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, 2001
[ ] 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 1 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: 94-108
Page 1 of 110
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, 2000 and 2001 an additional 10, 20 and 20 units were abandoned,
respectively.
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").
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 discussed herein, the Partnership is currently attempting
to dispose of its remaining five Local Limited Partnership investments. If the
Partnership is successful in disposing of its remaining investments, management
presently intends to wind up the Partnership's operations in the second quarter
of 2002. No assurance can be given that the Partnership will be able to
successfully conclude any of these transactions. Consequently, the completion of
the liquidation of the Partnership may be different than currently anticipated.
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.
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. 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
2
Item 1. Business, continued
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 required 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. Linden
Park, 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 of its existing
debt in July 1999.
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 holds 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.
In 1999, the Partnership sold its interests in Fiddlers Creek Apartments,
Ltd. ("Fiddlers Creek") and Linden Park Limited Partnership ("Linden Park"). The
Purchase Money Notes relating to Osuna Company ("Osuna") matured on November 27,
1999. The Partnership disposed of its interest in Osuna and the related Purchase
Money Note obligations in February 2000. On September 29, 1999 the Purchase
Money Notes relating to Fuquay-Varina Homes for the Elderly, Ltd.
("Fuquay-Varina"), Oxford Homes for the Elderly, Ltd. ("Oxford Homes") and
Williamston Homes for the Elderly, Ltd. ("Williamston Homes") matured. On March
30, 2001, these Purchase Money Notes were assumed by the buyer as part of the
sales price of the related Local Limited Partnership interests. On December 31,
2001, Brierwood II, Ltd. ("Brierwood II") and Pine Forest, Ltd. ("Pine Forest")
sold all of the assets of the respective Local Limited Partnerships and
terminated these Local Limited Partnerships. The Purchase Money Notes relating
to Pine Forest matured on October 30, 1999. These Purchase Money Notes have been
effectively cancelled, as the related Local Limited Partnership (the
Partnership's interest in which was the sole collateral for the notes) was
terminated on December 31, 2001 after the sale of the property. These
transactions are described in more detail below.
3
Item 1. Business, continued
As of December 31, 2001 all five remaining series of the Purchase Money
Notes were in default. The Purchase Money Notes relating to Austintown
Associates ("Austintown"), Meadowwood. Ltd. ("Meadowwood") and Brierwood, Ltd.
("Brierwood") matured on October 30, 1999. The Purchase Money Notes relating to
Glendale Manor Apartments ("Glendale") and Surry Manor, Ltd. ("Surry") matured
on August 29, 2000 and July 9, 2001, respectively.
Additional information concerning the Purchase Money Notes is set forth
below under "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
Because of the progress which had been made during 2000, effective
December 31, 2000, the Partnership adopted the liquidation basis of accounting.
Accordingly, the Partnership's 2000 and 2001 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 has been 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 disposition of the remaining investments in Local
Limited Partnerships, carrying costs of the assets prior to disposition,
settlement of claims and commitments, the amount of revenue and expenses of the
Partnership until completely liquidated and other uncertainties.
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. As described above, all of the notes
have matured. The Partnership does not have funds sufficient to repay such
notes. 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. 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. 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
Item 1. Business, continued
(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 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 December 31, 2001, the properties owned by Brierwood II and Pine
Forest were sold to purchasers affiliated with the local general partner in
these partnerships. These Partnerships were subsequently dissolved.
On March 30, 2001, the Partnership sold its 98% limited partnership
interests in Fuquay-Varina, Oxford Homes and Williamston Homes to the general
partner of these partnerships or his affiliate for $148,485 plus the assumption
of the related Purchase Money Note obligations. The carrying value of these
properties had been adjusted at December 31, 2000 to reflect the actual sales
transactions.
On February 1, 2000, the Partnership sold its 98% interest as a limited
partner (the "Partnership Interest") in 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.
5
Item 1. Business, continued
On May 28, 1999, the Partnership sold its interest in Fiddlers Creek 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. 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 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
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 (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. 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 $58,949 as of December 31, 2001.
In 2001, the Partnership paid $71,723 in consulting fees to the Linden GP in
respect of the successful sales of its interests in Fuqua-Varina, Oxford Homes
and Williamston Homes. Fees totaling $18,018 were paid in respect to Austintown
and the Partnership accrued fees due the Linden GP totaling $9,441 in respect of
the Brierwood II and Pine Forest investments. In 2000, the consulting fees paid
to the Linden GP in respect of the successful sale of the Partnership's
investment in Osuna 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 and Linden Park 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.
The sale of the Partnership's interests in Brierwood and Meadowwood
Apartments requires consent from all the related Purchase Money Note holders.
Such consents were requested. The Partnership did not receive unanimous consent.
Under the partnership agreements relating to these investments, Liberty LGP has
the right to cause the sale of the Local Limited Partnership's project. Liberty
LGP has pursued the sale of these properties owned by Brierwood and Meadowwood
Apartments. The purchasers are affiliates of the local general partner in these
Local Limited Partnerships. The transactions closed in March 2002.
6
Item 1. Business, continued
The Partnership entered into an agreement with the local general partner
of Austintown 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. 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 to satisfy the judgment. On
November 28, 2001, Mr. Manchi, the local general partner of Austintown, and his
associate, Mr. Baker, both of whom held Purchase Money Notes, were the highest
bidders for a portion of the limited partnership interest (representing the
portion - approximately 94% of the Partnership's 98% interest - securing certain
of the Purchase Money Notes) at public auction by the receiver at the Mahoning
County Courthouse. Their bids totaled $1,300. A 25% deposit was required and
paid by Messrs. Manchi and Baker. Their purchases will be finalized upon final
approval by the Department of Housing and Urban Development to the sale, Messrs.
Manchi and Baker furnishing a "sophisticated investor letter" and the payment of
the balance of the purchase price. The sale proceeds, after the costs of sale,
will be paid to the holders of the Purchase Money Note for which the collateral
was sold. Management understands that Mr. Manchi has been negotiating to
purchase the remaining Purchase Money Notes and expects that, if he acquires
them, he will exchange them for the balance of the limited partnership interest.
The Partnership will recognize the disposition of its limited partnership
interest as the sales are finalized. The estimated liquidation value has been
adjusted to reflect these latest estimated realizable values.
Management has continued discussions with the local manager for Surry and
Glendale. Under the Local Limited Partnership agreements relating to these
investments, Liberty LGP has the right to cause the sale of these projects by
the respective Local Limited Partnerships. The local manager has had appraisals
completed for these projects which have been distributed to the Purchase Money
Note holders and the general partners of the respective Local Limited
Partnership. The appraised values for Surry and Glendale are $1,100,000 and
$950,000, respectively. Liberty LGP is in the process of soliciting offers for
these properties from the local manager and/or third parties. All net proceeds
from any such sale will be distributed to the partners of the Local Limited
Partnerships. The Partnership's proceeds would in turn be distributed to the
related Purchase Money Note holders. Management is continuing to consider other
alternatives in the event such a sale is not arranged. Management is unable to
predict when or whether such a transaction will be consummated. The estimated
liquidation values of these investments have been adjusted to reflect the latest
estimated realizable values based on the appraisals.
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.
7
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 and Linden Park were sold in 1999,
Osuna in February, 2000, and Fuquay-Varina, Oxford Homes and Williamston Homes
in March, 2001. The projects owned by Brierwood II and Pine Forest were sold on
December 31, 2001 and these Local Limited Partnerships terminated. The following
table reflects: (1) the name of each of the Local Limited Partnerships in which
the Partnership held an investment at December 31, 2001 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,
2001, 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.
8
Item 2. Properties
Purchase Money Notes At Acquisition
------------------------------------------- ----------------------------
Name/Percentage Interest Total Original Unpaid Principal LHPLP Total
Ownership of Local Acquisiton Acquisition Principal and Interest as Maturity Share of Invested
Limited Partnership Date Cost Amount(A) of 12/31/01 Date Local Debt Assets (C)
- ------------------------ ---------- ----------- ---------- ---------------- -------- ------------ ------------
98% interests are owned
in the following Local
Limited Partnerships(B):
1 Glendale Manor 8/31/84 $810,000 $450,000 $729,202 8/29/2000 $929,000 $1,739,000
Apartments
2 Surry Manor, Ltd. 8/31/84 740,000 360,000 795,829 7/9/2001 1,006,000 1,746,000
3 Austintown 10/30/84 3,081,000 1,600,000 3,907,437 10/30/1999 3,635,000 6,716,000
Associates
94% interests are owned
in the following Local
Limited Partnerships(B):
4 Brierwood, Ltd. 10/29/84 563,000 270,000 672,006 10/30/1999 838,000 1,401,000
5 Meadowwood, Ltd. 10/29/84 1,001,000 610,000 1,536,011 10/30/1999 1,004,000 2,005,000
---------- ---------- ---------- ---------- -----------
Total Investments $6,195,000 $3,290,000 $7,640,485 $7,412,000 $13,607,000
========== ========== ========== ========== ===========
Description of Apartment Complex
--------------------------------------------------------
Geographic Government
Size Location Assistance (D)
----------- ------------- -------------------
98% interests are owned
in the following Local
Limited Partnerships(B):
1 Glendale Manor 50 Units Clinton, SC 221(d)(4)
Apartments 30,310 SF 100% Section 8 (E)
5.5 Acres
2 Surry Manor, Ltd. 44 Units Dobson, NC 221(d)(4)
27,253 SF 100% Section 8 (E)
5.0 Acres
3 Austintown 200 Units Austintown, 236 HUD
Associates 189,200SF OH 100% Section 8 (E)
20 Acres
94% interests are owned
in the following Local
Limited Partnerships(B):
4 Brierwood, Ltd. 56 Units Bainbridge, 515 RHS
42,840 SF GA 521 RHS
6 Acres 33 Units
5 Meadowwood, Ltd. 80 Units Tifton,GA 515 RHS
67,416 SF
6.8 Acres
Total Investments 430 units
(Continued)
9
Item 2. Properties, continued
<FN>
(A) Purchase Money Notes bear interest at 9% per annum (See Note 7 tt 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, 2001 on the Purchase Money Notes, prior to
adustment to the liquidation basis of accounting was as follows:
Principal Interest Total
$3,290,000 $4,350,485 $7,640,485
============== ============== =============
(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 05/2005
Surry Manor, Ltd. 04/2006
Austintown Associates 10/2004
</FN>
10
Item 3. Legal Proceedings
On September 15, 2000, James P. Manchi, the local general partner of Austintown,
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 98% limited partnership interest in Austintown. The remaining
holders of Purchase Money Notes relating to Austintown 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), 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 to satisfy the
judgment. According to a report of the receiver, on November 28, 2001, Mr.
Manchi or Mr. Baker was the highest bidder for 94.063% of the limited
partnership interest at public auction at the Mahoning County Courthouse, their
bids totaled $1,300, a 25% deposit was required and paid by Messrs. Manchi and
Baker on November 28, 2001, and their purchases will be finalized upon receiving
final approval by the Department of Housing and Urban Development to the sales,
their furnishing "sophisticated investor letters" and the payment of the balance
of the purchase price.
Item 4. Submission of Matters to a Vote of Security Holders
None
11
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 26, 2002, there were 924 holders of record of the 21,526
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. There were no distributions made in 2001. Distributions of $3,123
and $5,641 during 2000 and 1999, 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.
