SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Under Section 14(d)(4)
of the Securities Exchange Act of 1934
CAPITAL PARTNERS II, LTD. LIQUIDATING TRUST
(Name of Subject Company)
Capital Partners II, Ltd. Liquidating Trust
(Name of Person(s) Filing Statement)
Trust Units
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
______________________________________________________
Thomas W. Pauken, Liquidating Trustee
Capital Partners II, Ltd. Liquidating Trust
5646 Milton Street, Suite 900
Dallas, Texas 75206
(Name, address and telephone number of person
authorized to receive notice and communication on
behalf of the person filing statement)
Copy to:
John S. Daniels
Attorney at Law
6440 North Central Expressway, Suite 503
Dallas, Texas 75206
(214) 368-9405
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
<PAGE>
Item 1. Subject Company Information
The subject company is Capital Partners II, Ltd. Liquidating Trust (the
"Trust"), 5646 Milton Street, Suite 900, Dallas, Texas 75206. The telephone
number of the Trust is (214) 378-9340. Trust Units, which represent beneficial
interests in the assets of the Trust, are the subject of the tender offer to
which this Schedule 14D-9 relates. As of November 21, 2000, there were 43,254
Trust Units outstanding.
The Trust was created on November 17, 2000, for the purpose of continuing
the orderly liquidation of the assets of Renaissance Capital Partners II,
Ltd., a Texas limited partnership (the "Partnership") which has been managed
in liquidation since October, 1998 by Thomas W. Pauken, the Liquidation
Trustee of the Partnership. The First Amended and Restated Trust Agreement
governing the operations of the Trust was entered into effective November 17,
2000 and was filed as Exhibit 3.1 to a Report on Form 8-K filed by the Trust
with the Securities and Exchange Commission on November 21, 2000.
The beneficial owners of the Trust (the "Beneficiaries") are all of the
persons who were limited partners of the Partnership at the time of the
transfer, and each Beneficiary owns the same number of Trust Units as the
number of units owned in the Partnership.
There is no public market for the Trust Units, nor did a market exist for
units in the Partnership. Trust Units are also generally restricted as to
transfer except with the consent of the Liquidating Trustee.
Item 2. Identity and Background of Filing Person
The filing person is the Trust, the name, address and telephone number of
which are set forth in Item 1 above. This Schedule relates to an Offer to
Purchase up to 21,627 Trust Units (the "Offer") made by Sulzer Medica USA
Holding Co., 3 East Greenway Plaza, Suite 1600, Houston, Texas 77046
("Purchaser"). The Offer has been made pursuant to an Agreement dated as of
November 17, 2000, between the Purchaser and the Liquidating Trustee (the
"Tender Offer Agreement"), which is discussed herein in the Response to Item
4.
Thomas W. Pauken, the Liquidating Trustee of the Trust, is also the
Liquidation Trustee of the Partnership. On behalf of the Partnership, pursuant
to authority granted to him in an amendment to the governing partnership
agreement adopted by the limited partners on November 17, 2000, Mr. Pauken
transferred to the Trust all of the securities in Tutogen Medical, Inc.
("Tutogen") and all of the Partnership's cash and other securities. The
securities of Tutogen, consisting of 7,202,408 shares of common stock,
warrants to purchase 700,000 shares of common stock and options to purchase
3,500 shares of common stock (referred to collectively as the "Tutogen
Securities"), constituted more than 98% of the value of all of the
Partnership's assets reflected on its balance sheet as of September 30, 2000.
Item 3. Past Contacts, Transactions, Negotiations and Agreements
Mr. Pauken does not own any Trust Units. However, he serves as the
Chairman of the Board of Directors of Tutogen and as of November 27, 2000, he
was the beneficial owner of the following securities of Tutogen:
Name of Security Number Beneficially Owned
_________________________________ __________________________________
Common Stock 127,782 shares
Options to purchase Common Stock Options to purchase 70,000 shares
Warrants to purchase Common Stock Warrants to purchase 57,000 shares
The Tender Offer Agreement provides that, promptly upon the purchase by
the Purchaser of Trust Units pursuant to the Offer, and from time to time
thereafter, for so long as the Purchaser owns at least 35% of the then
outstanding Trust Units, the Purchaser shall be entitled to designate
supervising trustees constituting one-third of the Board of Trustees, rounded
up to the nearest whole number, and the other members of the Board of
Trustees, including the Liquidating Trustee shall, at such time, promptly take
all actions necessary to cause the Purchaser's designees to be elected as
supervising trustees of the Trust, including increasing the size of the Board
of Trustees or securing the resignations of incumbent supervising trustees, or
both. The Tender Offer Agreement further provides that, until the termination
of the Trust in accordance with the terms of the governing agreement, unless
the Purchaser shall otherwise agree in writing, the Liquidating Trustee shall
not resign from that position and shall not take any action to increase the
number of the Board of Trustees to greater than three or change the
constituency of the Board of Trustees, other than as contemplated pursuant to
the Tender Offer Agreement.
