UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 2000
[ ] 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 0-13520
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2828131
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Second Avenue, Needham, Massachusetts 02494
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (781) 444-5251
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interest
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ x ]
Aggregate market value of voting stock held by non-affiliates of the registrant:
Not applicable
Documents incorporated by reference: None
Exhibits Index on Pages: 95-109
Page 1 of 111
PART I
Item 1. Business
The Registrant, Liberty Housing Partners Limited Partnership (the
"Partnership"), is a limited partnership organized under the provisions of the
Massachusetts Uniform Limited Partnership Act on March 20, 1984. Until December
27, 1995, the general partners in the Partnership consisted of Liberty Real
Estate Corporation, the managing general partner (the "Former Managing General
Partner"), LHP Associates Limited Partnership, the associate general partner
(the "Former Associate General Partner") and, together with the Former Managing
General Partner, (the "Former General Partners"). On December 27, 1995, the
Former General Partners withdrew from the Partnership and TNG Properties, Inc.,
a Massachusetts corporation (the "Managing General Partner"), was admitted to
the Partnership as a substitute general partner with an interest equivalent to
the aggregate interests of the Former General Partners.
The units of Limited Partnership Interest ("Units") were offered and
sold commencing July 13, 1984, pursuant to a Registration Statement on Form S-11
under the Securities Act of 1933. The offering and sale of 21,616 units was
completed on July 12, 1985. During 1995, the Partnership recorded as cancelled
and no longer outstanding 40 units which were formally abandoned by the holders.
During 1998 an additional 10 units were abandoned. In December, 2000 an
additional 20 units were abandoned.
The Partnership will terminate on December 31, 2020, unless sooner
dissolved or terminated as provided in Section 11 of the Amended Agreement of
Limited Partnership dated as of July 13, 1984, as amended to date (the
"Partnership Agreement").
As discussed herein, the Partnership is currently in various stages of
negotiations to sell its interests in the remaining ten Local Limited
Partnerships. If the Partnership is successful in disposing of its remaining
investments, management presently intends to wind up the Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.
No assurance can be given that the Partnership will be able to
successfully conclude any of the above transactions. Consequently, the
completion of the liquidation of the Partnership may be different than currently
anticipated.
Because of the progress which has been made during 2000, effective
December 31, 2000, the Partnership has adopted the liquidation basis of
accounting. Accordingly, the Partnership's 2000 net asset values reflect the net
realizable values for the investments in Local Limited Partnerships after giving
effect to the estimated closing costs upon sale or disposal of the investments
and its other assets. In addition, a liability was recorded for estimates of
costs to be incurred in carrying out the dissolution and liquidation of the
Partnership. These costs include estimated legal fees, accounting fees, tax
return preparation and partnership administration. Actual costs could vary
significantly from these estimated costs due to uncertainty related to the
length of time required to complete the disposition of the investments and
unanticipated events which may arise in connection with those dispositions.
The net amount, if any, ultimately available for distribution from the
liquidation of the Partnership depends on many unpredictable factors, such as
the amounts realized on the sale of the remaining investments in Local Limited
Partnerships, carrying costs of the assets prior to sale, settlement of claims
and commitments, the amount of revenue and expenses of the Partnership until
completely liquidated and other uncertainties.
2
Item 1. Business, continued
The Partnership has no employees. Under the Partnership Agreement, the
Managing General Partner is solely responsible for the operation of the
Partnership and its properties.
The Partnership is engaged in only one industry segment, the business
of investing in, operating, owning, leasing and improving interests in real
estate through ownership of interests in other limited partnerships (the "Local
Limited Partnerships") which own and operate government-assisted, multi-family
rental housing complexes. As described in Item 2, the Partnership acquired
interests in 13 Local Limited Partnerships, each of which owns and operates a
government-assisted, garden-style, residential multi-family housing complex.
Each complex consists of one-to-three-story buildings of wood frame and brick
construction located on landscaped lots. The apartments within each of the
complexes contain fully equipped kitchens and some of the complexes include
swimming pools. In 1999, the Partnership sold its interests in Fiddlers Creek
Apartments and Linden Park Associates Limited Partnership. In February 2000, the
Partnership sold its interest in Osuna Apartments Company. These transactions
are described in more detail below.
The Partnership paid for two of the 13 limited partnership interests in
cash upon acquisition. The Partnership paid for 11 of such limited partnership
interests by delivery of cash, short-term promissory notes (which have all been
paid in full) and non-recourse promissory notes which bear interest at the rate
of 9% per annum ("Purchase Money Notes"). Each Purchase Money Note permits
interest to accrue to the extent cash distributions to the Partnership from the
applicable Local Limited Partnership are insufficient to enable the Partnership
to pay the Purchase Money Note on a current basis. The Purchase Money Notes do
not require payment of any portion of the principal amount of the notes prior to
maturity (except that the Purchase Money Notes require immediate payment
following a default (as defined therein) by the Partnership thereunder).
As a result of these interest accrual and payment provisions, each
Purchase Money Note requires a substantial balloon payment at maturity. The
payment of each Purchase Money Note is secured by a pledge of the Partnership's
interest in the Local Limited Partnership to which the note relates. As of
December 31, 2000 eight of these series of Purchase Money Notes were in default.
On September 29, 1999 the Purchase Money Notes relating to Fuquay-Varina Homes
for the Elderly, Ltd., Oxford Homes for the Elderly, Ltd. and Williamston Homes
for the Elderly, Ltd. matured. The Purchase Money Notes relating to Austintown
Associates, Meadowwood Ltd., Brierwood Ltd. and Pine Forest Apartments, Ltd.
matured on October 30, 1999. The Purchase Money Notes relating to Osuna
Apartments Company matured on November 27, 1999 and the Purchase Money Notes
relating to Glendale Manor Apartments matured on August 29, 2000. The Purchase
Money Notes relating to Surry Manor, Ltd. mature on July 9, 2001. Linden Park
Associates Limited Partnership, one of the two Local Limited Partnerships in
which the Partnership acquired its interest for cash, issued purchase money
notes in connection with the purchase of its housing complex. Such notes had
terms substantially identical to those of the Purchase Money Notes, and were
secured by a pledge by all of the partners in such Local Limited Partnership
(including the Partnership) of their respective partnership interests therein.
The notes were paid in full in connection with a refinancing by Linden Park
Associates of its existing debt in July 1999. As described below, the
Partnership disposed of its interest in Osuna Apartments and the related
Purchase Money Note obligations in February 2000.
Additional information concerning the Purchase Money Notes is set forth
below under "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
3
Item 1. Business, continued
The sale or other disposition by the Partnership of its interests in
the Local Limited Partnerships, including in connection with a foreclosure of
the pledged security, is likely to result in recapture of previously claimed tax
losses to the Partnership and may have other adverse tax consequences to the
Partnership and to the Limited Partners. Such recapture may cause some or all of
the Limited Partners to have taxable income from the Partnership without cash
distributions from the Partnership with which to satisfy the tax liability
resulting therefrom.
The Partnership does not intend to make any additional investments. The
Partnership's business is not seasonal.
In connection with the Partnership's investment in the Local Limited
Partnerships, Liberty LGP Limited Partnership, an affiliate of the Former
General Partners ("Liberty LGP") acquired co-general partnership interests or
special limited partnership interests in each of the Local Limited Partnerships.
In some cases, such interests entitle Liberty LGP to approve or disapprove
certain actions proposed to be taken by the unaffiliated general partners of the
Local Limited Partnership (the "Local General Partners"). In all cases, Liberty
LGP, acting alone, is authorized to cause each Local Limited Partnership to sell
and/or refinance the project owned by such Local Limited Partnership. On
December 27, 1995, TNG Properties, Inc. acquired a 19.8% limited partnership
interest in Liberty LGP. Liberty Housing Corporation held an 80.2% interest as a
general partner in Liberty LGP. Michael A. Stoller, President and CEO of the
Managing General Partner acquired all of the outstanding stock of Liberty
Housing Corporation from the Former Managing General Partner.
The Partnership's investments are and will continue to be subject to
various risks, including the following:
(1) The risk that Partnership funds will not be sufficient to enable the
Partnership to pay its debts and obligations. Among the Partnership's
liabilities are the Purchase Money Notes. Such notes do not require payments
during their term, except to the extent of cash distributions from the Local
Limited Partnerships, but require substantial balloon payments at maturity. As
described above, certain of the notes have matured and the remainder will mature
on July 9, 2001. The Partnership does not have funds sufficient to repay such
notes at maturity. See Item 7.
(2) Risk of recapture of previously claimed tax losses as a result of the
Partnership's inability to pay at maturity the Purchase Money Notes. As a result
of such recapture, the investors in the Partnership would have taxable income
from the Partnership, and the associated income tax liability, without cash
distributions from the Partnership with which to satisfy such income tax
liability.
(3) The risks associated with an investment in a partnership, including tax
risks as a result of possible adjustments by the IRS to federal income tax
returns filed by the Partnership and its Partners, and other tax risks.
(4) Risks that the federal government will cease or reduce funding of housing
subsidies, including subsidies under the Section 8 and Section 236 programs,
both of which provide substantial operating revenues to many of the Local
Limited Partnerships.
(5) Possible restrictions imposed by Federal, state or local agencies that
provide government assistance to the projects, which may limit the amount of
costs which may be passed on to tenants in the form of rent
4
Item 1. Business, continued
increases, limit future direct government assistance to Local Limited
Partnerships, or restrict the Partnership's ability to sell or refinance its
Local Limited Partnership interests.
(6) The risk that properties owned by Local Limited Partnerships will not
generate income sufficient to meet their operating expenses and debt service or
to fund adequate reserves for capital expenditures.
(7) Continuing quality of on-site management of the local properties. Such
on-site management is subject to direct control by the Local General Partners of
the Local Limited Partnerships and not by the Partnership.
(8) Possible adverse changes in general economic conditions and adverse local
conditions, such as competitive over-building, a decrease in employment, or
adverse changes in real estate selling laws, which may reduce the desirability
of real estate in a particular area.
(9) Circumstances over which the Local Limited Partnerships may have little or
no control, such as fires, earthquakes, and floods.
(10) The risk that properties owned by Local Limited Partnerships will be unable
to replace the revenue received under federal housing assistance contracts or
extend the current contract at the same terms upon their termination.
On February 1, 2000, the Partnership sold its 98% interest as a limited
partner (the "Partnership Interest") in Osuna Apartments Company ("Osuna") to
the Sovereign Management Corporation, the company retained by Osuna to manage
its apartment complex (the "Purchaser"). In consideration for the sale of the
Partnership Interest, the Partnership received a net cash purchase price of
$100,000. In connection with the sale, the holders of the Purchase Money Notes
(the "Notes") issued by the Partnership in connection with its acquisition of
the Partnership Interest released the Partnership from all liabilities in
connection with the Notes. After transaction expenses, the Partnership
recognized a gain of $2,432,299 on the sale of the investment.
On May 28, 1999, the Partnership sold its interest in Fiddlers Creek
Apartments in exchange for $483,451 in cash and assumption of the Purchase Money
Note obligations. After transaction expenses, the Partnership recognized a gain
of $2,579,632 on the sale of the investment. On April 13, 2000, estimated state
withholding taxes totaling $211,271 were paid from the proceeds of the sale of
the Partnership's investment in Fiddlers Creek Apartments. The Partnership
subsequently reevaluated this obligation and applied for a refund of the $211,
271 previously remitted. On November 7, 2000 the refund was received with
interest of $4,659.
On July 15, 1999, the Partnership sold its interest in Linden Park
Associates Limited Partnership in exchange for $395,960 in cash. After
transaction expenses, the Partnership recognized a gain of $344,491 on the sale
of the investment. Linden Park Associates refinanced their existing debt and
also paid in full the principal and accrued and unpaid interest due the
Partnership on their notes totaling $241,058. In accordance with the
Partnership's agreement with the General Partner of Linden Park Associates (the
"Linden GP"), these funds have been segregated for use to pay the fees and
expenses due the Linden GP in connection with the consulting arrangement
described below. Interest earned on these segregated funds will be available to
pay these fees and expenses.
The Linden GP was engaged in September, 1998 to assist the general
partner review the Partnership's portfolio, develop a strategy for maximizing
the value of the portfolio and implementing the strategy.
5
Item 1. Business, continued
The agreement provides for fees based on the successful implementation of all or
part of the strategy developed which will be paid from the segregated funds
discussed above. The remaining balance of the segregated funds was $147,103 as
of December 31, 2000. In 2000, the consulting fees paid to the Linden GP in
respect of the successful sale of the Partnership's investment in Osuna
Apartments was $23,426 and reimbursed expenses totaled $407. In 1999, the
consulting fees paid to the Linden GP in respect of the successful sales of the
Partnership's investments in Fiddlers Creek Apartments and Linden Park
Associates totaled $77,416 and reimbursed the Linden GP for expenses incurred
totaled $10,216.
The Partnership distributed $449,999 to the Partnership's Unit holders
in August, 1999 from the proceeds of the sales of these Local Limited
Partnership interests.
Management has entered into negotiations to sell the Partnership's 98%
limited partnership interests in Fuquay-Varina, Oxford Homes and Williamston
Homes to the general partner of these partnerships or his affiliate for
approximately $148,485 plus the assumption of the related Purchase Money Note
obligations. The sale of these interests requires consent from all the related
Purchase Money Note holders. Such consents have been received. These
transactions closed on March 30, 2001. These transactions closed at the amounts
reflected in the financial statements.
Management has entered into negotiations and agreements to sell the
Partnership's 94% interests in Brierwood, Brierwood II, Pine Forest and
Meadowwood Apartments. The Partnership would receive only a nominal cash payment
in connection with each sale. The sale of the Partnership's interests in
Brierwood, Pine Forest and Meadowwood Apartments also requires consent from all
the related Purchase Money Note holders. Such consents have been requested. The
Partnership received unanimous consent from the Purchase Money Note holders
relating to Pine Forest Apartments and did not receive unanimous consent from
the Purchase Money Note holders relating to Brierwood and Meadowwood Apartments.
Under the partnership agreements relating to these investments, Liberty LGP has
the right to cause the sale of the partnership's project. Liberty LGP has agreed
to pursue the sale of the properties owned by Brierwood and Meadowwood
Apartments. The proposed purchasers are affiliates of the local general partner
in these partnerships. Management presently anticipates the closing of these
transactions in the third quarter of 2001.
The Partnership entered into an agreement with the local general
partner of Austintown Associates to sell the Partnership's 98% limited
partnership interest, subject, among other things, to the consent of the related
Purchase Money Note holders. The Partnership did not receive unanimous consent
of the Purchase Money Note holders and the agreement expired on April 1, 2000.
On September 15, 2000 certain of the Purchase Money Note holders commenced an
action in the Court of Common Pleas Mahoning County, Ohio seeking, among other
things, to foreclose upon the Partnership's pledge of its 98% limited
partnership interest in Austintown Associates. The Partnership did not contest
the proceeding and, on February 26, 2001, the Court entered a default judgment
and order appointing a receiver to sell the Partnership's interest in Austintown
Associates to satisfy the judgment. The sale proceeds, after the costs of sale,
will be paid to the Purchase Money Note holders.
Management commenced discussions with the local manager for Surry
Manor, Ltd. and Glendale Manor Apartments to purchase the Partnership's
interests in those partnerships. No agreement on the transfer of these interests
has been reached. The sale of these interests requires unanimous consent of the
Purchase Money Note holders. Management will continue to pursue more detailed
discussions in 2001.
6
Item 1. Business, continued
No assurance can be given that the Partnership will be able to
successfully conclude any of the above transactions. Consequently, the
completion of the liquidation of the Partnership may be different than currently
anticipated.
Item 2. Properties
Each of the Local Limited Partnerships, in which the Partnership
acquired limited partnership interests, owns the fee interest in a
government-assisted residential multi-family rental-housing complex. As
discussed above, the Partnership's interests in Fiddlers Creek Apartments and
Linden Park Associates were sold in 1999 and in Osuna Apartments in February,
2000. The following table reflects: (1) the name of each of the Local Limited
Partnerships in which the Partnership held an investment at December 31, 2000
and the percentage of the total interests in the Local Limited Partnership
represented by the Partnership's interest; (2) the date on which the Partnership
acquired each of such interests; (3) the consideration paid for each interest,
(including purchase money notes); (4) the original principal amount, the
aggregate amount of the principal and accrued and unpaid interest outstanding as
of December 31, 2000, and the maturity date of the Purchase Money Notes relating
to each interest; (5) the Partnership's share of the mortgage indebtedness of
each Local Limited Partnership; (6) the size and the location of the housing
project owned by each Local Limited Partnership; and (7) the government program
pursuant to which the complex receives assistance and the number of housing
units in the project receiving such assistance.
More detailed information related to the properties owned by the Local
Limited Partnerships, including their respective amounts of mortgage
indebtedness is included in Schedule III, Real Estate and Accumulated
Depreciation and included in Item 8. The Purchase Money Note information
included in Schedule III is presented prior to the adjustment to adopt the
liquidation basis of accounting.
7
Purchase Money Notes
---------------------------------
Unpaid At Acquisition Description of Apartment Complex
Interest Total Principal ----------------------- ----------------------------------
Name/Percentage Acquisi- Acquisi- Original and LHPLP Total Government
Ownership of Local tion tion Principal Interest as Maturity Share of Invested Geographic Assistance
Limited Partnership Date Cost Amount (A) of 12/31/00 Date Local Debt Assets (C) Size Location (D)
- -------------------- -------- --------- ---------- ----------- ---------- ----------- ----------- --------- -------------- ---------
98% interests are owned
in the following Local
Limited Partnerships(B):
1 Glendale Manor 8/31/84 $810,000 $450,000 $688,702 8/29/2000 $929,000 1,739,000 50 Units Clinton, SC 221(d)(4)
Apartments 30,310 SF 100%
5.5 Acres Section 8
(E)
2 Surry Manor,
Ltd. 8/31/84 740,000 360,000 763,429 7/9/2001 1,006,000 1,746,000 44 Units Dobson, NC 221(d)(4)
27,253 SF 100%
5.0 Acres Section 8
(E)
3 Oxford Homes 9/28/84 1,004,000 643,600 974,493 9/28/1999 653,000 1,657,000 50 Units Oxford, NC 221(d)(4)
for the Elderly, 26,672 SF 100%
Ltd. 4.5 Acres Section 8
(E)
4 Williamston 9/28/84 1,064,000 664,100 886,970 9/28/1999 649,000 1,713,000 50 Units Williamstown, 221(d)(4)
Homes for the 26,496 SF NC 100%
Elderly, Ltd. 7 Acres Section 8
(E)
5 Fuquay-Varina 9/28/84 1,118,000 707,300 803,030 9/28/1999 822,000 1,940,000 60 Units Fuqyay-Varina,221(d)(4)
Homes for the 35,056 SF NC 100%
Elderly, Ltd. 6 Acres Section 8
(E)
6 Austintown 10/30/84 3,081,000 1,600,000 3,763,492 10/30/1999 3,635,000 6,716,000 200 Units Austintown, 236 HUD
Associates 189,200SF OH 100%
20 Acres Section 8
(E)
94% interests are owned
in the following Local
Limited Partnerships(B):
7 Pine Forest 10/29/84 736,000 350,000 837,328 10/30/1999 1,190,000 1,926,000 64 Units Cairo, GA 515 RHS
Apartments, 53,344 SF 521 RHS
Ltd. 6 Acres 29 Units
8 Brierwood, 10/29/84 563,000 270,000 652,814 10/30/1999 838,000 1,401,000 56 Units Bainbridge, 515 RHS
Ltd. 42,840 SF GA 521 RHS
6 Acres 33 Units
9 Meadowwood, 10/29/84 1,001,000 610,000 1,481,111 10/30/1999 1,004,000 2,005,000 80 Units Tifton,GA 515 RHS
Ltd. 67,416 SF
6.8 Acres
10 Brierwood II, 01/25/85 101,000 351,000 452,000 18 Units Bainbridge, 515 RHS
Ltd. 12,402 SF GA
1.4 Acres
----------- ---------- ----------- ----------- -----------
Total Acquisitions $10,218,000 $5,655,000 $10,851,369 $11,077,000 $21,295,000 672 units
=========== ========== =========== =========== ===========
(continued)
8
Item 2. Properties, continued
<FN>
(A) Purchase Money Notes bear interest at 9% per annum (Set Note 7 to Financial Statements). Each note requires no principal
payments prior to maturity. Each note requires payment of interest prior to maturity solely to the extent of cash
distributions from the Local Limited Partnership to which the note relates. To the extent interest is not paid currently,
it accrues and is payable at maturity. Accordingly, each note requires a substantial balloon payment at maturity.
The total of principal and accrued and unpaid interest outstanding at December 31, 2000 on the Purchase Money Notes, prior
to adustment to the liquidation basis of accounting was as follows:
Principal Interest Total
$5,655,000 $5,196,369 $10,851,369
========== ========== ===========
(B) Where the Partnership has acquired a 98% interest as investor partner, the Local General Partner has retained a 1% general
partner interest and Liberty LGP has acquired a 1% general partner interest. Where the Partnership has acquired a 94%
interest as investor partner, the Local General Partner has retained a 5% general partner interest and Liberty LGP has
acquired a 1% Special Limited Partner interest.
(C) The amount of any partnership management fee, as defined in the Partnership Agreement, which may be accrued and unpaid for
any year is limited to a specified percentage of Invested Assets, as defined in the Partnership Agreement.
(D) Government Assistance:
221 (d)Mortgage is insured by HUD
Section 8: Rental Assistance from HUD for low income or elderly housing
515 RHS: Mortgage financing and interest subsidies from RHS pursuant to Section 515 of the Housing Act of 1949
521 RHS: Rental assistance from RHS pursuant to Section 521 of the Housing Act of 1949
236 HUD: Mortgage insurance and interest subsidies from HUD
(E) Section 8 rental assistance contracts expire as follows:
Glendale Manor Apartments 05/2001
Surry Manor, Ltd. 04/2001
Oxford Homes for the Elderly, Ltd. 06/2001
Williamston Homes for the Elderly, Ltd. 03/2005
Fuquay-Varina Homes for the Elderly, Ltd. 05/2001
Austintown Associates 06/2001, 10/2001
</FN>
9
Item 3. Legal Proceedings
On September 15, 2000, James P. Manchi and Robert P. Baker commenced an action
against the Partnership in the Court of Common Pleas, Mahoning County, Ohio.
