SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
(Amendment No. 20)*
(Final Amendment)
MCNEIL PACIFIC INVESTORS FUND 1972
(Name of Subject Company [Issuer])
HIGH RIVER LIMITED PARTNERSHIP
CARL C. ICAHN
(Bidders)
LIMITED PARTNERSHIP UNITS
(Title of Class of Securities)
582568 87 9
(CUSIP Number of Class of Securities)
Keith L. Schaitkin, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
Calculation of Filing Fee
- -------------------------------------------------------------------
Transaction Amount of filing fee: $136.16
Valuation*: $680,790
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* For purposes of calculating the fee only. This amount
assumes the purchase of 6,189 units of limited partnership interest
(the "Units") of the subject partnership for $110.00 per Unit. The
amount of the filing fee, calculated in accordance with Rule
0-11(d) under the Securities Exchange Act of 1934, as amended,
equals 1/50th of one percent of the aggregate of the cash offered
by the bidder.
[X] Check box if any part of the fee is offset as provided by
Rule 0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
Amount Previously Paid: $136.16
Form or Registration No.: Schedule 14D-1, dated August 3, 1995
Filing Party: High River Limited Partnership & Carl C. Icahn
Date Filed: August 4, 1995
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18 of
the Securities Exchange Act of 1934 ("Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject to
all other provisions of the Act (however, see the Notes).<PAGE>
<PAGE>
SCHEDULE 14D-1/SCHEDULE 13D
CUSIP No. Page of Pages
1 NAME OF REPORTING PERSON
High River Limited Partnership
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /x/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
284 Units (See Item 6 below)
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.07%
10 TYPE OF REPORTING PERSON*
PN
<PAGE>
<PAGE>
SCHEDULE 14D-1/SCHEDULE 13D
CUSIP No. Page of Pages
1 NAME OF REPORTING PERSON
Riverdale Investors Corp., Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /x/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
284 Units (See Item 6 below)
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.06%
10 TYPE OF REPORTING PERSON*
CO
<PAGE>
<PAGE>
SCHEDULE 14D-1/SCHEDULE 13D
CUSIP No. Page of Pages
1 NAME OF REPORTING PERSON
Carl C. Icahn
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /x/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
530 Units (See Item 6 below)
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.85%
10 TYPE OF REPORTING PERSON*
IN
<PAGE>
<PAGE>
SCHEDULE 14D-1/SCHEDULE 13D
CUSIP No. Page of Pages
1 NAME OF REPORTING PERSON
Unicorn Associates Corporation
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /x/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
246 Units (See Item 6 below)
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.79%
10 TYPE OF REPORTING PERSON*
CO
<PAGE>
<PAGE>
AMENDMENT NO. 20 TO SCHEDULE 14D-1
AND
SCHEDULE 13D
This Amendment No. 20 (final amendment) to Schedule 14D-1 constitutes
(i) the final amendment to the Tender Offer Statement on Schedule 14D-1
filed by High River Limited Partnership, a Delaware limited partnership
("High River"), Riverdale Investors Corp., Inc., a Delaware corporation
("Riverdale"), and Carl C. Icahn, a citizen of the United States
(collectively, the "Reporting Persons") with the U.S. Securities and
Exchange Commission (the "Commission") on August 4, 1995, as amended by
Amendment No. 1 filed with the Commission on August 9, 1995, Amendment No.
2 filed with the Commission on August 14, 1995, Amendment No. 3 filed with
the Commission on August 18, 1995, Amendment No. 4 filed with the
Commission on August 21, 1995, Amendment No. 5 filed with the Commission on
August 22, 1995, Amendment No. 6 filed with the Commission on August 25,
1995, Amendment No. 7 filed with the Commission on August 31, 1995,
Amendment No. 8 filed with the Commission on September 7, 1995, Amendment
No. 9 filed with the Commission on September 8, 1995, Amendment No. 10
filed with the Commission on September 12, 1995, Amendment No. 11 filed
with the Commission on September 15, 1995, Amendment No. 12 filed with the
Commission on September 15, 1995, Amendment No. 13 filed with the
Commission on September 18, 1995 Amendment No. 14 filed with the Commission
on September 28, 1995, Amendment No. 15 filed with the Commission on
September 29, 1995 Amendment No. 16 filed with the Commission on October 2,
1995, Amendment No. 17 filed with the Commission on October 2, 1995,
Amendment No. 18 filed with the Commission on October 11, 1995, and
Amendment No. 19 filed with the Commission on October 12, 1995, and (ii)
the Statement on Schedule 13D of the Reporting Persons. All capitalized
terms used herein but not otherwise defined shall have the meanings
ascribed to such terms in the Offer to Purchase dated August 3, 1995, as
amended and supplemented from time to time (the "Offer to Purchase") and
the related Assignment of Partnership Interest (collectively with the Offer
to Purchase, the "Offer").
Item 6. Interest in Securities of Subject Company.
(a)-(b) The 530 Units which are listed above as being
beneficially owned by the reporting persons are based upon the preliminary
report of the depositary of Units which were tendered and accepted for
payment as referred to in the press release dated October 12, 1995
(previously filed as an exhibit to Amendment No. 19). The Reporting
Persons are seeking to obtain transfer of the Units pursuant to the
litigation referred to in the Press Release attached hereto as Exhibit 38
and the Complaint attached hereto as Exhibit 39.
