UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
---
For the quarterly period ended December 30, 1997
OR
[ ] 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: 0-17619
American Tax Credit Properties L.P.
(Exact name of Registrant as specified in its charter)
Delaware 13-3458875
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Richman Tax Credit Properties L.P.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
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 filing requirements
for the past 90 days.
Yes X No ___.
<PAGE>
11
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Table of Contents Page
<S> <C>
Balance Sheets as of December 30, 1997
(Unaudited) and March 30, 1997(Unaudited) 3
Statements of Operations for the three and nine month periods ended
December 30, 1997 (Unaudited)and December 30, 1996 (Unaudited) 4
Statements of Cash Flows for the nine months ended
December 30, 1997 (Unaudited)and December 30, 1996 (Unaudited) 5
Notes to Financial Statements as of December 30, 1997 (Unaudited) 7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
BALANCE SHEETS
(UNAUDITED)
December 30, March 30,
Notes 1997 1997
----- ----------------------------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 115,775 $ 284,108
Investments in bonds available-for-sale 2 2,934,031 2,883,959
Investment in local partnerships 3 6,530,390 7,382,178
Interest receivable 56,531 61,716
-------------- ----------------
$ 9,636,727 $ 10,611,961
=========== ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 44,275 $ 91,237
Payable to general partner 43,861
------------------- ----------------
44,275 135,098
-------------- --------------
Commitments and contingencies 2,3
Partners' equity (deficit)
General partner (272,062) (262,065)
Limited partners (41,286 units of limited partnership interest
outstanding) 9,635,770 10,625,435
Unrealized gain on investments in bonds available-for-sale, net 2 228,744 113,493
------------- ---------------
9,592,452 10,476,863
------------ -------------
$ 9,636,727 $ 10,611,961
============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Nine Months Three Months Nine Months
Ended December Ended December Ended December Ended December
30, 30, 30, 30,
Notes 1997 1997 1996 1996
----- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUE
Interest $ 62,289 $ 185,355 $ 65,924 $ 195,616
Other income from local partnerships 7,500 1,222 1,222
------------------------------------ ----------------- ------------------
TOTAL REVENUE 62,289 192,855 67,146 196,838
---------------- ---------------- ---------------- ----------------
EXPENSES
Administration fees 45,931 137,793 45,931 137,793
Management fee 43,866 131,600 43,866 131,600
Professional fees 23,588 57,149 90,627 131,960
Printing, postage and other 12,520 25,437 7,363 17,604
----------------- ----------------- ----------------- -----------------
TOTAL EXPENSES 125,905 351,979 187,787 418,957
---------------- ---------------- --------------- ----------------
Loss from operations (63,616) (159,124) (120,641) (222,119)
Equity in loss of investment in local
partnerships 3 (250,459) (840,538) (415,297) (1,433,097)
--------------- --------------- --------------- ---------------
NET LOSS $ (314,075) $ (999,662) $ (535,938) $ (1,655,216)
============== ============== ============== ==============
NET LOSS ATTRIBUTABLE TO
General partner $ (3,141) $ (9,997) $ (5,359) $ (16,552)
Limited partners (310,934) (989,665) (530,579) (1,638,664)
--------------- --------------- --------------- ---------------
$ (314,075) $ (999,662) $ (535,938) $ (1,655,216)
============== ============== ============== ==============
NET LOSS per unit of limited partnership
interest (41,286 units of limited
partnership interest) $ (7.53) $ (23.97) $ (12.85) $ (39.69)
================= ================ ================ =================
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 30, 1997 AND 1996
(UNAUDITED)
1997 1996
------------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 201,504 $ 213,601
Other income from local partnerships 7,500 1,222
Cash paid for
administration fees (145,534) (145,534)
management fee (175,461) (175,461)
professional fees (84,939) (145,583)
printing, postage and other expenses (36,868) (14,624)
--------------- ---------------
Net cash used in operating activities (233,798) (266,379)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash distributions from local partnerships 11,250 18,750
Maturity/redemption and sale of bonds 311,432 135,000
Investments in bonds, includes $1,301 of accrued interest paid at purchase
of investment (257,217)
--------------
Net cash provided by investing activities 65,465 153,750
---------------- --------------
Net decrease in cash and cash equivalents (168,333) (112,629)
Cash and cash equivalents at beginning of period 284,108 397,120
--------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 115,775 $ 284,491
============== ==============
SIGNIFICANT NON-CASH INVESTING ACTIVITIES
Unrealized gain (loss) on investments in bonds available-for-sale, net $ 115,251 $ (8,731)
============== ================
- ------------------------------------------------------------------------------------------------------------------------------------
See reconciliation of net loss to net cash used in operating activities on page
6.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
STATEMENTS OF CASH FLOWS - (Continued)
NINE MONTHS ENDED DECEMBER 30, 1997 AND 1996
(UNAUDITED)
1997 1996
-------------------- ------------
<S> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
Net loss $ (999,662) $ (1,655,216)
Adjustments to reconcile net loss to net cash used in operating
activities
Equity in loss of investment in local partnerships 840,538 1,433,097
Amortization of net premium on investments in bonds 21,432 24,223
Accretion of zero coupon bonds (11,769) (12,228)
Decrease in interest receivable 6,486 5,990
Decrease in payable to general partner (43,861) (43,861)
Decrease in accounts payable and accrued expenses (46,962) (18,384)
NET CASH USED IN OPERATING ACTIVITIES $ (233,798) $ (266,379)
============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 1997
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information. They do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. The results of operations are impacted significantly by the
combined results of operations of the Local Partnerships, which are
provided by the Local Partnerships on an unaudited basis during interim
periods. Accordingly, the accompanying financial statements are dependent
on such unaudited information. In the opinion of the General Partner, the
financial statements include all adjustments necessary to present fairly
the financial position as of December 30, 1997 and the results of
operations and cash flows for the interim periods presented. All
adjustments are of a normal recurring nature. The results of operations for
the three and nine month periods ended December 30, 1997 are not
necessarily indicative of the results that may be expected for the entire
year.