Messrs. Manchi and Baker are holders of Purchase Money Notes issued by the
Partnership in connection with the acquisition of its partnership interest in
Austintown Associates. The remaining holders of Purchase Money Notes relating to
Austintown Associates were joined as involuntary plaintiffs in the action by
Messrs. Manchi and Baker. The complaint was subsequently amended on October 4,
2000. The plaintiffs sought a declaration of the rights of the parties under the
Purchase Money Notes and related pledge agreements, a judgment in favor of the
holders for the monies due under the Purchase Money Notes (to be satisfied
through sale of the partnership interest in Austintown Associates), a
declaration of an event of default under the related pledge agreements and the
appointment of a receiver to supervise the sale of the partnership interest. The
Partnership did not contest the proceeding and, on February 26, 2001, the Court
entered a default judgment and order appointing a receiver to sell the
Partnership's interest in Austintown Associates to satisfy the judgment. The
sale proceeds, after the costs of sale, will be paid to the Purchase Money Note
holders.
Item 4. Submission of Matters to a Vote of Security Holders
None
10
PART II
Item 5. Market for the Partnership's Securities and Related Security Holder
Matters
(a) Market Information
The Partnership's outstanding securities consist of units of limited
partnership interest ("Units"). There is no public market for the Units, and it
is not anticipated that such a public market will develop. Transfer of the Units
is subject to compliance with state and federal securities laws, and in various
states is subject to compliance with the minimum investment and suitability
standards imposed by the Partnership and applicable "blue sky" laws.
(b) Holders.
As of March 5, 2001, there were 943 holders of record of the 21,546
Units outstanding.
(c) Dividends.
The Partnership Agreement requires that Distributable Cash from
Operations (as defined in the Partnership Agreement) be distributed 99% to the
Limited Partners and 1% to the General Partners, to the extent then available,
within 120 days after completion of the Partnership's fiscal year.
The Partnership Agreement provides that Cash from Sales or Refinancings
(as defined in the Partnership Agreement), if any, received by the Partnership,
will be distributed (i) first, until the Limited Partners have received an
amount equal to their total invested capital, 100% to the Limited Partners, and
(ii) the balance, 85% to the Limited Partners and 15% to the General Partners;
provided however that if the amount of Cash from Sales or Refinancings exceeds
the amount of profits for tax purposes arising from such sale or refinancing,
the amount of such excess is distributed to those Partners, if any, who have
positive balances in their capital accounts following any distributions made
pursuant to clause (i) in connection with such sale or refinancing, in
proportion to and to the extent of such positive balances, and prior to any
distributions pursuant to clause (ii).
The Partnership historically has not had Distributable Cash from
Operations. Distributions of $3,123, $5,641 and $4,961 during 2000, 1999 and
1998, respectively represent amounts paid on behalf of the Partnership by Local
Limited Partnerships pursuant to state non-resident withholding tax
requirements. During 1999, distributions of $449,999 were made from proceeds of
the sale of Local Limited Partnership interests. As discussed in Management's
Discussion and Analysis of Financial Condition and Results of Operations, future
distributions are dependent on the Partnership's realization of its assets and
settlement of its liabilities during the liquidation process.
11
Item 6. Selected Financial Data
The Partnership has adopted the liquidation basis of accounting,
effective December 31, 2000. Prior to that date, the Partnership recorded
results of operations using the going concern basis of accounting. The following
table sets forth selected financial information relating to the Partnership's
financial position and operating results. For comparative purposes, the
financial information for 2000 presented in the following table reflects the
Partnership's operating results and financial position immediately prior to the
adoption of liquidation accounting. This information should be read in
conjunction with Management's Discussion and Analysis of Financial Condition and
Results of Operations and the Financial Statements and Notes thereto, which are
included in Items 7 and 8 of this Report. Amounts are expressed in thousands
with the exception of per Unit calculations.
For the Years Ended December 31,
------------------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Interest income $ 23 $ 107 $ 36 $ 46 $ 61
Income (loss) before extraordinary
items 1,621 (1,602) (2,556) (2,218) (1,962)
Net income (loss) 1,621 1,322 (2,556) (2,218) (1,962)
Income (loss) per Unit before
extraordinary items 74.43 (73.56) (117.31) (101.75) (90.02)
Net income (loss) per Unit 74.43 60.67 (117.31) (101.75) (90.02)
Total assets at December 31 1,338(c) 2,042 2,254 2,229 2,587
Long-term debt (including current
portion, net of discount) at
December 31 10,851(c) 13,085 14,137 11,544 9,684
Distributable Cash from operations
per Unit (a) -- -- -- -- --
Units used in computing per unit
calculations above (b) 21,564 21,566 21,568 21,576 21,576
<FN>
(a) Distributable cash is calculated pursuant to the terms of the Partnership Agreement. See Note
11 to the Financial Statements.
(b) During 1998, the Partnership recorded as cancelled and no longer outstanding 10 units which
were formally abandoned by the holders. In December, 2000 an additional 20 units were
abandoned.
(c) Total assets and long-term debt at December 31, 2000 reflect the Partnership's financial
position immediately prior to the adoption of the liquidation basis of accounting. After
adoption of the liquidation basis of accounting, these were recorded as $820 and $52,
respectively.
</FN>
12
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Because of the progress which has been made during 2000 in connection
with the Partnership's efforts to liquidate its portfolio of investments in
Local Limited Partnerships, effective December 31, 2000, the Partnership has
adopted the liquidation basis of accounting. Prior to that date, the Partnership
recorded results of operations using the going concern basis of accounting.
Under the liquidation basis of accounting, assets are stated at their
estimated net realizable values and liabilities are stated at their anticipated
settlement amounts. The valuation of assets and liabilities necessarily requires
many estimates and assumptions, and there are substantial uncertainties in
carrying out the liquidation of the Partnership's assets. The actual values upon
dissolution and costs associated therewith could be higher or lower than the
amounts recorded. In connection with the liquidation, the Partnership has
recorded an accrual for additional expenses to reflect the Partnership's best
estimate of the costs associated with the liquidation.
Liquidity and Capital Resources
The Partnership
The Partnership is liable for the amount of the purchase money notes
delivered to purchase its interests in the Local Limited Partnerships (as
hereinafter described), and for the Partnership's day-to-day administrative and
operating expenses.
The Partnership acquired its interests in two Local Limited
Partnerships for cash. The Partnership acquired its interests in eleven other
Local Limited Partnerships by delivery of cash, short-term promissory notes (all
of which have been paid in full) and purchase money promissory notes which bear
interest at the rate of 9% per annum (the "Purchase Money Notes"). The payment
of each Purchase Money Note is secured by a pledge of the Partnership's interest
in the Local Limited Partnership to which the note relates. Recourse on each
Purchase Money Note is limited to the pledged partnership interest. Each note
had an initial term of 15 to 17 years. The Partnership's interests in these
Local Limited Partnerships were pledged as security for the Partnership's
obligations under the respective Purchase Money Notes.
In May 1999, the Partnership sold its interest in Fiddlers Creek
Apartments and the purchaser assumed the Partnership's obligations under the
related Purchase Money Notes. In July 1999, the Partnership sold its interest in
Linden Park Associates. Linden Park Associates refinanced their existing debt
and also paid in full the principal and accrued and unpaid interest due the
Partnership on their notes. In February 2000, the Partnership sold its interest
in Osuna Apartments Company and the holders of the Purchase Money Notes released
the Partnership from all liabilities in connection with the Notes.
At December 31, 2000 eight series of the Purchase Money Notes, relating
to Fuquay-Varina Homes for the Elderly, Ltd., Oxford Homes for the Elderly,
Ltd., Williamston Homes for the Elderly, Ltd., Austintown Associates, Meadowwood
Ltd., Brierwood Ltd, Pine Forest Apartments, Ltd. and Glendale Manor Apartments,
had matured and were in default. The remaining series of Purchase Money Notes,
relating to Surry Manor, Ltd., mature on July 9, 2001. None of the series of
Purchase Money Notes is cross-defaulted to the others, nor are the series of
Purchase Money Notes cross-collateralized in any manner.
13
The Partnership, continued
The terms of each Purchase Money Note permit interest to accrue to the
extent cash distributions to the Partnership from the applicable Local Limited
Partnership are insufficient to enable the Partnership to pay the Purchase Money
Note on a current basis. Generally, the amount of such cash distributions have
not been sufficient in any year to pay the full amount of interest accrued for
that year on the Purchase Money Notes. The Purchase Money Notes do not require
payment of any portion of the principal amount of the note prior to maturity
(except that the Purchase Money Notes require immediate payment following a
default (as defined therein) by the Partnership thereunder). Accordingly, each
Purchase Money Note requires a substantial balloon payment at maturity. The
aggregate outstanding principal amount of, and accrued and unpaid interest on,
the Purchase Money Note obligations of the Partnership outstanding at December
31, 2000 was $10,851,369. All unamortized discount on these notes has been
written off as of December 31, 2000. In connection with the adoption of the
liquidation basis of accounting, the value shown for the Purchase Money Notes
was adjusted to the anticipated settlement amount and no further interest
accruals will be recorded.
The sale or other disposition by the Partnership of its interests in
the Local Limited Partnerships, including in connection with a foreclosure of
the pledged security, is likely to result in recapture of previously claimed tax
losses to the Partnership and may have other adverse tax consequences to the
Partnership and to the Unit holders. Such recapture may cause some or all of the
Unit holders to have taxable income from the Partnership without cash
distributions from the Partnership with which to satisfy the tax liability
resulting therefrom.
On February 1, 2000, the Partnership sold its 98% interest as a limited
partner (the "Partnership Interest") in Osuna Apartments Company ("Osuna") to
the Sovereign Management Corporation, the company retained by Osuna to manage
its apartment complex (the "Purchaser"). In consideration for the sale of the
Partnership Interest, the Partnership received a net cash purchase price of
$100,000. In connection with the sale, the holders of the Purchase Money Notes
(the "Notes") issued by the Partnership in connection with its acquisition of
the Partnership Interest released the Partnership from all liabilities in
connection with the Notes. After transaction expenses, the Partnership
recognized a gain of $2,432,299 on the sale of the investment.
Management has entered into negotiations to sell the Partnership's 98%
limited partnership interests in Fuquay-Varina, Oxford Homes and Williamston
Homes to the general partner of these partnerships or his affiliate for
approximately $148,485 plus the assumption of the related Purchase Money Note
obligations. The sale of these interests requires consent from all the related
Purchase Money Note holders. Such consents have been received. These
transactions closed on March 30, 2001. These transactions closed at the amounts
reflected in the financial statements.
Management has entered into negotiations and agreements to sell the
Partnership's 94% interests in Brierwood, Brierwood II, Pine Forest and
Meadowwood Apartments. The Partnership would receive only a nominal cash payment
in connection with each sale. The sale of the Partnership's interests in
Brierwood, Pine Forest and Meadowwood Apartments also requires consent from all
the related Purchase Money Note holders. Such consents have been requested. The
Partnership received unanimous consent from the Purchase Money Note holders
relating to Pine Forest Apartments and did not receive unanimous consent from
the Purchase Money Note holders relating to Brierwood and Meadowwood Apartments.
Under the partnership agreements relating to these investments, Liberty LGP has
the right to cause the sale of the partnership's project. Liberty LGP has agreed
to pursue the sale of the properties owned by Brierwood and Meadowwood
Apartments. The proposed purchasers are affiliates of the local general partner
in these partnerships. Management presently anticipates the closing of these
transactions in the third quarter of 2001.
14
The Partnership, continued
The Partnership entered into an agreement with the local general
partner of Austintown Associates to sell the Partnership's 98% limited
partnership interest, subject, among other things, to the consent of the related
Purchase Money Note holders. The Partnership did not receive unanimous consent
of the Purchase Money Note holders and the agreement expired on April 1, 2000.
On September 15, 2000 certain of the Purchase Money Note holders commenced an
action in the Court of Common Pleas Mahoning County, Ohio seeking, among other
things, to foreclose upon the Partnership's pledge of its 98% limited
partnership interest in Austintown Associates. The Partnership did not contest
the proceeding and, on February 26, 2001, the Court entered a default judgment
and order appointing a receiver to sell the Partnership's interest in Austintown
Associates to satisfy the judgment. The sale proceeds, after the costs of sale,
will be paid to the Purchase Money Note holders.
Management commenced discussions with the local manager for Surry
Manor, Ltd. and Glendale Manor Apartments to purchase the Partnership's
interests in those partnerships. No agreement on the transfer of these interests
has been reached. The sale of these interests requires unanimous consent of the
Purchase Money Note holders. Management will continue to pursue more detailed
discussions in 2001.
As discussed above, the Partnership is currently in various stages of
negotiations to sell its interests in the remaining ten Local Limited
Partnerships. If the Partnership is successful in disposing of its remaining
investments, management presently intends to wind up the Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.
No assurance can be given that the Partnership will be able to
successfully conclude any of the above transactions. Consequently, the
completion of the liquidation of the Partnership may be different than currently
anticipated.
The net amount, if any, ultimately available for distribution from the
liquidation of the Partnership depends on many unpredictable factors, such as
the amounts realized on the sale of the remaining investments in Local Limited
Partnerships, carrying costs of the assets prior to sale, settlement of claims
and commitments, the amount of revenue and expenses of the Partnership until
completely liquidated and other uncertainties.
In light of the Partnership's adoption of the liquidation basis of
accounting, the Partnership's net asset values as of December 31, 2000 reflect
the net realizable values for the Investments in Local Limited Partnerships
after giving effect to the estimated closing costs upon sale or disposal of the
investments. In addition, an estimated liability was recorded for estimates of
costs to be incurred in carrying out the dissolution and liquidation of the
Partnership. These costs include estimated legal fees, accounting fees, tax
return preparation and partnership administration. Actual costs could vary
significantly from these estimated costs due to uncertainties related to the
length of time required to complete the liquidation and dissolution of the
Partnership and unanticipated events which may arise in disposing of the
Partnership's remaining assets.
At December 31, 2000, the Partnership had cash and cash equivalents of
$523,389. Of this amount $147,103 represents funds segregated for use to pay the
fees and expenses due the Linden GP pursuant to a consulting agreement and cash
reserves of $376,286. The increase in cash reserves compared with $148,946 at
December 31, 1999 was funded from the North Carolina state tax refund received
in November, 2000 totaling $211,271 plus interest of $4,659 and the proceeds of
the sale of the Partnership's interest in Osuna Apartments Company totaling
$100,000. Such reserves have partially funded the Partnership administrative
expenses, including expense reimbursement to the Managing General Partner. The
Partnership incurs certain
15
The Partnership, continued
administrative costs, including the management fee, which are earned by or
reimbursed to the Managing General Partner. As discussed more fully in Note 6 to
the financial statements, such administrative costs were $98,025, $99,681and
$98,136 in 2000, 1999 and 1998, respectively. In 1999 the Partnership did pay
$83,000 of deferred management fees and reimbursable expenses out of the
proceeds from the sales of its interests in Fiddlers Creek and LPLP. Management
intends to pay these deferred fees and costs from cash reserves over the
liquidation period.
During 2000, 1999 and 1998 distributable cash flow from the Local
Limited Partnerships (LLP's) in connection with which the Partnership delivered
Purchase Money Notes was distributed to the Partnership, as follows: 2000: Six
LLP's - $126,531; 1999: Seven LLP's - $245,730; and 1998: Seven LLP's -
$186,617. By April 30, 2000, 1999, and 1998, the Partnership used such cash
distributions to pay a portion of the accrued and unpaid interest on the related
Purchase Money Notes.
The Local Limited Partnerships.
The liquidity of the Local Limited Partnerships in which the
Partnership has invested is dependent on the ability of the respective Local
Limited Partnerships, which own and operate government assisted multi-family
rental housing complexes, to generate cash flow sufficient to fund operations
and debt service and to maintain working capital reserves. Each of the Local
Limited Partnerships is regulated by government agencies which require monthly
funding of certain operating and capital improvements reserves and which
regulate the amount of cash to be distributed to owners. Each Local Limited
Partnership's source of funds is rental income received from tenants and
government subsidies. Certain of the Local Limited Partnerships receive rental
income pursuant to Section 8 rental assistance contracts which expire at various
times from April 2001 through March 2005. Under the Multifamily Assisted Housing
and Reform and Affordability Act (MAHRAA) of 1997, as amended, Congress set
forth the legislation for a permanent "mark-to-market" program and provided for
permanent authority for the renewal of Section 8 Contracts. Owners with Section
8 contracts expiring after September 30, 1998 are subject to the provisions of
MAHRAA. On September 11, 1998, HUD issued an interim rule to provide
clarification of the implementation of the mark-to-market program. Since then,
revised guidance has been provided through various HUD housing notices, most
recently HUD housing notice 99-36, which addresses project-based Section 8
contracts expiring in fiscal year 2000.
Under this notice, project owners have several options for Section 8
contract renewals, depending on the type of project and rent level. Options
include marking rents up to market, renewing other contracts with rents at or
below market, referring projects to the Office of Multifamily Housing Assistance
Restructuring (OMHAR) for mark-to-market or "OMHAR lite" renewals, renewing
contracts that are exempted from referral to OMHAR, renewing contracts for
portfolio re-engineering demonstration and preservation projects, and opting out
of the Section 8 program. Owners must submit their option to HUD at least 120
days before expiration of their contract. Each option contains specific rules
and procedures that must be followed to comply with the requirements of housing
notice 99-36.
As such, each Local Limited Partnership may choose to either opt out of
the Section 8 program, request mortgage restructuring and renewal of the Section
8 contract, or request renewal of the Section 8 contract without mortgage
restructuring. Each option contains a specific set of rules and procedures that
must be followed in order to comply with the requirements of MAHRAA. The general
partner of Williamston Homes received a five year renewal to March, 2005,
subject to annual Federal appropriation of funds. The remaining properties are
working with HUD to renew their existing contracts for two to five year periods.
16
The Local Limited Partnerships, continued
The Partnership cannot reasonably predict legislative initiatives and
governmental budget negotiations, the outcome of which could result in a
reduction in funds available for the various federal and state administered
housing programs including the Section 8 program. Such changes could adversely
affect the future net operating income and debt structure of certain Local
Limited Partnerships currently receiving such subsidy or similar subsidies.
The Local Limited Partnerships are impacted by inflation in several
ways. Inflation allows for increases in rental rates generally reflecting the
impact of higher operating and replacement costs. Inflation also affects the
Local Limited Partnerships adversely by increasing operating costs such as
utilities and salaries.
As discussed above, the Partnership is currently in various stages of
negotiations to sell its interests in the remaining ten local limited
partnerships. If the Partnership is successful in disposing of its remaining
investments, management presently intends to wind up the Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.
Each of the Local Limited Partnerships has incurred mortgage
indebtedness as reflected in Item 8 in Schedule III - Real Estate and
Accumulated Depreciation. The mortgage loans provide for equal monthly payments
of principal and interest in amounts, which will reduce the principal amount of
the loans to zero at maturity. Each of the maturity dates of the respective
mortgages is substantially beyond the due date of the Purchase Money Note
obligations.
Upon a sale of a property by a Local Limited Partnership the mortgage
indebtedness of such property must be satisfied prior to distribution of any
funds to the partners in the Local Limited Partnership.
Partnership Operations
The Partnership is engaged solely in the business of owning interests
in the Local Limited Partnerships rather than the direct ownership of real
estate. The Partnership's interest income reflects interest earned on reserves,
interest earned on the notes receivable from LPLP (in 1998 net of discount
amortization) and the reversal of the unamortized discount in 1999. Total
interest income decreased to $22,805 in 2000 from $107,488 in 1999 primarily due
to the reversal of the unamortized discount of $74,524 in 1999. Total interest
income increased to $107,488 in 1999 from $36,347 in 1998 again primarily due to
the reversal of the unamortized discount of $74,524 in 1999.
The Partnership's interest expense decreased to $688,199 in 2000 from
$1,695,878 in 1999. The decrease is attributable to the write off of unamortized
discount (included in interest expense) on the Purchase Money Notes, $999,196 in
1999 versus $169,499 in 2000, and the sales of the Fiddlers Creek and Osuna
investments on May 28, 1999 and February 1, 2000, respectively. Interest expense
decreased $172,875 as a result of the cessation of the Partnership's liability
for the related Purchase Money Notes. The Partnership's interest expense
decreased to $1,695,878 in 1999 from $2,672,560 in 1998. The decrease was
attributable to the sale of the Fiddlers Creek investment. Refer to Note 7 to
the Financial Statements.
General and administrative expenses of the Partnership were $154,282 in
2000, $153,550 in 1999, and $143,677 in 1998.
Occupancy levels at the projects owned by the Local Limited
Partnerships ranged from 79% to 100% in 2000, 72% to 100% in 1999, and 89% to
100% in 1998.
17
Partnership Operations, continued
The Partnership's equity in income from the Local Limited Partnerships
was $8,594 in 2000, $139,548 in 1999, and $224,229 in 1998. The $130,954
decrease in income recognized in 2000 compared to 1999 is primarily due to the
recognition of five months of income from Fiddlers Creek Apartments in 1999
totaling $60,011 and the recognition of one month of Osuna Apartments operations
versus 12 months of income in 1999, the difference totaling $26,301. In
addition, Austintown Associates incurred significant maintenance and repairs in
2000, with the resulting net loss increasing by $32,866. Distributions from
Glendale Manor recorded as investment income also decreased by $16,969 in 2000
from 1999. The Partnership did not recognize losses from six Local Limited
Partnerships in 2000 totaling $140,423, as it would have reduced its investment
balance below zero, and recognized investment income of $2,033 based on cash
distributions received from Glendale Manor.
The $84,681 decrease in income recognized in 1999 compared to 1998 is
primarily due to the recognition of only five months of income from Fiddlers
Creek Apartments. In 1999, the Partnership's share of income from Fiddlers Creek
Apartments was $60,011 versus $132,181 in 1998. The Partnership did not
recognize losses from seven Local Limited Partnerships in 1999 totaling
$200,870, as it would have reduced its investment balance below zero, and
recognized investment income of $19,002 based on cash distributions received
from Glendale Manor.
