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, 2004
[ ] 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 0-13408
CENTURY PROPERTIES FUND XX
(Exact name of registrant as specified in its charter)
California 94-2930770
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO 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 PROPERTIES FUND XX
STATEMENT OF NET LIABILITIES IN LIQUIDATION
(unaudited)
(in thousands)
March 31, 2004
Assets
Cash and cash equivalents $ 1
Debt trustee escrow 860
861
Liabilities
Accounts payable 12
Other liabilities 83
Non-recourse promissory notes (Note A) 1,749
Estimated costs during the period of liquidation 68
1,912
Net liabilities in liquidation $(1,051)
See Accompanying Notes to Financial Statements
CENTURY PROPERTIES FUND XX
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
(Unaudited)
(in thousands)
For the Three Months
Ended March 31,
2004 2003
Net liabilities in liquidation at beginning of period $(1,027) $ (950)
Changes in net liabilities in liquidation attributed to:
Decrease in cash and cash equivalents (4) (6)
Decrease in debt trustee escrow (1) (5)
Increase in accounts payable (12) --
Decrease in other liabilities 9 23
Increase in Non-Recourse Promissory Notes and interest (19) (18)
Decrease (increase) in estimated costs during the
period of liquidation 3 (46)
Net liabilities in liquidation at end of period $(1,051) $(1,002)
See Accompanying Notes to Financial Statements
CENTURY PROPERTIES FUND XX
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
As of December 31, 1999, Century Properties Fund XX (the "Partnership" or
"Registrant") adopted the liquidation basis of accounting.
The Partnership's Nonrecourse Promissory Notes (the "Notes"), which had a
balance of principal and accrued interest of approximately $1,749,000 at March
31, 2004, matured on November 30, 1998. The notes bear interest at eight percent
per annum. The Partnership was in default due to non-payment upon maturity. Fox
Capital Management Corporation ("FCMC" or the "Managing General Partner")
previously contacted the indenture trustee for the Notes and certain holders of
the Notes regarding this default. On October 28, 1999, the Partnership entered
into a forbearance agreement with the indenture trustee for a period of 390
days. In turn, the Partnership agreed to (a) deliver to the indenture trustee
for the benefit of the note holders 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 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. At the expiration of
the forbearance period, the Partnership had not sold all of its properties or
satisfied the Notes. With the consent of the indenture trustee, the forbearance
period was extended to December 15, 2001. The sale of the Partnership's
remaining asset in October 2001 did not generate sufficient proceeds to pay off
the Notes in full. The Managing General Partner is working with the debt trustee
regarding a final payment to the noteholders. Once this payment is made, 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 at December 31,
1999, 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. 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
financial statements.
Included in liabilities in the statement of net liabilities in liquidation as of
March 31, 2004 is approximately $68,000 of costs that the Managing General
Partner estimates will be incurred during the remaining period of liquidation
based on the assumption that the liquidation process will be completed by
September 30, 2004. Because 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.
Affiliates of the Managing General Partner received no reimbursements for the
three months ended March 31, 2004 or 2003.
Note C - Contingencies
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
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that 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 that 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 sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, 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 Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary duty, unfair competition, conversion, unjust enrichment, and
judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action. The settlement only
benefits limited partners as of December 20, 2002 in those limited partnerships
named in the complaint that are not in the process of being liquidated or that
have already been liquidated. The Partnership's limited partners will not be
entitled to any proceeds from the settlement since the Partnership is in the
process of being liquidated, but have not compromised any potential claims as a
result of the settlement and dismissal. The Partnership's limited partners
should have received a Notice to Non-Settling Persons during April 2003 which
describes this information in more detail.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
filed an appeal seeking to vacate and/or reverse the order approving the
settlement and entering judgment thereto. On April 23, 2004, the Managing
General Partner and its affiliates filed a response brief in support of the
settlement and the judgment thereto. Plaintiffs have also filed a brief in
support of the settlement. Objector is scheduled to file a reply brief no later
than May 13, 2004.
The Managing General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with this case will
be material to the Partnership's overall operations.
Pursuant to a formal order of investigation received by AIMCO on March 29, 2004,
the Central Regional Office of the United States Securities and Exchange
Commission is conducting an investigation relating to certain matters. AIMCO
believes the areas of investigation include AIMCO's miscalculated monthly net
rental income figures in third quarter 2003, forecasted guidance, accounts
payable, rent concessions, vendor rebates, and capitalization of expenses and
payroll. AIMCO is cooperating fully. AIMCO does not believe that the ultimate
outcome will have a material adverse effect on its consolidated financial
condition or results of operations taken as a whole. Similarly, the Managing
General Partner does not believe that the ultimate outcome will have a material
adverse effect on the Partnership's financial condition or results of operations
taken as a whole.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
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. 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; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes. 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, Century Properties Fund XX (the "Partnership" or
"Registrant") adopted the liquidation basis of accounting. The Partnership's
Nonrecourse Promissory Notes (the "Notes"), which had a balance of principal and
accrued interest of approximately $1,749,000 at March 31, 2004, matured on
November 30, 1998. The notes bear interest at eight percent per annum. The
Partnership was in default due to non-payment upon maturity. Fox Capital
Management Corporation ("FCMC" or the "Managing General Partner") previously
contacted the indenture trustee for the Notes and certain holders of the Notes
regarding this default. On October 28, 1999, the Partnership entered into a
forbearance agreement with the indenture trustee for a period of 390 days. In
turn, the Partnership agreed to (a) deliver to the indenture trustee for the
benefit of the note holders 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 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. At the expiration of the forbearance
period, the Partnership had not sold all of its properties or satisfied the
Notes. With the consent of the indenture trustee, the forbearance period was
extended to December 15, 2001. The sale of the Partnership's remaining asset in
October 2001 did not generate sufficient proceeds to pay off the Notes in full.
