UNITED STATES
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 March 31, 2003
[ ] 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 0-14528
CENTURY PENSION INCOME FUND XXIII
(Exact name of registrant as specified in its charter)
California 94-2963120
(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)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTURY PENSION INCOME FUND XXIII
CONSOLIDATED STATEMENT OF NET LIABILITIES IN LIQUIDATION
(Unaudited)
(in thousands)
March 31, 2003
Assets
Cash and cash equivalents $ 248
Receivables and deposits 52
Debt trustee escrow 2,210
2,510
Liabilities
Accounts payable 99
Other liabilities 83
Non-recourse promissory notes:
Principal 11,847
Interest payable 16,465
Estimated costs during the period of liquidation 1,145
29,639
Net liabilities in liquidation $(27,129)
See Accompanying Notes to Consolidated Financial Statements
CENTURY PENSION INCOME FUND XXIII
STATEMENTS OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(Unaudited)
(in thousands)
For The Three Months
Ended March 31,
2003 2002
Net liabilities in liquidation at beginning of period $(25,094) $(23,942)
Changes in net liabilities in liquidation attributed to:
Increase in cash and cash equivalents 20 114
Decrease in receivables and deposits (19) (16)
Increase (decrease) in debt trustee escrow 1,277 (6)
Decrease in investment properties (2,820) --
Increase in accounts payable (78) --
Increase in accrued property taxes -- (22)
Decrease in tenant security deposits 5 --
Increase in other liabilities (9) (13)
Increase in non-recourse promissory notes - interest
payable (339) (339)
(Increase) decrease in estimated costs during the period
of liquidation (72) 543
Net liabilities in liquidation at end of period $(27,129) $(23,681)
See Accompanying Notes to Consolidated Financial Statements
CENTURY PENSION INCOME FUND XXIII
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
As of December 31, 1999, Century Pension Income Fund XXIII (the "Partnership" or
"Registrant") adopted the liquidation basis of accounting due to the imminent
loss of its investment properties.
The Partnership's Nonrecourse Promissory Notes (the "Notes") are secured by a
deed of trust on all properties owned in fee by the Partnership. The Notes were
issued in two series. The "1985 Series Notes", in the original principal amount
of $33,454,000 bear interest at 12% per annum, and the "1986 Series Notes", in
the original principal amount of $8,485,000, bear interest at 10% per annum,
except that portions of the interest were deferred, provided the Partnership
made minimum interest payments of 5% on the unpaid principal balance. The Notes
had a balance of principal and deferred interest of approximately $80,000,000 at
their maturity date of February 15, 1999. The Partnership was unable to satisfy
the Notes at maturity and as a result, the Partnership was in default on the
Nonrecourse Promissory Notes. Fox Capital Management Corporation ("FCMC" or the
"Managing General Partner") contacted the indenture trustee for the Nonrecourse
Promissory Notes regarding this default. In connection with these conversations,
on July 30, 1999 the Partnership entered into a forbearance agreement with the
indenture trustee pursuant to which the indenture trustee agreed not to exercise
its rights and remedies under the indenture for up to 390 days. In turn, the
Partnership agreed to (a) deliver to the indenture trustee for the benefit of
the noteholders all of the accumulated cash of the Partnership, less certain
reserves and anticipated operating expenses, (b) market all of its properties
for sale, (c) deliver all net cash proceeds from any sales to the indenture
trustee until the notes are fully satisfied and (d) comply with the reporting
requirements under the indenture. On March 31, 2003, the Partnership sold the
last remaining property, Commerce Plaza, to an unaffiliated third party. The net
sales proceeds were delivered to the indenture trustee to be applied to the
amounts due to the noteholders.
The sale of the Partnership's last remaining asset did not generate sufficient
proceeds to pay off the Notes in full. Upon the last payment on the Notes by the
indenture trustee, the Partnership is expected to terminate.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements to the liquidation
basis of accounting. Consequently, assets have been valued at estimated net
realizable value and liabilities are presented at their estimated settlement
amounts, including estimated costs associated with carrying out the liquidation.
The valuation of assets and liabilities necessarily requires many estimates and
assumptions and there are substantial uncertainties in carrying out the
liquidation. The actual realization of assets and settlement of liabilities
could be higher or lower than amounts indicated and is based upon the Managing
General Partner's estimates as of the date of the consolidated financial
statements.
Included in liabilities in the statement of net liabilities in liquidation as of
March 31, 2003 is approximately $1,145,000 of costs that the Managing General
Partner estimates will be incurred during the period of liquidation based on the
assumption that the liquidation process will be completed by December 31, 2003.
Because the success in realization of assets and the settlement of liabilities
is based on the Managing General Partner's best estimates, the liquidation
period may be shorter than projected or it may be extended beyond the projected
period.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing 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.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $32,000 and
$3,000 for the three months ended March 31, 2003 and 2002, respectively.