The Partnership did not record losses in 1998 totaling approximately
$163,658 from six Local Limited Partnerships and recognized investment income of
$51,065 based on cash distributions received from Glendale Manor and Surry
Manor.
The Partnership is not obligated to make additional capital
contributions to fund the deficit in its capital accounts in any of the Local
Limited Partnerships.
Because of the above discussed factors, the income (loss) before
extraordinary items increased to $1,621,217 in 2000 from $(1,602,392) in 1999
and decreased in 1999 from $(2,555,661) in 1998.
The Partnership realized a net gain of $2,432,299 on its sale of
investment in Osuna Apartments, $2,579,632 on its sale of investment in Fiddlers
Creek Apartments on May 28, 1999 and a net gain of $344,491 on the sale of
investment in Linden Park Associates on July 15, 1999. These gains were
calculated as follows:
Osuna Fiddlers Creek Linden Park
Apartments Apartments Associates
---------- ---------- ----------
Cash received $ 100,000 $ 483,451 $ 395,960
Purchase Money Notes assumed by buyer
or released at sale 2,938,554 2,624,966 --
Investment in local limited partnership
interest sold (569,998) (465,520) --
Consulting fees (23,426) (35,982) (41,434)
Professional fees and reimbursed expenses (12,831) (27,283) (10,035)
-----------------------------------------------------
Net gain on sale $ 2,432,299 $ 2,579,632 $ 344,491
18
Partnership Operations, continued
The operations of the Partnership and of each of the Local Limited
Partnerships are subject to numerous risks, including material tax risks. The
rents of the Properties, many of which receive rental subsidy payments,
including payments under Section 8 of Title II of the Housing and Community
Development Act of 1974 ("Section 8"), are subject to specific laws, regulations
and agreements with federal and state agencies. The subsidy agreements expire at
various times from April 2001 through March 2005. The United States Department
of Housing and Urban Development ("HUD") has issued notices, which relate to
project based Section 8 contracts. HUD's current program provides in general for
restructuring rents and/or mortgages where rents may be adjusted to market
levels and mortgage terms may be adjusted based on the reduction in rents,
although there may be instances in which only rents, but not mortgages, are
restructured.
The Partnership cannot reasonably predict legislative initiatives and
governmental budget negotiations, the outcome of which could result in a
reduction in funds available for the various federal and state administered
housing programs including the Section 8 program.
Such changes could adversely affect the future net operating income and
debt structure of certain Local Limited Partnerships currently receiving such
subsidy or similar subsidies. See Item 1 above.
Item 7A. Qualitative and Quantitative Disclosure About Market Risk:
This item is not applicable as this registrant is a small business issuer
within the meaning of Rule 12b-2.
19
Item 8. Financial Statements and Supplementary Data
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
Page
Financial Statements:
Statement of Net Assets in Liquidation, December 31, 2000 21
Balance Sheet, December 31, 1999 22
Statements of Operations for the Years
Ended December 31, 2000, 1999 and 1998 23
Statement of Adjustments to Net Assets in Liquidation 24
Statements of Changes in Partners' Deficit
for the Years Ended December 31, 2000, 1999 and 1998 25
Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998 26-27
Notes to Financial Statements 28-48
Independent Auditors' Reports 49-61
Separate Financial Statements, including
Reports of Independent Auditors', for
Significant Investees:
Austintown Associates 62-88
Financial Statement Schedules:
Schedule III - Real Estate and Accumulated Depreciation 89
All schedules other than those indicated in the index have been omitted as the
required information is inapplicable or the information is presented in the
financial statements or related notes.
20
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENT OF NET ASSETS IN LIQUIDATION
December 31, 2000
Assets (Liquidation Basis):
Cash and cash equivalents $376,286
Restricted cash 147,103
Investments in Local Limited Partnerships 296,910
--------
Total Assets 820,299
--------
Liabilities (Liquidation Basis):
Purchase Money Notes and accrued interest liabilities 51,983
Accounts payable to affiliates 386,271
Accounts payable 3,596
Accrued expenses 375,250
Interest payable 841
--------
Total liabilities 817,941
--------
Net Assets in Liquidation $ 2,358
========
The accompanying notes are an integral part of these financial statements.
21
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
BALANCE SHEET
December 31, 1999
Assets
Current assets:
Cash and cash equivalents $ 526,940
Deferred legal fees 40,109
------------
Total current assets 567,049
Investments in Local Limited Partnerships 1,475,083
------------
Total Assets $ 2,042,132
============
Liabilities and Partners' Deficit
Current liabilities:
Purchase Money Notes, current maturities $ 12,436,808
Accounts payable to affiliates 188,272
Accounts payable 1,565
Accrued expenses 98,597
Accrued interest payable 141,318
------------
Total current liabilities 12,866,560
Purchase Money Notes, net of current maturities 648,199
------------
Total liabilities 13,514,759
------------
Contingencies --
Partners' deficit:
General partners:
Capital contributions 4,202
Capital distributions (128)
Accumulated losses (210,889)
------------
(206,815)
------------
Limited partners (21,566 Units as of December 31,1999):
Capital contributions (net of
offering costs of $1,134,440) 9,649,520
Capital distributions (462,706)
Accumulated losses (20,452,626)
------------
(11,265,812)
------------
Total partners' deficit (11,472,627)
------------
Total liabilities and partners' deficit $ 2,042,132
============
The accompanying notes are an integral part of these financial statements.
22
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended December 31,
----------------------------------------------------
2000 1999 1998
---- ---- -----
Interest income $ 22,805 $ 107,488 $ 36,347
Expenses:
Interest expense 688,199 1,695,878 2,672,560
General and administrative expenses:
Affiliates 98,025 99,681 98,136
Other 56,257 53,869 45,541
----------- ----------- -----------
Total expenses 842,481 1,849,428 2,816,237
----------- ----------- -----------
Loss before other income and equity in income (loss) of
local limited Partnership investments (819,676) (1,741,940) (2,779,890)
Other income:
Gain on sale of investment in Osuna Apartments 2,432,299 -- --
----------- ----------- -----------
Income (Loss) before equity in income of local limited
Partnership investments 1,612,623 (1,741,940) (2,779,890)
Equity in income of local
Limited partnership investments 8,594 139,548 224,229
----------- ----------- -----------
Income (Loss) before extraordinary items 1,621,217 (1,602,392) (2,555,661)
Extraordinary items:
Gain on sale of investment in Fiddlers Creek Apts -- 2,579,632 --
Gain on sale of investment in Linden Park Associates -- 344,491 --
----------- ----------- -----------
-- 2,924,123 --
----------- ----------- -----------
Net income (loss) $ 1,621,217 $ 1,321,731 $(2,555,661)
=========== =========== ===========
Limited partners' interest in income (loss) before
extraordinary items $ 1,605,005 $(1,586,368) $(2,530,105)
=========== =========== ===========
Limited partners' interest in net income (loss) $ 1,605,005 $ 1,308,514 $(2,530,105)
=========== =========== ===========
Units used in computing basic net income (loss) per
limited partnership Unit 21,564 21,566 21,568
=========== =========== ===========
Basic income (loss) per limited partner unit before
extraordinary items $ 74.43 $ (73.56) $ (117.31)
=========== =========== ===========
Basic net income (loss) per
limited partnership Unit $ 74.43 $ 60.67 $ (117.31)
=========== =========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
23
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENT OF ADJUSTMENTS TO NET ASSETS IN LIQUIDATION
As of December 31, 2000
Net (Deficiency in) Assets at December 31, 2000 prior to the
adoption of the liquidation basis of accounting $ (9,854,533)
Adjustment of carrying values of investments in Local Limited
Partnerships and other assets to estimated net realizable
values at December 31, 2000, upon adoption of the
liquidation basis of accounting
(518,143)
Adjustment of carrying values of accounts payable and accrued
expenses, excluding accrued interest, to estimated
settlement amounts at December 31, 2000, upon adoption of
the liquidation basis of accounting
(424,352)
Adjustment of carrying values of Purchase Money Notes and
accrued interest liabilities and payables to estimated
settlement amounts at December 31, 2000, upon adoption of
the liquidation basis of accounting
10,799,386
------------
Net assets in liquidation at December 31, 2000 $ 2,358
============
The accompanying notes are an integral part of these financial statements.
24
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
For the years ended December 31, 2000, 1999 and 1998
General Limited
Partner Partners Total
------- -------- -----
Partners' deficit
at December 31, 1997 $ (194,370) $ (9,583,726) $ (9,778,096)
Net loss (25,556) (2,530,105) (2,555,661)
Capital Distributions (50) (4,911) (4,961)
------------ ------------ ------------
Partners'deficit
at December 31, 1998 $ (219,976) $(12,118,742) $(12,338,718)
Net income 13,217 1,308,514 1,321,731
Capital Distributions (56) (455,584) (455,640)
------------ ------------ ------------
Partners' deficit
at December 31, 1999 $ (206,815) $(11,265,812) $(11,472,627)
Net income 16,212 1,605,005 1,621,217
Capital Distributions (31) (3,092) (3,123)
------------ ------------ ------------
Partners' deficit at December 31, 2000, prior to
adoption of the liquidation basis of accounting $ (190,634) $ (9,663,899) $ (9,854,533)
============ ============ ============
Limited Partner distributions per unit:
2000 $ .14
======
1999 $21.13
======
1998 $ .23
======
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
25
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended December 31
-------------------------------
2000 1999 1998
---- ---- ----
Cash flows from operating activities:
Cash distributions from Local Limited Partnerships $ 129,654 $ 251,371 $ 191,578
Interest payments on Purchase Money Notes (123,760) (245,730) (186,617)
Uncashed interest payments on Purchase Money
Notes from prior years -- --
841
Cash paid for general and administration expenses:
Affiliates (27) (83,000) (137)
Other (44,225) (38,926) (43,793)
Interest received 22,805 25,733 20,529
----------- ----------- -----------
Net cash used in operating activities (15,553) (89,711) (18,440)
----------- ----------- -----------
Cash flows from financing activities:
Capital distributions (3,123) (455,640) (4,961)
Principal and accrued interest received upon
repayment of Linden Park Associates notes
receivable -- 241,058 --
----------- ----------- -----------
Net cash used in financing activities (3,123) (214,582) (4,961)
----------- ----------- -----------
Cash flows from investing items:
Cash proceeds from sale of investment in:
Osuna Apartments 100,000 -- --
Fiddlers Creek Apartments -- 483,451 --
Linden Park Associates -- 395,960 --
Consulting fees (23,426) (77,416) --
Deferred closing costs and reimbursable expenses (61,449) (13,046) --
Increase in restricted cash (147,103) -- --
----------- ----------- -----------
Net cash provided by (used in) investing items (131,978) 788,949 --
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents (150,654) 484,656 (23,401)
Cash and cash equivalents at:
Beginning of period 526,940 42,284 65,685
----------- ----------- -----------
End of period $ 376,286 $ 526,940 $ 42,284
=========== =========== ===========
(continued)
26
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CASH FLOWS (continued)
Reconciliation of net income (loss) to net cash used in operating activities:
For the Years Ended December 31
-------------------------------
2000 1999 1998
---- ---- ----
Net income (loss) $ 1,621,217 $ 1,321,731 $(2,555,661)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Share of income of Local Limited
Partnership investments (8,594) (139,548) (224,229)
Cash distributions from Local Limited
Partnerships 129,654 251,371 191,578
Interest expense added to purchase money
Notes, net of discount amortization 649,223 1,573,230 2,592,548
Interest income added to
notes receivable, net of discount
amortization, and interest received -- (81,755) (15,818)
Gain on sale of investment in Local Limited
Partnerships (2,432,299) (2,924,123) --
(Decrease) increase in:
Accrued interest payable (84,783) (122,241) (106,607)
Accounts payable to affiliates 97,998 15,002 98,000
Accounts payable 2,031 (1,093) 1,249
Accrued expenses 10,000 17,715 500
----------- ----------- -----------
Net cash used in operating activities $ (15,553) $ (89,711) $ (18,440)
=========== =========== ===========
<FN>
The accompanying notes are an integral part of these financialstatements.
</FN>
27
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Liquidation of the Partnership
Organization
Liberty Housing Partners Limited Partnership (the "Partnership") was
formed under the Massachusetts Uniform Limited Partnership Act on March 20, 1984
for the primary purpose of investing in other limited partnerships which own and
operate government assisted multi-family rental housing complexes (the "Local
Limited Partnerships").
The General Partners of the Partnership through December 27, 1995 were
Liberty Real Estate Corporation, which served as the Managing General Partner,
and LHP Associates Limited Partnership, which served as the Associate General
Partner. On December 27, 1995, Liberty Real Estate Corporation and LHP
Associates Limited Partnership withdrew from the Partnership and assigned and
transferred all of their interests in the Partnership to the Successor General
Partner, TNG Properties Inc., which was admitted to the Partnership as Successor
General Partner. TNG Properties Inc. serves as the Managing General Partner.
The Partnership Agreement authorized the sale of up to 30,010 units of
Limited Partnership Interest ("Units") of which 21,616 were subscribed for and
sold as of the completion of the offering on July 12, 1985. During fiscal 1995,
1998 and 2000, the Partnership recorded as cancelled and no longer outstanding
40, 10 and 20 Units, respectively, which were formally abandoned by the holders
of such Units.
Pursuant to terms of the Partnership Agreement, Profits or Losses for
Tax Purposes (other than from sales or refinancings) and Distributable Cash From
Operations, both as defined in the Partnership Agreement, are allocated 99% to
the Limited Partners and 1% to the General Partners. Different allocations of
profits or losses and cash distributions resulting from other events are
specified in the Partnership Agreement. Profits from a sale or refinancing
transaction of the Partnership or Local Limited Partnerships is allocated first,
to the extent of and in proportion to the balance of negative capital accounts,
second, pro rata to the Limited Partners to increase to the amount of Invested
Capital and third, 85% to the Limited Partners and 15% to the General Partner.
Losses from a sale or refinancing transaction are allocated pro rata to the
extent of any positive capital accounts and then 99% to the Limited Partners and
1% to the General Partner.
The Partnership Agreement provides that Cash from Sales or Refinancings
(as defined in the Partnership Agreement), if any, received by the Partnership,
will be distributed (i) first, until the Limited Partners have received an
amount equal to their total invested capital, 100% to the Limited Partners, and
(ii) the balance, 85% to the Limited Partners and 15% to the General Partners;
provided however that if the amount of Cash from Sales or Refinancings exceeds
the amount of profits for tax purposes arising from such sale or refinancing,
the amount of such excess is distributed to those Partners, if any, who have
positive balances in their capital accounts following any distributions made
pursuant to clause (i) in connection with such sale or refinancing, in
proportion to and to the extent of such positive balances, and prior to any
distributions pursuant to clause (ii).
28
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Liquidation of the Partnership, continued
Liquidation and Sale of Investments in Local Limited Partnerships
On February 1, 2000, the Partnership sold its 98% interest as a limited
partner (the "Partnership Interest") in Osuna Apartments Company ("Osuna") to
the Sovereign Management Corporation, the company retained by Osuna to manage
its apartment complex (the "Purchaser"). In consideration for the sale of the
Partnership Interest, the Partnership received a net cash purchase price of
$100,000. In connection with the sale, the holders of the Purchase Money Notes
(the "Notes") issued by the Partnership in connection with its acquisition of
the Partnership Interest released the Partnership from all liabilities in
connection with the Notes. After transaction expenses, the Partnership
recognized a gain of $2,432,299 on the sale of the investment.
On May 28, 1999, the Partnership sold its interest in Fiddlers Creek
Apartments in exchange for $483,451 in cash and assumption of the Purchase Money
Note obligations. After transaction expenses, the Partnership recognized a gain
of $2,579,632 on the sale of the investment. On April 13, 2000, estimated state
withholding taxes totaling $211,271 were paid from the proceeds of the sale of
the Partnership's investment in Fiddlers Creek Apartments. The Partnership
subsequently reevaluated this obligation and applied for a refund of the $211,
271 previously remitted. On November 7, 2000 the refund was received with
interest of $4,659.
On July 15, 1999, the Partnership sold its interest in Linden Park
Associates Limited Partnership in exchange for $395,960 in cash. After
transaction expenses, the Partnership recognized a gain of $344,491 on the sale
of the investment. Linden Park Associates refinanced their existing debt and
also paid in full the principal and accrued and unpaid interest due the
Partnership on their notes totaling $241,058. In accordance with the
Partnership's agreement with the General Partner of Linden Park Associates (the
"Linden GP"), these funds have been segregated for use to pay the fees and
expenses due the Linden GP in connection with the consulting arrangement
described below. Interest earned on these segregated funds will be available to
pay these fees and expenses.
The Partnership distributed $449,999 to the Partnership's Unit holders
in August, 1999 from the proceeds of the sales of the Local Limited Partnership
interests in Fiddlers Creek Apartments and Linden Park Associates.
The Linden GP was engaged in September, 1998 to assist the general
partner review the Partnership's portfolio, develop a strategy for maximizing
the value of the portfolio and implementing the strategy. The agreement provides
for fees based on the successful implementation of all or part of the strategy
developed which will be paid from the segregated funds discussed above. The
remaining balance of the segregated funds was $147,103 as of December 31, 2000.
In 2000, the consulting fees paid to the Linden GP in respect of the successful
sale of the Partnership's investment in Osuna Apartments was $23,426 and
reimbursed expenses totaled $407. In 1999, the consulting fees paid to the
Linden GP in respect of the successful sales of the Partnership's investments in
Fiddlers Creek Apartments and Linden Park Associates totaled $77,416 and
reimbursed the Linden GP for expenses incurred totaled $10,216.
29
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Plan of Liquidation of the Partnership, continued
Liquidation and Sale of Investments in Local Limited Partnerships, continued
Management has entered into negotiations to sell the Partnership's 98%
limited partnership interests in Fuquay-Varina, Oxford Homes and Williamston
Homes to the general partner of these partnerships or his affiliate for
approximately $148,485 plus the assumption of the related Purchase Money Note
obligations. The sale of these interests requires consent from all the related
Purchase Money Note holders. Such consents have been received. These
transactions closed on March 30, 2001. These transactions closed at the amounts
reflected in the financial statements.
Management has entered into negotiations and agreements to sell the
Partnership's 94% interests in Brierwood, Brierwood II, Pine Forest and
Meadowwood Apartments. The Partnership would receive only a nominal cash payment
in connection with each sale. The sale of the Partnership's interests in
Brierwood, Pine Forest and Meadowwood Apartments also requires consent from all
the related Purchase Money Note holders. Such consents have been requested. The
Partnership received unanimous consent from the Purchase Money Note holders
relating to Pine Forest Apartments and did not receive unanimous consent from
the Purchase Money Note holders relating to Brierwood and Meadowwood Apartments.
Under the partnership agreements relating to these investments, Liberty LGP has
the right to cause the sale of the partnership's project. Liberty LGP has agreed
to pursue the sale of the properties owned by Brierwood and Meadowwood
Apartments. The proposed purchasers are affiliates of the local general partner
in these partnerships. Management presently anticipates the closing of these
transactions in the third quarter of 2001.
The Partnership entered into an agreement with the local general
partner of Austintown Associates to sell the Partnership's 98% limited
partnership interest, subject, among other things, to the consent of the related
Purchase Money Note holders. The Partnership did not receive unanimous consent
of the Purchase Money Note holders and the agreement expired on April 1, 2000.
On September 15, 2000 certain of the Purchase Money Note holders commenced an
action in the Court of Common Pleas Mahoning County, Ohio seeking, among other
things, to foreclose upon the Partnership's pledge of its 98% limited
partnership interest in Austintown Associates. The Partnership did not contest
the proceeding and, on February 26, 2001, the Court entered a default judgment
and order appointing a receiver to sell the Partnership's interest in Austintown
Associates to satisfy the judgment. The sale proceeds, after the costs of sale,
will be paid to the Purchase Money Note holders.
Management commenced discussions with the local manager for Surry
Manor, Ltd. and Glendale Manor Apartments to purchase the Partnership's
interests in those partnerships. No agreement on the transfer of these interests
has been reached. The sale of these interests requires unanimous consent of the
Purchase Money Note holders. Management will continue to pursue more detailed
discussions in 2001.
The carrying values of the investments in the Local Limited
Partnerships and the Purchase Money Notes and related accrued interest were
adjusted to their estimated fair values and settlement amounts, respectively,
upon adopting the liquidation basis of accounting (See Note 2).
30
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Liquidation of the Partnership, continued
Liquidation and Sale of Investments in Local Limited Partnerships, continued
As discussed above, the Partnership is currently in various stages of
negotiations to sell its interests in the remaining ten Local Limited
Partnerships. If the Partnership is successful in disposing of its remaining
investments, management presently intends to wind up the Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.
No assurance can be given that the Partnership will be able to
successfully conclude any of the above transactions. Consequently, the
completion of the liquidation of the Partnership may be different than currently
anticipated.
The net amount, if any, ultimately available for distribution from the
liquidation of the Partnership depends on many unpredictable factors, such as
the amounts realized on the sale of the remaining investments in Local Limited
Partnerships, carrying costs of the assets prior to sale, settlement of claims
and commitments, the amount of revenue and expenses of the Partnership until
completely liquidated and other uncertainties.
2. Significant Accounting Policies
Basis of Accounting
Because of the progress which has been made during 2000 in connection with
the Partnership's efforts to liquidate its portfolio of investments in Local
Limited Partnerships, effective December 31, 2000, the Partnership has adopted
the liquidation basis of accounting. Prior to that date, the Partnership
recorded results of operations using the going concern basis of accounting.
The accompanying statement of net assets in liquidation as of December
31, 2000, reflects the transactions of the Partnership utilizing liquidation
accounting concepts as required by accounting principles generally accepted in
the United States of America. Under the liquidation basis of accounting, assets
are stated at their estimated net realizable values and liabilities are stated
at their anticipated payable amounts. The valuation of assets and liabilities
necessarily requires estimates and assumptions, and there are uncertainties in
carrying out the dissolution of the Partnership. The actual values upon
dissolution and costs associated therewith could be higher or lower than the
amounts recorded.
