FORM 10-Q

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

ASSISTED HOUSING FUND L.P. I

(Exact name of registrant as specified in its charter)

 

 

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

(Title of class)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý  No  o

 

 

Part I.  Financial Information

 

Item 1.  Financial Statements

 

ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)

 

		September 30, 2003			December 31, 2002
ASSETS
Rental property and equipment, at cost:
Buildings and equipment		$	16,036,506		$	16,018,401
Accumulated depreciation		(8,361,375		)	(7,959,382		)
		7,675,131			8,059,019
Land		723,111			723,111
		8,398,242			8,782,130
Cash:
Rental operation		130,663			138,910
Partnership		12,639			27,368
		143,302			166,278
Restricted deposits:
Tenant trust - security deposits		116,765			119,646
Reserve accounts		580,725			651,193
		697,490			770,839
Other assets:
Accounts receivable		39,739			39,779
Accounts receivable - DGPs		24,079			24,079
Prepaid expenses		32,536			19,115
		96,354			82,973
TOTAL ASSETS		$	9,335,388		$	9,802,220
LIABILITIES
Mortgage notes payable		$	12,226,526		$	12,257,788
Accounts payable		246,049			259,338
Due to affiliates		796,635			740,768
Accrued liabilities		134,696			111,491
Security deposits payable		119,194			120,483
TOTAL LIABILITIES		13,523,100			13,489,868
Minority interests in property partnerships		365,711			388,449
PARTNERS’ DEFICIT
Limited partners		(4,476,681		)	(4,004,129		)
General partner		(76,742		)	(71,968		)
		(4,553,423		)	(4,076,097		)
TOTAL LIABILITIES AND PARTNERS’ DEFICIT		$	9,335,388		$	9,802,220

 

See Accompanying Notes to Consolidated Financial Statements.

 

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ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

		Three Months Ended September 30,						Nine Months Ended September 30,
		2003			2002			2003			2002
Revenue:
Rent		$	424,818		$	412,096		$	1,305,460		$	1,252,520
Miscellaneous		16,935			17,748			45,623			51,355
		441,753			429,844			1,351,083			1,303,875
Rental operating expenses:
Repairs and maintenance		104,321			102,037			307,319			278,200
Utilities		80,918			69,630			252,070			231,752
General and operating		93,882			94,764			314,947			321,057
Taxes and insurance		94,640			91,973			271,193			270,764
Interest		74,181			65,953			232,902			210,473
Depreciation		139,904			137,839			401,993			410,953
		587,846			562,196			1,780,424			1,723,199
Loss from rental operations		(146,093		)	(132,352		)	(429,341		)	(419,324		)
Other income (expense):
Interest earned on partnership cash		17			22			56			77
Minority interest in operations		6,746			6,605			20,143			20,047
General and administrative		(8,009		)	(3,028		)	(68,184		)	(42,238		)
		(1,246		)	3,599			(47,985		)	(22,114		)
Net loss		$	(147,339	)	$	(128,753	)	$	(477,326	)	$	(441,438	)
Net loss per unit of limited partnership interest  (703 units)		$	(210	)	$	(183	)	$	(679	)	$	(628	)

 

See Accompanying Notes to Consolidated Financial Statements.

 

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ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

		Nine Months Ended September 30,
		2003			2002
Cash flows from operating activities:
Net loss		$	(477,326	)	$	(441,438	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		401,993			410,953
Minority interests in operations		(22,738		)	(20,104		)
Changes in certain assets and liabilities:
Accounts receivable		40			(9,601		)
Prepaid expenses		(13,421		)	(13,025		)
Accounts payable		(13,289		)	(5,949		)
Due to affiliates		55,867			53,908
Accrued liabilities		23,205			7,417
Tenant security deposits		1,592			2,839
Net cash used in operating activities		(44,077		)	(15,000		)
Cash flows from investing activities:
Purchase of depreciable property		(18,105		)	(60,598		)
Net decrease in reserve accounts deposits		70,468			65,971
Net cash provided by investing activities		52,363			5,373
Cash flows from financing activities:
Mortgage principal payments		(31,262		)	(28,388		)
Net cash used in financing activities		(31,262		)	(28,388		)
Net decrease in cash		(22,976		)	(38,015		)
Cash - beginning of year		166,278			199,668
Cash - end of period		$	143,302		$	161,653
Supplemental disclosure of cash flow information:
Cash paid for interest		$	232,902		$	210,473

 

See Accompanying Notes to Consolidated Financial Statements.