Item 10. Additional Information
Item 10(f) is hereby amended to add the following:
(f) The information set forth in Exhibits 38 and 39 attached
hereto are incorporated herein by reference.
Item 11. Materials to be Filed as Exhibits.
The following documents are filed as exhibits to this Schedule 14D-1:
(a)
Exhibit 38 Press Release dated November 7, 1995
(c)
Exhibit 40 Joint Filing Agreement dated November 9, 1995 by and
among High River Limited Partnership, Riverdale
Investors Corp., Inc. and Carl C. Icahn<PAGE>
<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.
Dated: November 13, 1995
HIGH RIVER LIMITED PARTNERSHIP
By: Riverdale Investors Corp., Inc.
Title: General Partner
By: /s/ Robert J. Mitchell
Robert J. Mitchell
Title: Vice President
RIVERDALE INVESTORS CORP., INC.
By: /s/ Robert J. Mitchell
Robert J. Mitchell
Title: Vice President
UNICORN ASSOCIATES CORPORATION
By: /s/ Gail Golden
Gail Golden
Title: Vice President
/s/ Theodore Altman
Carl C. Icahn
By: Theodore Altman as
Attorney-in-fact
[Signature Page for Amendment No. 20 to
McNeil Pacific Investors Fund 1972. Schedule 14D-1]<PAGE>
<PAGE>
EXHIBIT INDEX
Page Number
-----------
Exhibit 38 Press Release dated November 7, 1995
Exhibit 39 Complaint dated November 7, 1995
Exhibit 40 Joint Filing Agreement dated November 9,
1995 by and among High River Limited
Partnership, Riverdale Investors Corp.,
Inc., Unicorn Associates Corporation and
Carl C. Icahn
Exhibit 41 Power of Attorney dated November 9, 1995
granted by Carl C. Icahn to Theodore Altman
FOR IMMEDIATE RELEASE
Contact: Tina Sims
(212) 921-3355
Date: November 6, 1995
RE: HIGH RIVER LIMITED PARTNERSHIP--McNEIL REAL ESTATE FUNDS
New York, New York--High River Limited Partnership, an affiliate of
Carl C. Icahn, announced today that it has determined that it will seek to
remove McNeil Partners, L.P. ("McNeil") from its position as general partner of
each of McNeil Pacific Investors Fund 1972, McNeil Real Estate Fund V, Ltd.,
McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real
Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund
XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P.,
and McNeil Real Estate Fund XXV, L.P. (collectively, the "Partnerships"). The
Partnerships were all the subject of tender offers conducted by High River which
expired on October 6, 1995. The assertion of claims against McNeil, is exploring
for mismanagement, excessive fees and accountings, including claims that those
Partnerships organized prior to July 1984 were statutorily dissolved when they
were reorganized in 1992 and, accordingly, McNeil is not properly authorized to
act as General Partner or receive the compensation it has taken.
The decision was, among other things, a response to the obstacles
that have been created by McNeil to the completion of the transfer of units to
High River and admission of High River as a limited partner in each of the
Partnerships. Most recently, High River received a letter from an affiliate of
McNeil dated October 30, 1995, setting forth various "concerns" with respect to
the transfer of units to High River. In response to the letter, Mr. Icahn
stated, "We cannot help but view the ostensible concerns set forth in that
letter as an extension of the self interested delaying tactics which caused the
federal court in New York to find that McNeil had irreparably harmed its limited
partners and enjoin it from further violations of the law. In our view, McNeil
should not continue as the general partner of any of the partnerships."
<PAGE>
THEODORE ALTMAN (TA 8368)
GORDON ALTMAN BUTOWSKY WEITZEN
SHALOV & WEIN
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036
TELEPHONE: (212) 626-0800
ATTORNEYS FOR PLAINTIFF
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- -----------------------------------X
HIGH RIVER LIMITED PARTNERSHIP, :
A DELAWARE LIMITED PARTNERSHIP,
ON ITS OWN BEHALF AND DERIVATIVELY :
ON BEHALF OF MCNEIL REAL ESTATE
FUND IX LTD., MCNEIL REAL FUND XI, :
LTD. MCNEIL REAL ESTATE FUND
XV, LTD., MCNEIL REAL ESTATE FUND :
XXIV, LTD. AND MCNEIL REAL ESTATE
FUND XXV, LTD., :
PLAINTIFF, :
:
- AGAINST - COMPLAINT AND
: JURY DEMAND
MCNEIL PARTNERS L.P., MCNEIL
INVESTORS, INC., MCNEIL :
PACIFIC INVESTORS FUND 1972, LTD.,
MCNEIL REAL ESTATE FUND V, LTD., :
MCNEIL REAL ESTATE FUND IX, LTD.,
MCNEIL REAL ESTATE FUND X, LTD., :
MCNEIL REAL ESTATE FUND XI, LTD.,
MCNEIL REAL ESTATE FUND XIV, LTD., :
MCNEIL REAL ESTATE FUND XV, LTD.,
MCNEIL REAL ESTATE FUND XX, L.P., :
MCNEIL REAL ESTATE FUND XXIV, L.P.,
MCNEIL REAL ESTATE FUND XXV, L.P., :
ROBERT A. MCNEIL AND CAROLE J.
