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Day-to-day management included duties such as effecting property
acquisitions as decided by the partnership, protecting title,
paying debts, and setting aside reserves for replacement of
assets or to cover contingencies.
Section 4.05 Distribution of Net Cash Flow.
(a) The net cash flow of the Partnership shall be
distributed to the Partners annually or at such more
frequent intervals as the Managing Partner shall
determine. The “net cash flow” of the Partnership as
used herein shall mean the net profits derived from the
property owned by the Partnership as computed in
accordance with normal and accepted accounting
principles except that (i) depreciation of buildings,
improvements, furniture, fixtures, furnishings and
equipment shall not be taken into account, (ii)
mortgage amortization paid by the Partnership shall be
considered a deduction; and (iii) any amounts expended
by the Partnership in the discretion of the Partners
for capital improvements or set aside by the Managing
Partner as a reserve for the replacement of assets of
the Partnership or other contingencies shall be
considered a deduction. Borrowings of the Partnership
shall be excluded in computing net cash flow.
Although Fred Jr. was managing partner, decedent was
actively involved in the housing partnerships. He regularly
visited the housing projects to inspect the property and to
attend to tenants’ concerns, maintenance, and the like. He made
his own decisions, without consulting with Fred Jr., when such
issues arose. Moreover, decedent had a long history as a
businessman in the field of construction and brought his sons
into the business. Finally, when he was engaged in a business
enterprise, he was almost always the person in charge.
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Last modified: May 25, 2011