 

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ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

Note 1: Accounting Policies

 

Basis of Presentation

 

The accompanying Consolidated Financial Statements are unaudited and include the accounts of Assisted Housing Fund L.P. I (the Investor Partnership).  The Investor Partnership’s accounting and financial reporting policies are in accordance with accounting principles generally accepted in the United States of America.  The information furnished in these interim statements reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the periods presented.  Such adjustments are of a normal recurring nature unless otherwise disclosed in this Form 10-Q.  The results of operations in the interim statements are not necessarily indicative of the results that may be expected for the full year.  The interim financial information should be read in conjunction with Assisted Housing Fund L.P. I’s 2002 Annual Report on Form 10-K.  Certain prior period amounts have been reclassified to conform to current period classifications.

 

Note 2: Transactions with Affiliates

 

In connection with the acquisition and development of rental property and the management of both the rental property and the Investor Partnership, the Investor Partnership and Property Partnerships, as defined in Critical Accounting Policies, have paid or accrued the following amounts to certain affiliates:

 

		Nine Months Ended September 30, 2003			Nine Months Ended September 30, 2002
Murphey Favre Properties (MFP) – partnership service fees		$	5,625		$	5,625
Developer General Partners (DGPs) and affiliates – property management fees		$	73,738		$	64,711

 

Property management fees are paid out of rental operations.  Partnership service fees are payable from future sales of the properties, to the extent they are not paid from distributions of rental operation cash.

 

Under terms of the management service agreements, seven of the eleven Property Partnerships have affiliates of the DGPs which provide property management services for the rental properties.  These affiliates receive compensation for services in amounts approximating 8.8% of rental receipts.  Three of the rental properties are co-managed by affiliates of their DGPs.  These affiliates receive compensation for the services provided in amounts approximating 2.1% of rental receipts.

 

As of September 30, 2003 and December 31, 2002, related party payables consisted of the following:

 

		September 30, 2003			December 31, 2002
Advances from DGPs		$	201,784		$	201,784
Program management fees		326,726			326,726
Partnership services fees		65,625			60,000
Advances from MFP		201,525			151,283
Advances from affiliate of DGP		975			975
Total Related Party Payables		$	796,635		$	740,768

 

Advances from DGPs were  $201,784 at September 30, 2003 and December 31, 2002.  Terms of Rural Housing Services (RHS) loan agreements require each DGP to provide interest-free advances of stipulated amounts

 

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as initial operating capital to the Property Partnerships.  The balances at September 30, 2003 and December 31, 2002 include DGP interest-free advances of $152,107.  In addition, the balances include DGP advances of $35,468 for land improvements and $14,209 to fund operating deficits.  Advances from the DGPs may only be repaid from the proceeds of future sales of the respective properties.

 

Program management fees due to MFP of $326,726 represents amounts accrued through December 31, 1996.  No accruals have been recorded since that date.  Partnership services fees are also payable to MFP and reflect accruals through September 30, 2003 and December 31, 2002. Partnership fees are payable from future sales of the properties, to the extent they are not paid from distributions of rental operation cash.

 

During the nine months ended September 2003 and the full year 2002, MFP advanced $50,242 and $48,284, respectively, to the Investor Partnership for administrative expenses.  These advances brought the balances due to MFP at September 30, 2003 and December 31, 2002 to $201,525 and $151,283, respectively.

 

The Investor Partnership maintains deposits in checking and money market accounts which aggregated $12,639 and $27,368 at September 30, 2003 and December 31, 2002, respectively.

 

Note 3: Cash in Reserve Accounts

 

The loan agreements between the Property Partnerships and RHS require the Property Partnerships to deposit into separate reserve accounts, maintained as savings accounts, $127,196 annually until the reserve accounts reach $1,271,277.  Subject to RHS approval, these funds may be used for specific purposes.  During the nine months ended September 30, 2003, RHS approved the withdrawal of reserve funds at several of the Property Partnerships which resulted in a net decrease of $70,468 in the restricted deposit reserve accounts.