Certain reclassifications of amounts have been made to conform to the
current period presentation.
2. Investments in Bonds Available-For-Sale
As of December 30, 1997, certain information concerning investments in
bonds available-for-sale is as follows:
Gross Gross
Amortized unrealized unrealized Estimated
Description and maturity cost gains losses fair value
<S> <C> <C> <C> <C>
Corporate debt securities
After one year through five years $ 181,153 $ 3,247 $ (116) $ 184,284
After five years through ten years 927,305 38,978 - 966,283
After ten years 101,369 - (2,743) 98,626
------------- ------------------ -------------- --------------
1,209,827 42,225 (2,859) 1,249,193
------------ ------------- -------------- ------------
U.S. Treasury debt securities
Within one year 256,732 - (1,557) 255,175
After one year through five years 516,856 86,573 - 603,429
After five years through ten years 512,215 105,528 - 617,743
------------- ------------- ------------------ -------------
1,285,803 192,101 (1,557) 1,476,347
------------ ------------- -------------- ------------
U.S. government and agency securities
After ten years 209,657 - (1,166) 208,491
------------- --------------------------------- -------------
$ 2,705,287 $ 234,326 $ (5,582) $ 2,934,031
=========== ============ ============= ===========
</TABLE>
In connection with an agreement between Cobbet Hill Associates Limited
Partnership (the "Cobbet Local Partnership") and its first mortgage lender,
the Partnership is contingently liable under a standby letter of credit in
the amount of $242,529 which was issued on June 18, 1997 for the purpose of
covering future operating deficits, if any, of the Cobbet Local
Partnership. The letter of credit is secured by the Partnership's
investment in a U.S. Treasury bond in the face amount of $257,000. As of
February 13, 1998, no amounts have been drawn under the terms of the letter
of credit.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1997
(UNAUDITED)
3. Investment in Local Partnerships
The Partnership acquired a limited partnership interest in nineteen Local
Partnerships representing capital contributions in the aggregate amount of
$34,510,290. As of September 30, 1997, the Local Partnerships have
outstanding mortgage loans payable totaling approximately $77,437,000 and
accrued interest payable on such loans totaling approximately $4,092,000,
which are secured by security interests and liens common to mortgage loans
on the Local Partnerships' real property and other assets.
For the nine months ended December 30, 1997, the investment in Local
Partnerships activity consists of the following:
<S> <C>
Investment in Local Partnerships as of March 30, 1997 $ 7,382,178
Equity in loss of investment in Local Partnerships (840,538) (A)
Cash distributions received from Local Partnerships (11,250)
-------------
Investment in Local Partnerships as of December 30, 1997 $ 6,530,390
============
</TABLE>
(A) Equity in loss of investment in Local Partnerships is limited to the
Partnership's investment balance in each Local Partnership; any excess
is applied to other partners' capital in any such Local Partnership.
The amount of such excess losses applied to other partners' capital
was $1,730,634 for the nine months ended September 30, 1997 as
reflected in the combined statements of operations of the Local
Partnerships reflected herein Note 3.
The combined unaudited balance sheets of the Local Partnerships as of
September 30, 1997 and December 31, 1996 and the combined unaudited
statements of operations of the Local Partnerships for the three and nine
month periods ended September 30, 1997 and 1996 are reflected on pages 9
and 10, respectively.
<PAGE>
<TABLE>
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1997
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined balance sheets of the Local Partnerships as of September 30,
1997 and December 31, 1996 are as follows:
September 30, December 31,
1997 1996
----------------------------------
<S> <C> <C>
ASSETS
Cash and other investments $ 1,171,304 $ 1,218,425
Rental receivable 290,844 260,272
Escrow deposits and reserves 3,341,252 3,133,429
Land 4,075,735 4,416,035
Buildings and improvements (net of accumulated depreciation of
$33,612,010 and $31,649,149) 76,093,820 80,294,613
Intangible assets (net of accumulated amortization of $699,230 and
$836,753) 1,845,667 1,929,248
Other 741,722 965,578
--------------- ---------------
$ 87,560,344 $ 92,217,600
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses $ 1,061,153 $ 1,267,704
Due to related parties 5,014,034 5,291,779
Mortgage loans 77,436,853 83,114,342
Notes payable 994,013 1,009,368
Accrued interest 4,091,604 5,014,588
Other 357,123 2,034,144
--------------- --------------
88,954,780 97,731,925
------------- -------------
Partners' equity (deficit)
American Tax Credit Properties L.P.
