FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   (Mark one)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934


                        Commission File Number: 000-32859


                              BFA LIQUIDATION TRUST
             (Exact name of registrant as specified in its charter)


           ARIZONA                                             86-1018485
(State or Other Jurisdiction of                             (I.R.S. Employer
 Incorporation or Organization)                            Identification No.)


3300 N. CENTRAL AVE., SUITE 900, PHOENIX, ARIZONA                85012
    (Address of Principal Executive Offices)                   (Zip Code)


       Registrant's telephone number, including area code: (602) 279-3587


         Former Address: 1313 E. Osborn Rd, Suite 250, Phoenix, AZ 85014

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 [X] No [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
described in Rule 12b-2 of the Act [ ] Yes [X] No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date: As of May 13, 2003, 448,213,228
units  of  Class  A  Beneficial  Interests  and  137,176,571  units  of  Class B
Beneficial Interests were outstanding.
<PAGE>
                              BFA Liquidation Trust
                                    Form 10-Q
                                Table of Contents

PART 1 - FINANCIAL INFORMATION
Item 1.  Financial Statements                                                  1

Item 2.  Management's Discussion and Analysis of Financial Condition
         And Results of Operations                                            10

PART 2 - OTHER INFORMATION
Item 1   Legal Proceedings                                                    12
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     BFA LIQUIDATION TRUST AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     March 31, 2003   December 31, 2002
                                                                     --------------   -----------------
                 ASSETS IN LIQUIDATION AT ESTIMATED FAIR VALUE
<S>                                                                    <C>              <C>
Cash and cash equivalents                                              $  6,733,380     $  2,254,806
Receivables, net (note 2)                                                57,438,738       59,434,985
Other trust assets, net (notes 3 and 8)                                  50,043,607       46,149,276
Restricted cash and cash equivalents                                      2,589,221        6,631,801
Fair value of expected cash flows from settlements (note 4)                      --      188,478,673
                                                                       ------------     ------------

      TOTAL ASSETS                                                      116,804,946      302,949,541
                                                                       ------------     ------------

                           LIABILITIES IN LIQUIDATION
Accounts Payable and accrued liabilities                                  3,411,501        3,071,617
Notes payable (note 5)                                                    3,483,922        4,126,217
Estimated costs to complete liquidation and litigation (note 6)           5,569,677        6,679,030
Settlement liability (note 7)                                             3,380,513       94,239,336
                                                                       ------------     ------------

      TOTAL LIABILITIES                                                  15,845,613      108,116,200
                                                                       ------------     ------------
Commitments and contingencies (note 9)

      NET ASSETS IN LIQUIDATION                                        $100,959,333     $194,833,341
                                                                       ============     ============
CLAIMS AGAINST NET ASSETS IN LIQUIDATION
CONSIST OF THE FOLLOWING:
 Class "3A" Certificate, 448,213,228 units
   outstanding, $.20 per unit at March 31, 2003
   and $.36 at December 31, 2002                                       $ 90,347,036     $162,294,947
 Class "3B" Certificate, 137,176,571 units
   outstanding, $.08 per unit at March 31, 2003
   and $.24 at December 31, 2002                                         10,612,297       32,538,394
                                                                       ------------     ------------

      TOTAL NET ASSETS                                                 $100,959,333     $194,833,341
                                                                       ============     ============
</TABLE>

THE  ACCOMPANYING  NOTES ARE AN INTEGRAL  PART OF THESE  CONSOLIDATED  FINANCIAL
STATEMENTS.

                                       1
<PAGE>
                     BFA LIQUIDATION TRUST AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Three months ended
                                                                      -------------------------------
                                                                      March 31, 2003   March 31, 2002
                                                                      --------------   --------------
<S>                                                                    <C>              <C>
Net assets in liquidation, January 1, 2003 and January 1, 2002,
respectively                                                           $ 194,833,341    $ 128,980,963

Interest income on notes receivable (note 2)                               1,507,478        1,673,203
Interest expense on notes payable (note 5)                                   (58,584)        (205,962)
Changes in fair value of other trust assets and liabilities
(note 8)                                                                  (1,754,223)        (639,219)
Changes in fair value of estimated costs to complete
liquidation (note 6)                                                              --               --
Distributions to holders of Class 3A and 3B beneficial
interests                                                                (93,568,679)              --
                                                                       -------------    -------------

Net assets in liquidation, March 31, 2003 and March 31, 2002,
respectively                                                           $ 100,959,333    $ 129,808,985
                                                                       =============    =============
</TABLE>

THE  ACCOMPANYING  NOTES ARE AN INTEGRAL  PART OF THESE  CONSOLIDATED  FINANCIAL
STATEMENTS.

                                       2
<PAGE>
                     BFA LIQUIDATION TRUST AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

NATURE OF OPERATIONS

The BFA  Liquidation  Trust  (the  "TRUST")  was formed  pursuant  to the "First
Amended Joint Liquidating Plan of Reorganization of the Debtors Under Chapter 11
of the Bankruptcy  Code" proposed by the Baptist  Foundation of Arizona  ("BFA")
and related subsidiaries and affiliates (the "DEBTORS"), Official Collateralized
Investors'  Committee  and Official  Joint  Committee  of  Unsecured  Creditors,
relating to Case No.  99-13275 ECF GBN (the "PLAN"),  which was confirmed by the
Bankruptcy Court for the District of Arizona  ("BANKRUPTCY  COURT"), by an order
entered  on  December  22,  2000  and  became  effective  on  January  22,  2001
("EFFECTIVE DATE").

The primary purpose of the Trust is to (i) oversee and direct the liquidation of
the assets that were  transferred  to the Trust pursuant to the Plan (the "TRUST
ASSETS") for the benefit of the Trust's beneficiaries; (ii) prosecute all claims
and causes of action  that the Trust may have  against any person or entity (the
"LITIGATION  CLAIMS")  for the benefit of the Trust's  beneficiaries;  and (iii)
distribute any proceeds of the Litigation  Claims and the Trust Assets  received
by the Trust to the Trust's beneficiaries.