MCNEIL, :
DEFENDANTS. :
- -----------------------------------X
Plaintiff, High River Limited Partnership ("High
River"), by its attorneys, Gordon Altman Butowsky Weitzen Shalov & Wein hereby
<PAGE>
alleges, upon personal knowledge as to its own acts and upon information and
belief as to all other matters, as follows:
NATURE OF THE ACTION
1. Plaintiff High River has commenced tender offers for units of ten
California limited partnerships (the "California Limited Partnerships" or the
"Partnerships"), as described below. On August 10, 1995, High River filed an
action in this Court, pursuant to Rule 14d-5 of the Securities Exchange Act of
1934, to compel the general partner of those partnerships, McNeil Partners,
L.P., ("McNeil Partners" or the "General Partner"), and the remaining defendants
(all of which are affiliated with or controlled by defendant Robert A. McNeil)
to comply with the specific provisions of Rule 14d-5 which require it to
promptly provide the tender offeror with a list of the unit holders and their
addresses or to promptly mail copies of High River's tender offers to the
limited partners. On August 10, 1995, this Court (Hon. Peter K. Leisure, J.)
found that Defendants had failed to comply with Rule 14d-5 and that the unit
holders of the partnerships were being irreparably harmed. Accordingly, Judge
Leisure issued a injunction (the "August 10 Injunction") directing the
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<PAGE>
defendants to comply with the tender offer rules and either provide High River
with a list of the unit holders and their addresses or mail High River's tender
offer materials.
2. Despite this Court's August 10 Injunction, Defendants have continued, in
violation of the spirit, if not the letter of this Court's August 10 Injunction,
to block High River's tender offers. On October 6, 1995, High River's tender
offers expired and High River accepted for payment all units properly tendered
pursuant to the offers. Defendants, however, continue to seek to delay and block
High River from obtaining units in the Partnerships. Most recently, on October
30, 1995, High River's transfer agent, IBJ Schroder, received a letter from
Defendants which purported to outline several alleged deficiencies in High
River's transfer documents.
3. Defendants wish to avoid having a limited partner such as High River
because of its ability to monitor McNeil Partners and hold them accountable. For
the past several years, McNeil Partners has been operating all of the
Partnerships for its own benefit, but at the limited partners' expense. McNeil
Partners' improper conduct includes, but is not limited to:
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<PAGE>
o paying itself and entities owned and
controlled by it exorbitant fees and so-
called reimbursements of general and
administrative expenses while permitting the
Partnerships to sustain staggering continued
losses so that the Partnerships' current
value is now a fraction of its original
value;
o trafficking in control of the Partnerships for its own
benefit, by selling and repurchasing its general partnership
interests, at great profit, without regard to the substantial
detriment suffered by the Partnerships and their limited
partners;
o taking control of the general partnership interest
in some of the partnerships in violation of the
California partnership law; and
o managing the Partnerships so as to
extend indefinitely the fat fee
arrangements enjoyed by the General
Partner and its affiliates.
4. After having soaked the Partnerships of over $12 million dollars in fees
in 1994 alone, McNeil Partners desires to continue its lucrative, but unlawful
arrangement. Defendants, having failed to derail High River's tender offer, now
seek to block High River from completing the transfers of limited partner
interest and from obtaining admission as a limited partner. Defendants
motivation is clear. A motivated, well-financed investor with a large stake in
the Partnership, such as High River, can challenge Defendants' abusive conduct
and effectively hold them accountable to the limited partners. Defendants' forms
14d-9 filed with the Securities and Exchange Commission (the
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<PAGE>
"SEC") offer various pretenses for opposing the tender offers, but never
disclose Defendants' intention to resist High River's admission into the
partnership without a good faith basis. Accordingly, High River has been forced
to seek an injunction compelling Defendants to approve the transfer of ownership
from the tendering unit holders to High River.
5. Certain of the Partnerships that were formed prior to mid-1984 (the
"Pre-1984 Partnerships") were statutorily dissolved in the early 1990's by
reason of a failed attempt to transfer their general partner interests. As a
result of this dissolution, the Pre-1984 Partnerships terminated and McNeil
Partners is today acting as if it were the general partner of a lawfully
constituted entity, when, in fact, it has no such authority. In so doing, the
General Partner is maintaining an extremely lucrative and wasteful position at
the expense of the Pre-1984 Partnerships, without any lawful basis.