12
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. The financial information for 2001 is
not comparable to that for prior years as a result of the Partnership's adoption
of the liquidation basis of accounting. Accordingly, the financial information
for 2001 is presented in a separate table. 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. The information from both tables 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 Year Ended December 31,
2001 2000
---- ----
Net income (loss) from operating activities(d) $(155) $ --
Financial Position, End of Year
Investment in Local Limited Partnerships 265 297
Total assets 787 820
Long-term debt 265 52
Net Assets in Liquidation 4 2
Distributable Cash from Operations per Unit (a) -- --
2000 1999 1998 1997
---- ---- ---- ----
Interest income $ 23 $ 107 $ 36 $ 46
Income (loss) before
extraordinary items 1,621 (1,602) (2,556) (2,218)
Net income (loss) 1,621 1,322 (2,556) (2,218)
Income (loss) per Unit before
extraordinary items 74.43 (73.56) (117.31) (101.75)
Net income (loss) per Unit 74.43 60.67 (117.31) (101.75)
Total assets at December 31 1,338 (c) 2,042 2,254 2,229
Long-term debt (including
current portion, net of
discount) at December 31 10,851 (c) 13,085 14,137 11,544
Distributable Cash from
operations per Unit (a) -- -- -- --
Units used in computing per
Unit calculations above (b) 21,564 21,566 21,568 21,576
13
Item 6. Selected Financial Data, continued
(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
each of 2001 and 2000 an additional 20 units were abandoned in each year.
(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.
(d) Net income(loss) for 2000 is not comparable to 2001 and has not been
presented.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Critical Accounting Policy
Because of the progress which had 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 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.
14
The Partnership, continued
In May 1999, the Partnership sold its interest in Fiddlers Creek 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. Linden
Park refinanced their existing debt and also paid in full the principal and
accrued and unpaid interest due the Partnership on their notes.
On February 1, 2000, the Partnership sold its 98% interest as a limited
partner (the "Partnership Interest") in 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 March 30, 2001, the Partnership sold its 98% limited partnership
interests in Fuquay-Varina, Oxford Homes and Williamston Homes to the general
partner of these partnerships or his affiliate for $148,485 plus the assumption
of the related Purchase Money Note obligations. The carrying value of these
properties had been adjusted at December 31, 2000 to reflect the actual sales
transactions.
On December 31, 2001, the properties owned by Brierwood II and Pine
Forest were sold to purchasers affiliated with the local general partner in
these partnerships. These Local Limited Partnerships were subsequently
dissolved.
At December 31, 2001, the five remaining series of the Purchase Money
Notes, relating to Austintown, Meadowwood, Brierwood, Glendale and Surry, had
matured and were in default. 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.
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, 2001 was $7,640,485. All unamortized discount on these notes had 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 of $265,250 and $51,983 at
December 31, 2001 and 2000, respectively.
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.
15
The Partnership, continued
The sale of the Partnership's interests in Brierwood and Meadowwood
requires consent from all the related Purchase Money Note holders. Such consents
were requested. The Partnership did not receive unanimous consent. 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 pursued the sale
of these properties owned by Brierwood and Meadowwood. The purchasers are
affiliates of the local general partner in these partnerships. The transactions
closed in March 2002.
The Partnership entered into an agreement with the local general partner
of Austintown 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. 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 to satisfy the judgment. On
November 28, 2001, Mr. Manchi, the local general partner of Austintown, and his
associate, Mr. Baker, both of whom held Purchase Money Notes, were the highest
bidders for a portion of the limited partnership interest (representing the
portion - approximately 94% of the Partnership's 98% interest - securing certain
of the Purchase Money Notes) at public auction by the receiver at the Mahoning
County Courthouse. Their bids totaled $1,300. A 25% deposit was required and
paid by Messrs. Manchi and Baker. Their purchases will be finalized upon final
approval by the Department of Housing and Urban Development to the sale, Messrs.
Manchi and Baker furnishing a "sophisticated investor letter" and the payment of
the balance of the purchase price. The sale proceeds, after the costs of sale,
will be paid to the holders of the Purchase Money Note for which the collateral
was sold. Management understands that Mr. Manchi has been negotiating to
purchase the remaining Purchase Money Notes and expects that, if he acquires
them, he will exchange them for the balance of the limited partnership interest.
The Partnership will recognize the disposition of its limited partnership
interest as the sales are finalized. The estimated liquidation value has been
adjusted to reflect these latest estimated realizable values.
Management has continued discussions with the local manager for Surry and
Glendale. Under the Local Limited Partnership agreements relating to these
investments, Liberty LGP has the right to cause the sale of these projects by
the respective Local Limited Partnerships. The local manager has had appraisals
completed for these projects which have been distributed to the Purchase Money
Note holders and the general partners of the respective Local Limited
Partnerships. The appraised values for Surry and Glendale are $1,100,000 and
$950,000, respectively. Liberty LGP is in the process of soliciting offers for
these properties from the local manager and/or from third parties. All net
proceeds from any such sale will be distributed to the partners of the Local
Limited Partnerships. The Partnership's proceeds would in turn be distributed to
the related Purchase Money Note holders. Management is continuing to consider
other alternatives in the event such a sale is not arranged. Management is
unable to predict when or whether such a transaction will be consummated. The
estimated liquidation values of these investments have been adjusted to reflect
the latest estimated realizable values based on the appraisals.
If the Partnership is successful in disposing of its remaining
investments, management presently intends to wind up the Partnership's
operations in the second 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.
16
The Partnership, continued
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 and 2001
reflect Management's estimates of the net realizable values for the Investments
in Local Limited Partnerships at such dates 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, 2001, the Partnership had cash and cash equivalents of
$521,798. Of this amount $58,949 represents funds segregated for use to pay the
fees and expenses due the Linden GP pursuant to a consulting agreement and cash
reserves of $462,849. The increase in cash reserves compared with $376,286 at
December 31, 2000 was funded primarily as the result of $148,485 proceeds from
the sale of the Partnership's interests in Fuquay-Varina, Oxford Homes and
Williamston Homes, less the payment of costs relating to these sales and other
operating expenses. Restricted cash decreased as a result of costs paid relating
to the sale of the Partnership's investments. The cash reserves have partially
funded the Partnership administrative expenses, including expense reimbursement
to the Managing General Partner. The Partnership incurs certain 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 $53,000, $98,025 and $99,681 in 2001,
2000 and 1999, respectively. In 1999 the Partnership paid $83,000 of deferred
management fees and reimbursable expenses out of the proceeds from the sales of
its interests in Fiddlers Creek and Linden Park. Management intends to pay
additional deferred fees and costs from cash reserves over the liquidation
period.
During 2001, 2000 and 1999 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: 2001: Two LLP's -
$39,333; 2000: Six LLP's - $126,531 and 1999: Seven LLP's - $245,730. By April
30, 2001, 2000, and 1999, the Partnership used such cash distributions to pay a
portion of the accrued and unpaid interest on the related Purchase Money Notes.
17
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 October
2004 through April 2006. 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. In February 2001, HUD issued a
new Section 8 contract renewal GuideBook, which replaced HUD notice 99-36.
The GuideBook provides project owners with several options for Section 8
contract renewals. The Local Limited Partnerships which have Section 8 contracts
will not be affected by these guidelines until late 2003 or early 2004.
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 attempting to dispose of
its interests in the remaining five 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 second 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, if not assumed, prior to
distribution of any funds to the partners in the Local Limited Partnership.
18
Partnership Operations and Liquidation Activities
The Partnership is engaged solely in the business of owning interests in
the Local Limited Partnerships rather than the direct ownership of real estate.
On March 30, 2001, the Partnership sold its 98% limited partnership
interests in Fuquay-Varina, Oxford Homes and Williamston Homes to the general
partner of these partnerships or his affiliate for $148,485 plus the assumption
of the related Purchase Money Note obligations. The carrying value of these
properties had been adjusted at December 31, 2000 to reflect the actual sales
transactions.
On December 31, 2001, the Properties owned by Brierwood II and Pine
Forest were sold to purchasers affiliated with the local general partner in
these partnerships. These Partnerships were subsequently dissolved. The carrying
value of these properties had been adjusted at December 31, 2000 to reflect the
actual sales transactions.
Net assets in liquidation increased to $3,962 at December 31, 2001 from
$2,358 at December 31, 2000. The change was the result of the liquidation
adjustments of $156,213 and operating activities of $(154,609). Liquidation
adjustments consisted of proceeds received from the Fuquay-Varina, Oxford Homes
and Williamston Homes sales and net increases in the estimated value to be
received in liquidation of the remaining investments in Local Limited
Partnerships of $155,909. Operating activities include interest income of
$17,066, an increase in the estimated Purchase Money Note interest payable of
$255,371 and a decrease in accounts payable and accrued expenses of $83,695.
The Partnership's interest income reflects interest earned on reserves,
interest earned on the notes receivable from Linden Park 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.
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.
General and administrative expenses of the Partnership were $154,282 in
2000 and $153,550 in 1999.
The Partnership's equity in income from the Local Limited Partnerships
was $8,594 in 2000 and $139,548 in 1999. 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 in 1999 totaling $60,011 and the
recognition of one month of Osuna operations versus 12 months of income in 1999,
the difference totaling $26,301. In addition, Austintown incurred significant
maintenance and repairs in 2000, with the resulting net loss increasing by
$32,866. Distributions from Glendale 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.
19
Partnership Operations and Liquidation Activities, continued
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.
The Partnership realized a net gain of $2,432,299 on its sale of
investment in Osuna on February 1, 2000, $2,579,632 on its sale of investment in
Fiddlers Creek on May 28, 1999 and a net gain of $344,491 on the sale of
investment in Linden Park on July 15, 1999. These gains were calculated as
follows:
Osuna Fiddlers Creek Linden Park
----- -------------- -----------
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
Occupancy levels at the projects owned by the Local Limited Partnerships
ranged from 86% to 100% in 2001, 79% to 100% in 2000 and 72% to 100% in 1999.
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.
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 October 2004 through April 2006. 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.
20
Item 8. Financial Statements and Supplementary Data
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
INDEX
Page
Financial Statements:
Statements of Net Assets in Liquidation, December 31, 2001 and 2000 22
Statement of Changes of Net Assets in Liquidation for the
Year Ended December 31,2001 23
Statements of Operations for the Years
Ended December 31, 2000 and 1999 24
Statement of Adjustments to Net Assets in Liquidation,
December 31, 2000 25
Statements of Changes in Partners' Deficit
for the Years Ended December 31, 2000 and 1999 26
Statements of Cash Flows for the Years Ended
December 31, 2000 and 1999 27-28
Notes to Financial Statements 29-49
Independent Auditors' Reports 50-58
Separate Financial Statements, including
Reports of Independent Auditors', for
Significant Investees:
Austintown 59-87
Financial Statement Schedules:
Schedule III - Real Estate and Accumulated Depreciation 88
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.
21
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF NET ASSETS IN LIQUIDATION
December 31,
-------------------
2001 2000
---- ----
Assets (Liquidation Basis):
Cash and cash equivalents $462,849 $376,286
Restricted cash 58,949 147,103
Investments in Local Limited Partnerships 265,250 296,910
-------- --------
Total Assets 787,048 820,299
-------- --------
Liabilities (Liquidation Basis):
Purchase Money Notes and accrued interest liabilities 265,250 51,983
Accounts payable to affiliates 339,271 386,271
Accounts payable 1,000 3,596
Accrued expenses 176,724 375,250
Interest payable 841 841
-------- --------
Total liabilities 783,086 817,941
-------- --------
Net Assets in Liquidation $ 3,962 $ 2,358
======== ========
The accompanying notes are an integral part of these financial statements.
22
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENT OF CHANGES OF NET ASSETS IN LIQUIDATION
For the year ended December 31, 2001
Net Assets in liquidation at December 31, 2000 $ 2,358
Operating Activities
Interest income $ 17,066
Purchase Money Note interest - increase in
accrual (255,371)
Other operating expenses:
Affiliates 47,000
Other 36,696
---------
Sub-total operating activities (154,609)
Liquidating Activities
Increase in investment in Local Limited
Partnerships
319
Change in estimated liquidation value
Estimated sales price 155,909
Actual sales price (15)
---------
Sub-total liquidating activities 156,213
---------
Net Assets in liquidation at December 31, 2001 $ 3,962
=========
The accompanying notes are an integral part of these financial statements.
