SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
A DELAWARE LIMITED PARTNERSHIP
(Name of the Subject Company)
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P.IV
A DELAWARE LIMITED PARTNERSHIP
(Name of Person Filing Statement)
UNITS
(Title of Class of Securities)
100650209
(CUSIP Number of Class of Securities)
Renate Harrison, Esq.
c/o MMA Financial, LLC
101 Arch Street
Boston, MA 02110
(617) 439-3911
(Name, Address and Telephone Number of
Persons Authorized to Receive Notices and Communications on
Behalf of the Person(s) Filing Statement)
Copies to:
Joseph T. Brady, Esq.
Nixon Peabody LLP
101 Federal Street
Boston, MA 02110
(617) 345-1000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of the tender offer.
Item 1. Subject Company Information
The name of the subject company is Boston Financial Qualified Housing
Tax Credits L.P. IV, a Massachusetts limited partnership (the "Partnership"),
which has its principal executive offices at 101 Arch Street, Boston,
Massachusetts 02110. The general partners of the Partnership are Arch Street
VIII, Inc., a Massachusetts corporation and Arch Street IV Limited Partnership,
a Massachusetts limited partnership (together, the "General Partner") with
principal executive offices at 101 Arch Street, Boston, Massachusetts 02110. The
telephone number of the principal executive offices of the subject company and
its General Partner is (617) 439-3911.
The title of the class of equity securities to which this statement
relates is the Partnership's Units ("Units"), representing units of limited
partnership interests in the Partnership. There are currently 68,043 Units
issued and outstanding, held by 3,464 limited partners.
Item 2. Identity and Background of Filing Person
The name and address of the Partnership, which is the subject company
and the person filing this statement, are set forth in Item 1 above.
This Schedule 14D-9 relates to the offer by Anise, L.L.C., a Missouri
limited liability company (the "Purchaser"), to purchase up to 17,000 issued and
outstanding Units at a price of $53 per Unit, net to the seller in cash, upon
the terms and conditions set forth in the Offer to Purchase Units in the
Partnership, dated October 20, 2004, as it may be supplemented, modified or
amended from time to time (the "Anise Offer").
Based on the information provided by the Purchaser in the Anise Offer,
the address of the Purchaser's principal executive offices is 1001 Walnut,
Kansas City, Missouri 64106.
Item 3. Past Contacts, Transactions, Negotiations and Agreements
Except as described below, to the knowledge of the Partnership, there
are no material agreements, arrangements or understandings or any actual or
potential conflicts of interest between the Partnership, its executive officers,
directors or affiliates and the Purchaser, its executive officers, directors or
affiliates.
On or about September 28, 2004, the Purchaser commenced litigation
against the Partnership, Boston Financial Tax Credit Fund Plus, a Limited
Partnership ("Plus"), and their purported general partners (collectively, the
"defendants") in Clay County, Missouri, claiming that defendants were tortiously
interfering with the Purchaser's contracts (1) with the American Partnership
Board ("APB") to purchase 500 units in the Partnership on or about April 22,
2004; and (2) with GMAC Mortgage Corp. ("GMAC") to purchase 856 units in Plus on
or about July 1, 2004. The Purchaser sought immediate injunctive relief
compelling defendants to register the unit transfers and accept Anise as a
substitute limited partner, because the APB and GMAC would allegedly terminate
their agreements to sell units to Anise if the registrations had not been
processed by October 1, 2004. At the same time, the Purchaser moved to
consolidate this case with another case pending in Clay County, Missouri against
certain of the defendants, Park G.P., Inc. v. Boston Financial Qualified Housing
Tax Credits L.P. IV, et al., Case No. CV104-005765CC. Park G.P. and Anise are
managed by the same management company and have retained the same attorneys to
represent them.
By October 1, 2004, the foregoing unit transfers were registered, as
acknowledged by the Purchaser. See Anise Offer at page 15. Defendants believe
this moots the issues presented in the Purchaser's Verified Petition. Because
the Purchaser is refusing to dismiss the litigation, however, the defendants
plan to answer or otherwise respond to the Verified Petition on or before
November 9, 2004.