The accompanying statement of operations for the year ended December
31, 2000 reflects the operations of the Partnership prior to the adoption of
liquidation basis of accounting and prior to the adjustments required to adopt
the liquidation basis of accounting as of December 31, 2000.
31
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
2. Significant Accounting Policies, continued
Investment in Local Limited Partnerships
Investments in Local Limited Partnerships at December 31, 2000 consist
of investments in ten Local Limited Partnerships which are stated at estimated
liquidation value. Prior to the adoption of liquidation accounting, the
investments in Local Limited Partnerships were accounted for by the equity
method whereby costs to acquire the investments, including cash paid, notes
issued and other costs of acquisition, were capitalized as part of the
investment account. The Partnership's equity in the earnings or losses of each
of the Local Limited Partnerships was reflected as an addition to or reduction
of the respective investment account. The Partnership did not recognize losses,
which reduced its investment account below zero. Cash distributions received
which reduce the investment below zero are recognized as investment income.
Cash Equivalents
For purposes of the statement of cash flows, the Partnership considers
all highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Cash equivalents at December 31, 2000 consist of $363,484 certificates
of deposit which earned interest at rates of 4.9 and 4.83 percent and are rolled
forward on a seven day basis. The remaining funds held are in money market funds
with no stated maturity, valued at cost, which approximates market value. At
December 31, 1999, cash equivalents consisted of a $298,957 certificate of
deposit which earned interest at a rate of 4.9 percent and was rolled forward on
a seven day basis. The remaining funds were held in money market fund
investments with no stated maturity, valued at cost, which approximates market
value.
Interest
Discounts on purchase money notes were amortized over the terms of the
related notes using the effective interest method. At December 31, 2000 the
Partnership has fully amortized the discount for all the purchase money notes.
Interest accrued on the Purchase Money Notes was adjusted to its estimated
settlement amount in conjunction with adopting the liquidation basis of
accounting.
Discounts on notes receivable were being amortized over the term of the
notes using the effective interest method. In 1999, the unamortized discount on
the notes receivable was reversed and was included in the Partnership's interest
income.
32
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
2. Significant Accounting Policies, continued
Income Taxes
No provision or benefit for income taxes has been included in these
financial statements since the Partnership is not liable for federal or state
income taxes because Partnership income or loss is allocated to the partners for
income tax purposes. In the event the Partnership's tax returns are examined by
the Internal Revenue Service or state taxing authority and such examination
results in a change in the Partnership taxable income or loss, such change will
be reported to the partners. The Partnership is obligated under certain
circumstances to withhold and remit funds to certain states on behalf of
non-resident partners. This has no effect on the Partnership's profit or loss.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Per Unit Amounts
Net income (loss) per Limited Partnership Unit is based on the weighted
average number of Units outstanding in the applicable year. As of December 31,
2000, 1999, and 1998, there were 21,546, 21,566, and 21,566 units outstanding.
During December 2000, 20 units were abandoned and during 1998, 10 units were
abandoned. Refer to Note 1 for information regarding profit and loss sharing
ratios.
3. Contingencies
On September 29, 1999 the Purchase Money Notes relating to Fuquay-Varina,
Oxford Homes and Williamston Homes matured. The Purchase Money Notes relating to
Austintown Associates, Meadowwood Ltd, Brierwood Ltd and Pine Forest matured on
October 30, 1999 and the Purchase Money Notes relating to Osuna Apartments
matured on November 27, 1999. The Purchase Money Notes relating to Osuna were
assumed by the buyer in connection with the sale of the Partnership's investment
in February 2000. The Purchase Money Notes relating to Glendale Manor matured on
August 29, 2000. These remaining eight series Purchase Money Notes are now in
default. The Purchase Money Notes for Surry Manor mature on July 9, 2001.
33
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
3. Contingencies, continued
The sale or other disposition by the Partnership of its interests in
the Local Limited Partnerships, including in connection with a foreclosure of
the pledged security, is likely to result in recapture of previously claimed tax
losses to the Partnership and may have other adverse tax consequences to the
Partnership and to the Limited Partners. Such recapture may cause some or all of
the Limited Partners to have taxable income from the Partnership without cash
distributions from the Partnership with which to satisfy the tax liability
resulting therefrom.
As discussed in Note 1 above, the Partnership is currently in various
stages of negotiations to sell its interests in the remaining ten Local Limited
Partnerships. If the Partnership is successful in disposing of its remaining
investments, management presently intends to wind up the Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.
No assurance can be given that the Partnership will be able to
successfully conclude any of the above transactions. Consequently, the
completion of the liquidation of the Partnership may be different than currently
anticipated.
As a result of its investments in the Local Limited Partnerships, the
Partnership is affected by certain risks and uncertainties associated with the
operations of the Properties owned by the Local Limited Partnerships.
The rents of the Properties, many of which receive rental subsidy
payments, including payments under Section 8 of Title II of the Housing and
Community Development Act of 1974 ("Section 8"), are subject to specific laws,
regulations and agreements with federal and state agencies. The subsidy
agreements expire at various times from April 2001 through March 2005. Under the
Multifamily Assisted Housing and Reform and Affordability Act (MAHRAA) of 1997,
as amended, Congress set forth the legislation for a permanent "mark-to-market"
program and provided for permanent authority for the renewal of Section 8
Contracts. Owners with Section 8 contracts expiring after September 30, 1998 are
subject to the provisions of MAHRA. On September 11, 1998, HUD issued an interim
rule to provide clarification for implementation of the mark-to-market program.
Since then, revised guidance has been provided through various HUD housing
notices, most recently HUD housing notice 99-36, which addresses project-based
Section 8 contracts expiring in fiscal year 2000.
34
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
3. Contingencies, continued
Under this notice, project owners have several options for Section 8
contract renewals, depending on the type of project and rent level. Options
include marking rents up to market, renewing other contracts with rents at or
below market, referring projects to the Office of Multifamily Housing Assistance
Restructuring (OMHAR) for mark-to-market or "OMHAR lite" renewals, renewing
contracts that are exempted from referral to OMHAR, renewing contracts for
portfolio re-engineering demonstration and preservation projects, and opting out
of the Section 8 program. Owners must submit their option to HUD at least 120
days before expiration of their contract. Each option contains specific rules
and procedures that must be followed to comply with the requirements of housing
notice 99-36.
As such, each Local Limited Partnership may choose to either opt out of
the Section 8 program, request mortgage restructuring and renewal of the Section
8 contract, or request renewal of the Section 8 contract without mortgage
restructuring. Each option contains a specific set of rules and procedures that
must be followed in order to comply with the requirements of MAHRAA. The general
partner of Williamston Homes received a five year renewal to March, 2005 subject
to annual Federal appropriation of funds. The remaining properties are working
with HUD to renew their existing contracts for two to five year periods.
The Partnership cannot reasonably predict legislative initiatives and
governmental budget negotiations, the outcome of which could result in a
reduction in funds available for the various federal and state administered
housing programs including the Section 8 program. Such changes could adversely
affect the future net operating income and debt structure of certain Local
Limited Partnerships currently receiving such subsidy or similar subsidies.
4. Investments in Local Limited Partnerships
The Partnership acquired Local Limited Partnership interests in
thirteen Local Limited Partnerships which own and operate government assisted
multi-family housing complexes. As discussed in Note 1 above, the Partnership
has sold three of its investments as of December 31, 2000. The Partnership, as
Investor Limited Partner pursuant to Local Limited Partnership Agreements,
acquired interests ranging from 94% to 98% in the profit or losses from
operations and cash from operations of each of the Local Limited Partnerships.
As discussed above, the Partnership is currently in the process of
liquidating the Partnership and disposing of its remaining investments in the
Local Limited Partnerships estimated to occur through the fourth quarter of 2001
or first quarter of 2002. No assurance can be given that management will be able
to complete its liquidation of Partnership's investments within this time
period.
35
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
4. Investments in Local Limited Partnerships, continued
The Partnership distributed $449,999 to the Partnership's Unit holders
in August, 1999 from the proceeds of the sales of Local Limited Partnership
interests in Fiddlers Creek Apartments and Linden Park Associates.
Twelve Local Limited Partnership interests were acquired from
withdrawing partners of existing Local Limited Partnerships and one Local
Limited Partnership interest was acquired from a newly formed Local Limited
Partnership. In conjunction with the acquisition of eleven of the Local Limited
Partnership interests from withdrawing partners, the Partnership issued
long-term purchase money notes in the aggregate principal amount of $8,705,000,
before discount, to such withdrawing partners. In conjunction with the
acquisition of Linden Park Associate's interests, the Local Limited Partnership
issued purchase money notes to withdrawing partners amounting to $1,800,000 with
the same terms as the purchase money notes issued by the Partnership in
connection with its acquisition of interests in other Local Limited
Partnerships.
All of the Purchase Money Notes accrued simple interest at 9% per annum
through December 31, 2000. Interest is payable annually but only to the extent
of cash distributed from the respective Local Limited Partnerships. Both
principal and unpaid interest are due at maturity. Recourse on such purchase
money notes is limited to the Partnership's respective Local Limited Partnership
interests which are pledged as security on the notes. In connection with
adopting the liquidation basis of accounting the Partnership will not accrue
interest on the Purchase Money Notes subsequent to December 31, 2000.
Purchase Money Note obligations decreased by $2,938,554 in the first
quarter of 2000 as the Partnership's obligations with respect to the Purchase
Money Note were released in connection with the sale of the Partnership's
interest in Osuna. Purchase Money Note obligations decreased in 1999 as the
Purchase Money Note obligations were assumed by the purchaser of the
Partnership's interest in Fiddlers Creek Apartments. See Note 6 for further
information on Purchase Money Notes.
The Partnership's investments in Local Limited Partnerships reported in
its Balance Sheet at December 31, 1999 was $1,194,917 greater than the
Partnership's equity reported in the Summarized Balance Sheet below. This is
related to the share of unrecorded losses of the seven Local Limited
Partnerships and cash distributions received from Glendale Manor and Surry Manor
which were recorded as investment income. The investment of these seven Local
Limited Partnerships has been reduced to zero with Linden Park Associates (one
of the seven) being sold on July 15, 1999. Effective December 31, 2000, the
Investments in Local Limited Partnerships were reduced by $ 487,115 and deferred
legal costs relating to dispositions of the investments were reduced by $31,028
to reflect the investments at their aggregate estimated realizable value in
accordance with the liquidation basis of accounting.
The Partnership recorded its share of losses in Linden Park, Brierwood
Ltd., Brierwood II, Ltd., Pine Forest Apartments, Ltd., Surry Manor, Glendale
Manor and Meadowwood, Ltd. until its related investment was reduced to zero.
Subsequent to that point, any cash distributions received from the six remaining
partnerships will be recognized as investment income rather than as a reduction
in Investment in Local Limited Partnerships. In 2000, $2,033 of cash
distributions from Glendale Manor were recognized as investment income as it
would have reduced its investment balance below zero.
36
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
4. Investments in Local Limited Partnerships, continued
The Partnership is not obligated to make additional capital contributions to
fund the deficit in its capital accounts in these Local Limited Partnerships.
Certain Local Limited Partnerships have made payments on behalf of the
Partnership for non-resident state withholding taxes in accordance with state
income tax regulations. These amounts totaling $3,123 in 2000, $5,641 in 1999
and $4,961 in 1998 have been treated as distributions from the Local Limited
Partnerships and a distribution to the partners of Liberty Housing Partners
Limited Partnership.
The following is a summary of cumulative activity for investments in
Local Limited Partnerships since their dates of acquisition:
Years Ended December 31,
------------------------
2000 1999
---- ----
Total acquisition cost to the Partnership $ 9,356,379 $ 9,356,379
Additional capital contributed by the Partnership 11,425 11,425
Partnership's share of losses of Local Limited Partnerships (3,444,200) (3,450,761)
Cash distributions received from Local Limited Partnerships (4,199,256) (4,069,602)
Cash distributions received from Local Limited
Partnerships recognized as Investment Income 95,195 93,162
Sales of investments in Local Limited Partnerships (1,035,518) (465,520)
Adjustment to reduce investments in Local Limited Partnerships
to liquidation accounting basis (487,115) --
----------- -----------
Investments in Local Limited Partnerships $ 296,910 $ 1,475,083
=========== ===========
37
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
4. Investments in Local Limited Partnerships, continued
Summarized financial information from the combined financial statements
of all Local Limited Partnerships is as follows:
Summarized Balance Sheets
-------------------------
2000 1999
---- ----
Assets:
Investment property, net
of accumulated depreciation $ 7,771,045 $ 9,283,026
Current assets 1,127,683 1,798,870
Other assets 195,708 183,041
------------ ------------
Total assets $ 9,094,436 $ 11,264,937
============ ============
Liabilities and Partners' Equity (Deficit):
Current liabilities 730,061 809,543
Long-term debt, net of discounts 9,082,556 10,326,846
------------ ------------
Total liabilities 9,812,617 11,136,389
Partnership's equity (deficit) (553,347) 280,166
Other partners' equity (deficit) (164,834) (151,618)
------------ ------------
Total liabilities and
partners' equity (deficit) $ 9,094,436 $ 11,264,937
============ ============
Summarized Statements of Operations
-----------------------------------
For the Years Ended December 31,
--------------------------------
2000 1999 1998
---- ---- ----
Rental and other income $ 3,019,184 $ 4,463,668 $ 5,482,888
Expenses:
Operating expenses 1,981,234 2,957,059 3,442,496
Interest expense 582,074 773,617 1,019,581
Depreciation and amortization 591,400 813,890 1,011,101
----------- ----------- -----------
Total expenses 3,154,708 4,544,566 5,473,178
----------- ----------- -----------
Net income (loss) $ (135,524) $ (80,898) $ 9,710
----------- ----------- -----------
Partnership's share of net income (loss) $ (133,862) $ (80,324) $ 9,506
----------- ----------- -----------
Other partners' share
of net income (loss) $ (1,662) $ (574) $ 204
----------- ----------- -----------
38
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
4. Investments in Local Limited Partnerships, continued
The difference between the Partnership's share of income in Local
Limited Partnership investments in the Partnership's Statements of Operations
for the years ended December 31, 2000, 1999 and 1998 and the share of income
(loss) in the above Summarized Statements of Operations consists of the
Partnership's unrecorded share of losses and cash distributions recorded as
investment income as follows:
2000 1999 1998
---- ---- ----
Share of income in Local Limited Partnership Investments
in the Partnership's Statement of Operations $ 8,594 $ 139,548 $ 224,229
Partnership's share of income (loss) in the
Above summarized Statement of Operations (133,862) (80,324) 9,506
--------- --------- ---------
Difference $ 142,456 $ 219,872 $ 214,723
========= ========= =========
Unrecorded Losses:
Linden Park $ -- $ 37,641 $ 19,199
Brierwood, Ltd. 19,725 33,837 46,313
Brierwood II, Ltd. 10,259 25,903 18,802
Pine Forest Apartments, Ltd. 48,854 33,806 41,658
Surry Manor 23,508 39,642 --
Glendale Manor 5,554 1,995 7,778
Meadowwood 32,523 28,046 29,908
--------- --------- ---------
Subtotal Unrecorded Losses 140,423 200,870 163,658
Cash distributions recorded as investment income:
Glendale Manor 2,033 19,002 37,497
Surry Manor -- -- 13,568
--------- --------- ---------
Total $ 142,456 $ 219,872 $ 214,723
========= ========= =========
5. Notes and Accrued Interest Receivable
On July 15, 1999 (also the date that the Partnership sold its interest
in Linden Park) Linden Park refinanced their existing debt and paid in full the
principal and accrued and unpaid interest due the Partnership on their notes
totaling $241,058. In accordance with the Partnership's consulting agreement
with the General Partner of Linden Park (the "Linden GP") these funds have been
segregated for use to pay the fees and expenses due the Linden GP. The Linden GP
was engaged in 1998 to assist with the workout or liquidation of the
Partnership's portfolio. If the workout or liquidation of the entire portfolio
is successfully completed all of the segregated funds will be paid to the Linden
GP. The remaining balance of the segregated funds was $165,994 as of December
31, 1999 and is included in cash and cash equivalents.
39
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
6. Transactions with Affiliates
During the years ended December 31, 2000, 1999 and 1998 the Partnership
recognized general and administrative expenses owed to the Managing General
Partner, as follows:
2000 1999 1998
---- ---- ----
Reimbursement of Partnership
Administration expenses $48,025 $49,681 $48,136
Partnership management fees 50,000 50,000 50,000
Prior to the adoption of liquidation basis of accounting, accounts
payable as of December 31, 2000 and 1999, to affiliates totaling $286,271 and
$188,272 respectively, represent amounts owed for reimbursements of Partnership
administration expenses of $144,000 and $96,001, respectively, and partnership
management fees of $ 142,271 and $92,271, respectively. In 2000, the Partnership
reimbursed expenses of $27. In 1999, the Partnership reimbursed deferred
administration expenses of $20,000 and Partnership management fees of $63,000
out of the Fiddlers Creek Apartments and Linden Park Associates sales proceeds.
In connection with the adoption of the liquidation basis of accounting, an
adjustment to record estimated liabilities through the liquidation of $100,000
was recorded. This amount includes $50,000 of partnership management fees and
$50,000 of reimbursable administration expenses.
40
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes
Purchase money notes consist of the following at December 31:
2000 1999
---- ----
Purchase Money Notes, due July 9, 2001,
Bearing interest at 9% per annum,
Collateralized by the Partnership's
Local Limited Partnership interest
In Surry Manor, Ltd.:
Original principal balance $ 360,000 $ 360,000
Accrued and unpaid interest 403,429 371,029
Reduction to adjust to Liquidation Accounting (763,429) --
------------ ------------
-- 731,029
Purchase Money Notes, due August 29,
2000, bearing interest at 9% per annum,
collateralized by the Partnership's
Local Limited Partnership interest in
Glendale Manor Apartments:
Original principal balance 450,000 450,000
Accrued and unpaid interest 238,702 198,097
Reduction to adjust to Liquidation Accounting (688,702) --
------------ ------------
-- 648,197
Purchase Money Notes, due September 28,
1999, bearing interest at 9% per annum,
collateralized by the Partnership's
Local Limited Partnership interest in
Oxford Homes for the Elderly, Ltd.:
Original principal balance 643,600 643,600
Accrued and unpaid interest 330,893 272,357
Reduction to adjust to Liquidation Accounting (973,855) --
------------ ------------
638 915,957
Purchase Money Notes, due September 28,
1999, bearing interest at 9% per annum,
collateralized by the Partnership's
Local Limited Partnership interest in
Williamston Homes for the Elderly, Ltd.:
Original principal balance 664,100 664,100
Accrued and unpaid interest 222,870 162,702
Reduction to adjust to Liquidation Accounting (875,406) --
------------ ------------
11,564 826,802
41
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
2000 1999
---- ----
Purchase Money Notes, due September 28,
1999, bearing interest at 9% per annum,
collateralized by the Partnership's
Local Limited Partnership interest in
Fuquay-Varina Homes for the Elderly, Ltd.:
Original principal balance $ 707,300 $ 707,300
Accrued and unpaid interest 95,730 30,437
Reduction to adjust to Liquidation Accounting (773,502) --
------------ ------------
29,528 737,737
Purchase Money Notes, due
October 30, 1999, bearing interest at
9% per annum,collateralized by the
Partnership's Local Limited Partnership
Interest in Meadowwood, Ltd.:
Original principal balance 610,000 610,000
Accrued and unpaid interest 871,111 816,211
Reduction to adjust to Liquidation Accounting (1,481,012) --
------------ ------------
99 1,426,211
Purchase Money Notes, due
October 30, 1999, bearing interest at
9% per annum, collateralized by the
Partnership's Local Limited Partnership
Interest in Brierwood, Ltd.:
Original principal balance 270,000 270,000
Accrued and unpaid interest 382,814 353,406
Reduction to adjust to Liquidation Accounting (652,715) --
------------ ------------
99 623,406
42
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
2000 1999
---- ----
Purchase Money Notes, due
October 30, 1999, bearing interest at
9% per annum, collateralized by the
Partnership's Local Limited Partnership
Interest in Pine Forest Apartments, Ltd.:
Original principal balance 350,000 350,000
Accrued and unpaid interest 487,328 447,027
Reduction to adjust to Liquidation Accounting (837,328) --
------------ ------------
-- 797,027
Purchase Money Notes, due
October 30, 1999, bearing interest at
9% per annum, collateralized by the
Partnership's Local Limited Partnership
Interest in Austintown Associates:
Original principal balance $ 1,600,000 $ 1,600,000
Accrued and unpaid interest 2,163,492 2,019,437
Reduction to adjust to Liquidation Accounting (3,753,437) --
------------ ------------
10,055 3,619,437
Purchase Money Notes, due
November 27, 1999, bearing interest at
9% per annum, collateralized by the
Partnership's Local Limited Partnership
Interest in Osuna Apartments Company:
Original principal balance -- 1,300,000
Accrued and unpaid interest -- 1,628,803
Reduction to adjust to Liquidation Accounting -- --
------------ ------------
-- 2,928,803
43
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
2000 1999
---- ----
Total principal and accrued and unpaid interest at 9% at
December 31, 2000 at liquidation basis and at
December 31, 1999 at accrued basis 51,983 13,254,506
Aggregate discount on the above purchase
money notes plus accrued interest (based
upon average imputed interest rates of 21%)
The unamortized discount for those Purchase Money Notes
that matured in 1999 was written off -- (169,499)
------------ ------------
Purchase Money Note and accrued and unpaid interest
liability at December 31, 2000 at liquidation basis and at
December 31, 1999 at accrued basis $ 51,983 13,085,007
============
Less: current maturities, net of aggregate discount (12,436,808)
------------
Long-term purchase money note liability $ 648,199
============
The Purchase Money Notes were originally discounted using an imputed
interest rate of approximately 19% and assuming a certain level of cash flow
from distributions from the underlying Local Limited Partnerships
("distributions"). Since 1990, on an annual basis, the Partnership has reviewed
the estimated annual level of distributions expected to be received based on
historical and re-forecasted future distributions and adjusted accordingly the
future effective annual interest expense. In 1999, the effective annual interest
rate was approximately 21%. In 2000, the remainder of unamortized discount was
written off.