Capital contributions, net of distributions 33,948,889 33,971,389
Cumulative loss (27,415,999) (26,575,461)
------------ ------------
6,532,890 7,395,928
-------------- --------------
General partners and other limited partners, including ATCP II
Capital contributions, net of distributions 677,937 361,046
Cumulative loss (8,605,263) (13,271,299)
------------- ------------
(7,927,326) (12,910,253)
(1,394,436) (5,514,325)
$ 87,560,344 $ 92,217,600
============ ============
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1997
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The combined statements of operations of the Local Partnerships for the
three and nine month periods ended September 30, 1997 and 1996 are as
follows:
Three Months Nine Months Ended Three Months Nine Months Ended
Ended September September 30, Ended September September 30,
30, 30,
1997 1997 1996 1996
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 3,889,391 $ 11,932,233 $ 4,061,202 $ 11,921,773
Interest and other 71,925 177,441 62,906 166,246
---------------- --------------- ---------------- ----------------
TOTAL REVENUE 3,961,316 12,109,674 4,124,108 12,088,019
-------------- ------------- -------------- --------------
EXPENSES
Administrative 500,970 1,648,641 541,236 1,661,745
Utilities 259,059 1,008,785 244,298 978,730
Operating, maintenance and other 801,068 2,302,917 858,101 2,468,628
Taxes and insurance 446,978 1,456,488 671,077 1,686,163
Interest (including amortization of
$14,371, $58,950, $24,988 and $74,969) 1,620,428 5,297,272 1,944,095 5,839,863
Depreciation 992,507 3,012,008 985,250 2,974,528
-------------- -------------- --------------- --------------
TOTAL EXPENSES 4,621,010 14,726,111 5,244,057 15,609,657
------------- ------------- -------------- -------------
NET LOSS FROM OPERATIONS BEFORE
EXTRAORDINARY ITEM (659,694) (2,616,437) (1,119,949) (3,521,638)
EXTRAORDINARY ITEM
Extraordinary gain on extinguishment of
debt 6,441,935 6,441,935
------------- -------------
NET INCOME (LOSS) $ 5,782,241 $ 3,825,498 $ (1,119,949) $ (3,521,638)
============= ============ ============= =============
NET INCOME (LOSS) ATTRIBUTABLE TO
American Tax Credit Properties L.P. $ (250,459) $ (840,538) $ (415,297) $ (1,433,097)
General partners and other limited
partners, including ATCP II, which
includes specially allocated items
of income to certain general partners of
$6,761,326 for the three and nine
month periods ended September 30, 1997
and $397,649, $1,730,634, $684,788 and
$2,025,199 of American Tax Credit
Properties L.P. loss in
excess of investment 6,032,700 4,666,036 (704,652) (2,088,541)
-------------- ------------- -------------- --------------
$ 5,782,241 $ 3,825,498 $ (1,119,949) $ (3,521,638)
============= ============ ==== ============= =============
</TABLE>
The combined results of operations of the Local Partnerships for the three
and nine month periods ended September 30, 1997 are not necessarily
indicative of the results that may be expected for an entire operating
period.
<PAGE>
- -------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1997
(UNAUDITED)
3. Investment in Local Partnerships (continued)
The Partnership acquired a 99% limited partnership interest in B & V, Ltd.
(the "B & V Local Partnership"), a 190-unit complex located in Homestead,
Florida in December 1988. In August 1992, much of Homestead, Florida was
devastated by Hurricane Andrew and the Property owned by the B & V Local
Partnership sustained substantial damage. The damage to the complex was
covered by property insurance and the B & V Local Partnership was covered
by rental interruption insurance. It was the intention of the local general
partner of the B & V Local Partnership to reconstruct the complex, and thus
preserve the Low-income Tax Credits. However, delays in the rebuilding of
the complex occurred due to significant disagreements with the insurance
company concerning selection of the contractor and the costs to rebuild the
complex. In addition, the insurance carrier ceased making rental
interruption insurance payments and subsequently the lender declared a
default. While conducting repairs, which included completing 52 rental
units which were placed in service, the B & V Local Partnership was unable
to make required mortgage payments but undertook significant litigious
efforts to effect a workout with the lender and cause the insurance company
and contractor to perform under their obligations to rebuild the complex,
which included reorganization plans, bankruptcy proceedings, binding
arbitration and voluntary nonbinding mediation. Despite such efforts, the
complex lost 32 rental units pursuant to a quick-take eminent domain
proceeding in April 1996 and the remainder of the complex was ultimately
lost in April 1997 when the Bankruptcy Court ordered title transfer of the
Property. In December 1996, in connection with the bankruptcy and
foreclosure proceedings surrounding the B & V Local Partnership, the
Bankruptcy Court determined the value of the Property owned by the B & V
Local Partnership which resulted in the recognition of an impairment loss
which was included in the combined statement of operations of the Local
Partnerships for the year ended December 31, 1996. Because the
Partnership's investment balance in the B & V Local Partnership, after the
cumulative equity losses, became zero during the year ended March 30, 1995,
the net effect of the disposition of the bankruptcy has been fully
allocated to the local general partner of the B & V Local Partnership in
the third fiscal quarter; therefore, the aforementioned impairment and loss
of the property had no effect on the financial position, results of
operations or cash flows of the Partnership as of and for the nine months
ended December 30, 1997. The Partnership will not utilize the future
Low-income Tax Credits associated with the B & V Local Partnership and
limited partners will incur a tax credit recapture for a portion of
previous years' Low-income Tax Credits because the property was not held
through the entire Compliance Period.
As part of the overall plan and arrangement with the local general partner
of the B & V Local Partnership (see discussion above), the Partnership owns
a 99% limited partnership interest in B & V Phase I, Ltd. (the "B & V Phase
I Local Partnership"), which owns a 97-unit, Section 8 assisted apartment
complex located in Homestead, Florida, which was acquired from principals
of the local general partner of the B & V Local Partnership during the year
ended March 30, 1995. The Partnership acquired an interest in the B & V
Phase I Local Partnership in order to mitigate potential adverse
consequences of a loss of Low-income Tax Credits in the event that the
rebuilding of the apartment complex owned by the B & V Local Partnership
was not completed. Under the terms of the limited partnership agreement
between the Partnership and the B & V Phase I Local Partnership, the
Partnership made its full capital contribution of $140,000 in October 1994
with total Low-income Tax Credits expected to be allocated to the
Partnership over the period 1994 through 1998 of approximately $499,000.