6. Prior to commencing its tender offer, High River, purchased units of
limited partnership interest in McNeil Real Estate Fund IX, Ltd., McNeil Real
Estate Fund, XI, Ltd, McNeil Real Estate Fund XV, Ltd. (collectively "McNeil,
IX, IX and XV"), McNeil Real Estate Fund XXIV, L.P. and McNeil Real Estate Fund
XXV, L.P. High River has been admitted as a limited partner in each of these
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<PAGE>
partnerships. Accordingly, with respect to each of these partnerships, High
River brings derivative claims seeking an accounting from the McNeil Partners
for the fees that it earned while it unlawfully acted as the general partner of
McNeil IX, XI and XV and it seeks an order requiring McNeil Partners to disgorge
the excessive fees that it has earned since McNeil IX, XI and XV dissolved. High
River also brings derivative claims against McNeil Partners for breach of its
fiduciary duty to each of the partnerships in which High River has been
admitted.
JURISDICTION AND VENUE
7. Jurisdiction of this Court is conferred by Section 27 of the Securities
Exchange Act of 1934 (15 U.S.C. ss. 78aa) and 28 U.S.C. ss. 1367, the
Supplemental Jurisdiction statute.
8. Venue is appropriate in this jurisdiction pursuant to 28 U.S.C. ss. 1391
and 15 U.S.C. ss. 78aa because the improper actions of defendants, in violation
of federal securities laws, took place and will have a substantial impact within
this district.
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<PAGE>
PARTIES
9. Plaintiff High River is a limited partnership organized pursuant to the
laws of Delaware, and is located in New York, c/o Riverdale Investors Corp.,
Inc., 100 South Bedford Road, Mount Kisco, New York 10549. High River is an
entity controlled by Carl C. Icahn.
10. Defendant McNeil Partners is a Delaware Limited Partnership, with
offices in Dallas, Texas. McNeil Partners is in the business of real estate
management, and is general partner of all of the California Limited Partnerships
defendants, as described below.
11. Defendant McNeil Investors, Inc. ("McNeil Investors") is a Delaware
Corporation which is the general partner of McNeil Partners.
12. Defendant Robert A. McNeil ("McNeil") is the Chairman of the Board and
sole limited partner of the McNeil Partners. McNeil is also Chairman of McNeil
Investors.
13. Defendant Carole J. McNeil is Co-Chairman of the Board of McNeil
Investors and is McNeil's wife. Carole J. McNeil, along with McNeil, McNeil
Partners and McNeil Investors shall be referred to collectively as the
"Management Defendants".
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<PAGE>
14. The defendants McNeil Pacific Investor Fund 1972 ("McNeil Pacific"),
McNeil Real Estate Fund V, Ltd. ("McNeil V"), McNeil Real Estate Fund IX, Ltd.
("McNeil IX"), McNeil Real Estate Fund X, Ltd. ("McNeil X"), McNeil Real Estate
Fund XI, Ltd. ("McNeil XI"), McNeil Real Estate Fund XIV, Ltd. ("McNeil XIV"),
McNeil Real Estate Fund XV, Ltd. ("McNeil XV"), McNeil Real Estate Fund XX, L.P.
("McNeil XX"), McNeil Real Estate Fund XXIV, L.P. ("McNeil XXIV"), and McNeil
Real Estate Fund XXV, L.P. ("McNeil XXV") purport to be limited partnerships
organized under California Law. As described below, however, High River contends
that many of these Partnerships have, in fact, dissolved.
15. McNeil Partners and any other persons constituting management of the
Partnerships are controlled by McNeil. Accordingly, any demand on McNeil
Partners or other persons constituting management of the Partnerships to bring
this action on behalf of the Partnership would be futile.
THE HISTORY OF THE PARTNERSHIPS
16. The California Limited Partnerships were formed between 1971 and 1985
for the purpose of investing,
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<PAGE>
holding, managing and disposing of real estate and real- estate related
investments.
17. Most of the California Limited Partnerships were founded by Robert A.
McNeil, who is a member of the California bar and has been actively involved in
the management of real estate for at least 25 years. McNeil and The Robert A.
McNeil Corporation ("Ramco"), a corporation McNeil controlled, acted as the
general partner for most of the Partnerships that McNeil founded.
18. In 1986, McNeil sold his general partnership interests in the seven
California Limited Partnerships that he had founded to Southmark. As part of the
sale of the assets of the Partnerships, McNeil received substantial
compensation, and remained a co-general partner in most of the Partnerships,
along with Southmark. McNeil also received an indemnification from Southmark,
insulating him from liability for claims brought against the general partners
for mismanagement of the Partnerships.
19. A mere three years after McNeil sold his general partnership interests
to it, Southmark filed for bankruptcy protection. After having received
substantial compensation for his general partnership interests from Southmark in
1986, McNeil approached Southmark to repurchase the general
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<PAGE>
partnership interests in 1990, proposing to pay only a small fraction of what
Southmark had paid for them.
20. McNeil's attempts to repurchase the general partnership interests
should be viewed against the backdrop of a $5.4 million claim for
indemnification that he had brought against Southmark in 1989, that apparently
arose out of claims against McNeil and Southmark by third parties. Thus, McNeil
had substantial leverage in exercising control from Southmark. Indeed, when
McNeil attempted to repurchase the general partnership interests from Southmark,
he agreed to settle his claims for indemnification as part of the deal.
21. Under California law, limited partnerships formed prior to July 1,
1984, such as many of the California Limited Partnerships named as defendants in
this action, are governed by the California Uniform Limited Partnership Act.