The Partnership's interests in these Local Limited Partnerships were
pledged as security for the Partnership's obligations under the respective
Purchase Money Notes. The sale or other disposition by the Partnership of its
interests in the Local Limited Partnerships, including in connection with a
foreclosure of the pledged security, is likely to result in recapture of
previously claimed tax losses to the Partnership and may have other adverse tax
consequences to the Partnership and to the Limited Partners. Such recapture may
cause some or all of the Limited Partners to have taxable income from the
Partnership without cash distributions from the Partnership with which to
satisfy the tax liability resulting therefrom.
44
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
The Purchase Money Notes (PMN) outstanding for Fuquay-Varina, Oxford
Homes, Williamston Homes, Compass West Apartments, Meadowwood Ltd, Brierwood
Ltd, Pine Forest and Osuna Apartments matured in 1999 and Glendale Manor in
2000. The Purchase Money Notes relating to Osuna were assumed by the buyer in
connection with the sale of the Partnership's investment in February 2000. The
remaining eight series of PMNs identified above are now in default. In 2000 and
1999, the unamortized discount for these PMNs totaling $86,669 and $658,894,
respectively, were written off. The unamortized discount relating to the PMNs
outstanding for Surry Manor totaling $82,830 was also written off in 2000. These
PMNs relating to Surry Manor mature in July, 2001. The Partnership accrued
interest on these notes at the legal rate of 9 % through December 31, 2000. In
connection with adopting the liquidation basis of accounting the Partnership
will not accrue interest on the Purchase Money Notes subsequent to December 31,
2000.
All of the Purchase Money Notes and accrued interest thereon for the
remaining Purchase Money Notes may be repaid without penalty prior to maturity.
At December 31, 1999 accrued interest of $ 141,318 was currently payable. The
portion of interest, which is not expected to be paid currently, was added to
purchase money note debt and classified as either current or long-term at
December 31, 1999 depending on the maturity of the related PMNs. Effective
December 31, 2000 the PMNs were reduced by an aggregate $10,799,386 to $51,983
to reflect the PMNs and accrued and unpaid interest at their estimated
settlement amounts in accordance with the liquidation basis of accounting.
8. Accrued Expenses
Accrued Expenses in liquidation at December 31, 2000 and accrued
expenses at December 31, 1999 consisted of the following:
December 31,
---------------------
2000 1999
---- ----
Professional fees $ 50,897 $ 98,597
Liabilities accrued to estimated settlement
amounts in liquidation:
Professional fees 177,250 --
Consulting fees 147,103 --
-------- --------
$375,250 $ 98,597
======== ========
45
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
9. Reconciliation of Income (Loss) in Financial Statements to Income (Loss)
for Federal Income Tax Purposes
A reconciliation of the income (loss) reported in the Statements of
Operations for the years ended December 31, 2000, 1999 and 1998, to the income
(loss) reported for Federal income tax purposes is as follows:
2000 1999 1998
---- ---- ----
Net income (loss) per Statements of
Operations $ 1,621,217 $ 1,321,731 $(2,555,661)
Add: Excess of tax equity over book equity in
loss of Local Limited Partnership 326,937 (281,806) (700,821)
Add: Additional book basis interest 26,063 814,632 1,707,207
Expenses not deducted pursuant to I.R.C
Section 267 97,999 15,002 98,000
Excess tax gain over book gain on sale of
Interest in:
Fiddlers Creek Apartments -- 1,400,512 --
Linden Park Associates -- 3,423,861 --
Osuna Apartments Company 655,062 -- --
----------- ----------- -----------
Income (loss) for federal income
tax purposes $ 2,727,278 $ 6,693,932 $(1,451,275)
=========== =========== ===========
10. Concentration of Credit Risk
The Partnership maintains its cash and cash equivalents in two
financial institutions. The balances are insured by the Federal Deposit
Insurance Corporation up to $100,000 by these banks. As of December 31, 2000 and
1999, the uninsured cash balances held at its banks was approximately $361,163
and $369,747, respectively.
46
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
11. Statement of Distributable Cash from Operations (Unaudited)
Distributable Cash From Operations for the year ended December 31,
2000, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income per Statement of Operations $ 22,805
Plus: 2000 cash distributions to be received from
Local Limited Partnerships, net of non-resident
state withholding taxes 41,785
Less: 2000 interest payments on Purchase Money
Notes to be paid out of 1999 cash
distributions from Local Limited Partnerships (41,785)
Less: General and administrative expenses per
Statement of Operations (154,282)
---------
Cash from Operations, as defined (131,477)
---------
Distributable Cash from Operations, as defined $ 0
=========
12. Disclosures about Fair Value of Financial Instruments
Purchase Money Notes
Management does not believe it is practical to determine the fair value
of the Purchase Money Notes as of December 31, 1999 because notes with similar
terms and provisions are not currently available to the Partnership.
13. Subsequent Event
As described in Note 1, the sale of the Partnership's interests in
Fuquay-Varina, Oxford Homes and Williamston Homes closed on March 30, 2001.
These transactions closed at the amounts reflected in the financial statements.
47
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
14. Quarterly Financial Data (Unaudited)
The following is a summary of quarterly results of operation for 2000.
Amounts are expressed in thousands with the exception of per Unit calculations.
Selected Quarterly Data for the Year Ended December 31, 2000
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
Interest income $ 6 $ 4 $ 4 $ 9
Other income (1) 2,434 -- (2) --
Income (loss) before
extraordinary items:
Total 2,229 (81) (254) (273)
Per unit 102.35 (3.72) (11.67) (12.53)
Net income (loss):
Total 2,229 (81) (254) (273)
Per unit 102.35 (3.72) (11.67) (12.53)
(1) Reflects restatement of the gain on sale of investment in Osuna of
$2,432,299 from extraordinary income to ordinary income.
48
INDEPENDENT AUDITORS' REPORT
To the Partners
Liberty Housing Partners Limited Partnership
Needham, Massachusetts
We have audited the accompanying statement of net assets in liquidation
and statement of adjustments to net assets in liquidation of Liberty Housing
Partners Limited Partnership (a Massachusetts Limited Partnership) as of
December 31, 2000, and the related statements of operations, changes in
partners' deficit, and cash flows for the year ended December 31, 2000. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. We did not audit the 2000 financial statements of the Local Limited
Partnerships in which Liberty Housing Partners Limited Partnership owns a
limited partnership interest. Investments in such partnerships comprise 36% of
the total assets as of December 31, 2000, and income and (losses) from such
partnerships comprise .5% of the income (loss) for the year ended December 31,
2000 of Liberty Housing Partners Limited Partnership. The financial statements
of these partnerships were audited by other auditors whose reports have been
furnished to us, and our opinion insofar as it relates to information relating
to these partnerships is based solely on the reports of the other auditors. The
financial statements of Liberty Housing Partners Limited Partnership as of
December 31, 1999 and for each of the two years in the period ended December 31,
1999, were audited by other auditors whose report dated March 21, 2000,
expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audit and the reports of
the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audit and the reports of the other
auditors, the 2000 financial statements referred to above present fairly, in all
material respects, the statement of net assets in liquidation and statement of
adjustments to net assets in liquidation of Liberty Housing Partners Limited
Partnership as of December 31, 2000, and the results of its operations and its
cash flows for the year ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America.
49
As described in Note 2 to the financial statements, the Partnership
changed its basis of accounting effective December 31, 2000 from the going
concern basis. Accordingly, the carrying values of the remaining assets as of
December 31, 2000 are presented at estimated realizable values and all
liabilities are presented at estimated settlement amounts to the liquidation
basis.
Our audit was made for the purpose of forming an opinion on the basic
2000 financial statements taken as a whole. The supplemental schedule listed in
the accompanying index on page 20 is presented for the purposes of complying
with the Securities and Exchange Commission's rules and is not a required part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements. In
our opinion, which insofar as it relates to amounts included for the Local
Limited Partnerships, is based on the reports of the other auditors, this
schedule fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ROBERT ERCOLINI & COMPANY LLP
Boston, Massachusetts
March 30, 2001
50
INDEPENDENT AUDITORS' REPORT
To the Partners
Liberty Housing Partners Limited Partnership
We have audited the accompanying balance sheet of Liberty Housing
Partners Limited Partnership (a Massachusetts Limited Partnership) as of
December 31, 1999, and the related statements of operations, changes in
partners' deficit, and cash flows for each of the two years in the period ended
December 31, 1999. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial
statements of certain operating partnerships in which Liberty Housing Partners
Limited Partnership owns a limited partnership interest. Investments in such
partnerships comprise 36% of the assets as of December 31, 1999, and income and
(losses) from such partnerships comprise 8% and 0% of the partnership income
(loss) for each of the two years in the period ended December 31, 1999, of
Liberty Housing Partners Limited Partnership. The financial statements of these
partnerships were audited by other auditors, whose reports have been furnished
to us, and our opinion, insofar as it relates to information relating to these
partnerships, is based solely on the reports of the other auditors.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other
auditors referred to above, the financial statements referred to above present
fairly, in all material respects, the financial position of Liberty Housing
Partners Limited Partners as of December 31, 1999 the results of its operations
and its cash flows for each of the two years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States of America.
Bethesda, Maryland REZNICK FEDDER & SILVERMAN
March 21, 2000
51
Henderson & Godbee, P.C.
Certified Public Accountants
Members of American Institute of Certified Public Accountants o
Georgia Society of Certified Public Accountants
- --------------------------------------------------------------------------
Robert A. Goddard, Jr. CPA (1943-1989) Shirley S. Miller, CPA
Gerald H. Henderson, CPA Vondia W. Noland, CPA
J. Wendell Godbee, CPA Amber J. Tanner, CPA
Mark S. Rogers, CPA Thad E. Hughes, CPA
Maureen P. Collins, CPA H. Brandon Dampier, CPA
Maureen P. Collins, CPA Jeannine W. Torbert, CPA
Krystal P. Hiers, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners
Meadowwood, Ltd.
Valdosta, Georgia
We have audited the accompanying balance sheets of Meadowwood, Ltd. (A
Georgia Limited Partnership), FmHA Project No: 11-037-581292555 as of December
31, 2000 and 1999, and the related statements of operations, changes in
partners' equity (deficit) and cash flows for the years then ended. These
financial. statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Meadowwood, Ltd. as
of December 31, 2000 and 1999, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 17, 2001 on our consideration of Meadowwood, Ltd.'s
internal control structure, and a report dated January 17, 2001 on its
compliance with laws and regulations.
/s/ Henderson & Godbee, P.C.
Henderson & Godbee, P.C.
Certified Public Accountants
January 17, 2001
3488 North Valdosta Road / P.O. Box 2241 / Valdosta, Georgia 31604-2241
/ Phone: (229) 245-6040 / FAX: (229) 245-1669
52
Henderson & Godbee, P.C.
Certified Public Accountants
Members of American Institute of Certified Public Accountants o
Georgia Society of Certified Public Accountants
- --------------------------------------------------------------------------
Robert A. Goddard, Jr. CPA (1943-1989) Shirley S. Miller, CPA
Gerald H. Henderson, CPA Vondia W. Noland, CPA
J. Wendell Godbee, CPA Amber J. Tanner, CPA
Mark S. Rogers, CPA Thad E. Hughes, CPA
Maureen P. Collins, CPA H. Brandon Dampier, CPA
Maureen P. Collins, CPA Jeannine W. Torbert, CPA
Krystal P. Hiers, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners
Pine Forest Apartments, Ltd.
Valdosta, Georgia
We have audited the accompanying balance sheets of Pine Forest
Apartments, Ltd. (A Georgia Limited Partnership), USDA,RD No: 10-065-0581414045
as of December 31, 2000 and 1999, and the related statements of operations,
changes in partners' (deficit), and cash flows for the years then ended. These
financial statements are the responsibility of. the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Pine Forest
Apartments, Ltd. as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for the years then ended: in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 16, 2001 on our consideration of Pine Forest Apartments,
Ltd.'s. internal control structure and a report dated January 16, 2001 on its
compliance with laws and regulations.
/s/ Henderson & Godbee, P.C.
Henderson & Godbee, P. C.
Certified Public Accountants
January 16, 2001
3488 North Valdosta Road / P.O. Box 2241 / Valdosta, Georgia 31604-2241
/ Phone: (229) 245-6040 / FAX: (229) 245-1669
53
Henderson & Godbee, P.C.
Certified Public Accountants
Members of American Institute of Certified Public Accountants o
Georgia Society of Certified Public Accountants
- -----------------------------------------------------------------------------
Robert A. Goddard, Jr. CPA (1943-1989) Shirley S. Miller, CPA
Gerald H. Henderson, CPA Vondia W. Noland, CPA
J. Wendell Godbee, CPA Amber J. Tanner, CPA
Mark S. Rogers, CPA Thad E. Hughes, CPA
Maureen P. Collins, CPA H. Brandon Dampier, CPA
Maureen P. Collins, CPA Jeannine W. Torbert, CPA
Krystal P. Hiers, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners
Brierwood, Ltd.
Valdosta, Georgia
We have audited the accompanying balance sheets of Brierwood, Ltd. (A
Georgia Limited Partnership), RECD Project No.: 10-043-581354705 as of December
31, 2000 and 1999, and the related statements of operations, changes in
partners' (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on. these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects; the financial position of Brierwood, Ltd. as
of December 31, 2000 and 1999, and the results of its operation and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January l6, 2001 on our consideration of Brierwood, Ltd.'s internal
control structure and a report dated January 16, 2001 on its compliance with
laws and regulations.
/s/ Henderson & Godbee, P.C.
Henderson & Godbee, P. C.
Certified Public Accountants
January 16, 2001
3488 North Valdosta Road / P.O. Box 2241 / Valdosta, Georgia 31604-2241
/ Phone: (229) 245-6040 / FAX: (229) 245-1669
54
Henderson & Godbee, P.C.
Certified Public Accountants
Members of American Institute of Certified Public Accountants o
Georgia Society of Certified Public Accountants
- -----------------------------------------------------------------------------
Robert A. Goddard, Jr. CPA (1943-1989) Shirley S. Miller, CPA
Gerald H. Henderson, CPA Vondia W. Noland, CPA
J. Wendell Godbee, CPA Amber J. Tanner, CPA
Mark S. Rogers, CPA Thad E. Hughes, CPA
Maureen P. Collins, CPA H. Brandon Dampier, CPA
Maureen P. Collins, CPA Jeannine W. Torbert, CPA
Krystal P. Hiers, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners
Brierwood II, Ltd.
Valdosta, Georgia
We have audited the accompanying balance sheets of Brierwood II, Ltd.,
(A Georgia Limited Partnership), FmHA No: 10-43-581538983; as of December 31,
2000 and 1999, and the related statements of operations, changes in partners'
(deficit), and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and. perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Brierwood II, Ltd.,
as of December 31, 2000 and 1999, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with. Government Auditing Standards, we have also issued
a report dated January 16, 2001 on our consideration of Brierwood II, Ltd.'s
internal control structure and a report dated January 16, 2001 on its compliance
with laws and regulations.
/s/ Henderson & Godbee, P.C.
Henderson & Godbee, P. C.
Certified Public Accountants
January 16, 2001
3488 North Valdosta Road / P.O. Box 2241 / Valdosta, Georgia 31604-2241
/ Phone: (229) 245-6040 / FAX: (229) 245-1669
55
SHARRARD, MCGEE & CO., P.A.
CERTIFIED PUBLIC ACCOUNTANTS o CONSULTANTS
1321 LONG STREET o POST OFFICE BOX 5869 o HIGH POINT, NORTH CAROLINA 27262
(336) 884-0410
FAX (336) 884-1580
________
GREENSBORO OFFICE:
LAKE POINT, SUITE 202
701 GREEN VALLEY ROAD
P.O. BOX 10439
GREENSBORO, N.C. 27404
(336) 272-9777
January 17, 2001
Independent Auditors' Report
To the Partners
Fuquay-Varina Homes for the Elderly, Ltd.
We have audited the accompanying balance sheet of Fuquay-Varina Homes
for the Elderly, Ltd., HUD Project No. 053-35198-PM-WAH-L8 (a North Carolina
limited partnership) as of December 31, 2000, and the related statements of
income, partners' equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Fuquay-Varina Homes
for the Elderly, Ltd. as of December 31, 2000, and the results of its
operations, changes in partners' equity, and cash flows for the year then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 17, 2001 on
our consideration of Fuquay-Varina Homes for the Elderly, Ltd.'s internal
control and reports dated January 17, 2001, on its compliance with laws and
regulations, specific requirements applicable to major HUD programs, specific
requirements applicable to Fair Housing and NonDiscrimination, and specific
requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information shown on pages 17 - 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Sharrard, McGee & Co., P.A.
56
SHARRARD, MCGEE & CO., P.A.
CERTIFIED PUBLIC ACCOUNTANTS o CONSULTANTS
1321 LONG STREET o POST OFFICE BOX 5869 o HIGH POINT, NORTH CAROLINA 27262
(336) 884-0410
FAX (336) 884-1580
________
GREENSBORO OFFICE:
LAKE POINT, SUITE 202
701 GREEN VALLEY ROAD
P.O. BOX 10439
GREENSBORO, N.C. 27404
(336) 272-9777
Independent Auditors' Report
January 17, 2001
To the Partners
Oxford Homes for the Elderly, Ltd.
We have audited the accompanying balance sheet of Oxford Homes for the
Elderly, Ltd., HUD Project No. 053-35197-PM-WAH-L8 (a North Carolina limited
partnership) as of December 31, 2000, and the related statements of income,
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Oxford Homes for the
Elderly, Ltd. as of December 31, 2000, and the results of its operations,
changes in partners' equity, and cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 17, 2001 on
our consideration of Oxford Homes for the Elderly, Ltd.'s internal control and
reports dated January 17, 2001, on its compliance with laws and regulations,
specific requirements applicable to major HUD programs, specific requirements
applicable to Fair Housing and Non-Discrimination, and specific requirements
applicable to, nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information shown on pages 17 - 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Sharrard, McGee & Co., P.A.
57
SHARRARD, MCGEE & CO., P.A.
CERTIFIED PUBLIC ACCOUNTANTS o CONSULTANTS
1321 LONG STREET o POST OFFICE BOX 5869 o HIGH POINT, NORTH CAROLINA 27262
(336) 884-0410
FAX (336) 884-1580
________
GREENSBORO OFFICE:
LAKE POINT, SUITE 202
701 GREEN VALLEY ROAD
P.O. BOX 10439
GREENSBORO, N.C. 27404
(336) 272-9777
Independent Auditors' Report
January 17, 2001
To the Partners
Williamston Homes for the Elderly, Ltd.
We have audited the accompanying balance sheet of Williamston Homes for the
Elderly, Ltd., HUD Project No. 053-35196-PM-WAH-L8 (a North Carolina limited
partnership) as of December 31, 2000, and the related statements of income,
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued b the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Williamston Homes
for the Elderly, Ltd. as of December 31, 2000, and the results of its
operations, changes in partners' equity, and cash flows for the year then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 17, 2001 on
our consideration of Williamston Homes for the Elderly, Ltd.'s internal control
and reports dated January 17, 2001, on its compliance with laws and regulations,
specific requirements applicable to major HUD programs, specific requirements
applicable to Fair Housing and Non-Discrimination, and specific requirements
applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information shown on pages 17 - 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing Procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Sharrard, McGee & Co., P.A.
58
SHARRARD, MCGEE & CO., P.A.
CERTIFIED PUBLIC ACCOUNTANTS o CONSULTANTS
1321 LONG STREET o POST OFFICE BOX 5869 o HIGH POINT, NORTH CAROLINA 27262
(336) 884-0410
FAX (336) 884-1580
________
GREENSBORO OFFICE:
LAKE POINT, SUITE 202
701 GREEN VALLEY ROAD
P.O. BOX 10439
GREENSBORO, N.C. 27404
(336) 272-9777
Independent Auditors' Report
January 16, 2001
To the Partners
Surry Manor, Ltd.
We have audited the accompanying balance sheet of Surry Manor, Ltd.,
HUD Project No. 05335279-PM-WAH-L8 (a North Carolina limited partnership) as of
December 31, 2000, and the related statements of net loss, partners' deficit,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Surry Manor, Ltd. as
of December 31, 2000, and the results of its operations, changes in partners'
deficit, and cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 16, 2001 on
our consideration of Surry Manor, Ltd.'s internal control and reports dated
January 16, 2001, on its compliance with laws and regulations, specific
requirements applicable to major HUD programs, specific requirements applicable
to Fair Housing and Non-Discrimination, and specific requirements applicable to
nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information shown on pages 17 - 19 is presented for purposes of additional
analysis and is not a required. part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Sharrard, McGee & Co., P.A.
59
SHARRARD, MCGEE & CO., P.A.
CERTIFIED PUBLIC ACCOUNTANTS o CONSULTANTS
1321 LONG STREET o POST OFFICE BOX 5869 o HIGH POINT, NORTH CAROLINA 27262
(336) 884-0410
FAX (336) 884-1580
________
GREENSBORO OFFICE:
LAKE POINT, SUITE 202
701 GREEN VALLEY ROAD
P.O. BOX 10439
GREENSBORO, N.C. 27404
(336) 272-9777
Independent Auditors' Report
January 16, 2001
To the Partners
Glendale Manor Apartments
We have audited the accompanying balance sheet of Glendale Manor
Apartments, HUD Project No. 054-35386-PM-WAH-L8 f a South Carolina limited
partnership) as of December 31, 2000, and the related statements of net loss,
partners' deficit, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Glendale Manor
Apartments as of December 31, 2000, and the results of its operations, changes
in partners' deficit, and cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 16, 2001 on
our consideration of Glendale Manor Apartments' internal control and reports
dated January 16, 2001, on its compliance with laws and regulations, specific
requirements applicable to major HUD programs, specific requirements applicable
to Fair Housing and Non-Discrimination, and specific requirements applicable to
nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information shown on pages 17 -19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Sharrard, McGee & Co., P.A.