Prior to the acquisition, the B & V Phase I Local Partnership was also
damaged by Hurricane Andrew in August 1992. Since May 1, 1996, all 97 of
the rental units were complete and occupied. Pursuant to an agreement with
the lender, the B & V Phase I Local Partnership was to commence paying debt
service in January 1995 which was to coincide with the completion of
construction. However, due to construction delays, the B & V Phase I Local
Partnership had not commenced making such payments. The lender declared a
default under the terms of the mortgage and, on December 9, 1996 the lender
commenced a foreclosure action. On January 14, 1997, by agreement between
the B & V Phase I Local Partnership and the lender, the Circuit Court for
Dade County issued an order directing the B & V Phase I Local Partnership
to make mortgage payments to the lender accruing since December 1996 and to
thereafter make monthly mortgage payments to the lender. The B & V Phase I
Local Partnership has complied with this order and all payments accruing
since December 1996 through February 1998 have been made. On April 18,
1997, a motion for summary judgment in the lender's foreclosure action was
scheduled to be heard. However,
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1997
(UNAUDITED)
3. Investment in Local Partnerships (continued)
on April 17, 1997, the B & V Phase I Local Partnership filed a Chapter 11
Bankruptcy Petition with the United States Bankruptcy Court, District of
Connecticut, Bridgeport Division. On April 25, 1997, the lender filed a
motion seeking to change the venue for this case to the Southern District
of Florida. Subsequently, hearings were held in order for the Bankruptcy
Court to consider the lender's motion. In the course of these hearings, the
lender and the B & V Phase I Local Partnership reached a tentative
agreement whereby the lender would withdraw its request to change venue and
the B & V Phase I Local Partnership would agree to submit to the Bankruptcy
Court a plan providing for, among other things, a schedule of buy-out
prices to be paid to the lender at future designated dates. On July 14,
1997, the Bankruptcy Court approved a stipulation between the lender and
the B & V Phase I Local Partnership which incorporated the tentative
agreement. Under the terms of the stipulation, the plan of reorganization
is required to be filed with the Bankruptcy Court within 60 days of the
date of the stipulation unless extended by the parties. On September 10,
1997, the B & V Phase I Local Partnership filed a plan of reorganization
with the Bankruptcy Court, and on October 28, 1997 the Bankruptcy Court
issued an order approving the Disclosure Statement filed in connection
therewith and setting a timetable for confirming the plan. The plan of
reorganization was confirmed on or about December 9, 1997. The
Partnership's investment balance in the B & V Phase I Local Partnership,
after the cumulative equity losses, became zero during the year ended March
30, 1996.
Although Cobbet Hill Associates Limited Partnership (the "Cobbet Local
Partnership") is current on its mortgage obligation, certain needed repairs
of the building caused a technical default under the first mortgage. In
connection with the repairs, the Cobbet Local Partnership utilized a then
existing letter of credit in the amount of $242,529 which had been
established for the purpose of covering future operating deficits, if any.
The Partnership has purchased a U.S. Treasury bond in the face amount of
$257,000 to secure a replacement letter of credit. The repairs have been
completed and, upon engineering review and final payment to contractors,
property management will notify the lender of such completion. The Cobbet
Local Partnership was originally financed with a first mortgage with
mandatory monthly payment terms with The Massachusetts Housing Finance
Agency ("MHFA") and a second mortgage with MHFA (the "SHARP Operating
Loan") whereby proceeds would be advanced monthly as an operating subsidy
(the "Operating Subsidy Payments"). The terms of the SHARP Operating Loan
called for declining Operating Subsidy Payments over its term (not more
than 15 years). However, due to the economic condition of the Northeast
region in the early 1990's, MHFA instituted an Operating Deficit Loan
program ("ODL") which supplemented the scheduled reduction in the Operating
Subsidy Payments. Effective October 1, 1997 MHFA announced its intention to
eliminate the ODL program in order to save MHFA revenue, such that
properties will no longer be receiving the ODL and MHFA anticipates that
some, if not all of the properties which previously qualified under the ODL
program will be unable to make their required debt service payments. As a
result, MHFA expects the properties to require workouts. MHFA has indicated
that as part of such workouts, the owner of a property may have to provide
additional equity. The affordable housing developers in Massachusetts have
collectively obtained legal counsel to determine their rights in connection
with MHFA's recent unilateral decisions. Notwithstanding the foregoing, the
Cobbet Local Partnership has continued to offset its monthly mortgage
payment by the originally scheduled ODL of approximately $10,000 per month
through December 1997. The Cobbet Local Partnership's scheduled ODL for
1998 was approximately $14,000 per month. Accordingly, although the Cobbet
Local Partnership has reported near break even operations for the nine
months ended September 30, 1997, the future financial viability of the
Cobbet Local Partnership is highly uncertain given the recent actions taken
by MHFA.
Erie Associates Limited Partnership (the "Erie Local Partnership") is
operating pursuant to an amended and restated mortgage (the "Amended
Mortgage") dated December 1, 1994. The original financing called for
mandatory debt service of $7,647 per month, while the Amended Mortgage
requires monthly mandatory debt service of $5,883 through December 1, 1997,
on which date all outstanding amounts were due and payable. The local
general partners of the Erie Local Partnership report that the Erie Local
Partnership has not made all required payments under the terms of the
Amended Mortgage, that a default has been declared by the lender and that
discussions are currently being held with the lender.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
NOTES TO FINANCIAL STATEMENTS - (Continued)
DECEMBER 30, 1997
(UNAUDITED)
3. Investment in Local Partnerships (continued)
Although 4611 South Drexel Limited Partnership (the "South Drexel Local
Partnership") reported above break even operations during the nine months
ended September 30, 1997, the South Drexel Local Partnership was declared
in default of its first mortgage during December 1997 for failure to make
required payments during the four months ended December 1997. Such monthly
payments include principal and interest of approximately $7,500 plus escrow
for real estate taxes and insurance. As a result, the Partnership commenced
actions to remove the local general partner and the affiliated property
management agent. In an effort to appease the lender, the Partnership made
a payment to the lender during January 1998, thereby reducing the
delinquency to two months. The local general partner has informed the
Partnership of its intent to cooperate with the Partnership's removal
actions.