23
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended December 31,
-------------------------------------
2000 1999
---- ----
Interest income $ 22,805 $ 107,488
Expenses:
Interest expense 688,199 1,695,878
General and administrative expenses:
Affiliates 98,025 99,681
Other 56,257 53,869
----------- -----------
Total expenses 842,481 1,849,428
----------- -----------
Loss before other income and equity in income (loss) of
local limited Partnership investments (819,676) (1,741,940)
Other income:
Gain on sale of investment in Osuna 2,432,299 --
----------- -----------
Income (Loss) before equity in income of local limited
Partnership investments 1,612,623 (1,741,940)
Equity in income of local
Limited partnership investments 8,594 139,548
----------- -----------
Income (Loss) before extraordinary items 1,621,217 (1,602,392)
Extraordinary items:
Gain on sale of investment in Fiddlers Creek Apts -- 2,579,632
Gain on sale of investment in Linden Park -- 344,491
----------- -----------
-- 2,924,123
----------- -----------
Net income (loss) $ 1,621,217 $ 1,321,731
=========== ===========
Limited partners' interest in income (loss) before
extraordinary items $ 1,605,005 $(1,586,368)
=========== ===========
Limited partners' interest in net income (loss) $ 1,605,005 $ 1,308,514
=========== ===========
Units used in computing basic net income (loss) per
limited partnership Unit 21,564 21,566
=========== ===========
Basic income (loss) per limited partner unit before
extraordinary items $ 74.43 $ (73.56)
=========== ===========
Basic net income (loss) per
limited partnership Unit $ 74.43 $ 60.67
=========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
24
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.
25
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
For the years ended December 31, 2000 and 1999
General Limited
Partner Partners Total
------- -------- -----
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
======
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
26
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
---------------------------------
2000 1999
---- ----
Cash flows from operating activities:
Cash distributions from Local Limited Partnerships $ 129,654 $ 251,371
Interest payments on Purchase Money Notes (123,760) (245,730)
Uncashed interest payments on Purchase Money
Notes from prior years -- 841
Cash paid for general and administration expenses:
Affiliates (27) (83,000)
Other (44,225) (38,926)
Interest received 22,805 25,733
----------- -----------
Net cash used in operating activities (15,553) (89,711)
----------- -----------
Cash flows from financing activities:
Capital distributions (3,123) (455,640)
Principal and accrued interest received upon
repayment of Linden Park notes
receivable -- 241,058
----------- -----------
Net cash used in financing activities (3,123) (214,582)
----------- -----------
Cash flows from investing items:
Cash proceeds from sale of investment in:
Osuna 100,000 --
Fiddlers Creek -- 483,451
Linden Park -- 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
Cash and cash equivalents at:
Beginning of period 526,940 42,284
----------- -----------
End of period $ 376,286 $ 526,940
=========== ===========
(continued)
27
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
---- ----
Net income (loss) $ 1,621,217 $ 1,321,731
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)
Cash distributions from Local Limited
Partnerships 129,654 251,371
Interest expense added to purchase money
Notes, net of discount amortization 649,223 1,573,230
Interest income added to
notes receivable, net of discount
amortization, and interest received -- (81,755)
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)
Accounts payable to affiliates 97,998 15,002
Accounts payable 2,031 (1,093)
Accrued expenses 10,000 17,715
----------- -----------
Net cash used in operating activities $ (15,553) $ (89,711)
=========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
28
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, 2000 and 2001, the Partnership recorded as cancelled and no longer
outstanding 40, 10, 20 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).
29
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 December 31, 2001, the Properties owned by Brierwood II and Pine
Forest were sold to purchasers affiliated with the local general partner in
these partnerships. These Partnerships were subsequently dissolved. The carrying
value of these properties had been adjusted at December 31, 2000 to reflect the
actual sales transactions.
On March 30, 2001, the Partnership sold its 98% limited partnership
interests in Fuquay-Varina, Oxford Homes and Williamston Homes to the general
partner of these partnerships or his affiliate for $148,485 plus the assumption
of the related Purchase Money Note obligations. The carrying value of these
properties had been adjusted at December 31, 2000 to reflect the actual sales
transactions.
On February 1, 2000, the Partnership sold its 98% interest as a limited
partner (the "Partnership Interest") in 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 July 15, 1999, the Partnership sold its interest in Linden Park 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
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 (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.
On May 28, 1999, the Partnership sold its interest in Fiddlers Creek 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. 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.
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 and Linden Park.
30
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
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 $58,949 as of December 31, 2001.
In 2001, the Partnership paid $71,723 in consulting fees to the Linden GP in
respect of the successful sales of its' interests in Fuqua-Varina, Oxford Homes
and Williamston Homes. Fees totaling $18,018 were paid in respect of Austintown
and the Partnership accrued fees due the Linden GP totaling $9,441 in respect of
the Brierwood II and Pine Forest investments. In 2000, the consulting fees paid
to the Linden GP in respect of the successful sale of the Partnership's
investment in Osuna 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 and Linden Park totaled $77,416
and reimbursed the Linden GP for expenses incurred totaled $10,216.
The sale of the Partnership's interests in Brierwood and Meadowwood
requires consent from all the related Purchase Money Note holders. Such consents
were requested. The Partnership did not receive unanimous consent. Under the
partnership agreements relating to these investments, Liberty LGP has the right
to cause the sale of the Local Limited Partnership's project. Liberty LGP has
pursued the sale of these properties owned by Brierwood and Meadowwood. The
purchasers are affiliates of the local general partner in these Local Limited
Partnerships. The transactions closed in March 2002.
The Partnership entered into an agreement with the local general partner
of Austintown 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. 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 to satisfy the judgment. On
November 28, 2001, Mr. Manchi, the local general partner of Austintown, and his
associate, Mr. Baker, were the highest bidders for a portion of the limited
partnership interest (representing the portion - approximately 94% of the
Partnership's 98% interest - securing certain of the Purchase Money Notes) at
public auction by the receiver at the Mahoning County Courthouse. Their bids
totaled $1,300. A 25% deposit was required and paid by Messrs. Manchi and Baker.
Their purchases will be finalized upon final approval by the Department of
Housing and Urban Development to the sale, Messrs. Manchi and Baker furnishing a
"sophisticated investor letter" and the payment of the balance of the purchase
price. The sale proceeds, after the costs of sale, will be paid to the holders
of the Purchase Money Note for which the collateral was sold. Management
understands that Mr. Manchi has been negotiating to purchase the remaining
Purchase Money Notes and expects that, if he acquires them, he will exchange
them for the balance of the limited partnership interest. The Partnership will
recognize the disposition of its limited partnership interest as the sales are
finalized. The estimated liquidation value has been adjusted to reflect these
latest estimated realizable values.
31
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 continued discussions with the local manager for Surry and
Glendale. Under the Local Limited Partnership agreements relating to these
investments, Liberty LGP has the right to cause the sale of these projects by
the respective Local Limited Partnerships. The local manager has had appraisals
completed for these projects which have been distributed to the Purchase Money
Note holders and the general partners of the respective Local Limited
Partnerships. The appraised values for Surry and Glendale are $1,100,000 and
$950,000, respectively. Liberty LGP is in the process of soliciting offers for
these properties from the local manager and/or from third parties. All net
proceeds from any such sale will be distributed to the partners of the Local
Limited Partnerships. The Partnership's proceeds would in turn be distributed to
the related Purchase Money Note holders. Management is continuing to consider
other alternatives in the event such a sale is not arranged. Management is
unable to predict when or whether such a transaction will be consummated. The
estimated liquidation value of these investments have been adjusted to reflect
the latest estimated realizable values based on the appraisals.
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).
As discussed above, the Partnership is currently attempting to dispose of
its interests in the remaining five 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 second 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 had 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 adopted
the liquidation basis of accounting. Prior to that date, the Partnership
recorded results of operations using the going concern basis of accounting.
32
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
2. Significant Accounting Policies, continued
Basis of Accounting, continued
The accompanying statements of net assets in liquidation as of December
31, 2001 and 2000, reflect 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.
Investment in Local Limited Partnerships
Investments in Local Limited Partnerships at December 31, 2001 consist of
investments in five 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, 2001 consist of $377,672 certificates of
deposit with interest at rates of 1.76 and 1.74 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. Cash
equivalents at December 31, 2000 consisted 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.
33
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
2. Significant Accounting Policies, continued
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 had 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.
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,
2001, 2000, and 1999, there were 21,526, 21,546 and 21,566 units outstanding.
During 2001 and 2000, 20 units were abandoned in each year. Refer to Note 1 for
information regarding profit and loss sharing ratios.
34
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
3. Contingencies
As of December 31, 2001 all five remaining series of the Purchase Money
Notes were in default. The Purchase Money Notes relating to Austintown,
Meadowwood and Brierwood matured on October 30, 1999. The Purchase Money Notes
relating to Glendale and Surry matured on August 29, 2000 and July 9, 2001,
respectively. On September 29, 1999 the Purchase Money Notes relating to
Fuquay-Varina, Oxford Homes and Williamston Homes matured. On March 30, 2001,
these Purchase Money Notes were assumed by the buyer as part of the sales price
of the related Partnership interests. The Purchase Money Notes relating to Pine
Forest matured on October 30, 1999. These Purchase Money Notes have been
effectively cancelled as the related Partnership (the sole collateral) was
terminated on December 31, 2001 after the sale of the property. The Purchase
Money Notes relating to Osuna matured on November 27, 1999. The Partnership
disposed of its interest in Osuna and the related Purchase Money Note
obligations in February 2000. Linden Park, 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 of its existing debt in July 1999.
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 attempting to
dispose of its interests in the remaining five 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
second 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.
35
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
3. Contingencies, continued
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 October 2004 through April 2006. 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. In February 2001, HUD issued a new Section 8 contract
renewal GuideBook, which replaced HUD notice 99-36.
The GuideBook provides project owners with several options for Section 8
contract renewals. The Local Limited Partnerships which have Section 8 contracts
will not be affected by these guidelines until late 2003 or early 2004.
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 eight of its investments as of December 31, 2001. 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 second 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.
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 and Linden Park.
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'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.
36
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
4. Investments in Local Limited Partnerships, continued
All of the Purchase Money Notes accrued simple interest at 9% per annum.
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. See Note 6 for further information on
Purchase Money Notes.
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. At December 31, 2001, the Investments in Local
Limited Partnerships was $265,250 versus $296,910 at December 31, 2000. The net
decrease of $31,660 includes the net increase in estimated net sales value
totaling $156,213 less sales proceeds totaling $148,485 and cash distributions
received from the Local Limited Partnerships totaling $39,388.
The Partnership recorded its share of losses in Linden Park, Brierwood,
Brierwood II, Pine Forest, Surry, Glendale and Meadowwood until its related
investment was reduced to zero. Subsequent to that point, any cash distributions
received from the five 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 were recognized as
investment income as it would have reduced its investment balance below zero.
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. No payments were made in 2001. These amounts totaling
$3,123 in 2000 and $5,641 in 1999 have been treated as distributions from the
Local Limited Partnerships and a distribution to the partners of Liberty Housing
Partners Limited Partnership.