60
HbK
HILL, BARTH & KING LLC
7680 Market Street
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
January 24, 2001
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report
We have audited the accompanying balance sheet of Austintown Associates
(a Limited Partnership), HUD Project Number 042-44213, as of December 31, 2000,
the related statements of operations, partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Austintown
Associates (a Limited Partnership), HUD Project Number 042-44213, as of December
31, 2000 and the results of its operations, partners' capital and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 24, 2001 on
our consideration of Austintown Associates' internal controls and reports dated
January 24, 2001 on its compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD program
transactions.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying information on
pages 15 to 18 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of Austintown Associates. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Hill, Barth & King LLC
Certified Public Accountants
61
FINANCIAL STATEMENTS
AND ACCOMPANYING INFORMATION
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
62
CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT. ...........................................1
BALANCE SHEET .........................................................2-3
STATEMENT OF OPERATIONS................................................4-5
STATEMENT OF PARTNERS' CAPITAL ..........................................6
STATEMENT OF CASH FLOWS ...............................................7-8
NOTES TO FINANCIAL STATEMENTS.........................................9-14
ACCOMPANYING INFORMATION:
SUPPORTING DATA REQUIRED BY HUD...............................15-18
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL ....................19-20
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD
PROGRAMS.........................................................21
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO NONMAJOR HUD PROGRAM
TRANSACTIONS ....................................................22
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING
AND NON-DISCRIMINATION ........................................23
MANAGING PARTNERS' CERTIFICATION ......................................24
MANAGEMENT AGENT'S CERTIFICATION .......................................25
63
HbK
HILL, BARTH & KING LLC
7680 Market Street
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
January 24, 2001
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report
We have audited the accompanying balance sheet of Austintown Associates
(a Limited Partnership), HUD Project Number 042-44213, as of December 31, 2000,
the related statements of operations, partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Austintown
Associates (a Limited Partnership), HUD Project Number 042-44213, as of December
31, 2000 and the results of its operations, partners' capital and cash flows for
the year then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 24, 2001 on
our consideration of Austintown Associates' internal controls and reports dated
January 24, 2001 on its compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD program
transactions.
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying information on
pages 15 to 18 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of Austintown Associates. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Hill, Barth & King LLC
Certified Public Accountants
64
BALANCE SHEET
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
ASSETS
CURRENT ASSETS
1120 Cash and cash equivalents $ 47,615
1130 Accounts receivable tenants 13,005
1131 Less allowance for doubtful accounts 5,000
----------
1130N Net accounts receivable tenants 8,005
1135 Accounts receivable HUD 3,032
1190 Supplies inventory 4,799
1200 Miscellaneous prepaid expenses 1,101
----------
TOTAL CURRENT ASSETS 64,552
----------
TENANT DEPOSITS HELD BY TRUST
1191 Tenant security deposits 43,677
RESTRICTED DEPOSITS HELD BY MORTGAGEE
1310 Escrow deposits 54,560
1320 Replacement reserve 264,816
----------
TOTAL DEPOSITS 319,376
----------
PROPERTY AND EQUIPMENT
1410 Land and land improvements 469,020
1420 Buildings 4,852,292
1440 Building equipment - portable 27,378
1450 Furniture 2,625
1460 Furnishings 193,013
1465 Office furniture and equipment 30,057
1470 Maintenance equipment 36,941
1480 Motor vehicles 9,043
----------
5,620,369
1495 Less accumulated depreciation 2,851,718
NET PROPERTY AND EQUIPMENT 2,768,651
----------
OTHER ASSETS
1520 Unamortized loan costs - net 11,934
1590 Workers' compensation deposit 433
----------
TOTAL OTHER ASSETS 12,367
----------
$3,208,623
==========
See accompanying notes to financial statements
65
BALANCE SHEET (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
2110 Accounts payable trade $ 61,856
2113 Mortgage insurance payable 13,142
2113 Accounts payable - entity 7,500
2115 Accounts payable Section 236 408
2116 Accounts payable HUD 2,650
2130 Accrued interest 356
2150 Accrued real estate taxes 85,800
2170 Mortgage payable - current portion 104,812
2177 Operating loss loan - current portion 4,880
----------
TOTAL CURRENT LIABILITIES 281,404
----------
OTHER LIABILITIES
2191 Tenant security deposits 27,553
LONG-TERM DEBT LESS PRINCIPAL DUE WITHIN ONE YEAR
2320 Mortgage payable 2,575,939
2327 Operating loss loan 2,360
----------
TOTAL LONG-TERM DEBT 2,578,299
----------
3130 PARTNERS' CAPITAL 321,367
----------
$3,208,623
==========
See accompanying notes to financial statements
66
STATEMENT OF OPERATIONS
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
OPERATIONS
REVENUE
5120 Rent revenue - gross potential $ 225,291
5121 Tenant assistance payments 705,624
TOTAL POTENTIAL RENT REVENUE 930,915
---------
5220 Vacancies - apartments 26,292
---------
NET RENTAL REVENUE 904,623
---------
5410 Financial revenue - project operations 4,325
5440 Revenue from investments - reserve for replacements 11,314
---------
TOTAL FINANCIAL REVENUE 15,639
---------
5910 Laundry revenue 1,269
5920 Tenant charges 10,941
5990 Miscellaneous revenue 14,073
---------
TOTAL OTHER REVENUE 26,283
---------
TOTAL REVENUE 946,545
---------
EXPENSES
6210 Advertising 2,636
6310 Office salaries 39,312
6311 Office expenses 18,609
6320 Management fees 79,168
6330 Manager salaries 20,151
6340 Legal expenses 1,190
6350 Audit expense 9,500
6351 Accounting services 2,900
6370 Bad debts 7,502
6390 Miscellaneous expenses 5,508
---------
TOTAL ADMINISTRATIVE EXPENSES 186,476
---------
6450 Electricity 51,529
6451 Water and sewer 53,084
---------
TOTAL UTILITIES EXPENSE $ 104,613
---------
See accompanying notes to financial statements
67
STATEMENT OF OPERATIONS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
EXPENSES (CONTINUED)
6510 Payroll $ 104,482
6515 Supplies 99,261
6520 Contracts 105,459
6525 Garbage and trash removal 14,333
6530 Security contract 2,015
6546 Heating/cooling repairs and maintenance 386
6548 Snow removal 1,800
6570 Vehicle and maintenance equipment operation and repairs 2,587
6590 Miscellaneous expense 3,997
---------
TOTAL OPERATING AND MAINTENANCE EXPENSES 334,320
---------
6710 Real estate taxes 84,165
6711 Payroll taxes 13,246
6720 Property and liability insurance 16,664
6721 Fidelity bond insurance 419
6722 Workers' compensation, 4,973
6723 Health insurance 20,246
6790 Miscellaneous, taxes, licenses, permits and insurance 500
---------
TOTAL TAXES AND INSURANCE 140,213
---------
6820 Interest on mortgage payable 6,184
6830 Interest on long-term note payable 875
6850 Mortgage insurance premium 13,365
6890 Miscellaneous financial expenses 1,218
---------
TOTAL FINANCIAL EXPENSES 21,642
---------
TOTAL COST OF OPERATIONS BEFORE
DEPRECIATION AND AMORTIZATION 787,264
---------
NET INCOME BEFORE DEPRECIATION AND AMORTIZATION 159,281
---------
6600 Depreciation expense 195,933
6610 Amortization expense 657
---------
TOTAL DEPRECIATION AND AMORTIZATION 196,590
---------
LOSS FROM OPERATIONS (37,309)
7190 Other entity expenses 7,500
---------
NET LOSS $ (44,809)
=========
See accompanying notes to financial statements
68
STATEMENT OF PARTNERS' CAPITAL
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
GENERAL LIMITED
PARTNERS PARTNER TOTAL
Balance (deficit), January 1, 2000 $ (3,626) 374,527 $ 370,901
Net loss 0 (44,809) (44,809)
Earned distribution paid (95) (4,630) (4,725)
Balance (deficit), December 31, 2000 $ (3,721) 325,088 321,367
========= ========= =========
See accompanying notes to financial statements
69
STATEMENT OF CASH FLOWS
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net rental receipts $ 840,832
Interest receipts 15,639
Other operating receipts 23,453
Administrative (46,275)
Management fee (80,411)
Utilities (101,557)
Salaries and wages (185,155)
Operating and maintenance (221,330)
Real estate taxes (85,765)
Property insurance (7,034)
Miscellaneous taxes and insurance (5,063)
Tenant security deposits (1,438)
Interest on mortgages (6,708)
Interest on note payable (906)
Mortgage insurance premium (14,093)
Entity expenses (7,500)
Miscellaneous financial (1,219)
---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 115,470
---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (45,062)
Increase in reserve for replacement (26,721)
Increase in mortgage escrow deposit (1,553)
---------
NET CASH USED IN INVESTING ACTIVITIES (73,336)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Mortgage principal payments (102,205)
Partnership distributions (4,725)
---------
NET CASH USED IN FINANCING ACTIVITIES (106,930)
---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (64,796)
CASH AND CASH EQUIVALENTS
Beginning of year 112,411
---------
End of year $ 47,615
=========
See accompanying notes to financial statements
70
STATEMENT OF CASH FLOWS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net loss $ (44,809)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 195,932
Amortization 658
Increase in accounts receivable tenants (3,513)
Increase in accounts receivable other (3,032)
Increase in supplies inventory (52)
Increase in prepaid expenses 9,629
Increase in cash restricted for tenant security deposits (2,972)
Increase in accounts payable 23,631
Decrease in accrued interest (555)
Increase in accounts payable excess of income 228
Increase in accrued real estate taxes (1,600)
Decrease in prepaid rent (59,609)
Increase in tenant security deposits 1,534
---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 115,470
=========
See accompanying notes to financial statements
71
NOTES TO FINANCIAL STATEMENTS
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations:
Austintown Associates (a Limited Partnership) was formed in 1973
pursuant to the provisions of the laws of the State of Ohio. The Partnership
owns and operates a 200-unit apartment complex in Youngstown, Ohio under Section
236 of the United States Housing Act of 1974. The Partnership is regulated by
the U.S. Department of Housing and Urban Development (HUD) as to rents charged
and certain operating methods. Under this program the Partnership provides
housing to low and moderate-income families. Lower rental charges to tenants are
recovered by the Partnership through rent subsidies provided by HUD. The Section
236 and Section 8 Programs are major programs and the operating loss loan is a
nonmajor program. During the year ended December 31, 2000, rent subsidies from
HUD totaled $705,624 representing 75% of total revenue.
On October 30, 1984, ownership interests for the partners amounting to
99% of the interests of the existing partners were transferred by the original
partners to new partners. As a result of the transfer, the Partnership retained
one of the original General Partners as a Local General Partner, admitted a new
General Partner as Associate General Partner and admitted a Sole Investor
Limited Partner. During 1995, there was a substitution of the Associate General
Partner.
Profit or Loss:
Pursuant to Article X of the Amended and Restated Certificate of
Formation and Agreement of Limited Partnership, profits and losses are allocated
1% to the Local General Partner, 1% to the Associate General Partner and 98% to
the Sole Investor Limited Partner, provided all partners individually have only
positive balances or only negative balances. The agreement requires that all
losses be allocated to the Sole Investor Limited Partner if any General Partner
has a negative balance at a time when any Limited Partner has a positive capital
balance.
The agreement also specifies the order of allocations in such instances
as gain from a sale or refinancing and loss from a sale. These allocations may
differ from those for operating profits and losses.
72
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of Presentation:
The financial statements of the Partnership have been prepared on the
accrual method of accounting.
Funds of Partnership:
Under the conditions of the Regulatory Agreement, the (Partnership) is
obligated to create a Revenue Fund account into which all operating income of
the Partnership is deposited and a Reserve Fund for Replacements for application
toward the cost of unusual or extraordinary maintenance or repairs, renewals or
replacements with the prior permission of HUD.
Investment Restrictions:
The Regulatory Agreement and Section 236 place certain restrictions on
the investment of funds set aside in the required Reserve. In essence,
investment is restricted to direct obligations of, or obligations the principal
of and the interest on which are guaranteed to include both securities issued by
the United States Government and its agencies, and those insured by the United
States Government and its agencies, and those insured under the Federal Deposit
Insurance Corporation. In addition, any interest earned on the investment of
such funds must be retained in the required Reserve.
Cash Equivalents:
For purposes of the statement of cash flows, the Partnership considers
all highly-liquid, debt instruments purchased with a maturity of three months or
less, not invested in a Reserve required under the terms of its Regulatory
Agreement, to be cash equivalents.
73
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Supplies Inventory:
Supplies inventory consist of various maintenance and cleaning products
stated at cost.
Property and Equipment:
Property and equipment are stated at cost. Depreciation is computed on
the straight-line method. The estimated useful lives of the assets range from 3
to 30 years. Management continually reviews property and equipment to determine
that the carrying values have not been impaired.
Unamortized Loan Costs:
Loan costs are being amortized over the appropriate loan period on a
straight-line basis.
Housing Assistance Payments:
The Federal Housing Authority (FHA) has contracted with the Partnership
pursuant to Section 8 of the Housing and Community Development Act of 1974 to
make housing assistance payments to the Partnership on behalf of qualified
tenants.
Income Taxes:
Income of the partnership is taxed directly to its partners.
Accordingly, no provision for income taxes has been made in the accompanying
financial statement.
Distributions to Partners:
Distributions to partners are allowable only from surplus cash and are
limited in any one year to six percent of the initial equity investment, on a
cumulative basis.
Advertising Costs:
Advertising is expensed during the period in which incurred and
amounted to $2,636 in 2000.
74
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Interest Expense:
Under Section 236 of the National Housing Act, developers are given an
interest reduction, in that the interest rate to develop and build the project
is subsidized to an effective rate of 1 %. Interest expense is stated net of
interest subsidies in the amount of $184,659 in 2000.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE B - LONG-TERM DEBT
A deed of trust is pledged as collateral on the mortgage payable. The
FHA insured note bears interest at 7% and is payable through December 2015 in
monthly installments of $24,095 including principal and interest, net of an
interest subsidy of $15,388.
The operating loss loan is an FHA secured note with interest payable at
9%, due in monthly installments of $444, including principal and interest
through January 2002.
Following is a summary of principal amounts due on long-term debt for
each of the five years following December 31, 2000 and thereafter:
YEAR ENDING AMOUNT
----------- ------
2001 $ 109,692
2002 114,746
2003 120,514
2004 129,226
2005 138,568
Thereafter 2,075,245
---------
TOTAL $2,687,991
==========
75
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
NOTE B - LONG-TERM DEBT (CONTINUED)
Under agreement with the mortgage lender and the FHA, the Partnership
is required to make escrow deposits for taxes, insurance and replacement of
Partnership assets. The Partnership is also subject to restrictions as to
operating policies, rental charges, operating expenditures and distribution to
partners.
NOTE C - RELATED PARTY TRANSACTIONS
Distribution payable consists of administrative fees to the Associate
General Partner for services in overseeing the operations of the Partnership.
The $7,500 per annum fee is payable only out of surplus cash reserves. The fee
owed at December 31, 2000 was $7,500.
Pursuant to a management agreement dated July 1, 1998, management fees
were 8.92% of gross rental collections subject to a cap of $33 per unit.
Effective October 1, 2000, a new agreement was entered into changing the
management fees to 8.85% of gross rent collections, subject to a cap of $33 per
unit. The fees are payable to Federal Management Company, an affiliate of the
Local General Partner and amounted to $79,168 for the year ended December 31,
2000.
Included in operating expenses are expenses ultimately reimbursed to
Federal Management Company for payroll, payroll taxes, medical insurance and
office supplies of $204,625 for the year ended December 31, 2000.
Miscellaneous revenue includes commissions for the collection of
monthly fees for air conditioning equipment rented to the tenants by B & M
Professional Services, an affiliate of the Local General Partner. Such
commissions for the fiscal year ended December 31, 2000 were $3,493. Vending
laundry revenue of $1,269 in 2000 was received from B & M Professional Services
and recorded as miscellaneous income.
Included in operating expenses are payments of $26,795 for 2000 to B &
M Professional Services for painting and drywall repairs.
76
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2000
NOTE C - RELATED PARTY TRANSACTIONS (CONTINUED)
Payables to related parties as of December 31, 2000 are as follows:
Federal Management Company $ 24,920
B & M Professional Services $ 14,925
NOTE D - HOUSING ASSISTANCE PAYMENTS
The Federal Housing Authority (FHA) has contracted with the Partnership
pursuant to Section 8 of the Housing and Community Development Act of 1974 to
make housing assistance payments to the Partnership on behalf of qualified
tenants. One agreement covering 120 units was renewed effective October 1, 2000
for one year. A second agreement covering 80 units was renewed effective June 1,
2000 for one year.
NOTE E - COMMITMENTS, CONTINGENCIES AND CREDIT RISK
The Partnership's operations are concentrated in the multifamily real
estate market. In addition, the Partnership operates in a heavily regulated
environment. The operations of the Partnership are subject to the administrative
directives, rules and regulations of federal, state and local regulatory
agencies, including, but not limited to, HUD. Such administrative directives,
rules and regulations are subject to change by an act of congress or
administrative change mandated by HUD. Such changes may occur with little notice
or inadequate funding to pay for the related cost, including the additional
administrative burden, to comply with a change.
77
SUPPORTING DATA REQUIRED BY HUD
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
RESERVE FOR REPLACEMENTS
In accordance with the provisions of the Regulatory Agreement, restricted cash
is held by the mortgage servicing agent, M & T Real Estate, and is used for
replacement of property with the approval of HUD. Following is a summary of the
activity in the Reserve for Replacements account:
Balance at beginning of year $ 238,095
Deposits and withdrawals:
Monthly deposits 54,000
Interest earned 11,314
Approved withdrawals (38,593)
---------
Balance at end of year $ 264,816
=========
78
SUPPORTING DATA REQUIRED BY HUD (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
ASSETS
BALANCE BALANCE
JANUARY 1, DECEMBER
2000 ADDITIONS RETIREMENTS 31, 2000
-----------------------------------------------------------------------
Land and
land
improvements $ 469,020 $ 0 $ 0 $ 469,020
Buildings 4,834,587 17,705 0 4,852,292
Building
equipment -
portable 27,378 0 0 27,378
Furniture 2,625 0 0 2,625
Furnishings 168,030 24,983 0 193,013
Office furniture
and
equipment 30,057 0 0 30,057
Maintenance
equipment 34,567 2,374 0 36,941
Motor vehicles 9,043 0 0 9,043
TOTALS $ 575,307 45,062 $ 0 5,620,369
Accumulated
depreciation 2,655,786 195,932 $ 0 $2,851,718
79
SUPPORTING DATA REQUIRED BY HUD (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
SCHEDULE OF ADDITIONS TO FIXED ASSET ACCOUNTS
DESCRIPTION AMOUNT
Furnishings:
Carpeting $ 14,457
Cabinets 10,526
---------
24,983
Maintenance equipment:
Concrete saw 2,374
Buildings:
Doors 7,122
Emergency lighting 10,583
---------
17,705
---------
TOTAL FIXED ASSET ADDITIONS $ 45,062
=========
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL
RECEIPTS
PART A
Cash $ 91,292
Accounts receivable HUD 3,032
---------
94,324
---------
CURRENT OBLIGATIONS
Accrued mortgage interest payable 356
Accounts payable due within 30 days 61,856
Deficient tax insurance or MIP
escrow deposits 10,513
Tenant security deposits liability 27,553
Other 3,058
---------
TOTAL CURRENT OBLIGATIONS 103,336
---------
SURPLUS CASH (DEFICIENCY) $ (9,012)
=========
80
SUPPORTING DATA REQUIRED BY HUD (CONTINUED)
AUSTINTOWN ASSOCIATES (A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS
AND RESIDUAL RECEIPTS (CONTINUED)
PART B
Annual distributions earned during
current year $ 25,850
Distributions accrued and unpaid as
of the end of prior year 150,783
Distributions paid during fiscal period
covered by statement (12,224)
---------
AMOUNT OF DISTRIBUTIONS EARNED
BUT UNPAID $ 164,409
=========
AMOUNT AVAILABLE FOR DISTRIBUTION
NEXT FISCAL PERIOD $ 0
MISCELLANEOUS ACCOUNT DETAIL FOR THE
STATEMENT OF PROFIT AND LOSS
ACCOUNT 5990 - MISCELLANEOUS REVENUE
Community room/office rental $ 1,605
Air conditioning fee 3,493
Cable 4,791
Pool 80
Legal 810
BWC 2,419
Sale of lawnmower 500
Miscellaneous 374
-------
TOTAL $14,072
=======
ACCOUNT 6390 - MISCELLANEOUS ADMINISTRATIVE EXPENSES
Computer and phone services $ 1,208
CNA 212
Inspection 420
Credit reports 2,365
Mileage reimbursements 402
MA HMA dues 400
Miscellaneous 500
-------
TOTAL $ 5,507
=======
81
HbK
HILL, BARTH & KING LLC
7680 Market Street
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
January 24, 2001
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report on Internal Control
We have audited the financial statements of Austintown Associates (A
Limited Partnership), HUD Project Number 042-44213, as of and for the year ended
December 31, 2000 and have issued our report thereon dated January 24, 2001. We
have also audited Austintown Associates compliance with requirements applicable
to major HUD-assisted programs and have issued our report thereon dated January
24, 2001.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States and the Consolidated Audit Guide for Audits of HUD Programs
(the Guide), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General. Those standards and the Guide require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and about whether the
Partnership complied with laws and regulations, noncompliance with which would
be material to a major HUD-assisted program.
The management of the Partnership is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of controls. The objectives of internal control are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded against
loss from unauthorized use or disposition, and that transactions are executed in
accordance with management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally accepted
accounting principles and that HUD-assisted programs are managed in compliance
with applicable laws and regulations. Because of inherent limitations in any
internal control, errors, irregularities or instances of noncompliance may
nevertheless occur and not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that procedures may
become inadequate because of changes in conditions or that the effectiveness of
the design and operation of controls may deteriorate.
82
Partners
Austintown Associates January 24, 2001
In planning and performing our audits, we obtained an understanding of
the design of relevant internal controls and determined whether they had been
placed in operation, and we assessed control risk in order to determine our
auditing procedures for the purpose of expressing our opinions on Austintown
Associates financial statements and on its compliance with specific requirements
applicable to its major HUD-assisted programs and to report on internal control
in accordance with the provisions of the Guide and not to provide any assurance
on internal control.