4. Additional Information
Additional information, including the audited March 30, 1997 Financial
Statements and the Organization, Purpose and Summary of Significant
Accounting Policies, is included in the Partnership's Annual Report on Form
10-K for the fiscal year ended March 30, 1997 on file with the Securities
and Exchange Commission.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Material Changes in Financial Condition
As of December 30, 1997, Registrant has not experienced a significant change in
financial condition as compared to March 30, 1997. Principal changes in assets
are comprised of periodic transactions and adjustments and anticipated equity in
loss from operations of the Local Partnerships. During the nine months ended
December 30, 1997, Registrant received cash from interest earnings,
maturity/redemption and sale of bonds and distributions from Local Partnerships
and utilized cash for operating expenses and investments in bonds, which
investment serves as collateral for a standby letter of credit posted in
connection with a Local Partnership. Cash and cash equivalents and investments
in bonds available-for-sale decreased, in the aggregate, by approximately
$118,000 during the nine months ended December 30, 1997, which decrease includes
a net unrealized gain recorded on investments in bonds of approximately
$115,000, the amortization of net premium on investments in bonds of
approximately $21,000 and the accretion of zero coupon bonds of approximately
$12,000. During the nine months ended December 30, 1997, the investment in Local
Partnerships decreased as a result of Registrant's equity in the Local
Partnerships' net loss for the nine months ended September 30, 1997 of $840,538
and cash distributions received from Local Partnerships of $11,250.
The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. The rents of the Properties, many of which receive rental subsidy
payments pursuant to subsidy agreements ("HAP Contracts") are subject to
specific laws, regulations and agreements with federal and state agencies. Two
Local Partnerships, whose HAP Contracts expired during 1996 and were extended
for one year, have applied for treatment under the Restructuring Program during
1997. In addition, the Local Partnerships have various financing structures
which include (i) required debt service payments ("Mandatory Debt Service") and
(ii) debt service payments which are payable only from available cash flow
subject to the terms and conditions of the notes, which may be subject to
specific laws, regulations and agreements with appropriate federal and state
agencies ("Non-Mandatory Debt Service or Interest"). During the nine months
ended September 30, 1997, revenue from operations and reserves of the Local
Partnerships have generally been sufficient to cover the operating expenses and
Mandatory Debt Service. Most of the Local Partnerships are effectively operating
at or near break even levels, although certain Local Partnerships' operating
information reflects operating deficits that do not represent cash deficits due
to their mortgage and financing structure and the required deferral of property
management fees. However, as discussed below, certain Local Partnerships'
operating information indicates below break even operations after taking into
account their mortgage and financing structure and any required deferral of
property management fees.
Although Cobbet Hill Associates Limited Partnership (the "Cobbet Local
Partnership") is current on its mortgage obligation, certain needed repairs of
the building caused a technical default under the first mortgage. In connection
with the repairs, the Cobbet Local Partnership utilized a then existing letter
of credit in the amount of $242,529 which had been established for the purpose
of covering future operating deficits, if any. Registrant has purchased a U.S.
Treasury bond in the face amount of $257,000 to secure a replacement letter of
credit. The repairs have been completed and, upon engineering review and final
payment to contractors, property management will notify the lender of such
completion. The Cobbet Local Partnership was originally financed with a first
mortgage with mandatory monthly payment terms with The Massachusetts Housing
Finance Agency ("MHFA") and a second mortgage with MHFA (the "SHARP Operating
Loan") whereby proceeds would be advanced monthly as an operating subsidy (the
"Operating Subsidy Payments"). The terms of the SHARP Operating Loan called for
declining Operating Subsidy Payments over its term (not more than 15 years).
However, due to the economic condition of the Northeast region in the early
1990's, MHFA instituted an Operating Deficit Loan program ("ODL") which
supplemented the scheduled reduction in the Operating Subsidy Payments.
Effective October 1, 1997 MHFA announced its intention to eliminate the ODL
program in order to save MHFA revenue, such that properties will no longer be
receiving the ODL and MHFA anticipates that some, if not all of the properties
which previously qualified under the ODL program will be unable to make their
required debt service payments. As a result, MHFA expects the properties to
require workouts. MHFA has indicated that as part of such workouts, the owner of
a property may have to provide additional equity. The affordable housing
developers in Massachusetts have collectively obtained legal counsel to
determine their rights in connection with MHFA's recent unilateral decisions.
Notwithstanding the foregoing, the Cobbet Local Partnership has continued to
offset its
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
monthly mortgage payment by the originally scheduled ODL of approximately
$10,000 per month through December 1997. The Cobbet Local Partnership's
scheduled ODL for 1998 was approximately $14,000 per month. Accordingly,
although the Cobbet Local Partnership has reported near break even operations
for the nine months ended September 30, 1997, the future financial viability of
the Cobbet Local Partnership is highly uncertain given the recent actions taken
by MHFA. Of Registrant's total annual Low-income Tax Credits, (prior to the loss
of the B & V Local Partnership) approximately 8% is allocated from the Cobbet
Local Partnership. The Property's historic tax credit was allocated in 1988 and
all of the Low-income Tax Credits have been allocated since 1989 and are
scheduled to expire in 1999.
The terms of the partnership agreement of Erie Associates Limited Partnership
(the "Erie Local Partnership") require the Local General Partners of the Erie
Local Partnership to cause the management agent to defer property management
fees in order to avoid a default under the mortgage. The Erie Local Partnership
is operating pursuant to an amended and restated mortgage (the "Amended
Mortgage") dated December 1, 1994. The original financing called for Mandatory
Debt Service of $7,647 per month, while the Amended Mortgage requires monthly
Mandatory Debt Service of $5,883 through December 1, 1997, on which date all
outstanding amounts were due and payable. The Local General Partners of the Erie
Local Partnership report that the Erie Local Partnership has not made all
required payments under the terms of the Amended Mortgage, that a default has
been declared by the lender and that discussions are currently being held with
the lender. Of Registrant's total annual Low-income Tax Credits, (prior to the
loss of the B & V Local Partnership) approximately 2% is allocated from the Erie
Local Partnership.
Although 4611 South Drexel Limited Partnership (the "South Drexel Local
Partnership") reported above break even operations during the nine months ended
September 30, 1997, the South Drexel Local Partnership was declared in default
of its first mortgage during December 1997 for failure to make required payments
during the four months ended December 1997. Such monthly payments include
principal and interest of approximately $7,500 plus escrow for real estate taxes
and insurance. As a result, Registrant commenced actions to remove the Local
General Partner and the affiliated property management agent. In an effort to
appease the lender, Registrant made a payment to the lender during January 1998,
thereby reducing the delinquency to two months. The Local General Partner has
informed Registrant of its intent to cooperate with Registrant's removal
actions.