37
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
4. Investments in Local Limited Partnerships, continued
The following is a summary of cumulative activity for investments in
Local Limited Partnerships since their dates of acquisition:
Years Ended December 31,
------------------------
2001 2000
---- ----
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 (3,456,795) (3,444,200)
Cash distributions received from Local Limited Partnerships (4,249,583) (4,199,256)
Cash distributions received from Local Limited
Partnerships recognized as Investment Income 95,918 95,195
Sales of investments in Local Limited Partnerships (1,462,539) (1,035,518)
Adjustment to reduce investments in Local Limited Partnerships
to liquidation accounting basis (29,555) (487,115)
----------- -----------
Investments in Local Limited Partnerships $ 265,250 $ 296,910
=========== ===========
38
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 in which the Partnership held an
investment during the corresponding fiscal year is as follows:
Summarized Balance Sheets
Assets: 2001 2000
- ------ ---- ----
Investment property, net
of accumulated depreciation $ 4,726,301 $ 7,771,045
Current assets 745,820 1,127,683
Other assets 84,767 195,708
----------- -----------
Total assets $ 5,556,888 $ 9,094,436
=========== ===========
Liabilities and Partners' Equity (Deficit):
-----------
Current liabilities 563,305 730,061
Long-term debt, net of discounts 5,460,527 9,082,556
----------- -----------
Total liabilities 6,023,832 9,812,617
Partnership's equity (deficit) (372,760) (553,347)
Other partners' equity (deficit) (94,184) (164,834)
----------- -----------
Total liabilities and
partners' equity (deficit) $ 5,556,888 $ 9,094,436
=========== ===========
Summarized Statements of Operations
For the Years Ended December 31,
--------------------------------
2001 2000 1999
---- ---- ----
Rental and other income $ 2,521,634 $ 3,019,184 $ 4,463,668
Expenses:
Operating expenses 1,702,676 1,981,234 2,957,059
Interest expense 468,042 582,074 773,617
Depreciation and amortization 490,154 591,400 813,890
----------- ----------- -----------
Total expenses 2,660,872 3,154,708 4,544,566
----------- ----------- -----------
Operating loss (139,238) (135,524) (80,898)
Gain on sale of apartment complexes 1,027,340 -- --
----------- ----------- -----------
Net income (loss) $ 888,102 $ (135,524) $ (80,898)
=========== =========== ===========
Partnership's share of net income (loss) $ 814,039 $ (133,862) $ (80,324)
=========== =========== ===========
Other partners' share
of net income (loss) $ 74,063 $ (1,662) $ (574)
=========== =========== ===========
39
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 and 1999 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
---- ----
Share of income in Local Limited Partnership Investments
in the Partnership's Statement of Operations $ 8,594 $ 139,548
Partnership's share of loss in the
above summarized Statement of Operations (133,862) (80,324)
--------- ---------
Difference $ 142,456 $ 219,872
========= =========
Unrecorded Losses:
Linden Park $ -- $ 37,641
Brierwood 19,725 33,837
Brierwood II 10,259 25,903
Pine Forest 48,854 33,806
Surry 23,508 39,642
Glendale 5,554 1,995
Meadowwood 32,523 28,046
--------- ---------
Subtotal Unrecorded Losses 140,423 200,870
Cash distributions recorded as investment income:
Glendale 2,033 19,002
Surry -- --
--------- ---------
Total $ 142,456 $ 219,872
========= =========
5. Restricted Cash
Restricted Cash consists of funds segregated for use to pay the fees and
expenses due the Linden GP in accordance with the Partnership's consulting
agreement as discussed more fully in Note 1 above. The remaining balance of the
segregated funds was $58,949 and $147,103 as of December 31, 2001 and 2000,
respectively. If the workout or liquidation of the entire portfolio is
successfully completed all of the segregated funds will be paid to the Linden
GP. Interest earned on these segregated fund is available to pay the fees and
expenses due the Linden GP under the consulting agreement.
40
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
6. Transactions with Affiliates
During the years ended December 31, 2000 and 1999 the Partnership
recognized general and administrative expenses owed to the Managing General
Partner, as follows:
2000 1999
---- ----
Reimbursement of Partnership
Administration expenses $48,025 $49,681
Partnership management fees 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 and Linden Park 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 at December 31, 2000. This amount included $50,000 of
partnership management fees and $50,000 of reimbursable administration expenses.
In 2001, estimated management fees to the General Partner through liquidation
were reduced by $45,000 and estimated administrative expenses through
liquidation were reduced by $2,000. At December 31, 2001, accounts payable to
affiliates totaling $339,271 represents amounts owed for reimbursements of
Partnership administrative expenses and management fees of $192,000 and
$147,271, respectively.
41
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:
2001 2000
---- ----
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 435,829 403,429
Reduction to adjust to Liquidation Accounting (653,981) (763,429)
----------- -----------
141,848 --
Purchase Money Notes, due August 29,
2000, bearing interest at 9% per annum,
collateralized by the Partnership's
Local Limited Partnership interest in
Glendale ManorApartments:
Original principal balance 450,000 450,000
Accrued and unpaid interest 279,202 238,702
Reduction to adjust to Liquidation Accounting (607,100) (688,702)
----------- -----------
122,102 --
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
Accrued and unpaid interest -- 330,893
Reduction to adjust to Liquidation Accounting -- (973,855)
----------- -----------
-- 638
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
Accrued and unpaid interest -- 222,870
Reduction to adjust to Liquidation Accounting -- (875,406)
----------- -----------
-- 11,564
42
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
2001 2000
---- ----
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
Accrued and unpaid interest -- 95,730
Reduction to adjust to Liquidation Accounting -- (773,502)
----------- -----------
-- 29,528
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 926,011 871,111
Reduction to adjust to Liquidation Accounting (1,536,011) (1,481,012)
----------- -----------
-- 99
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 402,006 382,814
Reduction to adjust to Liquidation Accounting (672,006) (652,715)
----------- -----------
-- 99
43
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
2001 2000
---- ----
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
Accrued and unpaid interest -- 487,328
Reduction to adjust to Liquidation Accounting -- (837,328)
----------- -----------
-- --
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 2,307,437 2,163,492
Reduction to adjust to Liquidation Accounting (3,906,137) (3,753,437)
----------- -----------
1,300 10,055
----------- -----------
Total principal and accrued and unpaid interest at 9% as
adjusted to liquidation basis
$ 265,250 $ 51,983
=========== ===========
44
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
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.
As of December 31, 2001 all five remaining series of the Purchase Money
Notes were in default. The Purchase Money Notes relating to Austintown,
Meadowwood and Brierwood matured on October 30, 1999. The Purchase Money Notes
relating to Glendale and Surry matured on August 29, 2000 and July 9, 2001,
respectively. On September 29, 1999 the Purchase Money Notes relating to
Fuquay-Varina, Oxford Homes, and Williamston Homes matured. On March 30, 2001,
these Purchase Money Notes were assumed by the buyer as part of the sales price
of the related Partnership interests. The Purchase Money Notes relating to Pine
Forest matured on October 30, 1999. These Purchase Money Notes have been
effectively cancelled as the related Partnership (the sole collateral) was
terminated on December 31, 2001 after the sale of the property. The Purchase
Money Notes relating to Osuna matured on November 27, 1999. The Partnership
disposed of its interest in Osuna and the related Purchase Money Note
obligations in February 2000. Linden Park, 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 of its existing debt in July 1999.
In 2000 and 1999, the unamortized discount for these Purchase Money Notes
totaling $86,669 and $658,894, respectively, were written off. The unamortized
discount relating to the Purchase Money Notes outstanding for Surry totaling
$82,830 was also written off in 2000. 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.
45
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Partnership)
NOTES TO THE FINANCIAL STATEMENTS
7. Purchase Money Notes (Continued)
Effective December 31, 2000 the Purchase Money Notes 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. During 2001 the Purchase Money Notes were
increased by an aggregate $213,267 to $265,250 to reflect their estimated
settlement amounts in accordance with the liquidation basis of accounting. The
net increase of $213,267 at December 31, 2001 in estimated settlement amounts
reflects the increase in estimated net sales proceeds from Surry and Glendale
totaling $263,950 less the actual sale and assumption of the related Purchase
Money Notes of Fuquay-Varina, Oxford Homes and Williamston Homes totaling
$41,730 and the net estimated decrease in settlement amounts from Austintown ,
Meadowwood and Brierwood totaling $8,953.
8. Accrued Expenses
Accrued Expenses in liquidation at December 31, 2001 and 2000 consisted
of the following:
December 31,
-----------------------
2001 2000
---- ----
Professional fees $ 61,275 $ 50,897
Consulting fees 9,441 --
Liabilities accrued to estimated settlement
amounts in liquidation:
Professional fees 56,500 177,250
Consulting fees 49,508 147,103
-------- --------
$176,724 $375,250
======== ========
46
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 reported in the Statements of Operations
for the years ended December 31, 2001, 2000 and 1999, to the income reported for
Federal income tax purposes is as follows:
2001 2000 1999
---- ---- ----
Financial Statement net income (loss) $ (154,609) $ 1,621,217 $ 1,321,731
Adjustments:
Liquidation basis accounting adjustments 2,778,592 -- --
Excess of tax equity over book equity in
Loss of Local Limited Partnership 229,206 326,937 (281,806)
Additional book (tax) basis interest (356,065) 26,063 814,632
Expenses not deducted pursuant to I.R.C
Section 267 98,000 97,999 15,002
Excess tax gain over book gain on sale of:
Interests in Local Limited Partnerships 1,762,497 655,062 4,824,373
Assets by Local Limited Partnerships 1,417,886 -- --
----------- ----------- -----------
Income for federal income tax purposes $ 5,775,507 $ 2,727,278 $ 6,693,392
=========== =========== ===========
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, 2001 and 2000, the
uninsured cash balances held at its banks was approximately $400,075 and
$361,163, respectively.
47
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,
2001, as defined in Section 17 of the Partnership Agreement, is as follows:
Interest income $ 17,066
Plus: 2001 cash distributions to be received from
Local Limited Partnerships, net of non-resident
state withholding taxes 10,688
Less: 2002 interest payments on Purchase Money
Notes to be paid out of 2001 cash
distributions from Local Limited Partnerships (10,688)
Less: General and administrative expenses (129,114)
---------
Cash from Operations, as defined (112,048)
---------
Distributable Cash from Operations, as defined $ (0)
=========
12. Subsequent Event
On March 22, 2002, the Properties owned by Brierwood and Meadowwood were
sold to purchasers affiliated with the local general partner of each of these
partnerships. These Partnerships were subsequently dissolved. The carrying value
of these properties had been adjusted at December 31, 2001 to zero to reflect
the actual sales transactions. For tax reporting purposes the Partnership is
expected to report a gain of approximately $3,316,000.
48
LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
13. Quarterly Financial Data (Unaudited)
The following is a summary of quarterly results of operation for 2001. Amounts
are expressed in thousands with the exception of per Unit calculations.
Selected Quarterly Data for the Year Ended December 31, 2001
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
Net income(loss) from operating activities $ 2 $ (2) $ 3 $(158)
Financial Position, End of Year
Investment in Local Limited Partnerships 109 109 109 265
Total assets 746 629 617 787
Long-term debt 52 10 10 265
Net Assets in Liquidation 5 3 5 4
Distributable Cash from operations per Unit -- -- -- --
49
ROBERT ERCOLINI & COMPANY LLP
Certified Public Accountants o Business Consultants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Liberty Housing Partners Limited Partnership
Needham, Massachusetts
We have audited the accompanying statements of net assets in liquidation
of Liberty Housing Partners Limited Partnership (a Massachusetts Limited
Partnership) as of December 31, 2001 and 2000, the related statement of changes
of Net Assets in Liquidation for the year ended December 31, 2001, statement of
adjustments to net assets in liquidation 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 2001 and 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 34% and 36% of the total
assets as of December 31, 2001 and 2000, and income and (losses) from such
partnerships comprise 0% and .5% of the income (loss) for the years ended
December 31, 2001 and 2000, respectively, 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 statements of operations, changes in
partners' deficit and cash flows for the year 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 audits in accordance with auditing standards generally
accepted in the United States of America. 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 and the
reports of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other
auditors, the 2001 and 2000 financial statements of Liberty Housing Partners
Limited Partnership referred to above present fairly, in all material respects,
the statements of net assets in liquidation as of December 31, 2001 and 2000,
the statement of changes of net assets in liquidation for the year ended
December 31, 2001, the statement of adjustments to net assets in liquidation 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.
FIFTY-FIVE SUMMER STREET o BOSTON, MA 02110-1007 o
TELEPHONE 617.482-5511 o FAX 617.426-5252
50
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 to the liquidation basis. Accordingly, the carrying values of the
remaining assets as of December 31, 2001 and 2000 are presented at estimated
realizable values and all liabilities are presented at estimated settlement
amounts.