Item 4. The Solicitation or Recommendation
Following the receipt of the terms of the Anise Offer, the General
Partner reviewed and considered the offer on behalf of the Partnership. For the
reasons stated below, the General Partner is not making a recommendation
regarding the Anise Offer, is expressing no opinion and is remaining neutral
with respect to the Anise Offer:
- - In June of 1998, the General Partner was informed that the Local
General Partner of Bentley Court II, L.P., in which the Partnership
owns a limited partnership interest, was indicted on various criminal
charges and pled guilty on certain counts. The General Partner
replaced the Local General Partner and the site management company.
Furthermore, an IRS audit of the 1993 tax return for the Local
Limited Partnership questioned the treatment of certain items and
made findings of non-compliance in 1993. The IRS then expanded the
scope of the audit to include the 1994 and 1995 tax returns. As a
result, the IRS disallowed the property's Tax Credits for each of
these years. On behalf of the Partnership, the General Partner
retained counsel to appeal the IRS's findings in order to minimize
the loss of Tax Credits. This administrative appeal has been
unsuccessful to date and the IRS continues to take the position of
disallowing Tax Credits for 1993, 1994 and 1995 - a total of
approximately $2,562,000, or $38 per Unit, not including interest. In
addition, the Local General Partner received formal notification that
the IRS was expanding its claims to recapturing approximately
$500,000 of Tax Credits deducted in 1990, 1991 and 1992, or $7 per
Unit, not including interest. It is possible that the IRS will
further expand its claims for additional amounts with respect to
other years. The General Partner is currently considering its options
including an appeal in Federal Court and possible settlement with the
IRS. Absent further litigation or a settlement, it is anticipated
that the IRS will contact Limited Partners directly for any
adjustments that need to be made to returns for those years. It is
possible that the General Partner may decide to use Partnership
Reserves or sell the Bentley Court property to generate proceeds that
may be used in connection with the tax liabilities described above.
- - Limited Partners who tender their Units will lose the right to
receive any future distributions from the Partnership, including
distributions from any refinancing or sale of the Partnership's
properties, although there can be no assurance as to the timing,
amount or occurrence of any future distributions.
- - If the Limited Partner does not tender Units and he/she has losses
that have not yet been used to offset passive income, these losses
would continue to accrue to the Limited Partner and therefore would
not be released at this time.
- - Neither the Partnership nor, to the General Partner's knowledge, the
Purchaser has retained a third party to perform an evaluation or an
appraisal to determine whether the price offered in the Anise Offer
is fair.
- - Limited Partners who tender their Units could recognize a taxable
gain upon sale of their Units; therefore, the limited partners should
consult with their respective advisors about the financial, tax,
legal and other consequences of the Anise Offer.
- - As the market for the Units is an illiquid market, the Anise Offer
will provide the limited partners with an immediate opportunity to
liquidate their investment in the Partnership.
Neither the Partnership nor any executive officer, director, affiliate or
subsidiary of the Partnership currently intends to tender or sell the Units that
are held of record or beneficially owned by them pursuant to the Anise Offer.
Item 5. Person/Assets, Retained, Employed, Compensated or Used
Neither the Partnership nor any person acting on its behalf has employed,
retained or compensated, or intends to employ, retain or compensate, any person
to make solicitations or recommendations to the limited partners on its behalf
concerning the Anise Offer.
Item 6. Interest in Securities of the Subject Company
Neither the Partnership nor the General Partner or any of their executive
officers, directors, affiliates or subsidiaries affiliates have affected any
transactions in the Units during the past 60 days.
Item 7. Purposes of the Transaction and Plans or Proposals
(a) No negotiation is being undertaken by the Partnership in response to the
Anise Offer, which relates to or would result in: (1) a tender offer for or
other acquisition of securities by or of the Partnership; (2) an extraordinary
transaction such as a merger, reorganization or liquidation, involving the
Partnership or any subsidiary of the Partnership; (3) a purchase, sale or
transfer of a material amount of assets by the Partnership or any subsidiary;
(4) any material change in the present dividend rate or policy, or indebtedness
or capitalization of the Partnership.
(b) There are no transactions, board resolutions, agreements in principle, or
signed contracts in response to the Anise Offer that relates to or would result
in one or more of the matters referred to in item 7(a).
Item 8. Additional Information
None.