The Partnership insured its property up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insured its property above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the
Managing General Partner. During 2002, the Partnership's cost for insurance
coverage and fees associated with policy claims administration provided by AIMCO
and its affiliates was approximately $24,000. No such coverage was charged
during 2003 as the remaining property was sold.
Note C - Legal Proceedings
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. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Managing General Partner and
several of their affiliated partnerships and corporate entities. The action
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, among other
things, the acquisition of interests in certain Managing General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs seek monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking dismissal
of the action. In lieu of responding to the motion, the plaintiffs filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case and an appeal was taken from the order on
October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff
Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the
putative class. Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001, the Managing General Partner and its affiliates filed a
demurrer to the third amended complaint. On May 14, 2001, the Court heard the
demurrer to the third amended complaint. On July 10, 2001, the Court issued an
order sustaining defendants' demurrer on certain grounds. On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs filed a fourth amended class and derivative action complaint. On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On
October 5, 2001, the Managing General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint, which was heard on December 11, 2001.
On February 2, 2002, the Court served its order granting in part the demurrer.
The Court has dismissed without leave to amend certain of the plaintiffs'
claims. On February 11, 2002, plaintiffs filed a motion seeking to certify a
putative class comprised of all non-affiliated persons who own or have owned
units in the partnerships. The Managing General Partner and affiliated
defendants oppose the motion. On April 29, 2002, the Court held a hearing on
plaintiffs' motion for class certification and took the matter under submission
after further briefing, as ordered by the court, was submitted by the parties.
On July 10, 2002, the Court entered an order vacating the trial date of January
13, 2003 (as well as the pre-trial and discovery cut-off dates) and stayed the
case in its entirety through November 7, 2002 so that the parties could have an
opportunity to discuss settlement. On October 30, 2002, the court entered an
order extending the stay in effect through January 10, 2003.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action described below. On April
4, 2003, the Court preliminarily approved the settlement and scheduled a hearing
on final approval for June 2, 2003. While the Nuanes and Heller actions will be
dismissed with prejudice if the settlement is finally approved, the settlement
only benefits limited partners as of December 20, 2002 in those limited
partnerships named in the complaint that have not been or are in the process of
being liquidated. The Partnership's limited partners will not be entitled to any
proceeds from the settlement as the Partnership is in the process of being
liquidated. In this regard, the Partnership's limited partners should have
received a Notice to Non-Settling Persons.
During the third quarter of 2001, a complaint (the "Heller action") was filed
against the same defendants that are named in the Nuanes action, captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended complaint. The first amended complaint in the Heller action is
brought as a purported derivative action, and asserts claims for among other
things breach of fiduciary duty; unfair competition; conversion, unjust
enrichment; and judicial dissolution. Plaintiffs in the Nuanes action filed a
motion to consolidate the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed without leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing General Partner and affiliated
defendants moved to strike the first amended complaint in its entirety for
violating the Court's July 10, 2001 order granting in part and denying in part
defendants' demurrer in the Nuanes action, or alternatively, to strike certain
portions of the complaint based on the statute of limitations. Other defendants
in the action demurred to the fourth amended complaint, and, alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions and took the matters under submission. On February 4, 2002, the
Court served notice of its order granting defendants' motion to strike the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002, the plaintiffs filed a notice appealing the order striking
the complaint. Before completing briefing on the appeal, the parties stayed
further proceedings in the appeal pending the Court's review of the terms of the
proposed settlement described above.
The Managing General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. The discussions of the Registrant's
business and results of operations, including forward-looking statements
pertaining to such matters, do not take into account the effects of any changes
to the Registrant's business and results of operations. Actual results may
differ materially from those described in the forward-looking statements and
will be affected by a variety of risks and factors including, without
limitation: national and local economic conditions; the terms of governmental
regulations that affect the Registrant and interpretations of those regulations;
the competitive environment in which the Registrant operates; and financing
risks, including the risk that cash flows from operations may be insufficient to
meet required payments of principal and interest. Readers should carefully
review the Registrant's financial statements and the notes thereto, as well as
the risk factors described in the documents the Registrant files from time to
time with the Securities and Exchange Commission.