Our audit was made for the purpose of forming an opinion on the basic
2001 and 2000 financial statements taken as a whole. The supplemental schedule
listed in the accompanying index on page 21 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
/s/ ROBERT ERCOLINI & COMPANY LLP
Boston, Massachusetts
March 22, 2002
51
Reznick Fedder & Silverman
Certified Public Accountants o A Professional Corporation
4520 East West Highway o Suite 300 o Bethesda, Maryland 20814-3319
Phone (301) 652-9100 o Fax (301) 652-1848
INDEPENDENT AUDITORS' REPORT
To the Partners
Liberty Housing Partners Limited Partnership
We have audited the accompanying statements of operations, changes in
partners' deficit, and cash flows of Liberty Housing Partners Limited
Partnership (a Massachusetts Limited Partnership) for the year 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 audit. 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 8% of the Partnership income (loss) for the year 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 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 provides a
reasonable basis for our opinion.
In our opinion, based on our audit and the reports of the other auditors
referred to above, the financial statements referred to above present fairly, in
all material respects, the results of its operations and its cash flows for the
year ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States of America.
/s/ REZNICK FEDDER & SILVERMAN
Bethesda, Maryland
March 21, 2000
52
ATLANTA, GA BALTIMORE, MD BETHESDA, MD CHARLOTTE, NC
(404) 847-9447 (410) 783-4900 (301) 652-9100 (704) 332-9100
www.rfs.com
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
________
OFFICES:
HIGH POINT
GREENSBORO
ASHEBORO
Independent Auditors' Report
January 15, 2002
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,
2001, 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 auditing standards generally accepted
in the United States of America 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, 2001, and the results of its operations, changes in partners'
deficit, and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
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 15, 2002 on our
consideration of Surry Manor, Ltd.'s internal control and reports dated January
15, 2002, 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. These reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.
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.
53
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
________
OFFICES:
HIGH POINT
GREENSBORO
ASHEBORO
Independent Auditors' Report
January 16, 2002
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 1a South Carolina limited
partnership) as of December 31, 2001, and the related statements of income,
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 auditing standards generally
accepted in the United States of America 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, 2001, and the results of its operations, changes
in partners' deficit, and cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
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, 2002 on
our consideration of Glendale Manor Apartments' internal control and reports
dated January 16, 2002, 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. These reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
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.
54
INDEPENDENT AUDTTORS' 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, 2001
and 2000, 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 auditing standards generally accepted
in the United States of America 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, 2001 and 2000, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 14, 2002 on our consideration of Brierwood, Ltd.'s internal
control structure and a report dated January 14, 2002 on its compliance with
laws and regulations. These reports are an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audits.
/s/ Henderson & Godbee, P. C.
Henderson & Godbee, P. C.
Certified Public Accountants
January 14, 2002
55
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, 2001
and 2000, 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 auditing standards generally accepted
in the United States of America 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, 2001 and 2000, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 14, 2002 on our consideration of Brierwood 11, Ltd's internal
control structure and a report dated January 14, 2002 on its compliance with
laws and regulations. These reports are an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audits.
/s/ Henderson & Godbee, P. C.
Henderson & Godbee, P. C
Certified Public Accountants
January 14, 2002
56
INDEPENDENT AUDTTORS' 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, 2001 and 2000, 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 auditing standards generally accepted
in the United States of America 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, 2001 and 2000, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 14, 2002 on our consideration of Pine Forest Apartments, Ltd.'s
internal control structure and a report dated January 14, 2002 on its compliance
with laws and regulations. These reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audits.
/s/ Henderson & Godbee, P. C.
Henderson & Godbee, P. C
Certified Public Accountants
January 14, 2002
57
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, 2001
and 2000, 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 auditing standards generally accepted
in the United States of America 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, 2001 and 2000, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
In accordance with Government Auditing Standards, we have also issued a report
dated January 14, 2002 on our consideration of Meadowwood, Ltd.'s internal
control structure and a report dated January 14, 2002 on its compliance with
laws and regulations. These reports are an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audits.
/s/ Henderson & Godbee, P. C.
Henderson & Godbee, P. C
Certified Public Accountants
January 14, 2002
58
FINANCIAL STATEMENTS
AND ACCOMPANYING INFORMATION
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
59
- - - o o 0 o o - - -
C O N T E N T S
PAGE
INDEPENDENT AUDITORS' REPORT............................................. 61
BALANCE SHEET ......................................................... 62-63
STATEMENT OF OPERATIONS.................................................. 64-65
STATEMENT OF PARTNERS' CAPITAL........................................... 66
STATEMENT OF CASH FLOWS.................................................. 67-68
NOTES TO FINANCIAL STATEMENTS............................................ 69-74
ACCOMPANYING INFORMATION:
SUPPORTING DATA REQUIRED BY HUD....................................... 75-78
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL......................... 79-80
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS................ 81
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO NONMAJOR HUD PROGRAM
TRANSACTIONS ......................................................... 82
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING
AND NON-DISCRIMINATION................................................ 83
SCHEDULE OF FINDINGS AND QUESTIONED COSTS................................ 84
AUDITORS COMMENTS ON AUDIT RESOLUTION
MATTERS RELATING TO HUD PROGRAMS...................................... 85
MANAGING PARTNERS' CERTIFICATION......................................... 86
MANAGEMENT AGENT'S CERTIFICATION......................................... 87
- - - o o 0 o o - - -
60
HbK
HILL, BARTH & KING LLC
7680 Market Street January 18, 2002
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report
We have audited the accompanying balance sheet of Austintown
Associates, a Limited Partnership (Partnership), HUD Project Number 042-44213,
as of December 31, 2001, 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 U.S. 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, 2001 and the results of its operations, changes in partners' capital and
cash flows for the year then ended in conformity with U.S. 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 18, 2002 on
our consideration of Austintown Associates' internal controls and reports dated
January 18, 2002 on its compliance with 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. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.
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
OFFICES SERVING CLIENT IN OHIO, FLORIDA, PENNSYLVANIA and VIRGINIA
Member American Institute of Certified Public Accountants Division of CPA Firms-
SEC and Private Companies Practive Sections
BALANCE SHEET
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
ASSETS
CURRENT ASSETS
1120 Cash and cash equivalents $ 43,695
1130 Accounts receivable tenants 4,717
1131 Less allowance for doubtful accounts 2,500
-------------------------
1130N Net accounts receivable tenants 2,217
1135 Accounts receivable HUD 9,631
1140 Accounts receivable operations 151
-------------------------
TOTAL CURRENT ASSETS 55,694
-------------------------
TENANT DEPOSITS HELD BY TRUST
1191 Tenant security deposits 45,505
RESTRICTED DEPOSITS HELD BY MORTGAGEE
1310 Escrow deposits 53,951
1320 Replacement reserve 290,395
-------------------------
TOTAL DEPOSITS 344,346
-------------------------
PROPERTY AND EQUIPMENT
1410 Land and land improvements 469,020
1420 Buildings 4,876,132
1440 Building equipment - portable 27,378
1450 Furniture 2,625
1460 Furnishings 193,013
1465 Office furniture and equipment 20,315
1470 Maintenance equipment 34,967
1480 Motor vehicles 11,150
-------------------------
5,634,600
1495 Less accumulated depreciation 3,019,370
-------------------------
NET PROPERTY AND EQUIPMENT 2,615,230
-------------------------
OTHER ASSETS
1520 Unamortized loan costs - net 11,277
1590 Workers' compensation deposit 433
-------------------------
TOTAL OTHER ASSETS 11,710
-------------------------
$ 3,072,485
=========================
<FN>
See accompanying notes to financial statements
</FN>
62
BALANCE SHEET (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
2110 Accounts payable trade $ 60,403
2113 Accounts payable - entity 15,000
2115 Accounts payable section 236 excess income due to HUD 140
2120 Accrued wages payable 5,842
2121 Accrued payroll taxes payable 535
2123 Accrued management fee payable 6,600
2150 Accrued real estate taxes 87,000
2170 Mortgage payable - current portion 112,389
2177 Operating loss loan - current portion 2,362
-------------------------
TOTAL CURRENT LIABILITIES 290,271
-------------------------
OTHER LIABILITIES
2191 Tenant security deposits 27,580
LONG-TERM DEBT LESS PRINCIPAL DUE WITHIN ONE YEAR
2320 Mortgage payable 2,463,550
3130 PARTNERS' CAPITAL 291,084
-------------------------
$ 3,072,485
=========================
<FN>
See accompanying notes to financial statements
</FN>
63
STATEMENT OF OPERATIONS
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
OPERATIONS
REVENUE
5120 Rent revenue - gross potential $ 211,718
5121 Tenant assistance payments 734,374
----------------------
TOTAL POTENTIAL RENT REVENUE 946,092
5220 Vacancies - apartments 10,827
----------------------
NET RENTAL REVENUE 935,265
----------------------
5410 Financial revenue - project operations 3,664
5440 Revenue from investments - reserve for replacements 8,791
----------------------
TOTAL FINANCIAL REVENUE 12,455
----------------------
5311 Swimming pool rental revenue 288
5910 Laundry revenue 1,167
5920 Tenant charges 9,556
5945 Interest reduction payments revenue 47
5990 Miscellaneous revenue 9,840
----------------------
TOTAL OTHER REVENUE 20,898
----------------------
TOTAL REVENUE 968,618
----------------------
EXPENSES
6203 Conventions and meetings 645
6210 Advertising 3,250
6310 Office salaries 40,332
6311 Office expenses 19,794
6320 Management fee 79,200
6330 Manager salaries 19,277
6331 Administrative rent free unit 2,680
6340 Legal expense 1,710
6350 Audit expense 10,445
6370 Bad debts 5,452
6390 Miscellaneous expenses 5,424
----------------------
TOTAL ADMINISTRATIVE EXPENSES 188,209
----------------------
6450 Electricity 52,337
6451 Water 18,123
6453 Sewer 40,339
----------------------
TOTAL UTILITIES EXPENSES 110,799
----------------------
<FN>
See accompanying notes to financial statements
</FN>
64
STATEMENT OF OPERATIONS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
EXPENSES (CONTINUED)
6510 Payroll $ 103,313
6515 Supplies 105,796
6520 Contracts 100,539
6525 Garbage and trash removal 16,832
6530 Security contract 2,175
6546 Heating/cooling repairs and maintenance 1,208
6548 Snow removal 750
6570 Vehicle and maintenance equipment operation and repairs 4,893
6590 Miscellaneous expenses 2,882
----------------------
TOTAL OPERATING AND MAINTENANCE EXPENSES 338,388
----------------------
6710 Real estate taxes 88,226
6711 Payroll taxes 13,644
6720 Property and liability insurance 20,280
6721 Fidelity bond insurance 419
6722 Workers' compensation 1,656
6723 Health insurance 14,780
6790 Miscellaneous taxes, licenses, permits and insurance 659
----------------------
TOTAL TAXES AND INSURANCE 139,664
----------------------
6830 Interest on operating loss loan 375
6850 Mortgage insurance premium 12,599
----------------------
TOTAL FINANCIAL EXPENSES 12,974
----------------------
TOTAL COST OF OPERATIONS BEFORE
DEPRECIATION AND AMORTIZATION 790,034
----------------------
NET INCOME BEFORE DEPRECIATION AND AMORTIZATION 178,584
----------------------
6600 Depreciation expense 200,710
6610 Amortization expense 657
----------------------
TOTAL DEPRECIATION AND AMORTIZATION 201,367
----------------------
LOSS FROM OPERATIONS (22,783)
7190 Other entity expenses 7,500
----------------------
NET LOSS $ (30,283)
======================
<FN>
See accompanying notes to financial statements
</FN>
65
STATEMENT OF PARTNERS' CAPITAL
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
GENERAL LIMITED
PARTNERS PARTNER TOTAL
----------- ----------- -----------
Balance (deficit), January 1, 2001 $ (3,721) $ 325,088 $ 321,367
Net loss 0 (30,283) (30,283)
----------- ----------- -----------
Balance (deficit), December 31, 2001 $ (3,721) $ 294,805 $ 291,084
=========== =========== ===========
See accompanying notes to financial statements
66
STATEMENT OF CASH FLOWS
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net rental receipts $ 925,817
Interest receipts 12,455
Other operating receipts 29,101
Administrative (50,377)
Management fee (79,200)
Utilities (112,553)
Salaries and wages (200,135)
Operating and maintenance (226,410)
Real estate taxes (87,026)
Property insurance (19,179)
Miscellaneous taxes and insurance (2,929)
Tenant security deposits (1,801)
Interest on mortgages (299)
Interest on note payable (432)
Mortgage insurance premium (13,142)
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 173,890
-------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (43,150)
Increase in reserve for replacement (25,579)
Decrease in mortgage escrow deposit 609
-------------
NET CASH USED IN INVESTING ACTIVITIES (68,120)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Mortgage principal payments (109,690)
-------------
NET CASH USED IN FINANCING ACTIVITIES (109,690)
-------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,920)
CASH AND CASH EQUIVALENTS
Beginning of year 47,615
-------------
End of year $ 43,695
=============
OTHER SUPPLEMENTARY CASH FLOW INFORMATION
Property and equipment financed through accounts payable $ 4,139
=============
<FN>
See accompanying notes to financial statements
</FN>
67
STATEMENT OF CASH FLOWS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net loss $ (30,283)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 200,710
Amortization 657
Provision for doubtful accounts 5,424
Decrease in accounts receivable tenants 364
Increase in accounts receivable other (6,750)
Decrease in supplies inventory 4,799
Decrease in prepaid expenses 1,101
Increase in cash restricted for tenant security deposits (1,828)
Decrease in accounts payable (13,884)
Increase in accrued expenses 12,621
Decrease in accounts payable Section 236 excess income due to HUD (268)
Increase in accrued real estate taxes 1,200
Increase in tenant security deposits 27
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 173,890
=============
<FN>
See accompanying notes to financial statements
</FN>
68
NOTES TO FINANCIAL STATEMENTS
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
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, 2001, rent subsidies from
HUD totaled $734,374 representing 76% of total revenue.