Cal. Corp. ss. 15501 (1995) et seq. (the "Old Act") California limited
partnerships formed on or after July 1, 1984 are governed by the California
Revised Limited Partnership Act. Cal. Corp. ss. 15611 (1993) et seq. (the "New
Act")
22. The Old Act provides that if a limited partnership's original general
partners transfer their interest, without first admitting a successor general
partner, the partnership dissolves.
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<PAGE>
The Old Act in section 15520.5 states:
The retirement, death or insanity of a general partner
dissolves the partnership, UNLESS THE BUSINESS IS CONTINUED BY
THE REMAINING GENERAL PARTNERS
(a) Under a right so to do stated in the certificate, or
(b) With the consent of all members.
Old Act ss. 15520.5 (emphasis added).
23. Subsection 15509(1) of the Old Act states, in part, that: "without the
written consent or ratification of the specific act by all of the limited
partners, a general partner or all the general partners have no authority to . .
. (e) Admit a person as a general partner . . ." Old Act ss. 15509(1) (emphasis
added).
24. The amended partnership agreements and proxy statements for each of the
Pre-1984 Partnerships indicate that their existing general partners conveyed
their general partner interest, and, as a result, ceased to be general partners
of the Pre-1984 Partnerships, prior to the purported admission of McNeil
Partners (which in any event was not unanimously elected) as the new general
partner, resulting in dissolution under the Old Act. Neither the partnership
agreements (or any provision therein), nor any action taken by the new general
partner could resurrect the Pre-1984 Partnerships once they had, as here,
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<PAGE>
dissolved under California law.
25. McNeil nevertheless took control of the partnership assets of McNeil
IX, XI and XV, as well as the other Pre-1984 Partnerships and began behaving as
if the Pre-1984 Partnership had not dissolved and as if McNeil Partners, which
was wholly under his control, was the lawfully appointed general partner. When
McNeil took control of the partnerships, he not only greatly increased his own
compensation from the majority of the Partnerships, as described above, but he
also imposed ostensible amendments to the partnership agreements, varying in
specifics from partnership to partnership, and purported to insulate himself
from liability for misconduct as a general partner.
26. McNeil, therefore, through his sales and alleged repurchases of the
general partner's interests in the various Partnerships, trafficked in control
of the Partnerships, and in the case of the Pre-1984 partnerships, including
McNeil IX, XI and XV, took control of the assets of these partnerships
unlawfully, for his own personal gain and without regard to the detriment that
he caused to the Partnerships and the limited partners.
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<PAGE>
27. Since approximately 1991-1992, McNeil Partners has operated the
Partnerships as its own personal piggy bank, through an unconscionable
compensation and "reimbursement" scheme, and an incestuous web of self-dealing
with affiliated entities.
EXCESSIVE FEES
28. McNeil Partner has paid its affiliates enormous property management
fees -- in amounts wholly disproportionate with the services actually performed.
At the same time, McNeil Partner has caused the Partnerships to reimburse its
affiliates for certain general and administrative expenses and has received
certain other distributions in the form of both cash and other consideration. As
a result, much of the property management and other fees represent pure profit.
All the while the limited partners suffered with a thankless, losing investment.
29. The property management fees, expenses resulting from payment of
general and administrative expenses and other distributions paid to McNeil
Partners or its affiliates from each Partnership for the fiscal year ended
December 31, 1994, and the distributions to limited partners for the same year
are compared below:
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<PAGE>
o The General Partner took $66,285 in general and administrative
expenses and $72,765 in property management fees from McNeil
Pacific. The limited partners of McNeil Pacific have not
received distributions since 1990.
o The General Partner took $30,000 in general and administrative
expenses and $193,145 in property management fees from McNeil
V. The same year the limited partners of McNeil V received
distributions of $570,008.
o The General Partner took $719,703 in general and
administrative expenses and $915,989 in property
management fees from McNeil IX. The General
Partner also received $973,023 as a "Contingent
Management Incentive Distribution." Distributions
to the limited partners of McNeil IX have been
suspended since 1986 and will remain suspended for
the foreseeable future.
o The General Partner took $609,197 in general and
administrative expenses and $868,408 in property
management fees from McNeil X. The General
Partner also received $634,802 as a "Contingent
Management Incentive Distribution." Distributions
to the limited partners of McNeil X have been
suspended since 1986 and will remain suspended for
the foreseeable future.
o The General Partner took $434,577 in general and
administrative expenses and $671,785 in property
management fees from McNeil XI. The General
Partner also received $769,448 as a "Contingent
Management Incentive Distribution." Distributions
to the limited partners of McNeil XI have been
suspended since 1986 and will remain suspended for
the foreseeable future.
o The General Partner took $346,327 in general and
administrative expenses and $441,082 in property
management fees from McNeil XIV. The General
Partner also received $573,908 as a "Contingent
Management Incentive Distribution." Distributions
to the limited partners of McNeil XIV have been
suspended since 1986 and will remain suspended for
the foreseeable future.
o The General Partner took $236,077 in general and
administrative expenses and $376,559 in property
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management fees from McNeil XV. The General Partner also
received $508,862 as a "Contingent Management Incentive
Distribution." The same year the limited partners received
distributions of $499,993.
o The General Partner took $199,786 in general and
administrative expenses and $57,289 in property management
fees from McNeil XX. The General Partner also received a
$167,194 "Asset Management Fee." The same year the limited
partners received distributions of $249,933.
o The General Partner took $291,507 in general and
administrative expenses and $235,662 in property management
fees from McNeil XXIV. The General Partner also received a
$316,808 "Asset Management Fee." No distributions have been
paid to the limited partners since 1991 and none are
anticipated in 1995.
o The General Partner took $269,869 in general and
administrative expenses and $534,044 in property management
fees from McNeil XXV. The General Partner also received a
$626,282 "Asset Management Fee." The same year the limited
partners were paid $400,207.
30. In total, the General Partner and its affiliates received approximately
$12 million in cash and other consideration as property management fees,
"reimbursements" for general and administrative expenses, and other
distributions in 1994. By contrast, the limited partners, the owners of the
enterprises, received approximately only $1.7 million during the same year.
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THE GENERAL PARTNER'S PERPETUATION
OF THE EXCESSIVE FEE ARRANGEMENTS
31. Upon taking the general partners' interest in the Partnerships, McNeil
coupled his unconscionable boost of the Partnerships' payment obligations to him
with an extension of the dates for the sale of the Partnerships' assets. The
purpose stated by McNeil Partners for extending the time period was to allow the
real estate market and the performance of the Partnership's investment to
improve. It is apparent, however, that McNeil Partners intends to prolong for as
long as possible the excessive and unlawful compensation, fees and reimbursement
schemes that McNeil Partners and its affiliated entitles are enjoying at the
Partnerships' expense, and at the expense of the limited partners.
32. McNeil Partner's plans for the Partnerships are apparent from the
latest "10-K" filings that it has filed with the Securities Exchange Commission
(the "SEC"), which describe an intention to continue to operate the Partnerships
indefinitely, and only consider sale of some or all of their assets at some
indefinite time in the future. The Partnership's most recent 10-Ks therefore
demonstrate that McNeil Partners intends to extend for as long as possible the
gravy-train provided by its unconscionable 23 compensation and reimbursement
schemes.
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RESISTANCE TO HIGH RIVER'S TENDER OFFERS.
33. On August 4, 1995, High River commenced a series of tender offers for
up to 45% of the units of the California Limited Partnerships (the "Tender
Offers"). In connection with the Tender Offer, High River requested by
telecopied letter of August 3, 1995, that McNeil Partners comply with Rule 14d-5
of the Securities Exchange Act of 1934 (the "Act"), which requires that pursuant
to a request by a tender offeror, that the subject company (here, the
Partnerships) must either mail the tender offer materials to the limited
partners, or supply the offeror with a list of the limited partners and their
addresses.
34. High River received no response to its request until four business days
later, and three days after the Tender Offers were filed with the S.E.C., when
it received two telecopied letters from New York Counsel Skadden, Arps, Slate,
Meagher & Flom ("Skadden Arps").
35. One of the letters, dated August 8, 1995 (but received on August 9),
signed by defendants Robert A. McNeil and Carole J. McNeil, demanded that High
River and Carl C. Icahn sign a certificate stating that they had not received
any confidential information relating to the Partnerships from an unnamed former
lawyer of the McNeils. The accompanying letter signed by Patrick J. Foye of
Skadden Arps, indicated that the General
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Partner would not supply the limited partner list, nor would it begin to mail
the Tender Offers to any limited partners, until it received the signed
certificate that had been attached to the letter from the McNeils. High River,
through its counsel, responded on the same day by stating that there was no
basis for defendants' claims that it had obtained confidential information and
that, in any event, there was no excuse for the defendants' refusal to honor
their 14d-5 obligation.
36. On August 10, 1995, Judge Leisure issued an injunction directing
Defendants to either provide High River with a list of the unit holders and
their addresses or to mail High River's tender offer materials. Defendants chose
to mail. In granting High River's injunction, the Court found that Defendants
were irreparably harming their limited partners by attempting to block access to
information regarding High River's tender offers.
37. On August 17, 1995, High River wrote to McNeil Partners forwarding
copies of its proposed transfer documents. Unlike almost all other public held
entities, the Partnerships do not have an independent transfer agent. Instead
McNeil Partners, or its designee, act as transfer agent. As such, McNeil
Partners owes its limited partners the highest fiduciary obligations with
respect to the transfer process. Accordingly, High River sought to confirm that
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Defendants would take the necessary ministerial actions necessary to complete
the transfer of units obtained in the tender offer to High River and to insure
Defendants' cooperation in the transfer process. (Exhibit A).
38. On approximately August 22, 1995 High River amended its tender offer
and forwarded it to the Partnership for mailing. Shortly thereafter, on
approximately August 24, 1995, the parties entered a standstill agreement and
began to negotiate a friendly transaction. While the negotiations were being
conducted, High River learned that Defendants failed to timely mail High River's
amended tender offer materials and thereby ignored the clear direction of this
Court. It was not until after the negotiations broke off in late September that
Defendants mailed the amended offers. Defendants thereby again flagrantly
violated Rule 14d-5, ignored the directive of Judge Leisure's order and
materially delayed and damaged High River's offers.