Registrant acquired a 99% limited partnership interest in B & V, Ltd. (the "B &
V Local Partnership"), a 190-unit complex located in Homestead, Florida in
December 1988. In August 1992, much of Homestead, Florida was devastated by
Hurricane Andrew and the Property owned by the B & V Local Partnership sustained
substantial damage. The damage to the complex was covered by property insurance
and the B & V Local Partnership was covered by rental interruption insurance. It
was the intention of the Local General Partner of the B & V Local Partnership to
reconstruct the complex, and thus preserve the Low-income Tax Credits. However,
delays in the rebuilding of the complex occurred due to significant
disagreements with the insurance company concerning selection of the contractor
and the costs to rebuild the complex. In addition, the insurance carrier ceased
making rental interruption insurance payments and subsequently the lender
declared a default. While conducting repairs, which included completing 52
rental units which were placed in service, the B & V Local Partnership was
unable to make required mortgage payments but undertook significant litigious
efforts to effect a workout with the lender and cause the insurance company and
contractor to perform under their obligations to rebuild the complex, which
included reorganization plans, bankruptcy proceedings, binding arbitration and
voluntary nonbinding mediation. Despite such efforts, the complex lost 32 rental
units pursuant to a quick-take eminent domain proceeding in April 1996 and the
remainder of the complex was ultimately lost in April 1997 when the Bankruptcy
Court ordered title transfer of the Property. Registrant's investment balance in
the B & V Local Partnership, after the cumulative equity losses, became zero
during the year ended March 30, 1995. As a result of the eminent domain
proceeding by the City of Homestead, Registrant incurred a recapture of
Low-income Tax Credits taken through December 1995 of approximately $5 per Unit
and will forego future Low-income Tax Credits associated with such rental units
of approximately $5 per Unit for the period January 1996 through 1998. As a
result of the lender's foreclosure of the 158 rental units, Registrant estimates
a recapture of Low-income Tax Credits taken through December 1996 of
approximately $35 per Unit for Unit holders of record as of April 1997 and will
forego future Low-income Tax Credits associated with the 158 rental units of
approximately $10 per Unit for the period January 1997 through 1998.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
As part of the overall plan and arrangement with the Local General Partner of
the B & V Local Partnership (see discussion above), Registrant owns a 99%
limited partnership interest in B & V Phase I, Ltd. (the "B & V Phase I Local
Partnership"), which owns a 97-unit, Section 8 assisted apartment complex
located in Homestead, Florida, which was acquired from principals of the Local
General Partner of the B & V Local Partnership during the year ended March 30,
1995. Registrant acquired an interest in the B & V Phase I Local Partnership in
order to mitigate potential adverse consequences of a loss of Low-income Tax
Credits in the event that the rebuilding of the apartment complex owned by the B
& V Local Partnership was not completed. Under the terms of the limited
partnership agreement between Registrant and the B & V Phase I Local
Partnership, Registrant made its full capital contribution of $140,000 in
October 1994 with total Low-income Tax Credits expected to be allocated to
Registrant over the period 1994 through 1998 of approximately $499,000. Prior to
the acquisition, the B & V Phase I Local Partnership was also damaged by
Hurricane Andrew in August 1992. Since May 1, 1996, all 97 of the rental units
were complete and occupied. Pursuant to an agreement with the lender, the B & V
Phase I Local Partnership was to commence paying debt service in January 1995
which was to coincide with the completion of construction. However, due to
construction delays, the B & V Phase I Local Partnership had not commenced
making such payments. The lender declared a default under the terms of the
mortgage and, on December 9, 1996 the lender commenced a foreclosure action. On
January 14, 1997, by agreement between the B & V Phase I Local Partnership and
the lender, the Circuit Court for Dade County issued an order directing the B &
V Phase I Local Partnership to make mortgage payments to the lender accruing
since December 1996 and to thereafter make monthly mortgage payments to the
lender. The B & V Phase I Local Partnership has complied with this order and all
payments accruing since December 1996 through February 1998 have been made. On
April 18, 1997, a motion for summary judgment in the lender's foreclosure action
was scheduled to be heard. However, on April 17, 1997, the B & V Phase I Local
Partnership filed a Chapter 11 Bankruptcy Petition with the United States
Bankruptcy Court, District of Connecticut, Bridgeport Division. On April 25,
1997, the lender filed a motion seeking to change the venue for this case to the
Southern District of Florida. Subsequently, hearings were held in order for the
Bankruptcy Court to consider the lender's motion. In the course of these
hearings, the lender and the B & V Phase I Local Partnership reached a tentative
agreement whereby the lender would withdraw its request to change venue and the
B & V Phase I Local Partnership would agree to submit to the Bankruptcy Court a
plan providing for, among other things, a schedule of buy-out prices to be paid
to the lender at future designated dates. On July 14, 1997, the Bankruptcy Court
approved a stipulation between the lender and the B & V Phase I Local
Partnership which incorporated the tentative agreement. Under the terms of the
stipulation, the plan of reorganization is required to be filed with the
Bankruptcy Court within 60 days of the date of the stipulation unless extended
by the parties. On September 10, 1997, the B & V Phase I Local Partnership filed
a plan of reorganization with the Bankruptcy Court and on October 28, 1997 the
Bankruptcy Court issued an order approving the Disclosure Statement filed in
connection therewith and setting a timetable for confirming the plan. The plan
of reorganization was confirmed on or about December 9, 1997. Unless alternative
sources of financing can be secured, no assurances can be made concerning any
recapture of Low-income Tax Credits or interruption in Low-income Tax Credits
allocated from the B & V Phase I Local Partnership during 1998. Registrant's
investment balance in the B & V Phase I Local Partnership, after the cumulative
equity losses, became zero during the year ended March 30, 1996. Of Registrant's
total annual Low-income Tax Credits (prior to the loss of the B & V Local
Partnership) approximately 1% is allocated from the B & V Phase I Local
Partnership.