 

Note 4: Mortgage Notes Payable

 

The mortgage notes are payable to RHS in monthly installments totaling $26,959.  In accordance with the provisions of the Interest Credit Agreements, RHS provides monthly interest credits totaling $69,129, which reduce the interest rates stated in the mortgage notes to effective rates of one percent, over the lives of the mortgages.  Amortization of principal is based on the stated rates of 8.75% to 10.75% under RHS’s Predetermined Amortization Schedule System.  The mortgage notes mature May, 2039 through March, 2040.  Substantially all of the rental property and equipment is pledged as collateral on the mortgages.  No partner is individually liable on the mortgage notes.

 

The mortgage notes are regulated by the U.S. Government; there is no public or private market for the mortgage notes. Accordingly, management has determined that users of the financial statements would derive no benefit from any estimate of fair value and performing such an analysis would not be practicable.

 

Principal payments on the mortgage notes for the next 5 years are as follows:

 

Year		Amount
2003 (1)		$	10,492
2004		46,132
2005		50,465
2006		55,205
2007		60,392
Thereafter		12,003,840
		$	12,226,526

 

(1) For the remaining 3 months

 

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Note 5: Guarantees

 

Each of the DGPs has made a guarantee to the respective Property Partnership that they will compensate the Investor Partnership in the event the actual low-income housing tax credit is less than 85% to 90% of the available credit.  Through September 30, 2003 no payments have been made under these guarantees.

 

Note 6: Contingencies and Subsequent Events

 

The Investor Partnership has ceased accrual of the annual program management fee, payable in part to the general partner.  Management has determined that the source of payment, a future sale or refinance of one or more of the Property Partnerships, may not be sufficient to pay fees accrued in excess of the $544,540 payable at December 31, 1996.  As a consequence, management has elected to treat fees for years subsequent to 1996 as a contingent liability.  At September 30, 2003 and December 31, 2002, the contingent liability for program management fees totaled $447,102 and $372,585, respectively.

 

A DGP of Logan Apartments Company Limited Partnership, a Property Partnership, did not comply with RHS regulations regarding the handling of project cash during 2001 and 2000.  As a result, RHS issued a Letter of Acceleration on the mortgage note on August 29, 2001.  The mortgage note had a balance of $985,124 on September 30, 2003.  This DGP filed a Chapter 7 Petition in Bankruptcy on February 19, 2002.  MFP, on behalf of the Investor Partnership, filed a Complaint to Determine Dischargability of Debt and for Judgment on May 31, 2002 and a Motion for Summary Judgment against the DGP on October 23, 2002.  On April 2, 2003, the bankruptcy trustee drafted a motion to sell the DGP’s interest in Logan to Buckeye Community Hope Foundation (Buckeye), an Ohio non-profit organization.  As a condition of the sale, the non-profit would restore or replenish the assets that were misappropriated by the Logan DGP.  An Objection to the Trustee’s Motion was filed by the Investor Partnership on April 21, 2003.

 

After analysis of the Trustee’s Motion To Sell the DGP’s interest in Logan to Buckeye and the details of Buckeye’s offer to purchase the DGP’s interest in Logan, the Investor Partnership withdrew its Objection to the Trustee’s Motion To Sell.  On September 23, 2003 (to be effective no earlier than October 3, 2003), the U.S. Bankruptcy Court (S.D. WV) signed an Order Granting Trustee’s Motion To Sell [Etc.] the DGP’s interest in Logan to Buckeye.  Upon completion of the sale (anticipated during the fourth quarter of 2003), Buckeye will become a DGP in Logan, and it will restore and replenish assets misappropriated by the former DGP.

 

These contingencies and subsequent events are described in greater detail in the Investor Partnership’s 2002 Annual Report on Form 10-K in Note 8 to the Consolidated Financial Statements - “Contingency and Subsequent Events” and “Part II – Other Information, Item 1. Legal Proceedings” of the Investor Partnership’s September 30, 2003 on Form 10-Q.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Forward-Looking Statements

 

This quarterly report and other documents that we file with the Securities and Exchange Commission contain forward-looking statements.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.  They often include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.”

 

Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance.  By their nature, forward-looking statements are subject to risks and uncertainties.  These statements speak only as of the date they are made.  We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.  There are a number of factors, many of which are beyond our control, which could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements.  These factors include:

 

•                  General business, economic and real estate conditions may significantly affect our earnings;

 

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•                  Our ability to effectively manage or predict occupancy levels could adversely affect our earnings.