We performed tests of controls, as required by the Guide, to evaluate
the effectiveness of the design and operation of internal controls that we
considered relevant to preventing or detecting material noncompliance with
specific requirements applicable to the Partnership's major HUD-assisted
programs. Our procedures were less in scope than would be necessary to render an
opinion on internal control. Accordingly, we do not express such an opinion.
Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts that would be material
in relation to the financial statements being audited or that noncompliance with
laws and regulations that would be material to a HUD-assisted program may occur
and not be detected within a timely period by employees in the normal course of
performing their assigned functions. We noted no matters involving internal
control and its operations that we consider to be material weaknesses as defined
above.
This report is intended solely for the information of the Partners,
management and the Department of Housing and Urban Development and is not
intended to be and should not be used by anyone other than these specified
parties.
/s/ Hill, Barth & King LLC
Certified Public Accountants
83
HbK
HILL, BARTH & KING LLC
7680 Market Street
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
January 24, 2001
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report on Compliance with
Specific Requirements Applicable to Major HUD Programs
We have audited the financial statements of Austintown Associates (A
Limited Partnership), HUD Project Number 042-44213, as of and for the year ended
December 31, 2000 and have issued our report thereon dated January 24, 2001.
We have also audited the Partnership's compliance with the specific
program requirements governing: federal financial reports, mortgage status, the
replacement reserve, the residual receipts, tenant security deposits, cash
receipts and disbursements, distributions to owners, tenant application, tenant
eligibility, tenant recertification, management functions, management,
maintenance, and reexamination of tenants, that are applicable to each of its
major HUD-assisted programs for the year ended December 31, 2000. The management
of the Partnership is responsible for compliance with those requirements. Our
responsibility is to express an opinion on compliance with those requirements
based on our audit.
We conducted our audit of compliance with those requirements in
accordance with generally accepted auditing standards, Government Auditing
Standards issued by the Comptroller General of the United States and the
Consolidated Audit Guide for Audits of HUD Programs (the Guide), issued by the
U.S. Department of Housing and Urban Development, Office of the Inspector
General. Those standards and the Guide require that we plan and perform the
audit to obtain reasonable assurance about whether material noncompliance with
the requirements referred to above occurred. An audit includes examining, on a
test basis, evidence about the Partnership's compliance with those requirements.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Partnership complied, in all material respects,
with the requirements described above that are applicable to each of its major
HUD-assisted programs for the year ended December 31, 2000.
This report is intended solely for the information of the Partners,
management and the Department of Housing and Urban Development and is not
intended to be and should not be used by anyone other than these specified
parties.
/s/ Hill, Barth & King LLC
Certified Public Accountants
84
HbK
HILL, BARTH & KING LLC
7680 Market Street
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
January 24, 2001
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report on Compliance with
Requirements Applicable to Nonmajor HUD Program Transactions
We have audited the financial statements of Austintown Associates (A
Limited Partnership), HUD Project Number 042-44213, as of and for the year ended
December 31, 2000 and have issued our report thereon dated January 24, 2001.
In connection with our audit of the 2000 financial statements of the
Partnership and with our consideration of the Partnership's internal control
used to administer HUD programs, as required by the Consolidated Audit Guide for
Audits of HUD Programs (the Guide), issued by the U.S. Department of Housing and
Urban Development, Office of the Inspector General, we selected certain
transactions applicable to the nonmajor HUD-assisted program for the year ended
December 31, 2000. As required by the Guide, we performed auditing procedures to
test compliance with the requirements governing cash expenditures and matching
requirements that are applicable to those transactions. Our procedures were
substantially less in scope than an audit, the objective of which is the
expression of an opinion on the Partnership's compliance with those
requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under the Guide.
This report is intended solely for the information of the Partners,
management and the Department of Housing and Urban Development and is not
intended to be and should not be used by anyone other than these specified
parties.
/s/ Hill, Barth & King LLC
Certified Public Accountants
85
HbK
HILL, BARTH & KING LLC
7680 Market Street
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
January 24, 2001
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report on Compliance with Specific
Requirements Applicable to Fair Housing and Non-Discrimination
We have audited the financial statements of Austintown Associates (A
Limited Partnership), HUD Project Number 042-44213, as of and for the year ended
December 31, 2000 and have issued our report thereon dated January 24, 2001.
We have applied procedures to test the Partnership's compliance with
Fair Housing and Non-Discrimination requirements applicable to its HUD-assisted
programs for the year ended December 31, 2000.
Our procedures were limited to the applicable compliance requirement
described in the Consolidated Audit Guide for Audits of HUD Programs (the
Guide), issued by the U.S. Department of Housing and Urban Development, Office
of the Inspector General. Our procedures were substantially less in scope that
an audit, the objective of which is the expression of an opinion on the
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under the Guide.
This report is intended solely for the information of the Partners,
management and the Department of Housing and Urban Development and is not
intended to be and should not be used by anyone other than these specified
parties.
/s/ Hill, Barth & King LLC
Certified Public Accountants
86
MANAGING PARTNERS CERTIFICATION
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
We hereby certify that we have examined the accompanying financial
statements and accompanying information of Austintown Associates and, to the
best of our knowledge and belief, the same is complete and accurate as of and
for the year ended December 31, 2000.
General Partners:
/s/ James P. Manchi
2/8/01
Date
74-2343727
Partnership Federal Employer
Identification Number
87
MANAGEMENT AGENT'S CERTIFICATION
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2000
I hereby certify that I have examined the accompanying financial
statements and accompanying information of Austintown Associates and, to the
best of my knowledge and belief, the same is complete and accurate as of and for
the year ended December 31, 2000.
FEDERAL MANAGEMENT COMPANY
/s/ James P. Manchi
Corporate Officer
2/8/01
Date
34-1527725
Corporate Federal Employer
Identification Number
88
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY OWNED BY
LOCAL LIMITED PARTNERSHIPS IN WHICH REGISTRANT HAS INVESTED
At December 31, 2000
Net Life on
Cost At Interest Improvements Gross Amount At Which Carried Which
Acquisition Date Capitalized At December 31, 2000 Accumu- Depreci-
Number Total Buildings Subsequent Buildings lated ation is
Of Encum- And to Acqui- And Depre- Date Computed
Property Units brances Land Improvements sition Land Improvements Total ciation Built (Years)
Garden Apartment Complexes - Elderly Housing:
Surry Manor Apartments, 44 $ 878,561 $ 50,239 $ 1,259,177 76,992 $ 69,489 $ 1,316,919 $ 1,386,408 $ 730,029 1981 3-30
Dobson, NC
Glendale Manor Apartments, 50 798,374 53,652 1,187,181 14,539 53,652 1,201,720 1,255,372 673,184 1980 3-30
Clinton, SC
Fuquay-Varina Homes, 60 684,843 72,396 1,401,073 59,189 79,276 1,453,382 1,532,658 796,562 1977 3-30
Fuquay, NC
Williamston Homes, 50 540,397 60,967 1,096,520 39,258 81,067 1,115,678 1,196,745 624,488 1978 3-30
Williamston, NC
Oxford Homes, Oxford, NC 50 543,797 64,360 1,085,939 197,602 67,950 1,279,951 1,347,901 625,608 1978 3-30
Garden Apartment Complexes -Low and Moderate Income Housing:
Compass West Apartments, 200 2,778,497 397,105 4,822,593 400,671 469,020 5,151,349 5,620,369 2,851,718 1974 7-30
Austintown, OH
Meadowwood Apartments, 80 681,661 90,146 1,337,358 39,379 90,146 1,376,737 1,466,883 904,765 1977 10-25
Tifton, GA
Brierwood Apartments, 56 833,523 76,325 1,024,970 (26,931) 76,325 998,039 1,074,364 631,139 1979 10-25
Bainbridge, GA
Pine Forest Apartments, 64 1,204,691 44,588 1,491,921 1,380 44,588 1,493,301 1,537,889 980,547 1980 10-25
Cairo, GA
Brierwood II Apartments 18 366,081 27,288 423,387 -- 27,288 423,387 450,675 280,179 1984 10-25
Bainbridge, GA
Total Local Limited
Partnership Real Estate 672 $9,310,425 $937,066 $15,130,119 $802,079 $1,058,801 $15,810,463 $16,869,264 $ 9,098,219
The aggregate cost of the above properties for Federal income tax
purposes at December 31, 2000 is $21,224,819
A reconciliation of summarized carrying value of the above properties
for the years ended December 31,2000, 1999 and 1998 is a follows :
2000 1999 1998
Balance at beginning of year $ 18,904,502 $ 29,309,512 $ 28,802,902
Additions during the period - Improvements subse-
equent to acquisition, net of dispositions 251,659 59,485 506,610
Sale of Partnership interests (2,286,897) (10,464,495) --
Balance at end of year $ 16,869,264 $ 18,904,502 $ 29,309,512
A reconciliation of summarized accumulated depreciation on the above
properties for the years ended December 31, 2000, 1999 and 1998 is as follows :
2000 1999 1998
Balance at beginning of year ($ 9,621,476) ($13,216,585) ($12,276,725)
Current provision for depreciation, net of dispositions (577,141) (772,311) (939,860)
Sale of Partnership interests 1,100,398 4,367,420 --
Balance at end of year ($ 9,098,219) ($ 9,621,476) ($13,216,585)
89
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Partnership
(a-b) Identification of Directors and Executive Officers
The Partnership has no directors or officers. As indicated in Item 1 of
this report, the Managing General Partner of the Partnership, as of December 27,
1995, is TNG Properties Inc., a Massachusetts corporation. Under the Partnership
Agreement, the Managing General Partner is solely responsible for the operation
of the Partnership's properties, and the Limited Partners have no right to
participate in the control of such operations. The names and ages of the
directors and executive officers of the Managing General Partner, TNG Properties
Inc., are as follows as of March 21, 2000:
Name Title Age
- ---- ----- ---
Michael A. Stoller President, Chief Executive Officer and Director 44
Wilma R. Brooks Vice President, Treasurer and Director 43
Barbara A. Gilman Vice President and Director of Management 51
Stephen D. Puliafico Director 45
James C. Coughlin Director 36
The directors of the Managing General Partner generally are elected at
the annual meeting of stockholders of the Managing General Partner, to serve
until the next such annual meeting, and until their successors are duly elected
and qualified, or until their earlier death, resignation or removal. The
executive officers the Managing General Partner generally are elected at the
annual meeting of directors of the Managing General Partner, to serve until the
next such annual meeting, and until their successors are duly elected and
qualified, or until their earlier death, resignation or removal.
(c) Identification of certain significant persons.
None.
(d) Family relationship
Mr. Stoller and Ms. Brooks are husband and wife.
90
Item 10. Directors and Executive Officers of the Partnership, continued
(e) Business experience
Michael A. Stoller is President, CEO, and a Director of the Managing
General Partner and Newton Senior Living, LLC (formerly known as The Newton
Group, LLC). From 1992 to 1994, Mr. Stoller was President and Director of MBMC,
Inc. of Boston, and the Managing General Partner of MB Management Company
Limited Partnership, of Boston, a property management company. From 1983 to
1992, Mr. Stoller was employed by REMAS, Inc. and was a Partner and Chief
Operating Officer of MB Associates, which companies engaged in the development
and management of government assisted housing properties. Mr. Stoller holds a
B.S. from Babson College and is a Certified Public Accountant.
Stephen D. Puliafico is Director of the Managing General Partner. Since
August 1995 Mr. Puliafico has been Executive Vice President of Newton Senior
Living, LLC. From 1994 to 1995 Mr. Puliafico was a Regional Sales Manager for
Staples, a seller of office supplies. From 1982 to 1994, Mr. Puliafico was a
General Manager for Lechmere, a discount department store chain. Mr. Puliafico
holds a B.S. from Southeastern Massachusetts University.
James C. Coughlin is a Director of the Managing General Partner. Since
September 1997 Mr. Coughlin has been Vice President of Acquisitions of Newton
Senior Living, LLC. Mr. Coughlin is responsible for corporate finance, project
finance, project acquisitions, site selection and strategic planning. From 1995
to 1997, Mr. Coughlin was a principal of Peacock Associates, a real estate
consulting and financial advisory firm. From 1992 to 1995, Mr. Coughlin was a
real estate finance specialist for The Berkshire Group. Mr. Coughlin received
his B.A. from Stonehill College and his M.B.A. from Suffolk University. Mr.
Coughlin is a licensed Massachusetts real estate broker and a candidate at
Boston University's Real Estate Finance Certificate Program.
Wilma R. Brooks is Vice President, Treasurer and a Director of the
Managing General Partner and Vice President and Treasurer of Newton Senior
Living, LLC. From 1987 to 1993, Ms. Brooks was Chief Financial Officer and
Treasurer of Congress Group Ventures, Inc., of Cambridge, Massachusetts, a
commercial real estate developer. Ms. Brooks holds a B.S. from the University of
Vermont and is a Certified Public Accountant.
Barbara A. Gilman is Vice President and Director of Management of the
Managing General Partner. For the seven years prior to joining the Managing
General Partner in 1994, Ms. Gilman was Director of Management of Beacon
Management Company, of Boston, Massachusetts, a property management company. Ms.
Gilman holds a B.S. from Stonehill College.
(f-g) Involvement in certain legal proceedings
The Partnership is not aware of any legal proceedings during the past
five years which may be material to the evaluation of the ability and integrity
of any director or executive officer of the Managing General Partner.
91
Item 10. Directors and Executive Officers of the Partnership, continued
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Partnership's officers and directors, and persons who own more than
ten percent of a registered class of the Partnership's equity securities, to
file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with
the Securities and Exchange Commission.
Such officers, directors and ten-percent security holders are also
required by applicable rules to furnish the Partnership with copies of all
Section 16(a) reports they file. Although the Partnership has no directors or
officers, the rules promulgated under ss. 16(a) provide that, for purposes of
ss. 16, officers of the Managing General Partner are considered to be officers
of the Partnership. Based solely on its review of the copies of such forms
received by it, or written representation from certain reporting persons that no
Forms 3, 4 or 5 were required for such persons, the Partnership believes that,
during the fiscal year ended December 31, 2000 its officers and ten percent
security holders complied with all Section 16(a) filing requirements applicable
to such individuals.
Item 11. Executive Compensation
(a), (b), (c), (d), and (e): The officers and directors of the Managing
General Partner are compensated as employees of the Managing General Partner,
but receive no compensation from the Partnership. The Managing General Partner
and its affiliates receive compensation and expense reimbursement from the
Partnership, as more fully described in Note 6 of the Notes to Financial
Statements of the Partnership included in Item 8 of this report.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security ownership of certain beneficial owners and management.
Because it is organized as a limited partnership, the Partnership has
issued no securities possessing traditional voting rights. However, the
Partnership Agreement provides that certain matters may require the approval of
a majority in interest of the Limited Partners. Such matters include:
(1) Amendment of the Limited Partnership Agreement;
(2) Termination of the Partnership;
(3) Removal of any General Partner; and
(4) Sale of substantially all the assets of the Partnership.
92
Item 12. Security Ownership of Certain Beneficial Owners and Management,
continued
Under the Partnership Agreement, the Managing General Partner is solely
responsible for the operation of the Partnership's properties, and the Limited
Partners have no right to participate in the control of such operations. On
December 27, 1995, the Former Managing General Partner and Former Associate
General Partner withdrew from the Partnership and TNG Properties Inc. was
admitted in their place as Successor General Partner and became Managing General
Partner of the Partnership.
No person or group is known by the Managing General Partner to own
beneficially more than 5% of the Partnership's 21,546 Units outstanding as of
December 31, 2000
(b) Security ownership of management.
By virtue of its organization as a limited partnership, the Partnership
has no officers or directors. The Former Associate General Partner owned 10
Units, which have been assigned, as of January 1, 1997, to the current Managing
General Partner.
(c) Changes in Control.
None.
Item 13. Certain Relationships and Related Transactions
(a), (b), and (c): The Managing General Partner of the Partnership is
TNG Properties, Inc., a Massachusetts corporation. See Note 6 to the Financial
Statements of the Partnership contained in Item 8 of this report for a
description of the fees and expense reimbursement paid by the Partnership to the
current Managing General Partner and its affiliates. Directors and executive
officers of TNG Properties, Inc. are identified in Item 10 of this report.
During 2000, the Partnership was not involved in any transaction involving any
of these directors or officers of the Corporation or any member of the immediate
family of these individuals, nor did any of these persons provide services to
the Partnership for which they received direct or indirect remuneration.
Similarly, there exists no business relationship between the Partnership and any
of the directors or officers of the Managing General Partner, nor were any of
the individuals indebted to the Partnership. Liberty LGP, formerly an affiliate
of the predecessor general partners and now an affiliate of the Managing General
Partner is entitled to receive certain administrative fees from the Local
Limited Partnerships. At January 1, 2000 an aggregate of $117,674 in accrued and
unpaid administrative fees were due to Liberty LGP from the Local Limited
Partnerships. During 2000, Liberty LGP accrued $41,500 in administrative fees
due from the Local Limited Partnerships and received payment aggregating
$27,000. At December 31, 2000 accrued and unpaid administrative fees aggregated
$132,174. Liberty LGP is not entitled to interest on the accrued and unpaid
amount.
93
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. Financial Statements
See Index included in Item 8, on page 20 of this Report.
2. Financial Statement Schedules
See Index included in Item 8 on page 20 of this Report for schedules
applicable to registrant.
3. Exhibits
See (c) below
(b) Reports on Form 8-K
The registrant filed a Form 8-K dated December 20, 2000 reporting a
change in its certifying accountant.
(c) Index to Exhibits
Except as set forth below, all Exhibits to Form 10-K, as set forth in
Item 601 of Regulation S-K, are not applicable.
94
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
4. Instruments defining the rights of security holders:
4.1 The Amended and Restated Certificate of Limited Partnership Exhibit 4.1 to the registrant's Annual
Report on Form
10-K, for the period ended December
31, 1995.
4.2 First Amendment to Second Amended and Restated Certificate of Exhibit 4.2 to the registrant's Annual
Limited Partnership Report on Form
10-K, for the period ended December
31, 1995.
*4.39 Amended Agreement of Limited Partnership Exhibit A to the prospectus contained
in Form S-11 Registration Statement
(File 2-90617)
4.4 Amendment to the Amended Agreement of Limited Partnership Exhibit 4.4 to the registrant's Annual
(withdrawal of Liberty Real Estate Corporation and Admission of TNG Report on Form
Properties Inc. 10-K, for the period ended December
31, 1995.
4.5 Amendment to the Amended Agreement of Limited Partnership Exhibit 4.5 to the registrant's Annual
(withdrawal of LHP Associates Limited Partnership) Report on Form
10-K, for the period ended December
31, 1995.
10. Material Contracts and Other Documents
10.4 Documents Relating to Partnership Interest in Surry Manor, Ltd.
*10.4 (a) Escrow Agreement dated August 31, 1984 between Billy P. Shadrick, Exhibit 10.4 (a) Effective to
Bobby Ray Badgett, Housing Projects, Inc. and Liberty Housing Post-Amendment No. 1 to Form S-11
Partners Limited Partnership. Registration Statement (File 2-90617)
*10.4 (b) Amended and Restated Certificate and Agreement of Limited Exhibit 10.4 (b) to Post- Effective
Partnership of Surry Manor, Ltd. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
95
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.4 (c) Promissory Notes dated August 31, 1984 from Liberty Housing Exhibit 10.4 (c) to Post-Effective
Partners Limited Partnership to Billy P. Shadrick and from Liberty Amendment No. 1 to Form S-11
Housing Partners Limited Partnership to Bobby Joe Davis. Registration Statement (File 2-90617)
*10.4 (d) Purchase Money Notes dated August 31, 1984 from Liberty Housing Exhibit 10.4 (d) to Post-Effective
Partners to Billy P. Shadrick and from Liberty Housing Partners Amendment No. 1 to Form S-11
Limited Partnership to Bobby Joe Davis. Registration Statement (File 2-90617)
*10.4 (e) Pledge Agreements dated August 31, 1984 between Billy P. Shadrick Exhibit 10.4 (e) to Post-Effective
and Liberty Housing Partners Limited Partnership and between Bobby Amendment No. 1 to Form S-11
Joe Davis and Liberty Housing Partners Limited Partnership. Registration Statement (File 2-90617)
*10.4 (f) Deed of Trust Note dated July 11, 1980 from Surry Manor, Ltd. to Exhibit 10.4 (f) to Post-Effective
Highland Mortgage Company and related Deed of Trust dated July 11, Amendment No. 1 to Form S-11
1980 among Surry Manor, Ltd., James M. Tanner, and Highland Registration Statement (File 2-90617)
Mortgage Company.
*10.4 (g) Regulatory Agreement dated July 11, 1980 between Surry Manor, Ltd. Exhibit 10.4 (g) to Post-Effective
and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.4 (h) Housing Assistance Payments Contract dated April 9, 1981 between Exhibit 10.4 (h) to Post-Effective
Surry Manor, Ltd. and the Secretary of Housing and Urban Amendment No. 1 to Form S-11
Development. Registration Statement (File 2-90617)
10.5 Documents Relating to Partnership Interest in Glendale Manor
Apartments
*10.5 (a) Escrow Agreement dated August 31, 1984 between Billy P. Shadrick, Exhibit 10.5 (a) to Post-Effective
Bobby Ray Badgett, Housing Projects, Inc. and Liberty Housing Amendment No. 1 to Form S-11
Partners Limited Partnership. Registration Statement (File 2-90617)
*10.5 (b) Amended and Restated Certificate and Agreement of Limited Exhibit 10.5 (b) to Post-Effective
Partnership of Glendale Manor Apartments. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
96
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.5 (c) Promissory Notes dated August 31, 1984 from Liberty Housing Exhibit 10.5 (c) to Post-Effective
Partners Limited Partnership to Billy P. Shadrick, from Liberty Amendment No. 1 to Form S-11
Housing Partners Limited Partnership to Bobby Joe Davis and from Regis-tration Statement (File 2-90617)
Liberty Housing Partners Limited Partnership to Bobby R. Badgett.
