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 LIMITED PARTNERSHIP
(Name of the Subject Company)
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P.IV,
A LIMITED PARTNERSHIP
(Name of Person Filing Statement)
UNITS
(Title of Class of Securities)
100650209
(CUSIP Number of Class of Securities)
Susan F. Donahue, 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 Limited Partnership, 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 IV, 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 3,184 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 8,500 issued and
outstanding Units at a price of $101 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 September 19, 2005, 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 July 13, 2004, Park G.P., Inc. ("Park"), a related entity
of the Purchaser, commenced litigation against the Partnership and its purported
general partners (collectively, "Defendants") in Clay County, Missouri, claiming
that Defendants breached the relevant partnership agreement and their fiduciary
duties owed to Park by, among other things, failing to permit inspection of
certain alleged "books and records" of the Partnership. On or about October 7,
2004, Park sought leave of the court to amend its petition to include claims for
inspection of the alleged "books and records" against Boston Financial Qualified
Housing Limited Partnership, Boston Financial Tax Credit Fund Plus, A Limited
Partnership, Boston Financial Qualified Housing Tax Credits L.P. II, Boston
Financial Qualified Housing Tax Credits L.P. III, Boston Financial Qualified
Housing Tax Credits L.P. V, Boston Financial Tax Credit Fund VII, A Limited
Partnership, and their purported general partners (collectively, the "New
Defendants"). The court granted the amendment on November 15, 2004, and all
defendants subsequently moved to dismiss the amended complaint in its entirety.
That motion is currently pending. On or about October 8, 2004, Park moved the
court for entry of a temporary restraining order compelling the Defendants and
the New Defendants to turn over the alleged "books and records" in conjunction
with a transaction Park was proposing entering into. On October 12, 2004, the
court denied Park's request.
Defendants maintain that Park is not entitled to review the materials
requested and/or use the materials in secondary market transactions because,
among other things, (i) they are not "books and records" of the partnerships,
(ii) Park does not seek to review them for a proper purpose, and (iii) that
selective disclosure of the information to Park would give it an unfair
informational advantage in secondary market transactions, and may violate
federal and/or state securities laws.
On September 28, 2005, the General Partner received a letter from Park
demanding that the General Partner refrain from disposing of its interests in
Local Limited Partnerships that own and operate rental housing properties absent
the consent of a majority in interest of the Limited Partners, citing Section
5.4.2 of the Partnership Agreement. It is the General Partner's position that
Section 5.4.2 does not require the consent of a majority in interest of the
Limited Partners before the General Partner continues with the periodic
disposition of Local Limited Partnership interests, and that these periodic
dispositions of properties are not tantamount to an election of dissolution of
the Partnership. On October 3, 2005, the General Partner filed a Complaint for
Declaratory Judgment with the Superior Court of Suffolk County, Massachusetts
seeking a ruling on the interpretation of Section 5.4.2.
Item 4. The Solicitation or Recommendation
The General Partner is recommending against tendering Units with
respect to the Anise Offer and believes that Limited Partners should carefully
consider the following factors in making their own decision about whether to
accept or reject the Anise Offer:
- - The General Partner believes that the price per Unit reflected in the
Anise Offer may be undervalued. As an example, Leawood Manor, one of
Partnership's 15 remaining properties, is currently being marketed for
sale and based upon preliminary indications, it is the General
Partner's expectation that the net cash per Unit could exceed the $101
per Unit described in the Anise Offer (although there is no guaranty
that it will do so). 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.
- - The General Partner believes that the Anise Offer may reflect the
Purchaser's desire to ultimately own and/or control the Partnership's
remaining assets through one or more related or affiliated entities,
which may not be in the best interest of the Limited Partners. For
example, Maxus Properties, which is related to or otherwise affiliated
with the Purchaser, has expressed interest in the purchase of Leawood
Manor; however, on September 28, 2005, the Partnership received
correspondence from Park G.P., Inc., an affiliate of the Purchaser,
requesting that the General Partner refrain from disposing of any of
its assets, including Leawood Manor, without first obtaining the
consent of a majority in interest of the Limited Partners. If the Anise
Offer is fully subscribed, Purchaser affiliates will own 18.15% and
Anise will own 15.84% of the ownership interests in the Partnership,
resulting in an aggregate Partnership ownership interest of 33.99%.
- - As previously reported, Bentley Court II, L.P., one of the
Partnership's investments, is the subject of an adverse IRS audit.
Among other things, the IRS has disallowed the property's Tax Credits
for 1993, 1994 and 1995. The administrative appeals have been
unsuccessful 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. The General
Partner is currently considering its options including possible
settlement with the IRS. Absent 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.
- - 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: October 4, 2005
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV, A LIMITED PARTNERSHIP
By: Arch Street IV, 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 IV, Inc.,
its General Partner
By: /s/ Michael H. Gladstone
-----------------------------------
Name: Michael H. Gladstone
Title: Vice President
EXHIBIT 1 TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV,
A LIMITED PARTNERSHIP
101 Arch Street
Boston, MA 02110
October 4, 2005
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 Limited Partnership, a
Massachusetts limited partnership (the "Partnership").
Anise, L.L.C., a Missouri limited liability ("Anise"), has made an
offer (the "Anise Offer") to purchase Units for a cash purchase price of $101
per Unit, without interest, upon the terms and conditions set forth in the
"Offer to Purchase for Cash 8,500 Units of Limited Partnership Interests in
Boston Financial Qualified Housing Tax Credits L.P. IV, A Limited Partnership"
dated September 19, 2005.
The General Partner is recommending against tendering Units with
respect to the Anise Offer and believes that Limited Partners should carefully
consider the following factors in making their own decision about whether to
accept or reject the Anise Offer:
- - The General Partner believes that the price per Unit reflected in the
Anise Offer may be undervalued. As an example, Leawood Manor, one of
Partnership's 15 remaining properties, is currently being marketed for
sale and based upon preliminary indications, it is the General
Partner's expectation that the net cash per Unit could exceed the $101
per Unit described in the Anise Offer (although there is no guaranty
that it will do so). 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.
- - The General Partner believes that the Anise Offer may reflect Anise's
desire to ultimately own and/or control the Partnership's remaining
assets through one or more related or affiliated entities, which may
not be in the best interest of the Limited Partners. For example, Maxus
Properties, which is related to or otherwise affiliated with Anise, has
expressed interest in the purchase of Leawood Manor; however, on
September 28, 2005, the Partnership received correspondence from Park
G.P., Inc., an affiliate of Anise, requesting that the General Partner
refrain from disposing of any of its assets, including Leawood Manor,
without first obtaining the consent of a majority in interest of the
Limited Partners. If the Anise Offer is fully subscribed, Anise
affiliates will own 18.15% and Anise will own 15.84% of the ownership
interests in the Partnership, resulting in an aggregate Partnership
ownership interest of 33.99%.
- - As previously reported, Bentley Court II, L.P., one of the
Partnership's investments, is the subject of an adverse IRS audit.
Among other things, the IRS has disallowed the property's Tax Credits
for 1993, 1994 and 1995. The administrative appeals have been
unsuccessful 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. The General
Partner is currently considering its options including possible
settlement with the IRS. Absent 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.
- 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, A LIMITED PARTNERSHIP
By: Arch Street, Inc., its General Partner
By: /s/ Michael H. Gladstone
-----------------------------------
Name: Michael H. Gladstone
Title: Vice President
By: Arch Street Limited Partnership,
its General Partner
By: Arch Street, Inc., its General Partner
By: /s/ Michael H. Gladstone
-----------------------------------
Name: Michael H. Gladstone
Title: Vice President