Results of Operations
Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in Local Partnerships
in accordance with the equity method of accounting, under which the investment
is carried at cost and is adjusted for Registrant's share of the Local
Partnership's results of operations and by any cash distributions received.
Equity in loss of each investment in Local Partnership allocated to Registrant
is recognized to the extent of Registrant's investment balance in each Local
Partnership. Any equity in loss in excess of Registrant's investment balance in
a Local Partnership is allocated to other partners' capital in each such Local
Partnership. As a result, the reported equity in loss of investment in Local
Partnerships is expected to decrease as Registrant's
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
investment balances in the respective Local Partnerships become zero. The
combined statements of operations of the Local Partnerships reflected in Note 3
to Registrant's financial statements include the operating results of all Local
Partnerships, irrespective of Registrant's investment balances.
Cumulative losses and cash distributions in excess of investment in Local
Partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. Accordingly, cumulative losses and cash
distributions in excess of the investment are not necessarily indicative of
adverse operating results of a Local Partnership. See discussion above under
Material Changes in Financial Condition regarding Local Partnerships currently
operating below economic break even levels.
Three Months Ended December 30, 1997
For the three months ended December 30, 1997, Registrant had a net loss of
approximately $314,000, which included an equity in loss of investment in Local
Partnerships of approximately $250,000 for the three months ended September 30,
1997. Registrant's loss from operations for the three months ended December 30,
1997 of approximately $64,000 was attributable to interest revenue of
approximately $62,000, exceeded by operating expenses of approximately $126,000.
Nonrecognition of losses in excess of Registrant's investment in certain Local
Partnerships during the period was approximately $398,000.
The Local Partnerships' net loss from operations before extraordinary item of
approximately $660,000 for the three months ended September 30, 1997 was
attributable to rental and other revenue of approximately $3,961,000, exceeded
by operating and interest expenses (including Non-Mandatory Interest) of
approximately $3,614,000 and approximately $1,007,000 of depreciation and
amortization expenses.
Three Months Ended December 30, 1996
For the three months ended December 30, 1996, Registrant had a net loss of
approximately $536,000, which included an equity in loss of investment in Local
Partnerships of approximately $415,000 for the three months ended September 30,
1996. Registrant's loss from operations for the three months ended December 30,
1996 of approximately $121,000 was attributable to interest revenue of
approximately $66,000 and other income from Local Partnerships of approximately
$1,000, exceeded by operating expenses of approximately $188,000. Nonrecognition
of losses in excess of Registrant's investment in certain Local Partnerships
during the period was approximately $685,000.
The Local Partnerships' net loss of approximately $1,120,000 for the three
months ended September 30, 1996 was attributable to rental and other revenue of
approximately $4,124,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $4,234,000 and approximately $1,010,000
of depreciation and amortization expenses.
Nine Months Ended December 30, 1997
For the nine months ended December 30, 1997, Registrant had a net loss of
approximately $1,000,000, which included an equity in loss of investment in
Local Partnerships of approximately $841,000 for the nine months ended September
30, 1997. Registrant's loss from operations for the nine months ended December
30, 1997 of approximately $159,000 was attributable to interest revenue of
approximately $185,000 and other income from Local Partnerships of approximately
$8,000, exceeded by operating expenses of approximately $352,000. Nonrecognition
of losses in excess of Registrant's investment in certain Local Partnerships
during the period was approximately $1,731,000.
The Local Partnerships' net loss from operations before extraordinary item of
approximately $2,616,000 for the nine months ended September 30, 1997 was
attributable to rental and other revenue of approximately $12,110,000, exceeded
by operating and interest expenses (including Non-Mandatory Interest) of
approximately $11,655,000 and approximately $3,071,000 of depreciation and
amortization expenses.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Nine Months Ended December 30, 1996
For the nine months ended December 30, 1996, Registrant had a net loss of
approximately $1,655,000, which included an equity in loss of investment in
Local Partnerships of approximately $1,433,000 for the nine months ended
September 30, 1996. Registrant's loss from operations for the nine months ended
December 30, 1996 of approximately $222,000 was attributable to interest revenue
of approximately $196,000 and other income from Local Partnerships of
approximately $1,000, exceeded by operating expenses of approximately $419,000.
Nonrecognition of losses in excess of Registrant's investment in certain Local
Partnerships during the period was approximately $2,025,000.
The Local Partnerships' net loss of approximately $3,522,000 for the nine months
ended September 30, 1996 was attributable to rental and other revenue of
approximately $12,088,000, exceeded by operating and interest expenses
(including Non-Mandatory Interest) of approximately $12,561,000 and
approximately $3,049,000 of depreciation and amortization expenses.
Three and Nine Month Periods Ended December 30, 1997 v.
Three and Nine Month Periods Ended December 30, 1996
Registrant's operations for the three months ended December 30, 1997 resulted in
a net loss of approximately $314,000 as compared to a net loss of approximately
$536,000 for the three months ended December 30, 1996. The decrease in net loss
is primarily attributable to a decrease in the equity in loss of investment in
Local Partnerships of approximately $165,000, which is primarily the result of a
decrease in the net operating losses of certain Local Partnerships, and a
decrease in Registrant's professional fees of approximately $67,000 due to a
decline in legal expenses incurred in connection with the B & V and B & V Phase
I Local Partnerships.
Registrant's operations for the nine months ended December 30, 1997 resulted in
a net loss of approximately $1,000,000 as compared to a net loss of
approximately $1,655,000 for the nine months ended December 30, 1996. The
decrease in net loss is primarily attributable to a decrease in the equity in
loss of investment in Local Partnerships of approximately $593,000, which is
primarily the result of a decrease in the net operating losses of certain Local
Partnerships, and a decrease in Registrant's professional fees of approximately
$75,000 due to a decline in legal expenses incurred in connection with the B & V
and B & V Phase I Local Partnerships.