*10.5 (d) Purchase Money Notes dated August 31, 1984 from Liberty Housing Exhibit 10.5 (d) to Post-Effective
Partners Limited Partnership to Billy P. Shadrick and from Liberty Amendment No. 1 to Form S-11
Housing Partners Limited Partnership to Bobby Joe Davis. Registration Statement (File 2-90617)
*10.5 (e) Pledge Agreements dated August 31, 1984 between Billy P. Shadrick Exhibit 10.5 (e) to Post-Effective
and Liberty Housing Partners Limited Partnership, between Bobby Joe Amendment No. 1 to Form S-11
Davis and Liberty Housing Partners Limited Partnership and between Regis-triton Statement (File 2-90617)
Bobby R. Badgett and Liberty Housing Partners Limited Partnership.
*10.5 (f) Mortgage Note dated April 11, 1979 from Glendale
Manor Apartments Exhibit 10.5 (f) to Post-Effective to
Cincinnati Mortgage Corporation and related Mortgage
dated April Amendment No. 1 to Form S-11 11, 1979 between
Glendale Manor Apartments and Cincinnati Mortgage
Registration Statement (File 2-90617) Corporation.
*10.5 (g) Regulatory Agreement dated April 11, 1979 between Glendale Manor Exhibit 10.5 (g) to Post-Effective
Apartments and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.5 (h) Housing Assistance Payments Contract dated May 30, 1980 between Exhibit 10.5 (h) to Post-Effective
Glendale Manor Apartments and the Secretary of Housing and Urban Amendment No. 1 to Form S-11
Development Registration Statement (File 2-90617)
10.6 Documents Relating to Partnership Interest in Fiddlers Creek
Apartments
*10.6 (a) Escrow Agreement dated September 28, 1984 between Billy P. Exhibit 10.6 (a) To Post-Effective
Shadrick, Bobby Ray Badgett, J. Thomas Dotson and Liberty Housing Amendment No. 1 to Form S-11
Partners Limited Partnership. Registration Statement (File 2-90617)
97
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.6 (b) Amended and Restated Certificate and Agreement of Limited Exhibit 10.6 (b) to Post-Effective
Partnership of Fiddlers Creek Apartments. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.6 (c) Promissory Note form dated September 28, 1984, Purchase Money Note Exhibit 10.6 (c) to Post Effective
form dated September 28, 1984, Pledge Agreement form dated Amendment No. 1 to Form S-11
September 28, 1984 and Schedule of Promissory Notes, Purchase Money Registration Statement (File 2-90617)
Notes and Pledge Agreements between Liberty Housing Partners
Limited Partnership and the partners of Fiddlers Creek Apartments.
*10.6 (d) Deed of Trust Note dated September 1, 1975 from
Fiddlers Creek Exhibit 10.6 (d) to Post-Effective
Apartments to Guaranty Mortgage Company of Nashville and
related Amendment No. 1 to Form S-11 Deed of Trust dated
September 1, 1975 between Fiddlers Creek Registration
Statement (File 2-90617) Apartments and Guaranty Mortgage
Company of Nashville.
*10.6 (e) Regulatory Agreement dated September 1, 1975 between Fiddlers Creek Exhibit 10.6 (e) to Post-Effective
Apartments and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
10.7 Documents Relating to Partnership Interest Fuquay-Varina Homes for
the Elderly, Ltd.
*10.7 (a) Escrow Agreement dated September 28, 1984 between Billy P. Exhibit 10.7 (a) to Post-Effective
Shadrick, Bobby Ray Badgett and Liberty Housing Partners Limited Amendment No. 1 to Form S-11
Partnership. Registration Statement (File 2-90617)
98
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.7 (b) Amended and Restated Certificate and Agreement of Limited Exhibit 10.7 (b) to Post-Effective
Partnership of Fuquay-Varina Homes for the Elderly, Ltd. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.7 (c) Promissory Note form dated September 28, 1984, Purchase Money Note Exhibit 10.7 (c) to Post-Effective
form dated September 28, 1984, Pledge Agreement form dated Amendment No. 1 to Form S-11
September 28, 1984 and Schedule of Promissory Notes, Purchase Money Registration Statement (File 2-90617)
Notes and Pledge Agreements between Liberty Housing Partners
Limited Partnership and the partners of Fuquay-Varina Apartments.
*10.7 (d) Deed of Trust Note dated May 23, 1977 from Fuquay-Varina Homes for Exhibit 10.7 (d) to Post-Effective
Elderly, Ltd. to Cincinnati Mortgage Corporation and related Deed Amendment No. 1 to Form S-11
of Trust dated May 23, 1977 between Fuquay-Varina Homes for the Registration Statement (File 2-90617)
Elderly, Ltd. and Cincinnati Mortgage Corporation.
*10.7 (e) Regulatory Agreement dated May 23, 1977 between Fuquay-Varina Homes Exhibit 10.7 (e) to Post-Effective
for the Elderly, Ltd. and the Secretary of Housing and Urban Amendment No. 1 to Form S-11
Development. Registration Statement (File 2-90617)
*10.7 (f) Housing Assistance Payments Contract dated May 3, 1978 between Exhibit 10.7 to
Fuquay-Varina Homes for the Elderly, Ltd. and the Secretary of Post-Effective
Housing and Urban Development. Amendment No. 1 to
Form S-11 Registration (File 2-90617)
10.8 Documents Relating to Partnership Interest in Oxford Homes for the
Elderly, Ltd.
99
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.8 (a) Escrow Agreement dated September 28, 1984 between Billy P. Exhibit 10.8 (a) to Post-Effective
Shadrick, Bobby Ray Badgett and Liberty Housing Partners Limited Amendment No. 1 to Form S-11
Partnership. Registration Statement (File 2-90617)
*10.8 (b) Amended and Restated Certificate and Agreement of Limited Exhibit 10.8 (b) to Post-Effective
Partnership of Oxford Homes for the Elderly, Ltd. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.8 (c) Promissory Note form dated September 28, 1984, Purchase Money Note Exhibit 10.8 (c) to Post-Effective
form dated September 28, 1984, Pledge Agreement form dated Amendment No. 1 to Form S-11
September 28, 1984 and Schedule of Promissory Notes, Purchase Money Registration Statement (File 2-90617)
Notes and Pledge Agreements between Liberty Housing Partners
Limited Partnership and the partners of Oxford Homes for the
Elderly, Ltd.
*10.8 (d) Mortgage Note dated May 23, 1977 from Oxford Homes for the Elderly, Exhibit 10.8 (d) to Post-Effective
Ltd. to Cincinnati Mortgage Corporation and related Mortgage dated Amendment No. 1 to Form S-11
May 23, 1977 between Oxford Homes for the Elderly, Ltd. and Registration Statement (File 2-90617)
Cincinnati Mortgage Corporation.
*10.8 (e) Regulatory Agreement dated May 23, 1977 between Oxford Homes for Exhibit 10.8 (e) to Post-Effective
the Elderly, Ltd. and the Secretary of Housing and Urban Amendment No. 1 to Form S-11
Development. Registration Statement (File 2-90617)
*10.8 (f) Housing Assistance Payments Contract dated July 3, 1978 between Exhibit 10.8 (f) to Post-Effective
Oxford Homes for the Elderly, Ltd. and the Secretary of Housing and Amendment No. 1 to Form S-11
Urban Development. Registration Statement (File 2-90617)
100
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
10.9 Documents Relating to Partnership Interest in Williamston Homes for
the Elderly, Ltd.
*10.9 (a) Escrow Agreement dated September 28, 1984 between Billy P. Exhibit 10.9 (a) to Post-Effective
Shadrick, Bobby Ray Badgett and Liberty Housing Partners Limited Amendment No. 1 to Form S-11
Partnership. Registration Statement (File 2-90617)
*10.9 (b) Amended and Restated Certificate and Agreement of Limited Exhibit 10.9 (b) to Post-Effective
Partnership of Williamston Homes for the Elderly, Ltd. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.9 (c) Promissory Note form dated September 28, 1984, Purchase Money Note Exhibit 10.9 (c) to Post-Effective
form dated September 28, 1984, Pledge Agreement form dated Amendment No. 1 to Form S-11
September 28, 1984 and Schedule of Promissory Notes, Purchase Money Registration Statement (File 2-90617)
Notes and Pledge Agreements between Liberty Housing Partners
Limited Partnership and the partners of Williamston Homes for the
Elderly, Ltd.
*10.9 (d) Deed of Trust Note dated May 24, 1977 from Williamston Homes for Exhibit 10.9 (d) to Post-Effective
the Elderly, Ltd. and Cincinnati Mortgage Corporation and related Amendment No. 1 to Form S-11
Deed of Trust between Williamston Homes for the Elderly, Ltd. and Registration Statement (File 2-90617)
Cincinnati Mortgage Corporation.
*10.9 (e) Regulatory Agreement dated May 24, 1977 between Williamston Homes Exhibit 10.9 (e) to Post-Effective
for the Elderly, Ltd. and the Secretary of Housing and Urban Amendment No. 1 to Form S-11
Development. Registration Statement (File 2-90617)
*10.9 (f) Housing Assistance Payments Contract dated September 19, 1978 Exhibit 10.9 (f) to Post-Effective
between Williamston Homes for the Elderly, Ltd. and the Secretary Amendment No. 1 to Form S-11
of Housing and Urban Development. Registration Statement (File 2-90617)
101
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
10.10 Documents Relating to Partnership Interest in Austintown
Associates
*10.10 (a) Escrow Agreement dated October 30, 1984 between James P. Manchi, Exhibit 10.10 (a) to Post-Effective
Robert P. Baker, First March Realty Corporation and Liberty Amendment No. 1 to Form S-11
Housing Partners Limited Partnership. Registration Statement (File 2-90617)
*10.10 (b) Amended and Restated Certificate of Formation and Agreement of Exhibit 10.10 (b) to Post-Effective
Limited Partnership of Austintown Associates. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.10 (c) Promissory Note form dated October 30, 1984, Purchase Money Note Exhibit 10.10 (c) to Post-Effective
form dated October 30, 1984, Pledge Agreement form dated October Amendment No. 1 to Form S-11
30, 1984 and Schedule of Promissory Notes, Purchase Money Notes Registration Statement (File 2-90617)
and Pledge Agreements between Liberty Housing Partners Limited
Partnership and the partners of Austintown Associates.
*10.10 (d) Mortgage Note dated February 22, 1973 from Austintown Associates Exhibit 10.10 (d) to Post-Effective
to Metropolitan Mortgage Corporation of Ohio, Supplementary Amendment No. 1 to Form S-11
Mortgage Note dated November, 1975 from Austintown Associates to Registration Statement (File 2-90617)
The Cleveland Trust Company, Supplementary Mortgage Note dated
March 24, 1978 from Austintown Associates to Diversified
Financial & Mortgage Services, Inc. and the related Mortgage
dated February 22, 1973 between Austintown Associates and
Metropolitan Mortgage Corporation of Ohio.
102
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.10 (e) Regulatory Agreement dated February 22, 1973 between Austintown Exhibit 10.10 (e) to Post-Effective
Associates and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.10 (f) Housing Assistance Payments Contracts dated December 1, 1983 and Exhibit 10.10 (f) to Post-Effective
June 1, 1984 between Austintown Associates and the Secretary of Amendment No. 1 to Form S-11
Housing and Urban Development. Registration Statement (File 2-90617)
10.11 Documents Relating to Partnership Interest in Meadowwood, Ltd.
*10.11 (a) Second Amended and Restated Certificate and Agreement of Limited Exhibit 10.11 (a) to Post-Effective
Partnership of Meadowwood, Ltd. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.11 (b) Promissory Note form dated October 30, 1984, Purchase Money Note Exhibit 10.11 (b) to Post-Effective
form dated October 30, 1984, Pledge Agreement form dated October Amendment No. 1 to Form S-11
30, 1984 and Schedule of Promissory Notes, Purchase Money Notes Registration Statement (File 2-90617)
and Pledge Agreements between Liberty Housing Partners Limited
Partnership and the partners of Meadowwood, Ltd.
*10.11 (c) Promissory Notes dated October 3, 1977 and October 25, 1978 from Exhibit 10.11 (c) to Post-Effective
Meadowwood, Ltd. to Farmers Home Administration and related Deed Amendment No. 1 to Form S-11
to Secure Debt dated October 25, 1978 between Meadowwood, Ltd. Registration Statement (File 2-90617)
and Farmers Home Administration.
*10.11 (d) Farmers Home Administration Loan Agreement between Meadowwood, Exhibit 10.11 (d) to Post-Effective
Ltd. and Farmers Home Administration. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
103
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.11 (e) Interest Credit and Rental Assistance Agreement dated October 1, Exhibit 10.11 (e) to Post-Effective
1983 between Meadowwood, Ltd. and the Farmers Home Administration. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.12 Documents Relating to Partnership Interest in Brierwood, Ltd.
*10.12 (a) Second Amended and Restated Certificate and Agreement of Limited Exhibit 10.12 (a) to Post-Effective
Partnership of Brierwood, Ltd. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.12 (b) Promissory Note form dated October 30, 1984, Purchase Money Note Exhibit 10.12 (b) to Post-Effective
form dated October 30, 1984, Pledge Agreement form dated October Amendment No. 1 to Form S-11
30, 1984 and Schedule of Promissory Notes, Purchase Money Notes Registration Statement (File 2-90617)
and Pledge Agreements between Liberty Housing Partners Limited
Partnership and the partners of Brierwood, Ltd.
*10.12 (c) Promissory Note dated May 4, 1979 from Brierwood, Ltd. to Farmers Exhibit 10.12 (c) to Post-Effective
Home Administration and related Deed to Secure Debt dated May 4, Amendment No. 1 to Form S-11
1979 between Brierwood, Ltd. and Farmers Home Administration. Registration Statement (File 2-90617)
*10.12 (d) Farmers Home Administration Loan Agreement dated June 15, 1978 Exhibit 10.12 (d) to Post-Effective
between Brierwood, Ltd. and Farmers Home Administration. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
*10.12 (e) Interest Credit and Rental Assistance Agreement dated October 1, Exhibit 10.12 (e) to Post-Effective
1980 between Brierwood, Ltd. and the Farmers Home Administration. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
104
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
10.13 Documents Relating to Partnership Interest in Pine Forest
Apartments, Ltd.
*10.13 (a) Second Amended and Restated Certificate and Agreement of Limited Exhibit 10.13 (a) to Post-Effective
Partnership of Pine Forest Apartments, Ltd. Amendment No. 1 to Form S-11
Registration Statement
(File 2-90617)
*10.13 (b) Promissory Note form dated October 30, 1984, Purchase Money Note Exhibit 10.13 (b) to Post-Effective
form dated October 30, 1984, Pledge Agreement form dated October Amendment No. 1 to Form S-11
30, 1984 and Schedule of Promissory Notes, Purchase Money Notes Registration Statement (File 2-90617)
and Pledge Agreements between Liberty Housing Partners Limited
Partnership and the partners of Pine Forest Apartments, Ltd.
*10.13 (c) Promissory Note dated August 6, 1980 from Pine Forest Apartments, Exhibit 10.13 (c) to Post-Effective
Ltd. to Farmers Home Administration and related Deed to Secure Amendment No. 1 to Form S-11
Debt dated August 6, 1980 between Pine Forest Apartments, Ltd. Registration Statement (File 2-90617)
and Farmers Home Administration.
*10.13 (d) Farmers Home Administration Loan Agreement dated May 10, 1979 Exhibit 10.13 (d) to Post-Effective
between Pine Forest Apartments, Ltd. and Farmers Home Amendment No. 1 to Form S-11
Administration. Registration Statement (File 2-90617)
*10.13 (e) Interest Credit and Rental Assistance Agreement dated June 1, Exhibit 10.13 (e) to Post-Effective
1982 between Pine Forest Apartments, Ltd. and the Secretary of Amendment No. 1 to Form S-11
Housing and Urban Development. Registration Statement (File 2-90617)
10.14 Documents Relating to Partnership Interest in Osuna Apartments
Company
105
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.14 (a) Amended and Restated Certificate of Formation and Agreement of Exhibit 10.14 (a) to Post-Effective
Limited Partnership of Osuna Apartments Company. Amendment No. 2 To Form S-11
Registration Statement (File 2-90617)
*10.14 (b) Promissory Note form dated November 27, 1984, Purchase Money Note Exhibit 10.14 (b) to Post-Effective
form dated November 27, 1984, Pledge Agreement dated November 27, Amendment No. 2 to Form S-11
1984 between Liberty Housing Partners Limited Partnership, Registration Statement (File 2-90617)
Liberty LGP Limited Partnership and the Sovereign Corporation,
and Schedule of Promissory Notes and Purchase Money Notes between
Liberty Housing Partners Limited Partnership and the partners of
Osuna Apartments Company.
*10.14 (c) Mortgage Note dated March 5, 1974 from Osuna Apartments Company Exhibit 10.14 (c) to Post-Effective
to Housing America Mortgage Co., Inc. and related Mortgage dated Amendment No. 2 to Form S-11
March 5, 1974 from Osuna Apartments Company to Housing Mortgage Registration Statement (File 2-90617)
Co., Inc.
*10.14 (d) Regulatory Agreement dated March 5, 1974 between Osuna Apartments Exhibit 10.14 (d) to Post Effective
Company and the Secretary of Housing and Urban Development. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
*10.14 (e) Housing Assistance Payments Contracts dated August 7, 1984 Exhibit 10.14 (e) to Post-Effective
between Osuna Apartments Company and the Secretary of Housing and Amendment No. 2 to Form S-11
Urban Development. Registration Statement (File 2-90617)
10.15 Documents Relating to Partnership Interest in Linden Park
Associates Limited Partnership
106
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.15 (a) Certificate and Agreement of Limited Partnership of Linden Park Exhibit 10.15 (a) to Post-Effective
Associates Limited Partnership. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
*10.15 (b) Promissory Note form dated December 11, 1984, Purchase Money Note Exhibit 10.15 (b) to Post-Effective
form dated December 11, 1984, Pledge Agreement dated December 11, Amendment No. 2 to Form S-11
1984 by and between Liberty LGP Limited Partnership, John L. Registration Statement (File 2-90617)
Wagner, Liberty Housing Partners Limited Partnership and Graham
Park Venture, and Schedule of Promissory Notes and Purchase Money
Notes between Linden Park Associates Limited Partnership and
Graham Park Venture.
*10.15 (c) Deed of Trust Note and related Deed of Trust both dated December Exhibit 10.15 (c) to Post-Effective
5, 1972 and Allonge of January 29, 1976, Supplemental Deed of Amendment No. 2 to Form S-11
Trust both dated December 17, 1974 and Allonge of January 29, Registration Statement (File 2-90617)
1976, and Second Supplemental Deed of Trust Note and related
Second Supplemental Deed of Trust both dated January 29, 1976 all
documents between Graham Park Venture and Loyola Federal Savings
and Loan Association.
*10.15 (d) Loan Assumption Agreement dated March 23, 1976 between Pennamco, Exhibit 10.15 (d) to Post-Effective
Inc. and Virginia Housing Development Authority. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
*10.15 (e) Regulatory Agreement dated December 12, 1984 between Linden Park Exhibit 10.15 (e) to Post-Effective
Associates Limited Partnership and the Secretary of Housing and Amendment No. 2 to Form S-11
Urban Development. Registration Statement (File 2-90617)
107
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.15 (f) Regulatory Agreement dated January 31, 1976 between Graham Park Exhibit 10.15 (f) to Post-Effective
Venture and Virginia Housing Development Authority. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
10.16 Documents Relating to Partnership Interest Brierwood II, Ltd.
*10.16 (a) Amended and Restated Certificate and Agreement of Limited Exhibit 10.16 (a) to Post-Effective
Partnership of Brierwood II, Ltd. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
*10.16 (b) Promissory Note form dated January 4, 1985, Pledge
Agreement form Exhibit 10.16 (b) to Post-Effective
dated January 4, 1985 and Schedule of Promissory Notes
and Pledge Amendment No. 2 to Form S-11 Agreements
between Liberty Housing Partners Limited Partnership
Registration Statement (File 2-90617) and the partners
of Brierwood II, Ltd.
*10.16 (c) Promissory Note dated January 4, 1985 from Brierwood II, Ltd. to Exhibit 10.16 (c) to Post-Effective
Farmers Home Administration and related Deed to Secure Debt dated Amendment No. 2 to Form S-11
January 4, 1985 between Brierwood II, Ltd. and Farmers Home Registration Statement (File 2-90617)
Administration.
*10.16 (d) Farmers Home Administration Loan Agreement dated June 30, 1983 Exhibit 10.16 (d) to Post-Effective
between Brierwood II, Ltd. and Farmers Home Administration. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
*10.16 (e) Interest Credit and Rental Assistance Agreement dated January 4, Exhibit 10.16 (e) to Post-Effective
1985 between Brierwood II, Ltd. and the Farmers Home Amendment No. 2 to Form S-11
Administration. Registration Statement (File 2-90617)
*10.17 Letter agreement with John Wagner regarding consulting services Exhibit 10.17 to Form 10-Q
in connection with the liquidation or workout of the for the period ended
Partnership's portfolio September 30, 1998
108
Exhibit Description Page Number or Filing from which
Numbers Incorporated by Reference
*10.18 Agreement to Purchase and Sell Partnership Interests in Exhibit 10.18 to Form 10-Q for the
Austintown Associates period ended September 30, 1999
<FN>
*Incorporated by Reference as noted
</FN>
109
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
By: LIBERTY HOUSING PARTNERS LIMITED
PARTNERSHIP
(Registrant)
By: TNG Properties, Inc.,
Managing General Partner
Date: 4/5/01 By: /s/ Michael A. Stoller
Michael A. Stoller
President, CEO, and Director of
TNG Properties, Inc.
Managing General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
Signature Title Date
Vice President, Treasurer
and Director (principal
financial and accounting officer)
of TNG Properties, Inc. Managing
General Partner
/s/ Wilma R. Brooks 4/5/01
Wilma R. Brooks
110
Signatures, continued
Signature Title Date
President, CEO and Director of
TNG Properties, Inc. Managing
General Partner
/s/ Michael A. Stoller 4/5/01
Michael A. Stoller
Director of TNG Properties, Inc.
Managing General Partner
/s/ Stephen D. Puliafico 4/5/01
Stephen D. Puliafico
Director of TNG Properties, Inc.
Managing General Partner
/s/ James C. Coughlin 4/5/01
James C. Coughlin
111