Item 4. The Solicitation or Recommendation
The Board of Trustees of the Trust consists of the Liquidating Trustee and
two Supervising Trustees. The Board of Trustees unanimously took the following
actions with respect to the Offer on November 17, 2000:
* determined that the Offer, the Tender Offer Agreement, and the
transactions contemplated thereby are in the best interests of the
Beneficiaries and appropriate for the management, conservation and protection
of the trust estate of the Trust;
* approved the Offer, the Tender Offer Agreement and the other transactions
contemplated thereby;
* determined that it is advisable for the Liquidating Trustee to enter into
the Tender Offer Agreement on behalf of the Trust and to cause the Trust to
perform all of its obligations thereunder; and
* resolved to recommend that Beneficiaries desiring to obtain liquidity for
all or a portion of their investment in the Trust accept the Offer and tender
their Trust Units pursuant to the Offer. The Board of Trustees therefore
authorized the Liquidating Trustee to enter into the Tender Offer Agreement
and take such further actions as he determines are necessary or desirable for
the purpose of consummating the transactions contemplated by the Tender Offer
Agreement and causing the Trust to perform all of its obligations thereunder.
In making the foregoing decisions, the Board of Trustees considered,
without limitation, the terms of the Offer, the nature and purpose of the
Trust, the background and history of the Partnership, the desire of some
Beneficiaries to obtain liquidity for all or a portion of their investments,
the history and recent financial performance of Tutogen and the market value
of its common stock, and the fact that the Purchaser does not require external
financing to complete the Offer.
The Partnership was formed in 1991, and there have been relatively few
transfers of limited partnership interests and no public market therefor.
Since October, 1998, Mr. Pauken has been engaged in an orderly liquidation of
the assets of the Partnership. Throughout that period, the most significant
holding of the Partnership has consisted of securities issued by Tutogen (the
Tutogen Securities now owned by the Trust constitute a majority of Tutogen's
outstanding common stock), but the market value of those securities in 1998
was relatively low, as Tutogen had suffered substantial losses. More recently,
the financial condition and earnings of Tutogen have improved significantly.
On November 17, 2000, the limited partners of the Partnership approved an
amendment to the Restated and Amended Agreement and Articles of Limited
Partnership authorizing the Liquidation Trustee to transfer all or
substantially all of the Partnership's assets to the Trust. The Trust will be
managed by the Liquidating Trustee, subject to oversight by two Supervising
Trustees, until such time as the assets of the Trust, or the proceeds from
sale or other disposition of such assets, are distributed to the
Beneficiaries. Initially, the two Supervising Trustees are Kenneth Reimer and
Robert Farone.
The Trust is governed by the First Amended and Restated Trust Agreement,
dated November 17, 2000, which provides that, if the assets of the Trust have
not been distributed prior to the second anniversary of the formation of the
Trust (November 17, 2002), then the Trust shall be terminated, at which time
the remaining assets would be distributed to the Beneficiaries. If the Tutogen
Securities and other assets of the Trust are disposed of prior to that date,
then the Liquidating Trustee would distribute the proceeds as soon as
practicable thereafter.
In considering the Tender Offer Agreement and the Offer, the Board of
Trustees took into account the price offered for Trust Units and the fact
that, unlike other possible methods of providing some liquidity for
Beneficiaries prior to the final distribution of the assets of the Trust, the
Offer would
* allow each Beneficiary to decide whether to tender all or a portion of
his or her Trust Units or continue to hold all Trust Units, and
* enable the Trust (and, indirectly, the Beneficiaries) to continue to hold
a controlling position in Tutogen.
During the Partnership's liquidation, Mr. Pauken communicated with many of
the limited partners, and he learned from those communications that many of
them desire a method of obtaining liquidity. On the other hand, other
Beneficiaries have indicated that they wanted the ability to continue holding
an indirect beneficial interest in Tutogen through the Partnership (and now
through the Trust). In that regard, the Trustees believe that the Trust's
controlling interest in Tutogen is significant, and a premature sale or
distribution of the Tutogen Securities could limit the liquidation value of
the Trust and the ultimate amount realized by the Beneficiaries.
The Board believes that the price to be paid pursuant to the Offer is
favorable to Beneficiaries who desire to obtain some liquidity for their
investment. In that regard, for Beneficiaries who have had investments in the
Partnership since its formation, the price of $1,387.12 per Trust Unit
represents an increase of approximately 38.7% of the initial purchase price of
$1,000 per limited partnership interest for all Trust Units that are tendered
and accepted. Even if the Offer is over-subscribed and the number of Trust
Units accepted is reduced accordingly, Beneficiaries who tender all of their
Trust Units will be able to obtain a return of most of the amounts of their
original investments. Beneficiaries who retain all of a portion of their Trust
Units will have a continuing indirect interest in the Tutogen Securities.
The Board of Trustees also reviewed the Offer in relation to the Tutogen
Securities and the market value of Tutogen common stock. The closing price per
share of Tutogen common stock on November 17, 2000 (immediately preceding the
announcement of the Tender Offer Agreement) was 4 7/8, and the reported high
and low prices per share during the preceding 52 weeks were 1 9/16 and 8 1/16,
respectively. Each of the 43,254 Trust Units outstanding represents
approximately 182 shares of common stock of Tutogen, assuming exercise of the
options and warrants owned by the Trust. The Offer therefore represents,
indirectly, a price of approximately $7.59 per share of Tutogen common stock.
The Board of Trustees also believes that the Trust's continuing ownership
of the Tutogen Securities may enable Beneficiaries to realize additional value
on their investments. The improvement in Tutogen's operating performance and
financial condition since 1998, reflected in the increased market value of its
publicly traded stock, has substantially enhanced the Partnership's financial
condition. The market for Tutogen's common stock has been relatively inactive,
and its market value may fluctuate substantially; nevertheless, the Board of
Trustees believes that there is a reasonable prospect for appreciation if
Tutogen's earnings continue to increase.
The Board of Trustees also noted that the Purchaser's contractual
relationships with Tutogen, described in Tutogen's periodic reports filed with
the Commission, have been a positive factor in Tutogen's turnaround, and the
Purchaser's interest in Tutogen, as demonstrated by the financial commitment
inherent in the Offer, reinforces the view of the Board of Trustees that
Tutogen's future prospects are encouraging.
Finally, the Board of Trustees took into account the financial position of
the Purchaser and the absence of a need for external financing for the Offer
to be consummated. This factor appears to the Trustees to make consummation of
the Offer very likely, assuming the conditions to the Offer are satisfied.
Mr. Pauken, the Liquidating Trustee, does not own any Trust Units. Messrs.
Farone and Reimer, the two Supervisory Trustees of the Trust, own 40 and 50
Trust Units, respectively, and they have advised the Liquidating Trustee that
they intend to tender all of their Trust Units pursuant to the Offer.
The Board of Trustees believes that each Beneficiary should carefully
consider all of the terms of the Offer in light of such Beneficiary's
investment objectives. For Beneficiaries desiring to obtain liquidity for all
or a portion of their investments in the Trust, the Board of Trustees
recommends that they accept the Offer and tender all or a portion of their
Trust Units pursuant to the Offer. A Beneficiary desiring to be assured of
selling at least one half of his or her Trust Units pursuant to the Offer must
tender all of his or her Trust Units.
Item 5. Person/Assets Retained, Employed, Compensated or Used
The Trust has not employed, retained or arranged to compensate any person
to make solicitations or recommendations in connection with the Offer.
Item 6. Interest in Securities of the Subject Company
The Trust Units are not listed or traded on any securities exchange, and
there is no public market for the Trust Units (nor has there been a public
market for the units in the Partnership). To the knowledge of the Trust, there
have been no transfers of Trust Units (or, prior to the formation of the
Trust, units in the Partnership) in the past 60 days.
Item 7. Purposes of the Transaction and Plans or Proposals
The Trust is not engaged in any negotiations in response to the Offer. As
discussed under Item 4, the Board of Trustees unanimously approved the Tender
Offer Agreement and the Offer. The Tender Offer Agreement provides in part
that neither the Liquidating Trustee nor any Supervising Trustee shall
directly or indirectly solicit, initiate or encourage the submission of any
competing Acquisition Proposal (as defined in the Tender Offer Agreement) or,
except as required by the fiduciary duties of the Liquidating Trustee or the
Board of Trustees under the terms of the Trust Agreement and applicable law
after entering into a customary confidentiality agreement on terms no less
favorable to the Trust and the Purchaser than those contained in the Tender
Offer Agreement, participate in any discussions or negotiations regarding, or
furnish to any person, any information with respect to, or otherwise cooperate
in any way with respect to, or assist or participate in, facilitate or
encourage, any unsolicited proposal that constitutes, or may reasonably be
expected to lead to, a Superior Proposal (as defined in the Tender Offer
Agreement).