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
B & V Phase I, Ltd. (the "B & V Phase I Local Partnership") was damaged
by Hurricane Andrew in August 1992. Since May 1, 1996, all 97 of the
rental units were complete and occupied. Under an agreement with the
lender, the B & V Phase I Local Partnership was to commence paying debt
service in January 1995 which was to coincide with the completion of
construction. However, due to construction delays, the B & V Phase I
Local Partnership had not commenced making such payments. The lender
declared a default under the terms of the mortgage and, on December 9,
1996 the lender commenced a foreclosure action. On January 14, 1997, by
agreement of the B & V Phase I Local Partnership and the lender, the
Circuit Court for Dade County issued an order directing the B & V Phase
I Local Partnership to make mortgage payments to the lender accruing
since December 1996 and to thereafter make monthly mortgage payments to
the lender. The B & V Phase I Local Partnership has complied with this
order and all payments accruing during the period from December 1996
through February 1998 have been made. On April 18, 1997, a motion for
summary judgment in the lender's foreclosure action was scheduled to be
heard. However, on April 17, 1997, the B & V Phase I Local Partnership
filed a Chapter 11 Bankruptcy Petition with the United States
Bankruptcy Court, District of Connecticut, Bridgeport Division. As of
April 25, 1997, the lender filed a motion seeking to change the venue
for this case to the Southern District of Florida. Subsequently,
hearings were held in order for the Bankruptcy Court to consider the
lender's motion. In the course of these hearings, the lender and the B
& V Phase I Local Partnership reached a tentative agreement whereby the
lender would withdraw its request to change venue and the B & V Phase I
Local Partnership would agree to submit to the Bankruptcy Court a plan
providing for, among other things, a schedule of buy out prices to be
paid to the lender at future designated dates. On July 14, 1997, the
Bankruptcy Court approved a stipulation between the lender and the B &
V Phase I Local Partnership which incorporated the tentative agreement.
Under the terms of the stipulation, the plan of reorganization is
required to be filed with the Bankruptcy Court within 60 days of the
date of the stipulation unless extended by the parties. On September
10, 1997, the B & V Phase I Local Partnership filed a plan of
reorganization with the Bankruptcy Court and on October 28, 1997 the
Bankruptcy Court issued an order approving the Disclosure Statement
filed in connection therewith and setting a timetable for confirming
the plan. The plan of reorganization was approved on or about December
9, 1997.
On March 5, 1990, Stonebridge Associates ("Stonebridge") filed a
lawsuit against Federal Apartments Limited Partnership (the "Federal
Local Partnership") for repayment of an unsecured, non-interest bearing
note in the amount of $96,000. The suit was filed in the First Judicial
District Court in Caddo Parish, Louisiana. The suit alleges that the
defendant was required to pay down such note upon the receipt of the
second installment of the capital contribution obligation from
Registrant. Such capital contribution payment was made by Registrant to
the Federal Local Partnership on December 27, 1989. The Federal Local
Partnership contends that Stonebridge is not entitled to such payment.
Registrant is not aware of any other material legal proceedings.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None; see Items 1 and 5 regarding mortgage defaults of certain Local
Partnerships.
Item 4. Submission of Matters to a Vote of Security Holders
None
<PAGE>
AMERICAN TAX CREDIT PROPERTIES L.P.
Part II - OTHER INFORMATION (Continued)
Item 5. Other Information
As discussed in Part I, Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of Operations, the local general
partners of Erie Associates Limited Partnership (the "Erie Local
Partnership") report that the Erie Local Partnership has not made all
required payments under the terms of its amended and restated mortgage,
that a default has been declared by the lender and that discussions are
currently being held with the lender.
As discussed in Part I, Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of Operations, the local general
partners of Cobbet Hill Associates Limited Partnership (the "Cobbet
Local Partnership") report that the first mortgage lender has declared
a default pending restoration of the building's parapet. The
remediation has been completed and, upon engineering review and final
payment to contractors, property management will notify the lender of
such completion.
As discussed in Part I, Item 2 - Management's Discussion and Analysis
of Financial Condition and Results of Operations, the local general
partner of 4611 South Drexel Limited Partnership (the "South Drexel
Local Partnership") reported that the South Drexel Local Partnership
was declared in default of its first mortgage during December 1997 for
failure to make required payments during the four months ended December
1997. Such monthly payments include principal and interest of
approximately $7,500 plus escrow for real estate taxes and insurance.
As a result, Registrant commenced actions to remove the local general
partner and the affiliated property management agent. In an effort to
appease the lender, Registrant made a payment to the lender during
January 1998, thereby reducing the delinquency to two months. The local
general partner has informed Registrant of its intent to cooperate with
Registrant's removal actions.
Item 6. Exhibits and Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
AMERICAN TAX CREDIT PROPERTIES L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties L.P.,
General Partner
by: Richman Tax Credit Properties Inc.,
general partner
Dated: February 13, 1998 /s/ Richard Paul Richman
----------------- -------------------------
Richard Paul Richman
President, Chief Executive Officer and
Director of the general partner of the
General Partner
Dated: February 13, 1998 /s/ Neal Ludeke
----------------- ----------------
Neal Ludeke
Vice President and Treasurer
of the General Partner
(Principal Financial and Accounting
Officer of Registrant)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the quarter ended December
30, 1997 Form 10Q Balance Sheets and Statements of Operations and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000830159
<NAME> American Tax Credit Properties, I L.P.
<MULTIPLIER> 1000
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-30-1998
<PERIOD-START> MAR-31-1997
<PERIOD-END> DEC-30-1997
<EXCHANGE-RATE> 1.00
<CASH> 116
<SECURITIES> 2,934
<RECEIVABLES> 57
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,637
<CURRENT-LIABILITIES> 44
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,637
<SALES> 0
<TOTAL-REVENUES> 193
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (352)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,000)
<EPS-PRIMARY> (23.97)
<EPS-DILUTED> 0
</TABLE>
