million
into an escrow account for the benefit of the Plaintiffs. Upon final court
approval, approval by the Plaintiffs and the lapse of any time to appeal the
court approval of the settlement, the following shall occur:
1. Alan I. Casden, on behalf of himself, NAPICO and other
defendants in the REAL Litigation, will transfer to an agent
for the Plaintiffs shares of common stock ("Class A Common
Stock") of AIMCO owned by certain affiliates of Alan I. Casden
with an aggregate market value of $19 million, subject to
certain transfer restrictions, or at Alan I. Casden's option,
$19 million in cash.
2. NAPICO will issue an aggregate of $35 million in promissory
notes for the benefit of the Plaintiffs. An aggregate of $7
million of notes are to be repaid each year. The notes will
bear interest based on applicable rates of U.S. Treasury bills
with similar maturities. The notes will be guaranteed by AIMCO
Properties, L.P., an affiliate of AIMCO.
3. The parties to the Stipulation of Settlement will release each
other and related parties from any and all claims associated
with the REAL Litigation and the Plaintiffs' investment in the
partnerships that were the subject of the REAL Litigation.
4. The $29 million in the escrow account established by Alan I.
Casden will be released to the Plaintiffs.
Pursuant to the Stipulation of Settlement, upon final approval of the
settlement by the court, the parties shall jointly request that a new judgment
be entered in the REAL Litigation that will, among other things, expunge the
judgment originally entered against NAPICO and the other defendants on April 29,
2003.
On August 12, 2003, in connection with the proposed settlement pursuant
to the Stipulation of Settlement, NAPICO and AIMCO executed a Settlement
Agreement (the "Settlement Agreement") with the prior shareholders of Casden
Properties Inc. The principal terms of the Settlement Agreement include:
1. That NAPICO will voluntarily discontinue the action it
commenced on May 13, 2003 against the former shareholders of
Casden Properties Inc. and other indemnitors in AIMCO's March
2002 acquisition of Casden Properties Inc. (the "Casden
Merger").
2. That Alan I. Casden and certain related entities will resolve
certain pending claims for indemnification made by NAPICO,
AIMCO and their affiliates. These claims include
indemnification related to the REAL Litigation and certain
other matters in connection with the Casden Merger.
3. AIMCO, or an affiliate, will deposit $25 million of the $29
million that Alan I. Casden is responsible for depositing into
the escrow account for the benefit of the Plaintiffs pursuant
to the terms of the Stipulation of Settlement. In connection
with this deposit by AIMCO, The Casden Company will transfer
to AIMCO 531,915 shares of AIMCO Class A Common Stock owned by
The Casden Company, which shares are to be held in escrow by
AIMCO until final approval of the Stipulation of Settlement by
the court and the Plaintiffs. Upon such approval, AIMCO will
become the owner of the 531,915 shares. If final approval by
the court and the Plaintiffs is not obtained, the $25 million
deposited by AIMCO into the escrow account will be returned to
AIMCO and AIMCO will return to The Casden Company the 531,915
shares.
4. The Casden Company will promise to pay an aggregate amount of
$35 million on a secured, nonrecourse basis to NAPICO. The
Casden Company will be obligated to repay an aggregate of $7
million of the obligation each year. The obligation to repay
the $35 million will bear the same interest
and mature on the same schedule as the promissory notes issued
by NAPICO to the plaintiffs pursuant to the Stipulation of
Settlement. Payment of these obligations will be secured by
(i) a pledge of 744,681 shares of AIMCO Class A Common Stock
owned by Alan I. Casden or an affiliated entity, plus up to
60,000 additional shares for accrued interest, and (ii) cash
proceeds of recoveries or settlements that Alan I. Casden or
any of his affiliates, or any of the former shareholders of
Casden Properties Inc., receive in connection with or related
to the REAL Litigation (collectively, "Recoveries"). The
payment obligations to NAPICO will be required to be prepaid
with any Recoveries received. Payment may be made in cash or
in shares of AIMCO Class A Common Stock, except payments with
respect to Recoveries must be made in cash.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: August 13, 2003
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ Paul J. McAuliffe
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Paul J. McAuliffe
Executive Vice President and Chief
Financial Officer