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Organization, Consolidation and Presentation of Financial Statements
9 Months Ended
Sep. 30, 2011
Organization, Consolidation and Presentation of Financial Statements 
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

Note A – Basis of Presentation

 

The accompanying unaudited financial statements of National Property Investors 6 (the "Partnership" or "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X.  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 NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General Partner"), all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011. The balance sheet at December 31, 2010 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The Managing General Partner is an affiliate of Apartment Investment and Management Company ("Aimco"), a publicly traded real estate investment trust.

 

The Partnership’s management evaluated subsequent events through the time this Quarterly Report on Form 10-Q was filed.

 

Certain reclassifications have been made to the 2010 balances to conform to the 2011 presentation.

 

Subject to the prior approval of its limited partners, the Partnership plans to enter into an agreement and plan of conversion and merger, or merger agreement, with AIMCO Properties, L.P., and AIMCO NPI 6 Merger Sub LLC or the Aimco Subsidiary, a wholly owned subsidiary of AIMCO Properties, L.P.  First, under the proposed merger agreement, the Partnership will be converted from a California limited partnership to a Delaware limited partnership, or New NPI.  In the conversion, each unit of limited partnership interest in the Partnership, or NPI Unit, will be converted into an identical unit of limited partnership interest in New NPI, or New NPI Unit, and the general partnership interest in the Partnership now held by NPI Equity Investments, Inc. will be converted into a general partnership interest in New NPI. Second, the Aimco Subsidiary will be merged with and into New NPI, with New NPI as the surviving entity.  In the merger, each New NPI Unit will be converted into the right to receive, at the election of the holder of such unit, either (i) $41.08 in cash (the “Cash Consideration”) or (ii) a number of partnership common units of AIMCO Properties, L.P. calculated by dividing $41.08 by the average closing price of Aimco common stock as reported on the New York Stock Exchange over the ten consecutive trading days ending on the second trading day immediately prior to the consummation of the merger.  However, if AIMCO Properties, L.P. determines that the law of the state or other jurisdiction in which a limited partner resides would prohibit the issuance of partnership common units of AIMCO Properties, L.P. in that state or other jurisdiction (or that registration or qualification in that state or jurisdiction would be prohibitively costly), then such limited partner will only be entitled to receive the Cash Consideration for each Unit.  Those limited partners who do not make an election will be deemed to have elected to receive the Cash Consideration.

 

In the merger, AIMCO Properties, L.P.’s interest in the Aimco Subsidiary will be converted into New NPI Units. As a result, after the merger, AIMCO Properties, L.P. will be the sole limited partner of New NPI and will own all of the outstanding New NPI Units.  Subject to the approval of the limited partners, prior to entering into the merger agreement, the agreement of limited partnership of the Partnership will be amended to (i) eliminate the prohibition on transactions between NPI, on one hand, and its managing general partner and its affiliates, on the other, and (ii) authorize the managing general partner to complete the merger described below without any further action by the limited partners.

 

Under applicable law, the merger agreement, the conversion, the merger and the amendment must be approved by the Partnership’s managing general partner and a majority of the limited partnership units. The managing general partner has determined that the merger agreement, the conversion, the merger and the amendment are advisable and in the best interests of the Partnership and its limited partners; has approved the merger agreement, the conversion, the merger and the amendment; and has recommended that the limited partners approve the merger agreement, the conversion, the merger and the amendment. However, the terms of the merger may be modified before the merger is completed.  As of September 30, 2011, the Partnership had issued and outstanding 109,594 NPI Units, and AIMCO Properties, L.P. and its affiliates owned 76,622 of those NPI Units, or approximately 69.91% of the number of NPI Units outstanding.  Approximately 46,289 of the NPI Units owned by AIMCO Properties, L.P. and its affiliates are subject to a voting restriction, which requires such units to be voted in proportion to the votes cast with respect to NPI Units not subject to this voting restriction. AIMCO Properties, L.P. and its affiliates have indicated that they will vote all of their NPI Units that are not subject to this restriction, approximately 30,333 NPI Units or approximately 27.68% of the outstanding NPI Units, in favor of the merger agreement, the conversion, the merger and the amendment.  As a result, AIMCO Properties, L.P. and its affiliates expect to vote a minimum of 52,512 NPI Units, or approximately 47.92% of the NPI Units outstanding, in favor of the proposal.  Taking into account the remaining restricted NPI Units that AIMCO Properties, L.P. and its affiliates will vote in proportion to the remaining unrestricted NPI Units, the affirmative vote of at least 1,321 NPI Units held by limited partners unaffiliated with AIMCO Properties, L.P. is required to approve the merger agreement, the conversion, the merger and the amendment.  Approval of this proposal is a condition to the completion of the merger.  If the proposal is not approved, the merger will not be completed.