 

Controls and Procedures

 

An evaluation was performed under the supervision and with the participation of the Investor Partnership’s management, including the President and the Principal Accounting Officer of the General Partner, of the effectiveness of the design and operation of the Investor Partnership’s disclosure controls and procedures within 90 days before the filing date of this quarterly report.  Based on that evaluation, the Investor Partnership’s management, including the President and the Principal Accounting Officer of the General Partner, concluded that the disclosure controls and procedures were effective.  There have been no significant changes in the Investor Partnership’s internal controls or in other factors that could significantly affect internal controls subsequent to their evaluation.

 

We intend to review and evaluate the design and effectiveness of our disclosure controls and procedures on an ongoing basis to improve our controls and procedures over time and to correct any deficiencies that we may discover in the future.  Our goal is to ensure that our senior management has timely access to all material financial and non-financial information concerning our business.  While we believe the present design of our disclosure controls and procedures is effective to achieve our goal, future events affecting our business may cause us to modify our disclosure controls and procedures.

 

Critical Accounting Policies

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make a number of judgments, estimates and assumptions that affect the reported amount of assets, liabilities, income and expenses in our Consolidated Financial Statements and accompanying notes.  We believe that the judgments, estimates and assumptions used in preparation of our Consolidated Financial Statements are appropriate given the factual circumstances as of September 30, 2003.

 

Principles of Consolidation:

 

The financial statements consolidate the financial statements of the Investor Partnership and the following 11 Property Partnerships in which it has invested as a limited partner:

 

Fairview Apartments Company Limited Partnership (Fairview)

Ionia Limited Dividend Housing Association Limited Partnership (Ionia)

Logan Apartments Company Limited Partnership (Logan)

Rolling Brook II Limited Dividend Housing Association Limited Partnership (Rolling Brook)

Wexford Manor Limited Dividend Housing Association Limited Partnership (Wexford)

Blue Heron Apartment Associates Limited Partnership (Blue Heron)

Glenwood Apartment Associates Limited Partnership (Glenwood)

Pacific Place Apartment Associates Limited Partnership (Pacific Place)

Cove Limited Dividend Housing Association Limited Partnership (Cove)

Washington Street Limited Dividend Housing Association Limited Partnership (Washington)

Fayette Hills Limited Partnership (Fayette).

 

The financial statements are presented on a consolidated basis because the Investor Partnership holds approximately 99 percent of the profit and loss interests and approximately 55 percent of the equity interests in each Property Partnership.  Through an affiliate, who is a Special Limited Partner in each of the 11 Property Partnerships, the Investor Partnership controls certain fundamental decisions affecting the operation of the Property Partnerships.  These fundamental decisions include significant purchases of assets, material borrowings or creation of liens on the underlying properties, entering into material contracts, making tax elections and any act that would

 

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cause termination of the Property Partnership.  All material inter-partnership transactions and balances have been eliminated.  Net losses allocable to the minority partners for the nine months ended September 30, 2003 and the twelve months ended December 31, 2002 were $20,143 and $26,594, respectively.

 

The critical accounting policies are described in greater detail in the Investor Partnership’s 2002 Annual Report on Form 10-K in Note 1 to the Consolidated Financial Statements - “Nature of Business and Summary of Significant Accounting Policies.”

 

Results of Operations

 

For the Investor Partnership and its subsidiary Property Partnerships, the net loss increased $18,586 and $35,888, or (14%) and (8%) for the three and nine months ended September 30, 2003, compared with the same periods in 2002.  For the three months ended September 30, 2003, the net loss before depreciation was $7,435, compared with a net gain before depreciation of $9,086 for the three months ended September 30, 2002 with depreciation expense of $139,904 and $137,839, respectively.  Net loss before depreciation was $75,333 and $30,485 for the nine months ended September 30, 2003 and 2002, with depreciation expense of $401,993 and $410,953, respectively.

