UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________to _________
Commission file number 0-9704
ANGELES PARTNERS IX
(Exact Name of Small Business Issuer as Specified in Its Charter)
California 95-3417137
(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)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) 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
ANGELES PARTNERS IX
CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION
(Unaudited)
(in thousands)
September 30, 2004
Assets
Cash and cash equivalents $ 197
Liabilities
Other liabilities 54
Estimated costs during the period of liquidation 44
98
Net assets in liquidation $ 99
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS IX
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(Unaudited)
(in thousands)
For The Nine Months
Ended
September 30, 2004
Net assets in liquidation at beginning of period $ 2,878
Changes in net assets in liquidation attributed to:
Decrease in cash and cash equivalents (2,083)
Decrease in receivables and deposits (247)
Decrease in due from affiliates (656)
Decrease in accounts payable 27
Decrease in other liabilities 163
Decrease in estimated costs during the period of
liquidation 17
Net assets in liquidation at end of period $ 99
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS IX
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2003
(Restated) (Restated)
Income from continuing operations $ -- $ --
Income from discontinued operations:
Revenues:
Rental income 698 2,152
Other income 99 237
Total revenues 797 2,389
Expenses:
Operating 342 971
General and administrative 39 141
Depreciation 154 474
Interest 160 560
Property taxes 31 100
Total expenses 726 2,246
Income from discontinued operations 71 143
Net income $ 71 $ 143
Net income allocated to general partner (1%) $ 1 $ 1
Net income allocated to limited partners (99%) 70 142
$ 71 $ 143
Net income per limited partnership unit $ 3.50 $ 7.11
Distributions per limited partnership unit $ 8.16 $ 97.12
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS IX
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2003
Cash flows from operating activities:
Net income $ 143
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 474
Amortization of loan costs and discounts 30
Loss on early extinguishment of debt 13
Change in accounts:
Receivables and deposits (52)
Other assets (58)
Due from affiliates 175
Accounts payable (31)
Tenant security deposit liabilities 7
Accrued property taxes 47
Other liabilities (68)
Net cash provided by operating activities 680
Cash flows from investing activities:
Property improvements and replacements (172)
Net deposits to restricted escrows (46)
Net cash used in investing activities (218)
Cash flows from financing activities:
Payments on mortgage notes payable (184)
Loan costs paid (130)
Proceeds from mortgage note payable 4,810
Repayment of mortgage notes payable (3,063)
Distributions to partners (1,976)
Net cash used in financing activities (543)
Net decrease in cash and cash equivalents (81)
Cash and cash equivalents at beginning of period 264
Cash and cash equivalents at end of period $ 183
Supplemental disclosure of cash flow information:
Cash paid for interest $ 566
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS IX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
As of December 31, 2003, Angeles Partners IX (the "Partnership" or "Registrant")
adopted the liquidation basis of accounting due to the sales of its two
remaining investment properties (as discussed in "Note B - Disposition of
Investment Properties").
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its consolidated financial statements at
December 31, 2003, 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 of the Partnership. 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 General Partner's best estimates as
of the date of the consolidated financial statements.
The general partner of the partnership, Angeles Realty Corporation (the "General
Partner" or "ARC"), a subsidiary of Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust, estimates that the
liquidation process will be completed by June 30, 2005. Because the success in
realization of assets and the settlement of liabilities, including liabilities
related to the cases disclosed in "Note D - Contingencies", is based on the
General Partner's best estimates, the liquidation period may be shorter than
projected or it may be extended beyond June 30, 2005, the projected date of
liquidation
The accompanying consolidated statements of operations for the three and nine
months ended September 30, 2003 have been restated as of January 1, 2003 to
reflect the operations of Village Green Apartments and Forest River Apartments,
which sold during 2003, as income from discontinued operations, in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets".
Note B - Disposition of Investment Properties
On November 10, 2003, the Partnership sold Village Green Apartments to a third
party for a gross sale price of approximately $9,750,000. The net proceeds
realized by the Partnership were approximately $2,963,000 after payment of
closing costs and the assumption of the mortgage encumbering the property of
approximately $6,421,000 and the assumption of prorations by the purchaser.
On December 29, 2003, the Partnership sold Forest River Apartments to a third
party for a gross sale price of approximately $6,450,000. The net proceeds
realized by the Partnership were approximately $6,281,000 after payment of
closing costs and a prepayment penalty. The Partnership used approximately
$4,741,000 to repay the mortgage encumbering the property.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and depends on the 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 reimbursement of certain expenses incurred by affiliates on behalf
of the Partnership.