The Trust is not operated  with the  objective of  continuing or engaging in the
conduct of a trade or  business,  except to the extent  reasonably  necessary to
preserve or enhance the liquidation  value of the Trust Assets,  consistent with
the primary  purpose of the Trust. To facilitate the orderly  administration  of
the Trust and to maximize the value of the Trust Assets,  the Trust owns two (2)
subsidiaries. The assets will be grouped in a consistent and coherent manner and
held,  pending  sale,  by the  two  new  subsidiaries.  The  Trust  and  the two
subsidiaries  will be charged with the  responsibility of appraising the assets,
listing them for sale in an orderly manner,  and  distributing the proceeds from
the sale to its  beneficiaries  on a regular  basis.  The Trust is  expected  to
terminate  after five (5) years on January 22, 2006 unless the Bankruptcy  Court
determines  that an extension of the Trust is necessary  for the purposes of the
Trust.

The Plan provides for the appointment of a liquidating trustee (the "LIQUIDATING
TRUSTEE") and a liquidating trust board  ("LIQUIDATION  TRUST BOARD") to oversee
the  liquidation  of the Trust  Assets and to ensure  that such  liquidation  is
conducted in a cost-effective manner and in a reasonable time. In addition,  the
Liquidating Trustee and Liquidating Trust Board are directing the prosecution of
the Litigation Claims in an attempt to maximize the Trust's recoveries from such
claims.  The  Liquidating  Trustee  and the  Liquidating  Trust Board are making
ongoing efforts to dispose of the Trust Assets, to make timely distributions and
to minimize the duration of the Trust.

The Trust has a wholly-owned subsidiary to assist in liquidating the assets, New
Asset Subsidiary,  LLC, an Arizona limited  liability  company ("NAS").  NAS was
formed on the Effective  Date, and the Trust is the sole member of that company.
The Trust is able to direct NAS to take any actions that the Liquidating Trustee
believes  will  maximize  the  value  of the  assets  held  by  NAS.  The  Trust
transferred  substantially  all of its  assets to NAS,  which  NAS is  currently
marketing  for sale.  NAS is not  permitted to sell any assets or take any other
action  unless so  directed  by the Trust.  Collectively,  the Trust and NAS are
referred to as the "Trust".

BASIS OF PRESENTATION

The accompanying  unaudited  consolidated  financial  statements as of March 31,
2003 and  December  31, 2002 and for the three  months  ended March 31, 2003 and
2002 include the accounts of the Trust and NAS.  All  intercompany  transactions
and accounts are eliminated in consolidation. The Trust's investments in certain
wholly-owned  entities  are  included  in these  financial  statements  at their
estimated  fair value since the Trust  expects to liquidate the  investments  by
selling the entire individual businesses as going concerns.

These unaudited  consolidated  summary  financial  statements have been prepared
based on the liquidation basis of accounting, accordingly assets and liabilities
have been recorded at estimated fair values. In accordance with the

                                       3
<PAGE>
liquidation basis of accounting,  the financial statements reflect the estimated
costs of  liquidating  the assets and  distributing  the  proceeds to holders of
beneficial interests.

The accompanying unaudited consolidated summary financial statements reflect all
adjustments,  consisting only of normal  recurring  adjustments that are, in the
opinion of  management,  necessary  for a fair  statement of the results for the
interim  period  presented.   Such  financial  information  should  be  read  in
conjunction with the consolidated financial statements and related notes thereto
as of December 31, 2002 and for the fiscal year ended December 31, 2002 included
in the Trust's Form 10 -K as filed with the Securities and Exchange  Commission.
The results for the three months ended March 31, 2003 may not be  indicative  of
the future results for the entire year 2003.

Certain  amounts at December  31, 2002 have been  reclassified  to conform  with
current year presentation.

The Trust's  management has made certain  estimates and assumptions  relating to
the reporting of assets and liabilities and the disclosure of contingent  assets
and liabilities to prepare these  consolidated  summary financial  statements in
conformity with accounting principles generally accepted in the United States of
America. Under the liquidation basis of accounting,  assets and liabilities have
been  recorded  at their  estimated  fair  values.  Given that there is inherent
uncertainty in the valuation  process,  the amounts actually realized or settled
could  be  materially   different  from  those  reflected  in  the  accompanying
consolidated financial statements.

TRUST ASSETS

The assets of the Trust are  carried at  estimated  fair  values  determined  by
discounting,  at appropriate  risk adjusted  discount rates, the Trust's current
best  estimate  of cash  flows  expected  to be  realized  from the  collection,
liquidation  and  disposition  of assets held by the Trust.  Such assets consist
principally of notes  receivable,  income producing real estate and interests in
real estate, interests in partnerships and operating companies and miscellaneous
other assets and receivables  transferred to the Trust upon the  consummation of
the Plan.  The estimates of the future cash flows from which the asset values of
the Trust were derived are made under the  direction  of the Trust's  management
based upon  information  available and believed to be reliable.  These estimates
reflect significant judgments regarding  assumptions,  discount rates, timing of
cash flows,  market risk and allowable disputed claims.  Because of the inherent
uncertainty  regarding  the  valuation  of these  assets  there  will  likely be
differences  between actual  results and the estimated fair values  reflected in
the  accompanying  consolidated  financial  statements and the difference may be
material.

In addition to the assets  described  above, the Trust also holds the Litigation
claims, which consist of claims against the former directors and officers of BFA
and judgments and deficiencies  related to loans made to former borrowers of the
Debtors. Because of the significant uncertainties associated with estimating the
probability  and  timing  of cash  flows  related  to  these  claims,  it is not
practical to estimate their fair value. There can be no assurance that the Trust
will realize any value of such  Litigation  Claims.  However,  if realized these
Litigation Claims could be material to the Trust.

The fair value of Trust Assets is reassessed at least  quarterly and adjustments
to estimated fair values are reflected in the period in which they become known.
For each asset,  estimates of income,  expenses and net cash flow on a quarterly
basis through the expected final  disposition date are prepared.  The individual
asset cash flow  estimates  are  developed  based  upon  factors  which  include
appraisals by independent  appraisers,  physical  inspection of the asset or the
collateral  underlying the related loans, local market  conditions,  contractual
payments and discussions with the relevant borrower.

CONTINGENT LIABILITIES

In  addition  to  the  contractual  liabilities  recorded  on  the  accompanying
consolidated  financial  statements,  the  Trust  also  has  certain  contingent
liability  claims,  such as claims against the Trust for  mismanagement of trust
assets, breach of fiduciary duty, disputed note obligations,  unpaid fees and or
other  obligations  and various other theories and claims.  Management  does not
believe  that there will be any future  material  cash  outflows  as a result of
these  claims,  thus no amount is  included in these  accompanying  consolidated
financial statements. Because of the significant uncertainty associated with the

                                       4
<PAGE>
valuation  of  these   contingent   liabilities,   it  is  possible  that  these
contingencies  could be settled at amounts that differ from the amounts that are
reflected in these financial statements and the differences could be material.

OTHER LIQUIDATION LIABILITIES

Accounts  payable and  accrued  liabilities  are  reflected  at their  estimated
settlement  amounts  which in the  opinion of the Trust  approximate  their fair
value.

Notes payable are reported in the accompanying consolidated financial statements
at their stated amounts.  In the opinion of the Trust these amounts  approximate
their estimated fair value since the respective  interest rates  approximate the
market rates of interest for similar instruments.

ESTIMATED COSTS TO COMPLETE LIQUIDATION AND LITIGATION

The estimated costs to complete  liquidation  represent the estimated cash costs
of operating  the Trust  through its expected  termination  on January 21, 2006,
discounted using a 4.25% present value factor at March 31, 2003 and December 31,
2002. These costs, which include personnel,  facilities, Trustee and Liquidating
Trust Board compensation,  professional fees, litigation costs and other related
costs,  are  estimated  based on  various  assumptions  regarding  the number of
employees,   the  use  of  outside   professionals   (including   attorneys  and
accountants) and other costs. Litigation costs contain assumptions based on what
management expects the likely course of actions will be regarding litigating and
or  settling  certain  contingencies  (Note 6).  Given  that  there is  inherent
uncertainty  in the  estimation  process,  actual  results  could be  materially
different.

2. RECEIVABLES, NET

Receivables  primarily  consist  of a note  receivable  from  Shea  Homes,  Inc.
("SHEA") of $50.9  million and $53.0  million at March 31, 2003 and December 31,
2002, respectively.  The note receivable from Shea is collateralized by a master
planned community, and the remaining other receivables relate to land contracts,
mortgage notes receivable and various other commercial receivables.

The following is a summary of gross cash flows and related valuation  allowances
at:

<TABLE>
<CAPTION>
                                                          March 31, 2003    December 31, 2002
                                                          --------------    -----------------
<S>                                                        <C>                <C>
Total gross future cash flows from notes receivable        $ 100,629,610      $ 138,853,065
Collectibility discount                                      (34,708,314)       (69,241,041)
Present value discount (8-9%)                                 (8,482,558)       (10,177,039)
                                                           -------------      -------------
Net receivables                                            $  57,438,738      $  59,434,985
                                                           =============      =============
</TABLE>

Some of the  debtors  other  than  Shea  are in  default  on  their  contractual
obligations  to the Trust.  At this time  management  does not expect to receive
future  cash flows  related  to  receivables  in  default  and thus no amount is
included  in the above  stated  receivable  amount.  The  Trust is  aggressively
pursuing  collection of these debts by various means including,  but not limited
to, foreclosure and litigation and recoveries from these actions,  if any, could
be material.

3. OTHER TRUST ASSETS, NET

The other trust assets,  net are carried at estimated  fair values which are the
result of discounting,  at appropriate  discount rates, the currently  estimated
cash  flows  projected  to be  realized  from the  collection,  liquidation  and
disposition.  These valuations include  appraisals by independent  appraisers of
the  liquidation  value of some assets.  These values do not  represent the full
future cash flow values expected from the sale or operations of these assets due
to the discounting of respective cash flows. Such assets consist  principally of
income  producing  real  estate  and  interests  in real  estate,  interests  in
partnerships and operating companies, and miscellaneous other assets transferred
to the Trust upon the consummation of the Plan.

                                       5
<PAGE>
Other trust assets consist of the following:

                                               March 31, 2003  December 31, 2002
                                               --------------  -----------------
Real estate assets and partnerships, net        $ 47,647,273      $ 43,601,619
Investments in other operating companies, net      5,037,532         5,007,029
Other assets, net                                    638,779           696,956
                                                ------------      ------------
Future value of other trust assets                53,323,584        49,305,604
Present value discount (various rates)            (3,279,977)       (3,156,328)
                                                ------------      ------------
Other trust assets value                        $ 50,043,607      $ 46,149,276
                                                ============      ============

4. FAIR VALUE OF EXPECTED CASH FLOWS FROM SETTLEMENTS

Settlement  proceeds at December 31, 2002 primarily consist of net proceeds from
Arthur Andersen ("AA").  The AA, settlement  ,consists of gross proceeds of $217
million less legal fees of approximately  $32.9 million and litigation  expenses
incurred for prosecuting the litigation of approximately  $4.0 million for a net
amount of approximately $180.1 million. Both the Superior Court for the State of
Arizona,  Maricopa County (the "SUPERIOR  COURT") and Bankruptcy  Court approved
the settlement on September 13, 2002. Interest of approximately $1.1 million was
earned on the cash  balances held by the Trust for the AA settlement at December
31, 2002 and is reflected in these financial  statements.  On December 27, 2002,
the Trust  distributed  $6.5 million of the AA settlement to the Class 3A and 3B
beneficial  interest holders of the Trust and class action members in accordance
with the court approved plan of allocation.  At December 31, 2002, approximately
$174.7  million  representing  both the Trust and class  action  share of the AA
settlement  proceeds  remained  to  be  distributed.   In  addition  to  the  AA
settlement, the Trust and class action were able to reach settlements with Henry
& Horne, P.L.C.,  Nelson Lambson & Co., P.L.C., E. A. and Rebecca Kuhn, Jalma W.
and  Carole  Hunsinger  and  their  affiliates,  The  Arizona  Southern  Baptist
Convention  and  affiliated  entities,  Harold D. and  Stephanie B. Friend their
affiliated  entities and L. Dwain Hoover, Beva J. Hoover, D. Hoover & Associates
and the D.  Hoover  &  Associates  Investments,  Inc.  Retirement  Trust.  These
settlements  aggregately  total  approximately  $15.3 million less discounts and
consist of cash and other real property.  Litigation  expenses  related to these
settlements total  approximately  $1.6 million for a net amount of approximately
$13.7 million.

The court approved plan of allocation  states that the Trust is allocated 50% of
the proceeds and that the class action is  allocated  the  remaining  50% of the
proceeds.  On January 23,  2003,  the  remaining AA  settlement  funds of $174.7
million were distributed to the Class 3A and 3B beneficial  interest holders and
class action  members in accordance  with the court approved plan of allocation.
On  March  24,  2003 the  cash  proceeds  received  from  the  other  litigation
settlements  of $7.1 million were  distributed to the Class 3A and 3B beneficial
interest  holders and class action members in accordance with the court approved
plan of allocation.  The remaining  non-cash assets of $6.6 million  received as
part of these  additional  settlements has been  reclassified to the appropriate
asset  classification.  Therefore  at March 31,  2003 all cash  from  litigation
settlements had been distributed.

5. NOTES PAYABLE

The following is a summary of notes payable to third parties:

Gross  note  payable  of  approximately  $3.3  million,  including  interest  of
approximately  $145,000 to one  creditor  collateralized  by the Shea Homes note
receivable,  with payment terms of annual principal and interest payments,  with
an interest rate of 6.75%. Due June 26, 2005.

Gross  notes   payable  of   approximately   $159,000   including   interest  of
approximately $29,000, to various creditors  collateralized by real estate, with
payment terms including monthly interest only payments and monthly principal and
interest  payments,  with interest  rates ranging from 7% to 12%. Due at various
dates ranging from June 1, 2002 to October 31, 2008.

Gross notes  payable of  approximately  $14,000,  including  interest to various
creditors collateralized by various notes receivable, with monthly principal and
interest  payments and interest rates ranging from 7.5% to 8.75%. Due at various
dates ranging from March 1, 2007 to July 25, 2007.

                                       6
<PAGE>
At March 31, 2003, aggregate debt maturities including interest were as follows:

                                           2003            $1,340,843
                                           2004             1,223,471
                                           2005             1,329,304
                                           2006                    --
                                           2007                    --
                                     Thereafter                    --
                                                           ----------
                         3,893,618
        Less present value discount (6.75%-12%)              (409,696)
                                                           ----------

                                  Notes payable            $3,483,922
                                                           ==========

6. ESTIMATED COSTS TO COMPLETE LIQUIDATION AND LITIGATION

The  estimated  costs to complete  liquidation  and  litigation of $5,569,677 at
March 31, 2003 and $6,679,030 at December 31, 2002 represent the estimated costs
of operating  the Trust  through its expected  termination  on January 21, 2006,
discounted  using an 4.25%  present  value  factor.  These costs,  which include
personnel,  facilities,  Trustee and Board  compensation,  professional fees and
litigation  costs,  are  estimated  based on various  assumptions  regarding the
number of employees,  the use of outside professionals  (including attorneys and
accountants) and other matters.  Litigation costs contain  assumptions  based on
what  management  expects  the  likely  course  of  actions  will  be  regarding
litigating and or settling certain  contingencies  (Note 9). Given that there is
inherent  uncertainty  in  the  estimation  process,  actual  results  could  be
materially different.

7. SETTLEMENT LIABILITY

The  settlement  liability at March 31, 2003  represents  the class action's 50%
portion of the settlement proceeds and assets from Jalma W. and Carole Hunsinger
and their affiliates and Harold D. and Stephanie B. Friend and their affiliates.
The  settlement   liability   relates  to  assets  reported  in  receivables  of
approximately $2.4 million and other trust assets of approximately $4.3 million.
In January 2003 the courts  approved an allocation  process for the January 2003
settlements whereby the Trust and the class action each are allocated 50% of the
settlement  proceeds.  From all Litigation Claims, the Trust will distribute its
allocated share of the proceeds to the beneficial holders on a pro rata basis in
accordance  with the Plan. The class action  proceeds will be distributed to its
investors based on a formula as agreed by its members.  The Trust has recorded a
settlement  liability for the settlement  proceeds,  net of legal fees, equal to
the amount  allocated to the class action.  The liability  will remain until the
proceeds are distributed to the class action investors by the Trust.

8. CHANGES IN OTHER TRUST ASSETS

During the three  months  ended March 31, 2003 the  valuation  of certain  other
trust  assets  were  adjusted  based on current and pending  sales  offers,  new
information   received  by  management  and  actual  operating  results.   These
adjustments  aggregately  total an  approximate  $1.7 million  decrease in other
trust assets.  Included in actual  operating  results are sales of approximately
$200,000 for various parcels and lots in ASC San Antonio and Westside Property.

During the three  months  ended March 31, 2002 the  valuation  of certain  other
trust  assets  were  adjusted  based on current and pending  sales  offers,  new
information   received  by  management  and  actual  operating  results.   These
adjustments  aggregately  total an approximate  $640,000 decrease in other trust
assets.  Included in actual operating  results are sales of  approximately  $1.3
million for various parcels and lots in Ranch Vistoso, Show Low Country Club and
Westside Property.

                                       7
<PAGE>
9. COMMITMENTS, CONTINGENCIES AND SETTLEMENTS

CONTINGENT LIABILITIES

The Trust is involved in various legal proceedings.  A number of creditors filed
proofs of claims in the Debtors' bankruptcy proceedings. Two (2) of these claims
remain  outstanding  at March 31,  2003.  The  Debtors  have  objected  to these
outstanding  claims on various  grounds and all of these disputes are pending in
the  Bankruptcy  Court.  In the  opinion of the  management  of the  Trust,  the
Bankruptcy  Court's allowance of any of the following disputed claims may have a
material  adverse  impact on the financial  condition,  resulting in higher than
recorded  liabilities  and  decreased  net assets in  liquidation.  These claims
consisted of the following:

     (a)  Cook Charitable  Trust.  On March 31, 2000, the Cook Charitable  Trust
          filed a proof of claim  alleging  that BFA abused its  discretion  and
          breached  its  fiduciary  duty when it served as  trustee  of the Cook
          Charitable Trust and, as a result, is seeking $2 million to $5 million
          in damages. The Trust is attempting to settle this claim at this time.
          However,  the Trust is unable to  estimate  at this time the amount of
          future cash flows, if any, to Cook Charitable Trust.

     (b)  Claim of Grand  Canyon  University.  On March 31,  2000,  Grand Canyon
          University   ("GCU")  filed  a  proof  of  claim  seeking  payment  of
          approximately  $3.2 million for various unsecured  investments held by
          BFA,  approximately $3.67 million for the balance due under a note and
          deed of trust executed by Cora Properties,  Inc. (the "CORA NOTE") and
          a  quarterly  $24,425  annuity  payment  for  which  BFA is  primarily
          obligated and GCU is the guarantor. The Trust has objected to the $3.2
          million  claim and the  $24,425  quarterly  annuity  claim on  various
          grounds and is pursuing  discussions with GCU in regards to settlement
          of these  claims.  The claim  related  to the Cora Note has since been
          resolved and the liability has been recorded. The Trust filed with the
          court a  settlement  agreement  with GCU that  does not  result in any
          future  cash  outflows  from the $3.2  million  claim and the  $24,425
          quarterly annuity claim.

CONTINGENT ASSETS

During late 2001, the Trust commenced two (2) separate adversary  proceedings in
the  Bankruptcy  Court against  William Crotts and Thomas  Grabinski,  the Chief
Executive  Officer and General Counsel,  respectively,  of BFA during the period
that the fraud  occurred.  The Trust  alleges that Messrs.  Crotts and Grabinski
were the primary  architects of the fraud,  thereby  breaching  their  fiduciary
duties to BFA and its investors.  The Trust has successfully defeated motions by
Crotts and  Grabinski to dismiss the action,  and since that time has engaged in
extensive  discovery with these  parties.  Trial for this action is scheduled to
commence in early 2004,  following the  conclusion of the parallel  class action
case  scheduled  to  commence in June 2003.  No amount has been  recorded in the
accompanying consolidated financial statements related to this contingent asset.

In 2002 a complaint alleging four (4) separate causes of action was filed in the
Superior Court against BFA's former limited liability company member,  Chaparral
Pines,  LLC, in the development of the Chaparral Pines property.  The complaints
center  around the  mismanagement  of the property by the  defendant.  Chaparral
Pines filed a Motion to dismiss the complaint. After briefings and argument, the
Superior  Court has  allowed the Trust to proceed on three of the four counts in
the complaint. Discovery has commenced. Because of the substantial nature of the
Chaparral  Pines  project,  the  defendants'  are working to accumulate  all the
construction-related  documents. Currently, both the Trust and defendants are in
a document  review  process.  No amount has been  recorded  in the  accompanying
consolidated financial statements related to this contingent asset

Because of the  significant  uncertainty  associated with the valuation of these
contingent  assets,  it is likely that the  amounts  ultimately  realized  could
differ  from  the  amounts  that  are  actually  reflected  in the  accompanying
consolidated financial statements and the differences could be material.

                                       8
<PAGE>
10. CASH RECEIPTS AND DISBURSEMENTS

For the three months ended March 31, 2003 and March 31, 2002, the Trust received
net cash  proceeds  from  sales  of  assets,  note  receivable  collections  and
operations of approximately $99.3 and $8.1 million  respectively,  consisting of
the following:

                                                   Three months ended
                                            ---------------------------------
                                            March 31, 2003     March 31, 2002
                                            --------------     --------------
Notes receivable                             $  2,757,380        $ 7,017,207
Cash flows from other trust assets            183,967,684          1,234,066
                                             ------------        -----------
                                             $186,725,064        $ 8,251,273
                                             ============        ===========

Conversely,  for the same  respective  periods,  the Trust  paid out to  various
creditors approximately $94.9 and $4.2 million as follows:

                                                    Three months ended
                                            ---------------------------------
                                            March 31, 2003     March 31, 2002
                                            --------------     --------------
Trust operations                            $    (685,516)     $  (3,463,655)
Litigation costs                                       --                 --
Payables & class 5 creditors                           --           (810,814)
Payments to secured notes payables               (642,295)                --
distributions to 3A and 3B                   (180,918,679)                --
                                            --------------     -------------
                                            $(182,246,490)     $  (4,274,469)
                                            ==============     =============

11. SUBSEQUENT EVENTS

During April, 2003 the Trust sold a piece of real estate for approximately  $1.7
million which approximated its liquidation value at March 31, 2003.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

The historical  financial data presented  below for the three months ended March
31,  2003 and  March  31,  2002 are  derived  from  our  consolidated  financial
statements.  The selected  financial data should be read in conjunction with the
notes below and the consolidated financial statements and related notes included
in Item 1.

<TABLE>
<CAPTION>
                                                                              Three months ended
                                                                       -------------------------------
                                                                       March 31, 2003   March 31, 2002
                                                                       --------------   --------------
<S>                                                                     <C>              <C>
Net assets in liquidation, January 1, 2003 and January 1, 2002,
respectively                                                            $ 194,833,341    $ 128,980,963

Interest income on notes receivable                                         1,507,478        1,673,203
Interest expense on notes payable                                             (58,584)        (205,962)
Changes in fair value of other trust assets and liabilities                (1,754,223)        (639,219)
Changes in fair value of estimated costs to complete liquidation                   --               --
Distributions to holders of Class 3A and 3B beneficial
interests and class action members                                        (93,568,679)              --
                                                                        -------------    -------------
Net assets in liquidation, March 31, 2003 and March 31, 2002,
respectively                                                            $ 100,959,333    $ 129,808,985
                                                                        =============    =============
</TABLE>

                                       9
<PAGE>
Certain statements under the headings  "Management's  Discussion and Analysis of
Financial  Condition and Results of  Operations,"  "Business,"  and elsewhere in
this report constitute  "forward-looking  statements"  within the meaning of the
rules and regulations promulgated by the Securities and Exchange Commission.

This report contains a number of forward-looking  statements,  which reflect the
Trust's  current views with respect to future events and financial  performance.
Such   forward-looking   statements  are  based  on  management's   beliefs  and
assumptions  regarding  information  that is currently  available,  and are made
pursuant to the "safe harbor"  provisions of the federal  securities laws. These
forward-looking  statements are subject to certain risks and uncertainties.  The
Trust's  actual  performance  and results  could  differ  materially  from those
expressed in the forward-looking  statements due to risks and uncertainties that
could materially impact the Trust in an adverse fashion and are only predictions
of future results, and there can be no assurance that the Trust's actual results
will not  materially  differ  from those  anticipated  in these  forward-looking
statements.  In this report,  the words  "anticipates",  "believes",  "expects",
"intends",   "plans",   "may",   "future",   and  similar  expressions  identify
forward-looking statements. Readers are cautioned not to place undue reliance on
the forward-looking statements contained herein, which speak only as of the date
hereof.  The Trust has no  obligation  to  publicly  update or revise any of the
forward-looking  statements to reflect  events or  circumstances  that may arise
after the date hereof.

     THREE MONTHS ENDED MARCH 31 2003 AND 2002

The  estimated  fair value of the  Trust's net assets in  liquidation  decreased
approximately  $93.9  million  for the three  months  ended  March  31,  2003 as
compared to approximately $0.8 million increase for the three months ended March
31, 2002.  Factors which  contributed to the net decrease of the net asset value
of the Trust's net assets for the three  months ended March 31, 2003 include (i)
interest   income  from  notes   receivables   which  increased  net  assets  by
approximately  $1.5  million,  (ii)  interest  expense for notes  payable  which
decreased  net  assets by  approximately  $59,000,  (iii)  decrease  in value of
certain  other trust assets which  decreased  net assets by  approximately  $1.8
million  and  (iv)  distributions  to  holders  of  Class  3A and 3B  beneficial
interests which  decreased net assets by  approximately  $93.6 million.  Factors
which  contributed to the net increase of the net asset value of the Trust's net
assets for the three months  ended March 31, 2002  include (i)  interest  income
from notes receivable which increased net assets by approximately  $1.7 million,
(ii)  interest   expense  for  notes  payable  which  decreased  net  assets  by
approximately $206,000 and (iii) decrease in value of certain other trust assets
which decreased net asset by approximately $640,000.

Interest  income  from notes  receivable  decreased  in 2003 as compared to 2002
because of  principal  payments  received.  Interest  expense  on notes  payable
decreased  from 2003 as compared 2002 because of principal  payments made by the
Trust.  The changes in fair value of other  trust  assets was greater in 2003 as
compared  to 2002  because  of changes  in the fair  market  value of assets and
certain related  liabilities due to pending or current sales offers,  receipt of
current information and actual operating results of the assets.

In 2003, the Trust distributed  approximately  $93.6 million to holders of Class
3A or 3B beneficial  interests.  This  distribution  was made  principally  from
collections  on  Trust  Assets  and the  distribution  of the  Trust's  share of
litigation  proceeds.  The Class 3A and 3B beneficial  interests  were valued at
approximately  $100.9  million at March 31, 2003 and $129.8  million at December
31, 2002.

Non-cash  trust assets at March 31, 2003 and December 31, 2002 were comprised of
the following:


NON-CASH ASSETS IN LIQUIDATION AT                      March 31,    December 31,
      ESTIMATED FAIR VALUE                                2003          2002
                                                     ------------   ------------
Receivables, net                                     $ 57,438,738   $ 59,434,985
Other trust assets, net                                50,043,607     46,149,276
Fair value of expected cash flows from settlement                   $  6,594,000
                                                     ------------   ------------
TOTAL ASSETS                                         $107,482,345   $112,178,261
                                                     ============   ============

                                       10
<PAGE>
The fair value of Trust Assets is reassessed at least  quarterly and adjustments
to estimated fair values are reflected in the period in which they become known.
For each asset,  estimates of income,  expenses and net cash flow on a quarterly
basis through the expected final  disposition date are prepared.  The individual
asset cash flow  estimates  are  developed  based upon  factors,  which  include
appraisals by independent  appraisers,  physical  inspection of the asset or the
collateral  underlying the related loans, local market  conditions,  contractual
payments and discussions with the relevant borrower. At March 31, 2003 and March
31, 2002, the projected  monthly cash flows were  discounted at various rates to
reflect the Trust Assets at estimated fair value.

The  Trust's  consolidated  financial  statements,  which have been  prepared in
accordance with accounting principles generally accepted in the United States of
America and in  accordance  with the  liquidating  basis of  accounting.  During
preparation of these consolidated financial statements, the Trust is required to
make  estimates and  assumptions  that affect the reported  amounts of assets at
estimated fair value,  liquidation  liabilities,  resolution of disputed claims,
estimates  of  liquidating  costs to be  incurred,  resolution  of  current  and
potential  litigation and the fair value of and related disclosure of contingent
assets and liabilities. On an on-going basis the Trust evaluates and updates its
estimates and  assumptions.  The Trust bases its estimates  and  assumptions  on
historical  experience and on various other  assumptions that the Trust believes
are  reasonable  under the  circumstances.  The results for the basis for making
judgments  about the fair values of assets and  liquidation  liabilities are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates under different assumptions or conditions.

     The Trust believes the following  critical  accounting  policies affect the
Trust's more  significant  estimates and assumptions  used in the preparation of
our consolidated  financial  statements,  which have been prepared in accordance
with the liquidation basis of accounting:

     o    Receivables  are  recorded  at  fair  value,   which   represents  our
          discounted   expected  future  cash  flows  calculated  based  on  the
          following factors:  receivable payment history,  financial performance
          of debtor, and underlying collateral of the Trust.

     o    Other  assets  consist  of  real  estate  partnerships,  interests  in
          operating  companies  and other assets and are recorded at fair value,
          which  represents  discounted  expected  future cash  flows,  based on
          estimates  and  assumptions  regarding  timing  of  sales,  timing  of
          payments, projected cash flows and appropriate discount factors.

     o    Payables,  accrued liabilities and notes payable are recorded based on
          expected  cash  outflows  which  require   estimates  and  assumptions
          relating to the timing of the payments and discount factors.

     o    Estimated costs to complete  liquidation and litigation  represent the
          estimated costs of operating the Trust to its expected  termination on
          January 21, 2006,  discounted  using a 4.25%  present  value factor at
          March 31, 2003 and at December 31, 2002.

          *    The costs include personnel, facilities,  Liquidating Trustee and
               Liquidating  Trust  Board  compensation,  professional  fees  and
               litigation   costs,   and  are  estimated  based  on  assumptions
               regarding the number of employees,  use of outside professionals,
               and timing of cash flows.

     o    Contingent Assets,  Litigation Settlements and related liabilities are
          recorded at the Trust's  estimated  future cash flows which  require a
          significant   amount   of   estimates   and   assumptions    regarding
          collectibility,  probable  outcomes,  timing of cash flows and various
          other factors.

                                       11
<PAGE>
PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ARTHUR ANDERSEN

     On January 23, 2003,  the Trust  distributed  approximately  $174.7 million
which  represented  the remaining  proceeds of the $217 million  settlement with
BFA's  former  auditor  Arthur  Andersen,  LLP  ("AA"),  net of  legal  fees  of
approximately $32.9 million and litigation expenses incurred for prosecuting the
litigation of approximately  $4.0 million,  to the  Beneficiaries in conjunction
with a plan of  allocation  approved by the Superior  Court.  This  distribution
marked the  culmination of a year in which the settlement  with AA fell apart in
the wake of AA's indictment by the United States Department of Justice,  only to
be restored after commencing trial of the action.

FORMER DIRECTORS, ACCOUNTANTS AND AFFILIATED PARTIES

The Trust has spent  substantial  time  investigating  potential  claims against
third parties and  analyzing  insurance  policies  that could provide  insurance
coverage for claims by the Trust against potentially  responsible third parties.
As a result  of  these  investigations,  and  subsequent  settlement  agreements
approved  by the courts in January  2003 with L.  Dwain  Hoover and  Affiliates,
Harold Friend and Affiliates,  Edgar Alan Kuhn,  Jalma Hunsinger and Affiliates,
Arizona  Southern  Baptist  Convention and Nelson Lambson and Henry & Horne. The
Trust was able to recover an  aggregate  settlement  amount of $16.5  million in
cash and real  property.  In addition,  each of the settling  parties  agreed to
waive all claims  totaling  $37.0 million filed against BFA with the  Bankruptcy
Court. On March 24, 2003 the Trust  distributed the available cash proceeds from
these settlements of approximately $7.1 million.

CROTTS AND GRABINSKI

     During  late  2001,  the  Trust   commenced  two  (2)  separate   adversary
proceedings in the Bankruptcy Court against William Crotts and Thomas Grabinski,
the Chief Executive Officer and General Counsel, respectively, of BFA during the
period  that the fraud  occurred.  The Trust  alleges  that  Messrs.  Crotts and
Grabinski  were the primary  architects of the fraud,  thereby  breaching  their
fiduciary duties to BFA and its investors.

     The Trust has  successfully  defeated  motions by Crotts and  Grabinski  to
dismiss the action, and since that time has engaged in extensive  discovery with
these  parties.  Trial for this action is  scheduled  to commence in early 2004,
following the conclusion of the parallel class action case scheduled to commence
in June 2003.

COOK CHARITABLE TRUST CLAIM AND RELATED MATTERS

     This claim  arises out of the  Sovereign  Sherwood  Crossing LLC venture in
which  Cook  Charitable   Trust  and  Sovereign  Realty  Advisors  ("SRA")  were
shareholders. In 1999, BFA exercised its power as trustee of the Cook Charitable
Trust  ("CCT") to arrange  for CCT to  contribute  $6.3  million in capital  and
substitute for a BFA  subsidiary as a shareholder  in the entity  purchasing the
Sherwood Crossing apartment  complex.  CCT alleges that, among other things, BFA
breached its fiduciary duties to CCT by investing virtually the entire corpus of
the trust in  Sovereign  Sherwood  Crossing and by  permitting  SRA to receive a
substantial  equity stake in the entity without  contributing  any capital.  CCT
brought an  arbitration  proceeding  against  SRA,  in which the Trust  produced
documents and witnesses. That case was settled in September 2002 with CCT buying
out SRA's interest for $4 million,  exclusive of  approximately  $1.1 million in
prior  distributions  to SRA. CCT now seeks to recoup its payments to SRA in its
claim  against  BFA. The Trust has opposed this claim and the matter is expected
to be ready for trial in the second half of 2003.

CHAPARRAL PINES

     In 2002 a complaint  alleging four (4) separate  causes of action was filed
in the Superior Court against BFA's former  limited  liability  company  member,
Chaparral  Pines,  LLC, in the development of the Chaparral Pines property.  The
complaints  center around the  mismanagement  of the property by the  defendant.
Chaparral  Pines filed a Motion to dismiss the  complaint.  After  briefings and
argument,  the  Superior  Court has allowed the Trust to proceed on three of the
four  counts  in  the  complaint.   Discovery  has  commenced.  Because  of  the
substantial  nature of the Chaparral Pines project,  the defendants' are working
to accumulate all the construction-related  documents. Currently, both the Trust
and defendants are in a document review process.

WILLIAM BLAIR

     In an effort to avoid repaying $4 million dollars in debt to the Trust, Mr.
Blair has  engaged in a number of legal  maneuvers.  In 2001,  the Trust filed a
Notice of  Trustee's  Sale on the  collateral  securing  repayment on one of the
Notes  (the  "DESERT  DIAMOND  NOTE").  Mr.  Blair  then  filed a  petition  for
bankruptcy  relief under Chapter 11 to frustrate the  collection  efforts of the

                                       12
<PAGE>
Trust. Separately,  Fidelity Title, the title company that worked with Mr. Blair
to transfer  title of portions of the Trust's  collateral  to third party buyers
without  lien  releases,  filed its own  lawsuit  in a  different  jurisdiction,
seeking a variety of legal and equitable relief.

     With regard to the petition for bankruptcy relief filed by Mr. Blair in the
name of Desert  Diamond,  in 2002, the Trust  successfully  opposed a "cramdown"
plan of reorganization,  and then separately  succeeded in converting the Desert
Diamond  bankruptcy case to a liquidation under the provisions of Chapter 7. The
Trust  worked with the  Chapter 7 Trustee to sell the  remaining  real  property
collateral  to  a  third  party  purchaser.   That  sale  has  closed,   netting
approximately   $380,000   to  the  Trust.   The  Trust   previously   recovered
approximately  $100,000  from other  collection  efforts,  bringing  the Trust's
recovery to approximately $480,000.