39. Defendants further damaged delayed and disrupted High River's tender
offers by (a) communicating with unit holders in violation of the standstill
agreement to discourage them from tendering units; (b) misleading unit holders
concerning the purported existence of alternatives to High River's tender
offers, such as their own tender offer and an increase in distributions
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to partners; and, (c) in clear violationof the SEC's rules, mailing withdrawal
forms to unit holders without making the necessary disclosures and filings with
the SEC.
40. On October 30, 1995, three weeks after the expiration of High River's
tender offers, High River's transfer agent, IBJ Schroder, received a letter from
Defendants that raised several alleged concerns regarding High River's transfer
documentation (Exhibit B). This letter was High River's first indication that
Defendants intended to abuse the transfer process. Defendants' bad faith was
manifest by their failure to respond to High River's August 17 letter, and
Defendants' abuse of the transfer process was a serious breach of fiduciary
duty.
41. The October 30 letter was only Defendants' latest attempt to prevent
High River from increasing its stake in the Partnerships. Viewed in the context
of the Partnership's history, however, it is not surprising that Defendants
resisted High River's attempt to gain a significant foothold in the
Partnerships. Defendants fear that any large investor who they do not control
might challenge their fee arrangement and other management policies and make
them accountable to unit holders.
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FIRST CLAIM FOR RELIEF
VIOLATIONS OF SECTION 14D AND 14E OF THE EXCHANGE
ACT AND THE REGULATIONS PROMULGATED THEREUNDER
42. High River repeats and realleges the allegations of the preceding
paragraphs as if fully set forth herein.
43. In violation of Sections 14(d) and 14(e) of the Securities Exchange Act
of 1934, 15 U.S.C. 7, and the regulations promulgated thereunder, Defendants
form 14d-9 failed to fully and accurately disclose Defendants intentions to
wrongfully resist High River's admission into the limited partnerships.
44. Defendants also mailed withdrawal forms to limited partners of the
Partnerships without making the necessary disclosures and filings with the
Securities and Exchange Commission.
45. High River has no adequate remedy at law.
SECOND CLAIM FOR RELIEF
BREACH OF CONTRACT - THIRD PARTY BENEFICIARY
46. High River repeats and realleges the allegations of the preceding
paragraphs as if fully set forth herein.
47. High River has received assignments of interest from unit holders
tendering their units to High River. As an assignee,
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High River has the right to enforce the terms of the agreements governing the
Partnerships against McNeil.
48. McNeil has breached the terms of the partnership agreements and the
underlying duty of good faith and fair dealing that is implied in all contracts
by refusing, without justification or excuse, to admit High River as a limited
partner.
49. High River has no adequate remedy at law.
THIRD CLAIM FOR RELIEF
BREACH OF FIDUCIARY DUTY WITH RESPECT TO MCNEIL IX,
MCNEIL XI, MCNEIL XV, MCNEIL XXIV AND MCNEIL XXV
50. High River repeats and realleges the previous allegations as if fully
set forth herein.
51. At all times relevant, the Management Defendants owed a fiduciary duty
to the Partnerships and to the limited partners. This duty includes the duty of
care, loyalty, good faith, fair dealing, honesty and candor in the management of
the Partnerships.
52. The Management Defendants have breached and continue to breach their
fiduciary duties to the Partnerships by wasting the Partnership's assets and
causing the Partnerships to enter into a variety of one-sided sweetheart deals
designed to serve only the interest of the Management
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Defendants at the expense of the limited partners.
53. As a direct and proximate result of the Management Defendants' breaches
of fiduciary duty, McNeil IX, McNeil XI, McNeil XV, McNeil XXIV and McNeil XXV
(collectively, the "Derivative Partnerships") have been damaged in an amount to
be determined at trial.
FOURTH CLAIM FOR RELIEF
BREACH OF CONTRACT WITH RESPECT TO MCNEIL IX,
MCNEIL XI, MCNEIL XV, MCNEIL XXIV AND MCNEIL XXV
54. High River repeats and realleges the allegations of the preceding
paragraphs as if fully set forth herein.
55. Each of the Partnerships is governed by a partnership agreement that
constitutes a contract by the limited partners of the respective partnerships
and McNeil Partners.
56. The governing partnership agreements contain numerous provisions
designed to protect the limited partners from overreaching and self-dealing by
McNeil Partners and its affiliates.
57. The Management Defendants have breached the partnership agreements and
as a direct and proximate result of those breaches,
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High River and the Derivative Partnerships have been damaged in an amount to be
determined at trial.
FIFTH CLAIM FOR RELIEF
ACCOUNTING WITH RESPECT TO MCNEIL IX, XI AND XV
58. High River repeats and realleges the allegations of the proceeding
paragraph as if fully set forth herein.
59. The Management Defendants took control of the assets of McNeil IX, XI
and XV after the Pre-1984 Partnerships had dissolved and McNeil Partners behaved
as if it were a lawfully appointed general partner of McNeil IX, XI and XV.