Item 8. Additional Information
No response required.
Item 9. Exhibits
(a)(1) Offer to Purchase dated November 28, 2000 (incorporated by reference
to Exhibit (a)(1) to the Schedule TO filed by Purchaser with respect
to the Trust on November 28, 2000).
(a)(2) Form of Transfer Agreement and Instructions thereto (incorporated by
reference to Exhibit (a)(2) to the Schedule TO filed by Purchaser
with respect to the Trust on November 28, 2000).
(a)(3) Transmittal letter accompanying this Schedule as delivered to the
Beneficiaries.
(d)(1) Agreement dated November 17, 2000, among Purchaser and the
Liquidating Trustee (incorporated by reference to Exhibit (d)(1) to
the Schedule TO filed by Purchaser with respect to the Trust on
November 28, 2000).
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Date: November 28, 2000 /s/ Thomas W. Pauken
Thomas W. Pauken
Liquidating Trustee of Capital
Partners II, Ltd. Liquidating Trust
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
______ ___________________________________________________________________
(a)(1) Offer to Purchase dated November 28, 2000 (incorporated by reference
to Exhibit (a)(1) to the Schedule TO filed by Purchaser with respect
to the Trust on November 28, 2000).
(a)(2) Form of Transfer Agreement and Instructions thereto (incorporated by
reference to Exhibit (a)(2) to the Schedule TO filed by Purchaser
with respect to the Trust on November 28, 2000).
(a)(3) Transmittal letter accompanying this Schedule as delivered to the
Beneficiaries.
(d)(1) Agreement dated November 17, 2000, among Purchaser and the
Liquidating Trustee (incorporated by reference to Exhibit (d)(1) to
the Schedule TO filed by Purchaser with respect to the Trust on
November 28, 2000).
<PAGE>
Exhibit (a)(3)
Capital Partners II, Ltd. Liquidating Trust
THOMAS W. PAUKEN
TRUSTEE
5646 Milton Street
Suite 900
Tel (214) 378-9340 Dallas, Texas 75206 Fax (214) 378-9261
November 28, 2000
To the Beneficiaries of Capital Partners II, Ltd. Liquidating Trust (the
"Trust"):
The Trust was recently organized to continue the orderly liquidation of
the assets of Renaissance Capital Partners, II, Ltd. (the "Partnership"), as
authorized at the Special Meeting of Limited Partners of the Partnership on
November 17, 2000. As a limited partner in the Partnership, you automatically
became a Beneficiary of the Trust, with the same number of Trust Units as the
number of limited partnership units which you own. Substantially all of the
assets of the Partnership have been transferred to the Trust.
I am pleased to report to you positive news with respect to the Trust. On
behalf of the Trust, I signed an agreement with Sulzer Medica USA Holding Co.
(the "Purchaser") whereby the Purchaser is making a tender offer to purchase
for cash up to 21,627 Trust Units (one half of those outstanding), at a price
of $1,387.12 per Trust Unit (the "Offer"). For the Trust Units actually
purchased, this would represent a 38.7% per units increase over the original
price paid when the Partnership was formed. It will enable Beneficiaries of
the Trust who desire to do so to obtain liquidity for at least one half of
their Trust Units, while retaining the Trust's ownership (and indirect
ownership by the Beneficiaries) of our most significant assets, securities of
Tutogen Medical, Inc. If more than 21,627 Trust Units are tendered, they will
be accepted on a pro rata basis. ACCORDINGLY, IF YOU WISH TO BE ASSURED OF
SELLING AT LEAST ONE HALF OF YOUR TRUST UNITS IN THE TENDER OFFER, YOU MUST
TENDER ALL OF THE TRUST UNITS THAT YOU OWN.
As discussed in the enclosed Schedule 14D-9, the Board of Trustees of the
Trust unanimously approved the agreement with the Purchaser and the Offer and
recommends that Beneficiaries desiring to obtain liquidity for all or a
portion of their investment in the Trust accept the Offer and tender their
Trust Units pursuant to the Offer. The reasons for these determinations and
other important information about the Offer are discussed in the Schedule 14D-
9. I urge you to review this information carefully, together with the Offer to
Purchase and related Transfer Agreement, which describe the Offer and contain
instructions for responding. Please consider all of the enclosed information
carefully.
Sincerely yours,
/s/ Thomas W. Pauken
Thomas W. Pauken
Liquidating Trustee