As of December 31, 1999, the Partnership adopted the liquidation basis of
accounting due to the imminent loss of its investment properties. The
Nonrecourse Promissory Notes had a balance of principal and deferred interest of
approximately $80,000,000 at their maturity date of February 15, 1999. The
Partnership was unable to satisfy the Nonrecourse Promissory Notes (the "Notes")
at maturity and as a result, the Partnership was in default on the Notes. The
Managing General Partner contacted the indenture trustee for the Notes regarding
this default. In connection with these conversations, on July 30, 1999, the
Partnership entered into a forbearance agreement with the indenture trustee
pursuant to which the indenture trustee agreed not to exercise its rights and
remedies under the Notes' indenture for up to 390 days. In turn, the Partnership
agreed to (a) deliver to the Notes' indenture trustee for the benefit of the
noteholders all of the accumulated cash of the Partnership, less certain
reserves and anticipated operating expenses, (b) market all of its properties
for sale, (c) deliver all net cash proceeds from any sales to the indenture
trustee until the notes are fully satisfied and (d) comply with the reporting
requirements under the indenture. On March 31, 2003, the Partnership sold the
last remaining property, Commerce Plaza to an unaffiliated third party. The net
sales proceeds were delivered to the Notes' indenture trustee to be applied to
the amounts due to the noteholders.
On March 31, 2003, the Partnership sold Commerce Plaza to an unaffiliated third
party for net sales proceeds of approximately $1,270,000 after the payment of
closing costs. The Partnership's share of the net sales proceeds of
approximately $1,270,000 were delivered to the indenture trustee to be applied
to the amounts due to the noteholders.
The sale of the Partnership's last remaining asset did not generate sufficient
proceeds to pay off the Notes in full. Upon the last payment on the Notes by the
indenture trustee, the Partnership is expected to terminate.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements to the liquidation
basis of accounting. Consequently, assets have been valued at estimated net
realizable value and liabilities are presented at their estimated settlement
amounts, including estimated costs associated with carrying out the liquidation.
The valuation of assets and liabilities necessarily requires many estimates and
assumptions and there are substantial uncertainties in carrying out the
liquidation. The actual realization of assets and settlement of liabilities
could be higher or lower than amounts indicated and is based upon the Managing
General Partner's estimates as of the date of the consolidated financial
statements.
During the three months ended March 31, 2003, net liabilities increased by
approximately $2,035,000. This increase is primarily due to a decrease in
investment properties and an increase in interest payable on the non-recourse
promissory notes partially offset by an increase in cash in the debt trustee
escrow account. The decrease in investment properties and the increase in cash
in the debt escrow account is a result of the sale of Commerce Plaza. The
increase in interest payable is due to the accrual of three months of interest
on the current principal balance of approximately $11,847,000.
During the three months ended March 31, 2002, net liabilities decreased by
approximately $261,000. This decrease is primarily due to an increase in cash
and cash equivalents and a decrease in the estimated costs during the period of
liquidation partially offset by an increase in the interest payable on the
non-recourse promissory notes. The increase in cash and cash equivalents is
primarily due to operating cash generated by the Partnership's remaining asset.
The decrease in the estimated costs during the period of liquidation is
primarily due to the reduced number of months remaining until the Partnership's
liquidation. The increase in interest payable is due to the accrual of three
months of interest on the current principal balance of approximately
$11,847,000.
The statement of net liabilities in liquidation as of March 31, 2003 includes
approximately $1,145,000 of costs that the Managing General Partner estimates
will be incurred during the period of liquidation, based on the assumption that
the liquidation process will be completed by December 31, 2003. Because the
success in realization of assets and the settlement of liabilities is based on
the Managing General Partner's best estimates, the liquidation period may be
shorter or extended beyond the projected period.
In light of the maturity of the Notes, no distributions were made to the limited
partners for the three month periods ended March 31, 2003 and 2002.
The following is a general description of the tax consequences that may result
to a limited partner upon the sale of the Partnership's remaining property. Each
limited partner should consult with his or her own tax advisor to determine his
or her particular tax consequences. The taxable gain and income resulting from
the sale of the Partnership's property will pass through to the limited
partners, and will likely result in income tax liability to the limited partners
without any distribution of cash from the Partnership.
The Managing General Partner monitors developments in the area of legal and
regulatory compliance and is studying new federal laws, including the
Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 mandates or suggests
additional compliance measures with regard to governance, disclosure, audit and
other areas. In light of these changes, the Partnership expects that it will
incur higher expenses related to compliance, including increased legal and audit
fees.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO owned 108 limited partnership units in the Partnership
representing approximately 0.11% of the outstanding units at March 31, 2003.
Affiliates of the Managing General Partner also owned 5,511 limited partnership
units (8.24%) of the Partnership's 1985 Nonrecourse Promissory Notes and 1,635
limited partnership units (9.64%) of the Partnership's 1986 Nonrecourse
Promissory Notes at March 31, 2003. Although the Managing General Partner owes
fiduciary duties to the limited partners of the Partnership, the Managing
General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As
a result, the duties of the Managing General Partner, as managing general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO, as its sole stockholder.