During the nine months ended September 30, 2003, affiliates of the General
Partner were entitled to receive 5% of gross receipts from both of the
Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $116,000 for the
nine months ended September 30, 2003 which is included in operating expenses.
Affiliates of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $14,000 and $75,000 for the
nine months ended September 30, 2004 and 2003, respectively.
In connection with the sales of Rosemont Crossing Apartments and Panorama
Terrace Apartments during 2001, the General Partner earned commissions of 3% of
the selling price, or approximately $154,000 and $217,000, respectively. In
connection with the sale of The Pines of Northwest Crossing Apartments in July
2000, the General Partner earned a commission of 3% of the selling price or
approximately $285,000. These fees are subordinate to the limited partners
receiving a preferred return, as specified in the Partnership Agreement. During
the year ended December 31, 2001, the Partnership paid all of these fees. The
limited partners will not receive their preferred return when the Partnership
terminates. As a result, the General Partner returned these amounts to the
Partnership during the nine months ended September 30, 2004.
Pursuant to the Partnership Agreement, the General Partner was entitled to a fee
for executive and administrative management services equal to 5% of "net cash
from operations". Approximately $14,000 was earned during the nine months ended
September 30, 2003.
For services provided in connection with the refinancing of the mortgages
encumbering Forest River Apartments, the General Partner was paid a commission
of approximately $48,000 during the nine months ended September 30, 2003.
The Partnership insured its properties 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 properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During 2003, the Partnership was charged by AIMCO and its affiliates
approximately $52,000 for insurance coverage and fees associated with policy
claims administration.
Note D - 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 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 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 captioned Heller v. Insignia Financial Group (the "Heller action") was
filed against the same defendants that are named in the Nuanes action. 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.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
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
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering judgment thereto. On November 24,
2003, the Objector filed an application requesting the court order AIMCO to
withdraw settlement tender offers it had commenced, refrain from making further
offers pending the appeal and auction any units tendered to third parties,
contending that the offers did not conform with the terms of the settlement.
Counsel for the Objector (on behalf of another investor) had alternatively
requested the court take certain action purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions and denied them both in their entirety. The Objector filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.
On January 28, 2004, the Objector filed his opening brief in the Appeal. On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement and the judgment thereto. The plaintiffs have also
filed a brief in support of the settlement. On June 4, 2004, Objector filed a
reply to the briefs submitted by the General Partner and Plaintiffs. In addition
both the Objector and plaintiffs filed briefs in connection with the second
appeal. The Court of Appeals heard oral argument on both appeals on September
22, 2004 and took the matters under submission.
The 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.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act ("FLSA") by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. On March 5, 2004, the plaintiffs filed
an amended complaint also naming NHP Management Company, which is also an
affiliate of the General Partner. The complaint is styled as a Collective Action
under the FLSA and seeks to certify state subclasses in California, Maryland,
and the District of Columbia. Specifically, the plaintiffs contend that AIMCO
Properties L.P. failed to compensate maintenance workers for time that they were
required to be "on-call". Additionally, the complaint alleges AIMCO Properties
L.P. failed to comply with the FLSA in compensating maintenance workers for time
that they worked in responding to a call while "on-call". The defendants have
filed an answer to the amended complaint denying the substantive allegations.
Some discovery has taken place and settlement negotiations continue. Although
the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not
believe that the ultimate outcome will have a material adverse effect on its
financial condition or results of operations. Similarly, the General Partner
does not believe that the ultimate outcome will have a material adverse effect
on the Partnership's consolidated financial condition or results of operations.
The Partnership is unaware of any other pending or outstanding litigation
matters involving it that are not of a routine nature arising in the ordinary
course of business.
As previously disclosed, the Central Regional Office of the United States
Securities and Exchange Commission (the "SEC") is conducting a formal
investigation relating to certain matters. Although the staff of the SEC is not
limited in the areas that it may investigate, 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, capitalization of payroll and certain other costs, and tax
credit transactions. AIMCO is cooperating fully. AIMCO is not able to predict
when the matter will be resolved. AIMCO does not believe that the ultimate
outcome will have a material adverse effect on its consolidated financial
condition or results of operations. Similarly, the General Partner does not
believe that the ultimate outcome will have a material adverse effect on the
Partnership's consolidated financial condition or results of operations.
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. 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, and possible environmental
liabilities. 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.
Results from Operations
As of December 31, 2003, the Partnership adopted the liquidation basis of
accounting, due to the sales of its two remaining investment properties.
On November 10, 2003, the Partnership sold Village Green Apartments to a third
party for a gross sale price of approximately $9,750,000. The net proceeds
realized by the Partnership were approximately $2,963,000 after payment of
closing costs and the assumption of the mortgage encumbering the property of
approximately $6,421,000 and the assumption of prorations by the purchaser.