Item 9. Exhibits
1. Recommendation
Signatures
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
Dated: November 5, 2004
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
By: Arch Street VIII, Inc., its general partner
By: /s/ Michael H. Gladstone
-----------------------------------
Name: Michael H. Gladstone
Title: Vice President
By: Arch Street IV Limited Partnership, its general partner
By: Arch Street VIII, Inc., its general partner
By: /s/ Michael H. Gladstone
----------------------------------
Name: Michael H. Gladstone
Title: Vice President
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV,
A MASSACHUSETTS LIMITED PARTNERSHIP
101 Arch Street
Boston, MA 02110
November 5, 2004
Dear Limited Partner:
As you are aware, a bidder has made an offer to purchase units
representing units of limited partnership interests ("Units") of Boston
Financial Qualified Housing Tax Credits L.P. IV, a Massachusetts limited
partnership (the "Partnership").
Anise, L.L.C., a Missouri limited liability, has made an offer (the
"Anise Offer") to purchase Units for a cash purchase price of $53 per Unit,
without interest, upon the terms and conditions set forth in the "Offer to
Purchase for Cash 17,000 Units of Limited Partnership Interests in Boston
Financial Qualified Housing Tax Credits L.P. IV," dated October 20, 2004.
The General Partner is making no recommendation, is expressing no
opinion and is remaining neutral with respect to the Anise Offer. Although the
General Partner is not making a recommendation with respect to the Anise Offer,
the General Partner believes that Limited Partners should carefully consider the
following factors in making their own decision about whether to accept or reject
the Anise Offer:
- - In June of 1998, the General Partner was informed that the Local
General Partner of Bentley Court II, L.P., in which the Partnership
owns a limited partnership interest, was indicted on various criminal
charges and pled guilty on certain counts. The General Partner replaced
the Local General Partner and the site management company. Furthermore,
an IRS audit of the 1993 tax return for the Local Limited Partnership
questioned the treatment of certain items and made findings of
non-compliance in 1993. The IRS then expanded the scope of the audit to
include the 1994 and 1995 tax returns. As a result, the IRS disallowed
the property's Tax Credits for each of these years. On behalf of the
Partnership, the General Partner retained counsel to appeal the IRS's
findings in order to minimize the loss of Tax Credits. This
administrative appeal has been unsuccessful to date and the IRS
continues to take the position of disallowing Tax Credits for 1993,
1994 and 1995 - a total of approximately $2,562,000, or $38 per Unit,
not including interest. In addition, the Local General Partner received
formal notification that the IRS was expanding its claims to
recapturing approximately $500,000 of Tax Credits deducted in 1990,
1991 and 1992, or $7 per Unit, not including interest. It is possible
that the IRS will further expand its claims for additional amounts with
respect to other years. The General Partner is currently considering
its options including an appeal in Federal Court and possible
settlement with the IRS. Absent further litigation or a settlement, it
is anticipated that the IRS will contact Limited Partners directly for
any adjustments that need to be made to returns for those years. It is
possible that the General Partner may decide to use Partnership
Reserves or sell the Bentley Court property to generate proceeds that
may be used in connection with the tax liabilities described above.
- - Limited Partners who tender their Units will lose the right to receive
any future distributions from the Partnership, including distributions
from any refinancing or sale of the Partnership's properties, although
there can be no assurance as to the timing, amount or occurrence of any
future distributions.
- - If the Limited Partner does not tender Units and he/she has losses
that have not yet been used to offset passive income, these losses
would continue to accrue to the Limited Partner and therefore would
not be released at this time.
- - Neither the Partnership nor, to the General Partner's knowledge, the
Purchaser has retained a third party to perform an evaluation or an
appraisal to determine whether the price offered in the Anise Offer is
fair.
- - Limited Partners who tender their Units could recognize a taxable gain
upon sale of their Units; therefore, the limited partners should
consult with their respective advisors about the financial, tax, legal
and other consequences of the Anise Offer.
- - As the market for the Units is an illiquid market, the Anise Offer will
provide the limited partners with an immediate opportunity to liquidate
their investment in the Partnership.
A copy of the Partnership's Statement on Schedule 14D-9 has been filed
with the Securities and Exchange Commission and sets forth the Partnership's
response to the Anise Offer. Limited partners are advised to carefully read the
Schedule 14D-9.
Should you have any questions concerning Anise Offer, please call our
Portfolio Services Team at 1-800-823-4828 between 9am and 5pm Central Time.
Sincerely,
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV