Opinion ID: 803373
Heading Depth: 3
Heading Rank: 1

Heading: Background of the Debtors

Text: The Debtors are five single-asset real estate debtors as defined in 11 U.S.C. § 101(51B). Each of the Debtors is a Kentucky limited partnership with a corresponding general partner, an administrative limited partner, and an investor limited partner. By virtue of the partnership agreements, the General Partners hold .01% of the corresponding limited partnership’s equity interests, the administrative limited partners hold .01% of the corresponding limited partnership’s equity interests, and the investor limited partners hold the remaining 99.98% of the corresponding limited partnership’s equity interests. Each of the Debtors owns a parcel of real property on which it operates a low-incoming housing apartment complex. To finance the acquisition and construction/rehabilitation of each property, the Debtors obtained construction loan financing from the Bank. Each construction loan automatically converted into permanent financing upon various terms and conditions. Pursuant to the agreements, the Bank loaned the Debtors the following total amounts of money: Creekside Senior Apartments, LP: $1,3.90,000.00 Nicholasville Greens, LP: $7.60,234.35 Franklin Place, LP: $7.93,345.29 Pennyrile Senior Apartments, LP: $5.34,242.63 Park Row Senior Apartments, LP: $1,0.34,222.00 As security for these loans, the Bank took a first mortgage lien upon the Debtors’ real properties. All five notes matured prior to the filing of the Debtors’ bankruptcy cases. -4- Each of the Debtors’ real property complexes was developed in conjunction with the federal Low-Income Housing Tax Credit Program enacted by Congress in 1986 to encourage private market investment in low-income housing. See 26 U.S.C. § 42. In exchange for agreeing to rent restrictions, the owners or investors in the property get a dollar-for-dollar credit against their federal income tax obligations over a period of 10 years, provided that the property remains in compliance with the low-income housing tax credit program requirements. The Treasury Department administers the program while state agencies distribute the credits on a competitive basis.