 

Total revenue of $441,753 and $1,351,083 for the three and nine months ended September 30, 2003 increased $11,909 and $47,208 compared with the same periods of 2002, respectively.  The year over year revenue increase was primarily due to rent level increases.  Overall operating expenses increased slightly for the three and nine months ended September 30, 2003, as compared with the same periods of 2002.  Operating expenses increased primarily due to increased costs for repair and maintenance during the three and nine months ended September 30, 2003.  Loss from rental operations was $146,093 and $429,341 for the three and nine months ended September 30, 2003, compared with $132,352 and $419,324 for the three and nine months ended September 30, 2002.

 

Non-operating expense of $1,246 increased $4,845 for the three months ended September 30, 2003, compared with non-operating income of $3,599 for the same period in 2002.  Non-operating expense increased $25,871 for the nine months ended September 30, 2003 compared to the same period 2002.  The year to date expenses included audit and accounting fees related to the Investor Partnership.  In 2002, audit and accounting expenses were recorded in the second quarter.  Additionally, in the first quarter of 2003, the Investor Partnership paid approximately $7,500 related to audit fees for five of the Property Partnerships.  Previously additional audit procedures were done when the financial statements were consolidated at the partnership level.  These particular Property Partnerships, because of their small number of dwelling units, are not required by U.S. Department of Agriculture Rural Development Agency, through its RHS, to have audited financial statements.   In support of the new reporting and controls requirements of the Sarbanes-Oxley Act of 2002, the Investor Partnership now requires audited financial statements for all Property Partnerships.

 

Liquidity and Capital Resources

 

The objective of liquidity management is to ensure the Company has the continuing ability to maintain cash flows that are adequate to fund operations and meet obligations and other commitments on a timely and cost-effective basis.  The principal source of liquidity is from the parent holding company, Murphey Favre Properties, Inc.

 

At September 30, 2003, the Investor Partnership’s operating cash was $12,639 and the Property Partnerships’ operating cash totaled $130,663 for a combined total of $143,302.  At September 30, 2002, the cash balance of $161,653 included $31,688 in Investor Partnership cash and $129,965 in operating cash accounts of the Property Partnerships.

 

Net cash used in operating activities for the nine months ended September 30, 2003 totaled $44,077 compared to $15,000 for the same period of 2002.  Achieving positive cash flows is an ongoing challenge for

 

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several of the Property Partnerships.  For the nine months ended September 30, 2003, only four properties generated positive cash flow. For the seven that generated negative cash flow, the deficits were funded by authorized reserve account withdrawals.  The Investor Partnership is not required to fund additional amounts to the Property Partnerships based on each Property Partnership agreement.  Additionally, each Property Partnership is operated as an individual project and without any contractual arrangements of any kind among the Property Partnerships.

 

At September 30, 2003, Logan Apartments Company Limited Partnership's (Logan’s) tenant security deposit account was underfunded by $3,897.  Additionally, Logan was approximately $27,000 in arrears in property taxes at September 30, 2003.  While both of these liquidity matters are violations of RHS regulations, RHS has taken no action against Logan.  Further actions taken by a Logan DGP in 2000 and 2001 that led to certain other violations of RHS regulations are the subject of litigation and bankruptcy proceedings, more fully described in Part II. Item 1. Legal Proceedings.

 

Market Risk Management

 

The management of the Investor Partnership does not believe that the operation of the Investor Partnership and the Property Partnerships are materially affected by interest rates or other financial market risks at this time.  In the event of a proposed future sale of any of the Property Partnerships’ properties, mortgage interest rates and availability of financing to potential buyers may have an impact on the selling opportunity.

 

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PART II. OTHER INFORMATION

 

Except for the disclosures, set forth below, all items under Part II are inapplicable or have a negative response and are therefore omitted.

 

Item 1. Legal Proceedings

 

In 2001 and 2000, Arthur H. Winer (Winer), a DGP of Logan, did not comply with RHS regulations in handling project cash.  This non-compliance was reported to appropriate authorities in 2001.  Winer made multiple unauthorized withdrawals of project cash totaling $9,000 and $15,079, for personal business. Further, project bank accounts, totaling $60,131 at December 31, 2002, were also pledged.  As a result, RHS issued a Letter of Acceleration on August 29, 2001. RHS suspended further proceedings on October 11, 2001, based on preliminary agreements reached with Logan’s other DGPs and the Logan property management agent.