ITEM 3. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of the Managing
General Partner, who are the equivalent of the Partnership's principal executive
officer and principal financial officer, respectively, have, within 90 days of
the filing date of this quarterly report, evaluated the effectiveness of the
Partnership's disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and procedures are adequate. There have been no significant changes in the
Partnership's internal controls or in other factors that could significantly
affect the Partnership's internal controls since the date of evaluation. The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Managing General Partner and
several of their affiliated partnerships and corporate entities. The action
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, among other
things, the acquisition of interests in certain Managing General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs seek monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking dismissal
of the action. In lieu of responding to the motion, the plaintiffs filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case and an appeal was taken from the order on
October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff
Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the
putative class. Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001, the Managing General Partner and its affiliates filed a
demurrer to the third amended complaint. On May 14, 2001, the Court heard the
demurrer to the third amended complaint. On July 10, 2001, the Court issued an
order sustaining defendants' demurrer on certain grounds. On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs filed a fourth amended class and derivative action complaint. On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On
October 5, 2001, the Managing General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint, which was heard on December 11, 2001.
On February 2, 2002, the Court served its order granting in part the demurrer.
The Court has dismissed without leave to amend certain of the plaintiffs'
claims. On February 11, 2002, plaintiffs filed a motion seeking to certify a
putative class comprised of all non-affiliated persons who own or have owned
units in the partnerships. The Managing General Partner and affiliated
defendants oppose the motion. On April 29, 2002, the Court held a hearing on
plaintiffs' motion for class certification and took the matter under submission
after further briefing, as ordered by the court, was submitted by the parties.
On July 10, 2002, the Court entered an order vacating the trial date of January
13, 2003 (as well as the pre-trial and discovery cut-off dates) and stayed the
case in its entirety through November 7, 2002 so that the parties could have an
opportunity to discuss settlement. On October 30, 2002, the court entered an
order extending the stay in effect through January 10, 2003.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action described below. On April
4, 2003, the Court preliminarily approved the settlement and scheduled a hearing
on final approval for June 2, 2003. While the Nuanes and Heller actions will be
dismissed with prejudice if the settlement is finally approved, the settlement
only benefits limited partners as of December 20, 2002 in those limited
partnerships named in the complaint that have not been or are in the process of
being liquidated. The Partnership's limited partners will not be entitled to any
proceeds from the settlement as the Partnership is in the process of being
liquidated. In this regard, the Partnership's limited partners should have
received a Notice to Non-Settling Persons.
During the third quarter of 2001, a complaint (the "Heller action") was filed
against the same defendants that are named in the Nuanes action, captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended complaint. The first amended complaint in the Heller action is
brought as a purported derivative action, and asserts claims for among other
things breach of fiduciary duty; unfair competition; conversion, unjust
enrichment; and judicial dissolution. Plaintiffs in the Nuanes action filed a
motion to consolidate the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed without leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing General Partner and affiliated
defendants moved to strike the first amended complaint in its entirety for
violating the Court's July 10, 2001 order granting in part and denying in part
defendants' demurrer in the Nuanes action, or alternatively, to strike certain
portions of the complaint based on the statute of limitations. Other defendants
in the action demurred to the fourth amended complaint, and, alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions and took the matters under submission. On February 4, 2002, the
Court served notice of its order granting defendants' motion to strike the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002, the plaintiffs filed a notice appealing the order striking
the complaint. Before completing briefing on the appeal, the parties stayed
further proceedings in the appeal pending the Court's review of the terms of the
proposed settlement described above.
The Managing General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 3, Agreement of Limited Partnership, incorporated by
reference to Exhibit A to the Prospectus of the Partnership
dated July 1, 1985 and thereafter supplemented, contained in
the Partnership's Registration Statement on Form S-11 (Reg.
No. 2-96389).
Exhibit 99, Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
b) Reports on Form 8-K:
None filed during the quarter ended March 31, 2003.
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.
CENTURY PENSION INCOME FUND XXIII
By: FOX PARTNERS V
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Thomas C. Novosel
Thomas C. Novosel
Senior Vice President
and Chief Accounting Officer
Date: May 14, 2003
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Century Properties
Income Fund XXIII;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 14, 2003
/s/Patrick J. Foye
Patrick J. Foye
Executive Vice President of Fox Capital
Management Corporation, equivalent of the
chief executive officer of the Partnership
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Century Properties
Income Fund XXIII;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 14, 2003
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and Chief Financial
Officer of Fox Capital Management Corporation,
equivalent of the chief financial officer of
the Partnership
Exhibit 99
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-QSB of Century Properties
Income Fund XXIII (the "Partnership"), for the quarterly period ended March 31,
2003 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), Patrick J. Foye, as the equivalent of the chief executive
officer of the Partnership, and Paul J. McAuliffe, as the equivalent of the
chief financial officer of the Partnership, each hereby certifies, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/ Patrick J. Foye
Name: Patrick J. Foye
Date: May 14, 2003
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: May 14, 2003
This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.