Partnership Interest:
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. On November 28, 2001, 94.063% of the Sole Investor Limited Partner's
interest was sold at public auction to two individuals. The sale is contingent
upon final approval by HUD and the buyers furnishing a sophisticated investor
letter. As of January 18, 2002 these contingences have not been satisfied.
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.
69
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Profit or Loss (Continued):
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.
Since the sale of the Sole Investor Limited Partner's interest on
November 28, 2001 has not been finalized, the partnership agreement has not been
amended for allocation of profit and losses as of January 18, 2002.
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:
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.
70
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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. Accumulated amortization amounted to $91,318 as of December
31, 2001.
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 $3,250 in 2001.
Interest Reduction Payments Revenue:
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 reduction payments revenue
includes an interest subsidy of $184,118 stated net of interest expense in the
amount of $184,071.
71
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates:
The preparation of financial statements in conformity with U.S.
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 $15,339.
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 May 2002.
Following is a summary of principal amounts due on long-term debt for
each of the five years following December 31, 2001 and thereafter:
YEAR ENDING AMOUNT
----------- ------
2002 $ 114,751
2003 120,514
2004 129,226
2005 138,568
2006 148,585
Thereafter 1,926,657
------------
TOTAL $2,578,301
============
72
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
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. The Partnership does not make deposits to the escrow account for
insurance since they pay the insurance monthly from operating cash.
NOTE C - RELATED PARTY TRANSACTIONS
Accounts payable - entity consists of a cumulative administrative fee
payable 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, 2001 was $15,000.
Pursuant to a management agreement dated October 1, 2000, a management
fee of 8.85% of gross rent collections subject to a cap of $33 per unit is
payable to Federal Management Company, an affiliate of the Local General
Partner. The fee amounted to $79,200 for the year ended December 31, 2001.
Included in operating expenses are expenses ultimately reimbursed to
Federal Management Company for payroll, payroll taxes, medical insurance and
office supplies of $197,694 for the year ended December 31, 2001.
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, 2001 were $3,079. Laundry
revenue of $1,167 in 2001 was received from B & M Professional Services.
Included in operating expenses are payments of $38,523 for 2001 to B &
M Professional Services for painting and drywall repairs.
73
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUSTINTOWN ASSOCIATES
(A LIMITED PARTNERSHIP)
HUD PROJECT NUMBER 042-44213
December 31, 2001
NOTE C - RELATED PARTY TRANSACTIONS (CONTINUED)
Payables to related parties as of December 31, 2001 are as follows:
Federal Management Company $ 16,463
B & M Professional Services $ 17,255
NOTE D - TENANT ASSISTANCE PAYMENTS
The Assisted Housing Services Corporation, as agent for Columbus
Metropolitan Housing Authority has contracted with the Partnership pursuant to
Section 8 of the United States Housing Act of 1937 to make tenant assistance
payments to the Partnership on behalf of qualified tenants. An agreement
covering all 200 units was renewed effective October 1, 2001 for three years.
These payments cannot annually exceed $850,000.
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.
74
SUPPORTING DATA REQUIRED BY HUD
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
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. During October and November of
2001 HUD approved temporary withdrawals amounting to $122,308 to cover a lapse
in tenant assistance payments during the transition between contracts. The
withdrawals were repaid in December 2001. Following is a summary of the activity
in the Reserve for Replacements account:
Balance at beginning of year $264,816
Deposits, withdrawals and repayments:
Monthly deposits 54,000
Interest earned 8,791
Approved withdrawals (159,520)
Repayments of temporary operating advances 122,308
--------
Balance at end of year $290,395
========
75
SUPPORTING DATA REQUIRED BY HUD (CONTINUED)
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
ASSETS
---------------------------------------------------------------------
BALANCE BALANCE
JANUARY 1, DECEMBER 31,
2001 ADDITIONS RETIREMENTS 2001
----------- ----------- ----------- ------------
Land and
land improvements $ 469,020 $ 0 $ 0 $ 469,020
Buildings 4,852,292 39,419 (15,579) 4,876,132
Building equipment -
portable 27,378 0 0 27,378
Furniture 2,625 0 0 2,625
Furnishings 193,013 0 0 193,013
Office furniture and
equipment 30,057 1,263 (11,005) 20,315
Maintenance equipment 36,941 3,857 (5,831) 34,967
Motor vehicles 9,043 2,750 (643) 11,150
---------- ---------- ---------- ----------
TOTALS $5,620,369 $ 47,289 $ (33,058) $5,634,600
========== ========== ========== ==========
Accumulated depreciation $2,851,718 $ 200,710 $ (33,058) $3,019,370
========== ========== ========== ==========
76
SUPPORTING DATA REQUIRED BY HUD (CONTINUED)
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
SCHEDULE OF ADDITIONS TO FIXED ASSET ACCOUNTS
DESCRIPTION AMOUNT
----------- --------
Office furniture and equipment:
Filing cabinets $ 1,263
Motor vehicles:
Van 2,750
Maintenance equipment:
Plumbing snake 2,649
Snow blower 1,208
-------
3,857
Buildings:
Windows 39,419
-------
TOTAL FIXED ASSET ADDITIONS $47,289
=======
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL RECEIPTS
CASH
Cash and cash equivalents and security deposits $89,200
Tenant subsidy due for period covered by
financial statement 9,631
-------
TOTAL CASH 98,831
-------
CURRENT OBLIGATIONS
Accounts payable and accrued liabilities
due within 30 days 60,781
Tenant security deposits liability 27,580
Other current obligations 140
-------
TOTAL CURRENT OBLIGATIONS 88,501
-------
SURPLUS CASH (DEFICIENCY) $10,330
=======
77
SUPPORTING DATA REQUIRED BY HUD (CONTINUED)
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS
AND RESIDUAL RECEIPTS (CONTINUED)
AMOUNT OF DISTRIBUTIONS EARNED
BUT UNPAID
Annual distributions earned during
current year $ 25,850
Distributions earned and unpaid as
of the end of prior year 164,409
Distributions paid during fiscal period
covered by statement 0
--------
TOTAL DISTRIBUTIONS EARNED
BUT UNPAID $190,259
========
AMOUNT AVAILABLE FOR DISTRIBUTION
NEXT FISCAL PERIOD $ 10,330
========
MISCELLANEOUS ACCOUNT DETAIL FOR THE
STATEMENT OF OPERATIONS
ACCOUNT 5990 - MISCELLANEOUS REVENUE
Community room/office rental $ 1,670
Air conditioning fee 3,079
Cable 4,740
Legal 110
Sale of toilet 80
Miscellaneous 161
--------
TOTAL $ 9,840
========
ACCOUNT 6390 - MISCELLANEOUS
ADMINISTRATIVE EXPENSES
Bank charges $ 1,230
CNA 212
Inspection 70
Credit reports 2,084
Mileage reimbursements 668
MA HMA dues 400
Miscellaneous 760
--------
TOTAL $ 5,424
========
78
HbK
HILL, BARTH & KING LLC
7680 Market Street January 18, 2002
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
Partners
Austintown Associates
Youngstown, Ohio
Independent Auditors' Report on Internal Control
We have audited the financial statements of Austintown Associates, a
Limited Partnership (Partnership), HUD Project Number 042-44213, as of and for
the year ended December 31, 2001 and have issued our report thereon dated
January 18, 2002. We have also audited Austintown Associates compliance with
requirements applicable to major HUD-assisted programs and have issued our
report thereon dated January 18, 2002.
We conducted our audits in accordance with U.S. 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 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, that transactions are executed in
accordance with management's authorization and recorded properly to permit the
preparation of financial statements in accordance with U.S. 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.
OFFICES SERVING CLIENT IN OHIO, FLORIDA, PENNSYLVANIA and VIRGINIA
Member American Institute of Certified Public Accountants Division of CPA Firms-
SEC and Private Companies Practive Sections
79
Partners
Austintown Associates January 18, 2002
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 operation that we consider to be material weaknesses as defined
above.
However, we noted other matters involving the internal control that we
have reported to the management of the Partnership in a separate letter dated
January 18, 2002.
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
80
HbK
HILL, BARTH & KING LLC
7680 Market Street January 18, 2002
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
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 (Partnership), HUD Project Number 042-44213, as of and for
the year ended December 31, 2001 and have issued our report thereon dated
January 18, 2002.
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, 2001. 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 U.S. 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.
The results of our audit procedures disclosed immaterial instances of
noncompliance with the requirements referred to above, which we have
communicated to the management of the Partnership in a separate letter, dated
January 18, 2002. We considered those instances of noncompliance in forming our
opinion of compliance, which is expressed in the following paragraph.
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, 2001.
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
OFFICES SERVING CLIENT IN OHIO, FLORIDA, PENNSYLVANIA and VIRGINIA
Member American Institute of Certified Public Accountants Division of CPA Firms-
SEC and Private Companies Practive Sections
81
HbK
HILL, BARTH & KING LLC
7680 Market Street January 18, 2002
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
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 (Partnership), HUD Project Number 042-44213, as of and for
the year ended December 31, 2001 and have issued our report thereon dated
January 18, 2002.
In connection with our audit of the 2001 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, 2001. 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
OFFICES SERVING CLIENT IN OHIO, FLORIDA, PENNSYLVANIA and VIRGINIA
Member American Institute of Certified Public Accountants Division of CPA Firms-
SEC and Private Companies Practive Sections
82
HbK
HILL, BARTH & KING LLC
7680 Market Street January 18, 2002
Youngstown, Ohio 44512
(330) 758-8615 PHONE
(330) 758-0357 FAX
www.hbkcpa.com
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 (Partnership), HUD Project Number 042-44213, as of and for
the year ended December 31, 2001 and have issued our report thereon dated
January 18, 2002.
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, 2001.
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.
Certified Public Accountants
OFFICES SERVING CLIENT IN OHIO, FLORIDA, PENNSYLVANIA and VIRGINIA
Member American Institute of Certified Public Accountants Division of CPA Firms-
SEC and Private Companies Practive Sections
83
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
No matters were reported for the year ended December 31, 2001.
84
AUDITORS' COMMENTS ON AUDIT RESOLUTION MATTERS
RELATING TO HUD PROGRAMS
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
No matters were reported for the year ended December 31, 2001.
85
MANAGING PARTNERS' CERTIFICATION
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
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, 2001.