The Managing General Partner is working with the debt trustee regarding a final
payment to the noteholders. Once this payment is made, 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 at December 31,
1999 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. 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
financial statements.
During the three months ended March 31, 2004, net liabilities increased by
approximately $24,000. This increase is due to increases in the accrued interest
payable on the Notes and in accounts payable partially offset by decreases in
other liabilities and the estimated costs during the period of liquidation. The
estimated costs during the period of liquidation decreased due to a lower
estimate for legal costs to be incurred by the Partnership.
During the three months ended March 31, 2003, net liabilities increased by
approximately $52,000. This increase is primarily due to an increase in the
accrued interest payable on the Notes and due to an increase in the estimated
costs during the period of liquidation partially offset by a decrease in other
liabilities. The increase in the estimated costs during the period of
liquidation is due to an increase in the estimated time to complete the
liquidation.
Included in other liabilities in the statement of net liabilities in liquidation
as of March 31, 2004 is approximately $68,000 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 September 30, 2004.
Because 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.
In light of the maturity of the Notes, no distributions were made to the limited
partners for the three months ended March 31, 2004 and 2003.
In addition to its indirect ownership of the Managing General Partner interest
in the Partnership, AIMCO and its affiliates owned 3,950 limited partnership
units in the Partnership representing 6.39% of the outstanding units at March
31, 2004. AIMCO and its affiliates also own 8,977 of the notes representing
9.10% of the outstanding notes at March 31, 2004.
ITEM 3. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of 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, has
evaluated the effectiveness of the Partnership's disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report. Based on such evaluation, 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 concluded that, as of the
end of such period, the Partnership's disclosure controls and procedures are
effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
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
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that 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 that 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 sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, 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 Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary duty, unfair competition, conversion, unjust enrichment, and
judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action. The settlement only
benefits limited partners as of December 20, 2002 in those limited partnerships
named in the complaint that are not in the process of being liquidated or that
have already been liquidated. The Partnership's limited partners will not be
entitled to any proceeds from the settlement since the Partnership is in the
process of being liquidated, but have not compromised any potential claims as a
result of the settlement and dismissal. The Partnership's limited partners
should have received a Notice to Non-Settling Persons during April 2003 which
describes this information in more detail.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
filed an appeal seeking to vacate and/or reverse the order approving the
settlement and entering judgment thereto. On April 23, 2004, the Managing
General Partner and its affiliates filed a response brief in support of the
settlement and the judgment thereto. Plaintiffs have also filed a brief in
support of the settlement. Objector is scheduled to file a reply brief no later
than May 13, 2004.
The Managing General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with this case will
be material to the Partnership's overall operations.
ITEM 6. 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 February 22, 1984, and November 8, 1984, and thereafter
supplemented, contained in the Partnership's Registration
Statement on Form S-11 (Reg. No. 2-88615).
Exhibit 31.1, Certification of equivalent of Chief Executive
Officer pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Exhibit 31.2, Certification of equivalent of Chief Financial
Officer pursuant to Securities Exchange Act Rules
13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
Exhibit 32.1, 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, 2004.
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 PROPERTIES FUND XX
By: FOX PARTNERS III
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION
Its Managing General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
By: /s/Thomas M. Herzog
Thomas M. Herzog
Senior Vice President
and Chief Accounting Officer
Date: May 13, 2004
Exhibit 31.1
CERTIFICATION
I, Martha L. Long, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Century Properties
Fund XX;
2. Based on my knowledge, this 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
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an quarterly report) that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 13, 2004
/s/Martha L. Long
Martha L. Long
Senior Vice President of Fox Capital
Management Corporation, equivalent of
the chief executive officer of the
Partnership
Exhibit 31.2
CERTIFICATION
I, Thomas M. Herzog, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Century Properties
Fund XX;
2. Based on my knowledge, this 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
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an quarterly report) that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 13, 2004
/s/Thomas M. Herzog
Thomas M. Herzog
Senior Vice President and Chief
Accounting Officer of Fox Capital
Management Corporation, equivalent of
the chief financial officer of the
Partnership
Exhibit 32.1
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
Fund XX (the "Partnership"), for the quarterly period ended March 31, 2004 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Martha L. Long, as the equivalent of the Chief Executive Officer of
the Partnership, and Thomas M. Herzog, 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/Martha L. Long
Name: Martha L. Long
Date: May 13, 2004
/s/Thomas M. Herzog
Name: Thomas M. Herzog
Date: May 13, 2004
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.