60. Because McNeil Partners had no authority to act as a general partner,
High River is entitled to an accounting of the fees the Management Defendants
removed from McNeil IX, XI and XV. McNeil Partners and its affiliates must also
disgorge the profits received from McNeil IX, XI and XV that were greater than
the fair value of the services that they rendered while acting as a general
partner.
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WHEREFORE High River demands judgment:
1. Granting preliminary and permanent injunctive relief compelling
defendants to admit High River as a limited partner in each of the ten
Partnerships and to transfer the tendered units of interest in the Partnerships
to High River;
2. Awarding High River damages in an amount to be determined at trial;
3. Ordering the Management Defendants to discharge their fiduciary duties
to the Derivative Partnerships;
4. Ordering the Management Defendants to account to McNeil IX, XI and XV
and to disgorge profits in excess of the reasonable value of services rendered
to those partnerships;
5. Awarding damages to the Derivative Partnerships in an amount to be
determined at trial; and
6. Awarding High River and the Derivative Partnerships the cost of this
suit, including reasonable attorneys fees and such other and further relief as
the Court deems just and proper.
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JURY DEMAND
High River and the Derivative Partnerships hereby demand a jury trial.
Dated: New York, New York
November 7, 1995
GORDON ALTMAN BUTOWSKY WEITZEN
SHALOV & WEIN
By:___________________________
Theodore Altman (TA 8368)
Howard S. Koh (HK 4730)
114 West 47th Street
New York, New York 10036
(212) 626-0800
Attorneys for Plaintiff
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JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act
of 1934, as amended, the persons named below agree to the joint filing on behalf
of each of them of statements on Schedule 13D (including amendments thereto)
with respect to the units of limited partnership interest of each of McNeil
Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real
Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund
XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd.,
McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil
Real Estate Fund XXV, L.P. and further agree that this Joint Filing Agreement be
included as an Exhibit to such joint filings. In evidence thereof, the
undersigned, being duly authorized, have executed this Joint Filing Agreement
this 9th day of November, 1995.
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE INVESTORS CORP.,
INC.
Its: General Partner
By: /s/ Robert J. Mitchell
Robert J. Mitchell
Its: Vice President and
Treasurer
RIVERDALE INVESTORS CORP., INC.
By: /s/Robert J. Mitchell
Robert J. Mitchell
Its: Vice President and
Treasurer
UNICORN ASSOCIATES CORPORATION
By: /s/ Gail Golden
Gail Golden
Its: Vice President
/s/ Theodore Altman
Carl C. Icahn
By: Theodore Altman, as
attorney-in-fact
[Joint Filing Agreement for Schedule 13D with respect to McNeil Partnership]
<PAGE>
POWER OF ATTORNEY
KNOW EVERYONE BY THESE PRESENTS, which are intended to constitute a
Power of Attorney, that I, CARL C. ICAHN, residing at Museum Towers, 15 W. 53rd
Street, Apt. 51C, New York, N.Y., do hereby appoint THEODORE ALTMAN, residing at
94 Haights Cross Road, Chappaqua, New York.
MY ATTORNEY-IN-FACT TO ACT: As Attorney-In-Fact for the limited
purpose of executing (i) amendments to statements on Schedule 14D-1 in
connection with those certain tender offers (the "McNeil Tender Offers") with
respect to each of McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate
Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd.,
McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real
Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.McNeil Real Estate Fund
XXIV, L.P. and McNeil Real Estate Fund XXV, L.P.; (ii) a Schedule 13D and all
amendments thereto, in connection with the McNeil Tender Offers, including joint
filing agreements in connection thereto; (iii) Forms 3,4 and 5, and all
amendments thereto, in connection with the McNeil Tender Offers; (iv) amendments
to statements on Schedule 14D-1 in connection with those certain tender offers
(the "Shelter Tender Offers") with respect to each of Shelter Properties I
Limited Partnerhsip, Shelter Properties II Limited Partnership, Shelter
Properties III Limited Partnership, Shelter Properties IV Limited Partnership,
Shelter Properties V Limited Parternship and Shelter Properties VI Limited
Partnership; (v) a Schedule 13D and all amendments thereto, in connection with
the Shelter Tender Offers, including joint filing agreements in connection
thereto; and (vi) Forms 3, 4 and 5, and all amendments thereto, in connection
with the Shelter Tender Offers.
To induce any third party to act hereunder, I hereby agree that any
third party receiving a duly executed copy or facsimile of this instrument may
act hereunder, and that revocation or termination hereof, shall be ineffective
as to such third party unless and until actual notice or knowledge of such
revocation or termination shall have been received by such third party.
IN WITNESS WHEREOF, I have hereunto signed my name this 9th day of
November, 1995.
/s/ Carl C. Icahn
Carl C. Icahn
STATE OF NEW YORK }
COUNTY OF NEW YORK}
On November 9, 1995 before me, Alice Blumberg the undersigned
officer, personally appeared CARL C. ICAHN, known personally to me to be the
individual described in and who executed the foregoing instrument and
acknowledged that he executed the same.
/s/ Alice Blumberg
Notary Public
[Signature Page to Power of Attorney for McNeil and Shelter Partnerships]
<PAGE>