     The Trust  separately  filed a lawsuit and obtained a judgment  against Mr.
Blair  individually  as a co-maker under the Desert Diamond Note.  That debt has
been reduced to judgment in an amount of $1.4 million dollars,  plus interest at
19% until paid in full.  With  regards to Mr.  Blair's  second  obligation  (the
"CAMPBELL  NOTE") the Superior Court entered  judgment on March 19, 2003 against
both Mr. Blair and his Trust in the amount of $1,418,329.82 with interest at the
rate of 18% from August 13, 2001, until paid. Additionally the court awarded the
Trust legal fees in the amount of $54,931.00  and costs of $1,279.20.  The Trust
now has  successfully  litigated  and received  judgments on the two state court
actions and  defended  the actions of Mr.  Blair in  connection  with the Desert
Diamond  bankruptcy.  This bankruptcy  included a proposed  cramdown plan and an
adversary  lawsuit  to  modify  the  underlying  contract.  The  assets  of  the
bankruptcy  estate have been  liquidated  and the proceeds  from the sale of the
assets distributed to the Trust.

     With regard to the remaining  action against the title company  defendants,
the  Bankruptcy   Court  recently   granted  the  Title  Company's   Motion  for
Reconsideration and reversed its prior ruling. The effect is that the Bankruptcy
Court has upheld an alleged  contract  modification  disallowed  by a  different
judge in earlier litigation.  If the Bankruptcy Court's ruling stands as issued,
the Trust would be required to release its liens on the remaining  real property
collateral  for a  release  price of  $12,500/lot  (a total of  $275,00  for the
remaining  lots) The Title  Company  also has on file a Motion for Award of Fees
seeking an award of $130,000 in fees and costs incurred.  The Trust is currently
considering  filing a Motion  for  Reconsideration,  or in the  alternative,  an
appeal.

DISPUTED PROOFS OF CLAIMS

     A  number  of  creditors  filed  proofs  of  claims  in the BFA  bankruptcy
proceeding,  which  have been  objected  to by BFA.  All of these  disputes  are
pending in the  Bankruptcy  Court as of  December  31,  2002.  The claims are as
follows:

          1.   Cook  Charitable  Trust.  On March 31, 2000, the Cook  Charitable
               Trust  filed a proof  of  claim  alleging  that  BFA  abused  its
               discretion  and  breached  its  fiduciary  duty when it served as
               trustee of the Cook Charitable Trust and, as a result, is seeking
               $2 million to $5 million in damages.  The Trust is  attempting to
               settle this claim at this time.  However,  the Trust is unable to
               estimate at this time the amount of future cash flows, if any, to
               Cook Charitable Trust.

          2.   Claim of Grand Canyon University. On March 31, 2000, Grand Canyon
               University  ("GCU")  filed a proof of claim  seeking  payment  of
               approximately $3.2 million for various unsecured investments held
               by BFA,  approximately  $3.67 million for the balance due under a
               note and deed of trust  executed by Cora  Properties,  Inc.  (the
               "CORA NOTE") and a quarterly  $24,425  annuity  payment for which
               BFA is primarily  obligated and GCU is the  guarantor.  The Trust
               has objected to the $3.2 million claim and the $24,425  quarterly
               annuity claim on various grounds and is pursuing discussions with
               GCU in regards to settlement  of these claims.  The claim related
               to the Cora Note has since been  resolved and the  liability  has
               been  recorded.  The  Trust  filed  with the  Bankruptcy  Court a
               settlement  agreement with GCU that does not result in any future
               cash  outflows  from  the  $3.2  million  claim  and the  $24,425
               quarterly annuity claim.

                                       13
<PAGE>
ITEM 4. CONTROLS AND PROCEDURES

Within the ninety (90) days prior to the date of this report,  the Trust carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Trust's  management,  including the Liquidating  Trustee (the Trust's  principal
executive  officer) and the  Assistant to the  Liquidating  Trustee (the Trust's
principal financial  officer),  of the effectiveness of the design and operation
of the Trust's  disclosure  controls and procedures,  as defined in Exchange Act
Rule 15d-14(c).  Based upon that evaluation, the Trust's Liquidating Trustee and
the Assistant to the Liquidating  Trustee concluded that the Trust's  disclosure
controls and procedures are effective in enabling the Trust to record,  process,
summarize and report information required to be included in the Trust's periodic
SEC filings  within the  required  time period.  There have been no  significant
changes  in the  Trust's  internal  controls  or in  other  factors  that  could
significantly  affect the  internal  controls  subsequent  to the date the Trust
carried out its evaluation.

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Dated May 13, 2003                      BFA LIQUIDATION TRUST

                                        By: /s/ Clifton R. Jessup, Jr.
                                            ------------------------------------
                                        Name: Clifton R. Jessup, Jr.
                                        Title: Liquidating Trustee

                                       14
<PAGE>
                                  CERTIFICATION

I, Clifton R. Jessup, Jr., certify that:

1. I have reviewed  this  quarterly  report on Form 10-Q of the BFA  Liquidation
Trust;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
issuer as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (i)  designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries,   is  made  known  to  them  by  others  within  those   entities,
particularly during the period in which this quarterly report is being prepared;

     (ii) evaluated the  effectiveness of the registrant's  disclosure  controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
quarterly report ("EVALUATION DATE"); and

     (iii)  presented  in  this  quarterly  report  our  conclusions  about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
the  registrant's  board of  directors  (or persons  fulfilling  the  equivalent
function):

     (i) all  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (ii) any fraud, whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 13, 2003                      By: /s/ Clifton R. Jessup, Jr.
                                            ------------------------------------
                                        Name: Clifton R. Jessup, Jr.
                                        Title: Liquidating Trustee

                                       15
<PAGE>
                            CERTIFICATION (CONTINUED)

I, Mark A. Roberts, certify that:

1. I have reviewed  this  quarterly  report on Form 10-Q of the BFA  Liquidation
Trust;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
issuer as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (i)  designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries,   is  made  known  to  them  by  others  within  those   entities,
particularly during the period in which this quarterly report is being prepared;

     (ii) evaluated the  effectiveness of the registrant's  disclosure  controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
quarterly report ("EVALUATION DATE"); and

     (iii)  presented  in  this  quarterly  report  our  conclusions  about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
the  registrant's  board of  directors  (or persons  fulfilling  the  equivalent
function):

     (i) all  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (ii) any fraud, whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 13, 2003                      By: /s/ Mark A. Roberts
                                            ------------------------------------
                                        Name: Mark A. Roberts
                                        Title: Assistant to the Liquidating
                                               Trustee

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