 

On February 19, 2002, Winer filed a Chapter 7 Petition in Bankruptcy in the U.S. Bankruptcy Court for the Southern District of West Virginia, in Charleston, WV, triggering the “automatic stay” under the Bankruptcy Code, which precluded all actions to collect Winer debts, absent approval of the Bankruptcy Court, including the unauthorized withdrawals of project cash and pledging of project bank accounts mentioned above.  MFP, General Partner of the Investor Partnership, through outside bankruptcy counsel, and on behalf of Logan, filed a creditor’s claim against and also filed a Complaint to Determine Dischargeability of Debt and for Judgment to protect the claim for Logan debt from being dischargeable and to obtain a judgment against Winer for the amount of the creditor’s claim.  Winer filed an Answer to the Complaint contesting its assertions.  The U.S. Trustee filed a Motion to Sell Personal Property Free and Clear of All Liens and Encumbrances and to Allow Expenses (Trustee’s Motion) seeking, in part, to sell Winer’s partnership interest in Logan, free of all liens and encumbrances, to Buckeye Community Hope Foundation, an Ohio non-profit corporation (Buckeye).  The Investor Partnership initially prepared and filed an Objection to the Trustee’s Motion, but as result of further research and discussions, it will withdraw its Objection.  A hearing on the Trustee’s Motion was scheduled for May 16, 2003, but was continued to August 15, 2003.

 

On September 23, 2003 (to be effective no earlier than October 3, 2003), the U.S. Bankruptcy Court (S.D. WV) signed an Order Granting Trustee’s Motion To Sell [Etc.] the DGP’s interest in Logan to Buckeye.  Upon completion of the sale (anticipated during the fourth quarter of 2003), Buckeye will become a DGP in Logan and it will restore and replenish assets misappropriated by the former DGP (i.e., Winer).

 

The Investor Partnership also filed a Motion for Summary Judgment (SJ Motion) against Winer, which was later modified.  A Response to the SJ Motion was filed by Winer (Response) contesting the SJ Motion.  A hearing date on the SJ Motion has not yet been set by the Bankruptcy Court in WV.  Trial in the Adversary Proceeding was previously scheduled for April 11, 2003 but was continued indefinitely pending Court-mandated additional briefing (since filed) on issues arising under the SJ Motion and the Response.

 

The Investor Partnership also sent a demand letter to Thomas Runquist (Runquist) and Rural Housing Corporation (RHC), the other DGPs of Logan, requiring that Runquist and RHC, who are jointly liable for the actions of Winer, reimburse Logan for its damages and costs sustained as a result of Winer’s improper actions.  A written response to the demand letter was received from counsel for Runquist and RHC, acknowledging the demand but declining to reimburse Logan for Winer’s improper actions.  The Investor Partnership will reply to the Runquist/RHC response letter based on the results of the hearing on the Trustee’s Motion.

 

We believe the claims by AHF and MFP are meritorious and that the cash balances of Logan will be restored as a result of these claims.  However, litigation and legal disputes are inherently uncertain.  We cannot guarantee that AHF or MFP will prevail in their efforts, if the cash balances of the Logan property will be restored or if any cash will be recovered.  Any cash shortfalls at Logan that will require replenishment by the Investor Partnership will have an adverse effect on its financial position.

 

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Item 6.   Exhibits and Reports on Form 8-K

 

a.)                                   Exhibits.

 

INDEX OF EXHIBITS

 

Exhibit No.		Description
31(a)		Certification of the President of the General Partner Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31(b)		Certification of the Principal Accounting Officer of the General Partner Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32(a)		Certification of the President of the General Partner Pursuant to 18 U.S.C. Section 1350 (filed herewith).
32(b)		Certification of the Principal Accounting Officer of the General Partner Pursuant to 18 U.S.C. Section 1350 (filed herewith).

 

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SIGNATURES

 

Pursuant to the requirements 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 and on the date indicated.

 

 

ASSISTED HOUSING FUND L.P. I
Registrant
By:	Murphey Favre Properties, Inc.
	General Partner
By:	/s/ Robert K.  Stump			Date:	November 12, 2003
	Robert K.  Stump
	President

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

 

By:	Murphey Favre Properties, Inc.
	General Partner
By:	/s/ Brett J. Atkinson		Date:	November 12, 2003
	Brett J. Atkinson
	Treasurer and Principal Accounting Officer

 

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