General Partners:
/s/ James P. Manchi
-----------------------
February 4, 2002
Date
74-2343727
----------------------------
Partnership Federal Employer
Identification Number
86
MANAGEMENT AGENT'S CERTIFICATION
AUSTINTOWN ASSOCIATES
(A Limited Partnership)
HUD PROJECT NUMBER 042-44213
Year ended December 31, 2001
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, 2001.
FEDERAL MANAGEMENT COMPANY
/s/ James P. Manchi
Corporate Officer
February 4, 2002
Date
34-1527725
---------------------------------
Corporate Federal Employer
Identification Number
87
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
Net
Cost At Interest Acquisition Date Improvements
--------------------------------- Capitalized
Number Total Buildings Subsequent
Of Encum- And to
Property Units brances Land Improvements Acquisition
- -------- ----- ------- ---- ------------ -----------
Garden Apartment Complexes - Elderly Housing:
Surry Manor Apartments, 44 $878,561 $50,239 $1,259,177 89,899
Dobson, NC
Glendale Manor Apartments, 50 798,374 53,652 1,187,181 14,573
Clinton, SC
Garden Apartment Complexes - Low and Moderate
Income Housing:
Compass West Apartments, 200 2,778,497 397,105 4,822,593 446,772
Austintown, OH
Meadowwood Apartments, 80 681,661 90,146 1,337,358 39,379
Tifton, GA
Brierwood Apartments, 56 833,523 76,325 1,024,970 (26,931)
Bainbridge, GA
---- ---------- -------- ---------- --------
Total Local Limited
Partnership Real Estate 430 $5,970,616 $667,467 $9,631,279 $563,692
==== ========== ======== ========== ========
Gross Amount At Which Carried Life on
At December 31, 2001 Which
---------------------------------------- Accumu- Depreci-
Buildings lated ation is
And Depre- Date Computed
Property Land Improvements Total ciation Built (Years)
- -------- ---- ------------ ----- ------- ----- -------
Garden Apartment Complexes - Elderly Housing:
Surry Manor Apartments, $70,989 $1,328,326 $1,399,315 $777,355 1981 3-30
Dobson, NC
Glendale Manor Apartments, 53,652 1,201,754 1,255,406 712,574 1980 3-30
Clinton, SC
Garden Apartment Complexes - Low and Moderate
Income Housing:
Compass West Apartments, 469,020 5,197,450 5,666,470 3,019,370 1974 7-30
Austintown, OH
Meadowwood Apartments, 90,146 1,376,737 1,466,883 957,446 1977 10-25
Tifton, GA
Brierwood Apartments, 76,325 998,039 1,074,364 669,392 1979 10-25
Bainbridge, GA
-------- ----------- ----------- ---------
Total Local Limited
Partnership Real Estate $760,132 $10,102,306 $10,862,438 $6,136,137
======== =========== =========== =========
The aggregate cost of the above properties for Federal income tax purposes at
December 31, 2001 is $13,683,499.
A reconciliation of summarized carrying value of the above properties for the
years ended December 31,2001, 2000 and 1999 is a follows:
2001 2000 1999
---- ---- ----
Balance at beginning of year $ 16,869,264 $ 18,904,502 $ 29,309,512
Additions during the period - Improvements subse-
equent to acquisition, net of dispositions 59,042 251,659 59,485
Sale of Property (1,988,564)
Sale of Partnership interests (4,077,304) (2,286,897) (10,464,495)
------------ ------------ ------------
Balance at end of year $ 10,862,438 $ 16,869,264 $ 18,904,502
============ ============ ============
A reconciliation of summarized accumulated depreciation on the above properties
for the years ended December 31, 2001, 2000 and 1999 is as follows:
2001 2000 1999
---- ---- ----
Balance at beginning of year ($ 9,098,219) ($ 9,621,476) ($13,216,585)
Current provision for depreciation, net of dispositions (424,454) (577,141) (772,311)
Sale of Property 1,334,607
Sale of Partnership interests 2,051,929 1,100,398 4,367,420
------------ ------------ ------------
Balance at end of year ($ 6,136,137) ($ 9,098,219) ($ 9,621,476)
============ ============ ============
88
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 01, 2002:
Name Title Age
Michael A. Stoller President, Chief Executive Officer and Director 45
Wilma R. Brooks Vice President, Treasurer and Director 44
Barbara A. Gilman Vice President and Director of Management 52
Stephen D. Puliafico Director 46
James C. Coughlin Director 37
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.
89
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.
90
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, 2001 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.
91
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 21,526 Units outstanding as of
December 31, 2001.
(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 2001, 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, 2001 an aggregate of $132,174 in accrued and
unpaid administrative fees were due to Liberty LGP from the Local Limited
Partnerships. During 2001, Liberty LGP accrued $22,500 in administrative fees
due from the Local Limited Partnerships, received payments aggregating $89,500
and wrote off fees outstanding totaling $7,917. At December 31, 2001 accrued and
unpaid administrative fees aggregated $57,257. Liberty LGP is not entitled to
interest on the accrued and unpaid amount.
92
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
No reports on Form 8-K were filed during the quarter ended December
31, 2001.
(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.
93
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
Exhibit Description Page Number or Filing from
Numbers ----------- Which 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 Limited Exhibit 4.2 to the registrant's Annual
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 (withdrawal of Exhibit 4.4 to the registrant's Annual
Liberty Real Estate Corporation and Admission of TNG Properties Inc. Report on Form 10-K, for the period
ended December 31, 1995.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
4.5 Amendment to the Amended Agreement of Limited Partnership (withdrawal of LHP Exhibit 4.5 to the registrant's Annual
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, Ltd.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.4 (a) Escrow Agreement dated August 31, 1984 between Billy P. Shadrick, Bobby Ray Exhibit 10.4 (a) Effective to
Badgett, Housing Projects, Inc. and Liberty Housing Partners Limited Post-Amendment No. 1 to Form S-11
Partnership. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.4 (b) Amended and Restated Certificate and Agreement of Limited Partnership of Surry Exhibit 10.4 (b) to Post-Effective
Manor, Ltd. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
94
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.4 (c) Promissory Notes dated August 31, 1984 from Liberty Housing Partners Limited Exhibit 10.4 (c) to Post-Effective
Partnership to Billy P. Shadrick and from Liberty Housing Partners Limited Amendment No. 1 to Form S-11
Partnership to Bobby Joe Davis. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.4 (d) Purchase Money Notes dated August 31, 1984 from Liberty Housing Partners to Exhibit 10.4 (d) to Post-Effective
Billy P. Shadrick and from Liberty Housing Partners Limited Partnership to Amendment No. 1 to Form S-11
Bobby Joe Davis. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.4 (e) Pledge Agreements dated August 31, 1984 between Billy P. Shadrick and Liberty Exhibit 10.4 (e) to Post-Effective
Housing Partners Limited Partnership and between Bobby Joe Davis and Liberty Amendment No. 1 to Form S-11
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 Highland Exhibit 10.4 (f) to Post-Effective
Mortgage Company and related Deed of Trust dated July 11, 1980 among Surry Amendment No. 1 to Form S-11
Manor, Ltd., James M. Tanner, and Highland Mortgage Company. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.4 (g) Regulatory Agreement dated July 11, 1980 between Surry Manor, Ltd. and the Exhibit 10.4 (g) to Post-Effective
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 Surry Manor, Exhibit 10.4 (h) to Post-Effective
Ltd. and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
10.5 Documents Relating to Partnership Interest in Glendale Apartments
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.5 (a) Escrow Agreement dated August 31, 1984 between Billy P. Shadrick, Bobby Ray Exhibit 10.5 (a) to Post-Effective
Badgett, Housing Projects, Inc. and Liberty Housing Partners Limited Amendment No. 1 to Form S-11
Partnership. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.5 (b) Amended and Restated Certificate and Agreement of Limited Partnership of Exhibit 10.5 (b) to Post-Effective
Glendale Apartments. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
95
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.5 (c) Promissory Notes dated August 31, 1984 from Liberty Housing Partners Limited Exhibit 10.5 (c) to Post-Effective
Partnership to Billy P. Shadrick, from Liberty Housing Partners Limited Amendment No. 1 to Form S-11
Partnership to Bobby Joe Davis and from Liberty Housing Partners Limited Registration Statement (File 2-90617)
Partnership to Bobby R. Badgett.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.5 (d) Purchase Money Notes dated August 31, 1984 from Liberty Housing Partners Exhibit 10.5 (d) to Post-Effective
Limited Partnership 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)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.5 (e) Pledge Agreements dated August 31, 1984 between Billy P. Shadrick and Liberty Exhibit 10.5 (e) to Post-Effective
Housing Partners Limited Partnership, between Bobby Joe Davis and Liberty Amendment No. 1 to Form S-11
Housing Partners Limited Partnership and between Bobby R. Badgett and Liberty Registration Statement (File 2-90617)
Housing Partners Limited Partnership.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.5 (f) Mortgage Note dated April 11, 1979 from Glendale Apartments to Cincinnati Exhibit 10.5 (f) to Post-Effective
Mortgage Corporation and related Mortgage dated April 11, 1979 between Glendale Amendment No. 1 to Form S-11
Apartments and Cincinnati Mortgage Corporation. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.5 (g) Regulatory Agreement dated April 11, 1979 between Glendale Apartments and the Exhibit 10.5 (g) to Post-Effective
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 Glendale Exhibit 10.5 (h) to Post-Effective
Apartments and the Secretary of Housing and Urban Development Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
10.6 Documents Relating to Partnership Interest in Fiddlers Creek
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.6 (a) Escrow Agreement dated September 28, 1984 between Billy P. Shadrick, Bobby Ray Exhibit 10.6 (a) To Post-Effective
Badgett, J. Thomas Dotson and Liberty Housing Partners Limited Partnership. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
96
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.6 (b) Amended and Restated Certificate and Agreement of Limited Partnership of Exhibit 10.6 (b) to Post-Effective
Fiddlers Creek. 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 form dated Exhibit 10.6 (c) to Post-Effective
September 28, 1984, Pledge Agreement form dated September 28, 1984 and Schedule Amendment No. 1 to Form S-11
of Promissory Notes, Purchase Money Notes and Pledge Agreements between Liberty Registration Statement (File 2-90617)
Housing Partners Limited Partnership and the partners of Fiddlers Creek.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.6 (d) Deed of Trust Note dated September 1, 1975 from Fiddlers Creek to Guaranty Exhibit 10.6 (d) to Post-Effective
Mortgage Company of Nashville and related Deed of Trust dated September 1, 1975 Amendment No. 1 to Form S-11
between Fiddlers Creek and Guaranty Mortgage Company of Nashville. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.6 (e) Regulatory Agreement dated September 1, 1975 between Fiddlers Creek and the Exhibit 10.6 (e) to Post-Effective
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. Shadrick, Bobby Ray Exhibit 10.7 (a) to Post-Effective
Badgett and Liberty Housing Partners Limited Partnership. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
97
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.7 (b) Amended and Restated Certificate and Agreement of Limited Partnership of Exhibit 10.7 (b) to Post-Effective
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 form dated Exhibit 10.7 (c) to Post-Effective
September 28, 1984, Pledge Agreement form dated September 28, 1984 and Schedule Amendment No. 1 to Form S-11
of Promissory Notes, Purchase Money Notes and Pledge Agreements between Liberty Registration Statement (File 2-90617)
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 Elderly, Exhibit 10.7 (d) to Post-Effective
Ltd. to Cincinnati Mortgage Corporation and related Deed of Trust dated May 23, Amendment No. 1 to Form S-11
1977 between Fuquay-Varina Homes for the Elderly, Ltd. and Cincinnati Mortgage Registration Statement (File 2-90617)
Corporation.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.7 (e) Regulatory Agreement dated May 23, 1977 between Fuquay-Varina Homes for the Exhibit 10.7 (e) to Post-Effective
Elderly, Ltd. and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.7 (f) Housing Assistance Payments Contract dated May 3, 1978 between Fuquay-Varina Exhibit 10.7 to Post-Effective
Homes for the Elderly, Ltd. and the Secretary of 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.