On December 29, 2003, the Partnership sold Forest River Apartments to a third
party for a gross sale price of approximately $6,450,000. The net proceeds
realized by the Partnership were approximately $6,281,000 after payment of
closing costs and a prepayment penalty. The Partnership used approximately
$4,741,000 to repay the mortgage encumbering the property.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its consolidated financial statements at
December 31, 2003, 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 of the Partnership. 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 best estimates of the General
Partner as of the date of the consolidated financial statements.
During the nine months ended September 30, 2004, net assets in liquidation
decreased by approximately $2,779,000. The decrease in net assets in liquidation
is primarily due to decreases in cash and cash equivalents, due from affiliates,
and receivables and deposits, partially offset by a decrease in other
liabilities. The decreases in cash and cash equivalents and due from affiliates
are primarily the result of distributions of approximately $2,858,000 made to
the partners from proceeds from the sales of Forest River Apartments and Village
Green Apartments and sale commissions previously paid which were returned to the
Partnership (as discussed below). The decrease in receivables and deposits is
primarily due to the recoupment of non-resident withholding previously paid on
behalf of the limited partners. The decrease in other liabilities is primarily
due to a decrease in the estimated liabilities established at the time of sale
of Village Green Apartments and Forest River Apartments (as discussed above).
The statement of net assets in liquidation as of September 30, 2004 includes
approximately $44,000 of costs that the General Partner estimates will be
incurred during the period of liquidation, based on the assumption that the
liquidation process will be completed by June 30, 2005. Because the success in
realization of assets and the settlement of liabilities, including liabilities
related to the cases discussed in "Item 1. Financial Statements - Note D -
Contingencies" to the consolidated financial statements, is based on the General
Partner's best estimates, the liquidation period may be shorter or extended
beyond June 30, 2005 the projected date of liquidation.
The Partnership distributed the following amounts during the nine months ended
September 30, 2004 and 2003 (in thousands, except per unit data):
Nine Months Per Nine Months Per
Ended Limited Ended Limited
September 30, Partnership September 30, Partnership
2004 Unit 2003 Unit
Operations $ -- $ -- $ 484 $ 23.98
Refinancing proceeds (1) -- -- 1,476 73.14
Sale proceeds (2) 2,842 140.83 -- --
Other (3) 16 -- 16 --
Total $2,858 $140.83 $1,976 $ 97.12
(1) From the refinancing of the mortgages encumbering Forest River Apartments
in May 2003.
(2) From the sale of Forest River Apartments in December 2003, the sale of
Village Green Apartments in November 2003, and sale commissions previously
paid (as discussed in "Item 1. Financial Statements - Note C -
Transactions with Affiliated Parties") which were returned to the
Partnership.
(3) Distribution to the General Partner of the majority-owned sub-tier limited
partnership in connection with the transfer of funds from the
majority-owned sub-tier limited Partnership to the Partnership.
Other
In addition to its indirect ownership of the general partner interests in the
Partnership, AIMCO and its affiliates owned 13,501 limited partnership units
(the "Units") in the Partnership representing 67.59% of the outstanding Units at
September 30, 2004. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. Pursuant to the Partnership Agreement,
unitholders holding a majority of the Units are entitled to take action with
respect to a variety of matters that include, but are not limited to, voting on
certain amendments to the Partnership Agreement and voting to remove the General
Partner. As a result of its ownership of 67.59% of the outstanding Units, AIMCO
and its affiliates are in a position to control all voting decisions with
respect to the Partnership. Although the General Partner owes fiduciary duties
to the limited partners of the Partnership, the General Partner also owes
fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of
the General Partner, as general partner, to the Partnership and its limited
partners may come into conflict with the duties of the General Partner to AIMCO
as its sole stockholder.
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 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 General Partner, who are the
equivalent of thePartnership'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 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 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 captioned Heller v. Insignia Financial Group (the "Heller action") was
filed against the same defendants that are named in the Nuanes action. 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.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
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
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering judgment thereto. On November 24,
2003, the Objector filed an application requesting the court order AIMCO to
withdraw settlement tender offers it had commenced, refrain from making further
offers pending the appeal and auction any units tendered to third parties,
contending that the offers did not conform with the terms of the settlement.
Counsel for the Objector (on behalf of another investor) had alternatively
requested the court take certain action purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions and denied them both in their entirety. The Objector filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.