=========== ================================================================================ =======================================
98
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.8 (a) Escrow Agreement dated September 28, 1984 between Billy P. Shadrick, Bobby Ray Exhibit 10.8 (a) to Post-Effective
Badgett and Liberty Housing Partners Limited Partnership. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.8 (b) Amended and Restated Certificate and Agreement of Limited Partnership of Oxford Exhibit 10.8 (b) to Post-Effective
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 form dated Exhibit 10.8 (c) to Post-Effective
September 28, 1984, Pledge Agreement form dated September 28, 1984 and Schedule Amendment No. 1 to Form S-11
of Promissory Notes, Purchase Money Notes and Pledge Agreements between Liberty Registration Statement (File 2-90617)
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, Ltd. to Exhibit 10.8 (d) to Post-Effective
Cincinnati Mortgage Corporation and related Mortgage dated May 23, 1977 between Amendment No. 1 to Form S-11
Oxford Homes for the Elderly, Ltd. and Cincinnati Mortgage Corporation. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.8 (e) Regulatory Agreement dated May 23, 1977 between Oxford Homes for the Elderly, Exhibit 10.8 (e) to Post-Effective
Ltd. and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.8 (f) Housing Assistance Payments Contract dated July 3, 1978 between Oxford Homes Exhibit 10.8 (f) to Post-Effective
for the Elderly, Ltd. and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
99
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which 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. Shadrick, Bobby Ray Exhibit 10.9 (a) to Post-Effective
Badgett and Liberty Housing Partners Limited Partnership. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.9 (b) Amended and Restated Certificate and Agreement of Limited Partnership of Exhibit 10.9 (b) to Post-Effective
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 form dated Exhibit 10.9 (c) to Post-Effective
September 28, 1984, Pledge Agreement form dated September 28, 1984 and Schedule Amendment No. 1 to Form S-11
of Promissory Notes, Purchase Money Notes and Pledge Agreements between Liberty Registration Statement (File 2-90617)
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 the Elderly, Exhibit 10.9 (d) to Post-Effective
Ltd. and Cincinnati Mortgage Corporation and related Deed of Trust between Amendment No. 1 to Form S-11
Williamston Homes for the Elderly, Ltd. and Cincinnati Mortgage Corporation. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.9 (e) Regulatory Agreement dated May 24, 1977 between Williamston Homes for the Exhibit 10.9 (e) to Post-Effective
Elderly, Ltd. and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.9 (f) Housing Assistance Payments Contract dated September 19, 1978 between Exhibit 10.9 (f) to Post-Effective
Williamston Homes for the Elderly, Ltd. and the Secretary of Housing and Urban Amendment No. 1 to Form S-11
Development. Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
100
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
10.10 Documents Relating to Partnership Interest in Austintown
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.10 (a) Escrow Agreement dated October 30, 1984 between James P. Manchi, Robert P. Exhibit 10.10 (a) to Post-Effective
Baker, First March Realty Corporation and Liberty Housing Partners Limited Amendment No. 1 to Form S-11
Partnership. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.10 (b) Amended and Restated Certificate of Formation and Agreement of Limited Exhibit 10.10 (b) to Post-Effective
Partnership of Austintown. 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 form dated Exhibit 10.10 (c) to
Post-Effective Amendment October 30, 1984, Pledge
Agreement form dated October 30, 1984 and Schedule
No. 1 to Form S-11 Registration Statement of
Promissory Notes, Purchase Money Notes and Pledge
Agreements between (File 2-90617) Liberty Housing
Partners Limited Partnership and the partners of
Austintown.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.10 (d) Mortgage Note dated February 22, 1973 from Austintown to Metropolitan Exhibit 10.10 (d) to Post-Effective
Mortgage Corporation of Ohio, Supplementary Mortgage Note dated November, Amendment No. 1 to Form S-11
1975 from Austintown to The Cleveland Trust Company, Supplementary Mortgage Registration Statement (File 2-90617)
Note dated March 24, 1978 from Austintown to
Diversified Financial & Mortgage Services, Inc. and
the related Mortgage dated February 22, 1973
between Austintown and Metropolitan Mortgage
Corporation of Ohio.
=========== ============================================================================== =========================================
101
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.10 (e) Regulatory Agreement dated February 22, 1973 between Austintown and the Exhibit 10.10 (e) to Post-Effective
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 June 1, Exhibit 10.10 (f) to Post-Effective
1984 between Austintown and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
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 Partnership Exhibit 10.11 (a) to Post-Effective
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 form dated Exhibit 10.11 (b) to Post-Effective
October 30, 1984, Pledge Agreement form dated October 30, 1984 and Schedule Amendment No. 1 to Form S-11
of Promissory Notes, Purchase Money Notes and Pledge Agreements between Registration Statement (File 2-90617)
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 Meadowwood, Exhibit 10.11 (c) to Post-Effective
Ltd. to Farmers Home Administration and related Deed to Secure Debt dated Amendment No. 1 to Form S-11
October 25, 1978 between Meadowwood, Ltd. and Farmers Home Administration. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.11 (d) Farmers Home Administration Loan Agreement between Meadowwood, Ltd. and Exhibit 10.11 (d) to Post-Effective
Farmers Home Administration. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
102
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- ---------------------------------------------------------------------------------- -------------------------------------
*10.11 (e) Interest Credit and Rental Assistance Agreement dated October 1, 1983 Exhibit 10.11 (e) to Post-Effective
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 Partnership Exhibit 10.12 (a) to Post-Effective
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 form dated Exhibit 10.12 (b) to Post-Effective
October 30, 1984, Pledge Agreement form dated October 30, 1984 and Schedule Amendment No. 1 to Form S-11
of Promissory Notes, Purchase Money Notes and Pledge Agreements between Registration Statement (File 2-90617)
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 Home Exhibit 10.12 (c) to Post-Effective
Administration and related Deed to Secure Debt dated May 4, 1979 between Amendment No. 1 to Form S-11
Brierwood, Ltd. and Farmers Home Administration. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.12 (d) Farmers Home Administration Loan Agreement dated June 15, 1978 between Exhibit 10.12 (d) to Post-Effective
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, 1980 Exhibit 10.12 (e) to Post-Effective
between Brierwood, Ltd. and the Farmers Home Administration. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
103
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which 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 Partnership Exhibit 10.13 (a) to Post-Effective
of Pine Forest, 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 form dated Exhibit 10.13 (b) to Post-Effective
October 30, 1984, Pledge Agreement form dated October 30, 1984 and Schedule Amendment No. 1 to Form S-11
of Promissory Notes, Purchase Money Notes and Pledge Agreements between Registration Statement (File 2-90617)
Liberty Housing Partners Limited Partnership and the partners of Pine
Forest, Ltd.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.13 (c) Promissory Note dated August 6, 1980 from Pine Forest, Ltd. to Farmers Home Exhibit 10.13 (c) to Post-Effective
Administration and related Deed to Secure Debt dated August 6, 1980 between Amendment No. 1 to Form S-11
Pine Forest, Ltd. and Farmers Home Administration. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.13 (d) Farmers Home Administration Loan Agreement dated May 10, 1979 between Pine Exhibit 10.13 (d) to Post-Effective
Forest, Ltd. and Farmers Home Administration. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.13 (e) Interest Credit and Rental Assistance Agreement dated June 1, 1982 between Exhibit 10.13 (e) to Post-Effective
Pine Forest, Ltd. and the Secretary of Housing and Urban Development. Amendment No. 1 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
10.14 Documents Relating to Partnership Interest in Osuna Apartments Company
=========== ================================================================================ =======================================
104
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.14 (a) Amended and Restated Certificate of Formation and Agreement of Limited Exhibit 10.14 (a) to Post-Effective
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 form dated Exhibit 10.14 (b) to Post-Effective
November 27, 1984, Pledge Agreement dated November 27, 1984 between Liberty Amendment No. 2 to Form S-11
Housing Partners Limited Partnership, Liberty LGP Limited Partnership and Registration Statement (File 2-90617)
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 to Housing Exhibit 10.14 (c) to Post-Effective
America Mortgage Co., Inc. and related Mortgage dated March 5, 1974 from Amendment No. 2 to Form S-11
Osuna Apartments Company to Housing Mortgage Co., Inc. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.14 (d) Regulatory Agreement dated March 5, 1974 between Osuna Apartments Company Exhibit 10.14 (d) to Post Effective
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 between Osuna Exhibit 10.14 (e) to Post-Effective
Apartments Company and the Secretary of Housing and Urban Development. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
10.15 Documents Relating to Partnership Interest in Linden Park Limited Partnership
=========== ================================================================================ =======================================
105
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.15 (a) Certificate and Agreement of Limited Partnership of Linden Park Limited Exhibit 10.15 (a) to Post-Effective
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 form dated Exhibit 10.15 (b) to Post-Effective
December 11, 1984, Pledge Agreement dated December 11, 1984 by and between Amendment No. 2 to Form S-11
Liberty LGP Limited Partnership, John L. Wagner, Liberty Housing Partners Registration Statement (File 2-90617)
Limited Partnership and Graham Park Venture, and Schedule of Promissory
Notes and Purchase Money Notes between Linden Park Limited Partnership and
Graham Park Venture.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.15 (c) Deed of Trust Note and related Deed of Trust both dated December 5, 1972 and Exhibit 10.15 (c) to Post-Effective
Allonge of January 29, 1976, Supplemental Deed of Trust both dated December Amendment No. 2 to Form S-11
17, 1974 and Allonge of January 29, 1976, and Second Supplemental Deed of Registration Statement (File 2-90617)
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, Inc. and Exhibit 10.15 (d) to Post-Effective
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 Limited Exhibit 10.15 (e) to Post-Effective
Partnership and the Secretary of Housing and Urban Development. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
=========== ================================================================================ =======================================
106
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.15 (f) Regulatory Agreement dated January 31, 1976 between Graham Park Venture and Exhibit 10.15 (f) to Post-Effective
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 Partnership of Exhibit 10.16 (a) to Post-Effective
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 dated Exhibit 10.16 (b) to
Post-Effective Amendment January 4, 1985 and
Schedule of Promissory Notes and Pledge Agreements
No. 2 to Form S-11 Registration Statement between
Liberty Housing Partners Limited Partnership and
the partners of (File 2-90617) Brierwood II, Ltd.
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.16 (c) Promissory Note dated January 4, 1985 from Brierwood II, Ltd. to Farmers Exhibit 10.16 (c) to Post-Effective
Home Administration and related Deed to Secure Debt dated January 4, 1985 Amendment No. 2 to Form S-11
between Brierwood II, Ltd. and Farmers Home Administration. Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.16 (d) Farmers Home Administration Loan Agreement dated June 30, 1983 between Exhibit 10.16 (d) to Post-Effective
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, 1985 Exhibit 10.16 (e) to Post-Effective
between Brierwood II, Ltd. and the Farmers Home Administration. Amendment No. 2 to Form S-11
Registration Statement (File 2-90617)
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.17 Letter agreement with John Wagner regarding consulting services in Exhibit 10.17 to Form 10-Q
connection with the liquidation or workout of the Partnership's portfolio for the period ended
September 30, 1998
=========== ================================================================================ =======================================
107
=========== ================================================================================ =======================================
Exhibit Description Page Number or Filing from
Numbers ----------- Which Incorporated by Reference
- ------- -------------------------------
- ----------- -------------------------------------------------------------------------------- ---------------------------------------
*10.18 Agreement to Purchase and Sell Partnership Interests in Austintown Exhibit 10.18 to Form 10-Q for the
period ended September 30, 1999
=========== ================================================================================ =======================================
*Incorporated by Reference as noted
108
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: 3/27/02 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 3/27/02
Wilma R. Brooks
109
Signatures, continued
Signature Title Date
- --------- ----- ----
President, CEO and Director of 3/28/02
TNG Properties, Inc. Managing
General Partner
/s/ Michael A. Stoller
Michael A. Stoller
Director of TNG Properties, Inc. 3/28/02
Managing General Partner
/s/ Stephen D. Puliafico
Stephen D. Puliafico
Director of TNG Properties, Inc.
Managing General Partner
_____________________
James C. Coughlin
110