On January 28, 2004, the Objector filed his opening brief in the Appeal. On
April 23, 2004, the General Partner and its affiliates filed a response brief in
support of the settlement and the judgment thereto. The plaintiffs have also
filed a brief in support of the settlement. On June 4, 2004, Objector filed a
reply to the briefs submitted by the General Partner and Plaintiffs. In addition
both the Objector and plaintiffs filed briefs in connection with the second
appeal. The Court of Appeals heard oral argument on both appeals on September
22, 2004 and took the matters under submission.
The 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.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act ("FLSA") by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. On March 5, 2004 the plaintiffs filed
an amended complaint also naming NHP Management Company, which is also an
affiliate of the General Partner. The complaint is styled as a Collective Action
under the FLSA and seeks to certify state subclasses in California, Maryland,
and the District of Columbia. Specifically, the plaintiffs contend that AIMCO
Properties L.P. failed to compensate maintenance workers for time that they were
required to be "on-call". Additionally, the complaint alleges AIMCO Properties
L.P. failed to comply with the FLSA in compensating maintenance workers for time
that they worked in responding to a call while "on-call". The defendants have
filed an answer to the amended complaint denying the substantive allegations.
Some discovery has taken place and settlement negotiations continue. Although
the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not
believe that the ultimate outcome will have a material adverse effect on its
financial condition or results of operations. Similarly, the 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.
ITEM 6. EXHIBITS
See Exhibit Index.
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.
ANGELES PARTNERS IX
By: Angeles Realty Corporation
General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
By: /s/Stephen B. Waters
Stephen B. Waters
Vice President
Date: November 15, 2004
ANGELES PARTNERS IX
EXHIBIT INDEX
Exhibit Number Description of Exhibit
3.1 Amended Certificate and Agreement of the Limited Partnership
filed in Form S-11 dated December 24, 1984 incorporated herein
by reference.
10.18(a) Purchase and Sale Contract between Angeles Partners IX, as
Seller, and Mullins Properties, LLC, as Purchaser, dated
May 15, 2003.*
10.18(b) Assignment of Purchase and Sale Contract between Mullins
Properties, LLC, as Assignor and Village Green, LLC as
Assignee, dated May 15, 2003.*
10.18(c) First Amendment to Purchase and Sale Contract between Angeles
Partners IX, as Seller, and Village Green, LLC, as
Purchaser, dated May 30, 2003.*
10.18(d) Reinstatement and Second Amendment to Purchase and Sale
contract between Angeles Partners IX, as Seller, and Village
Green, LLC, as Purchaser, dated August 6, 2003.*
10.18(e) Third Amendment to Purchase and Sale Contract between Angeles
Partners IX, as Seller, and Village Green, LLC, as
Purchaser, dated October 30, 2003.*
*(Incorporated by reference to Exhibit 10.18(a) through
(e), respectively. Filed in Form 10-QSB for the nine months
ended September 30, 2003).
10.19(a) Purchase and Sale Contract between Houston Pines, as Seller,
and American Opportunity for Housing-Forest River, LLC, as
Purchaser, dated June 18, 2003.**
10.19(b) Amendment to Purchase and Sale contract between Houston Pines,
as Seller, and American Opportunity for Housing-Forest River,
LLC, as Purchaser.**
10.19(c) Second Amendment to Purchase and Sale contract between Houston
Pines, as Seller, and American Opportunity for Housing-Forest
River, LLC, as Purchaser.**
**(Incorporated by reference to Exhibits 10.19(a) through (c),
respectively. Filed in Form 8-K dated December 29, 2003).
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.
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.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
Exhibit 31.1
CERTIFICATION
I, Martha L. Long, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Angeles Partners
IX;
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 small business issuer as of, and for, the periods presented in this
report;
4. The small business issuer'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 small business issuer 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
small business issuer, 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 small business issuer'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 small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer'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 small business issuer'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 small business
issuer's internal control over financial reporting.
Date: November 15, 2004
/s/Martha L. Long
Martha L. Long
Senior Vice President of Angeles Realty
Corporation, equivalent of the chief
executive officer of the Partnership
Exhibit 31.2
CERTIFICATION
I, Stephen B. Waters, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Angeles Partners
IX;
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 small business issuer as of, and for, the periods presented in this
report;
4. The small business issuer'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 small business issuer 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
small business issuer, 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 small business issuer'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 small business issuer's
internal control over financial reporting that occurred during the
small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer'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 small business issuer'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 small business
issuer's internal control over financial reporting.
Date: November 15, 2004
/s/ Stephen B. Waters
Stephen B. Waters
Vice President of Angeles Realty
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 Angeles Partners IX
(the "Partnership"), for the quarterly period ended September 30, 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 Stephen B. Waters, 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: November 15, 2004
/s/Stephen B. Waters
Name: Stephen B. Waters
Date: November 15, 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.