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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
to
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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KRUPP REALTY FUND, LTD. - III
(Name of Subject Company)
KRUPP REALTY FUND, LTD. - III
(Name of Person Filing Statement)
LIMITED PARTNERSHIP UNITS
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
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Laurence Gerber
The Krupp Corporation
470 Atlantic Avenue
Boston, Massachusetts 02210
(617) 423-2233
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
on Behalf of the Person(s) filing Statement)
COPY TO:
Scott D. Spelfogel, Esq. James M. Dubin, Esq.
The Berkshire Group Paul, Weiss, Rifkind, Wharton & Garrison
470 Atlantic Avenue 1285 Avenue of the Americas
Boston, Massachusetts 02210 New York, New York 10019-6064
(617) 423-2233 (212) 373-3000
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This Amendment No. 1 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
filed with the Securities and Exchange Commission (the "Commission") by Krupp
Realty Fund, Ltd. - III, a Massachusetts limited partnership (the
"Partnership"), on December 5, 1996 and relates to the tender offer made by
Krescent Partners L.L.C., a Delaware limited liability company (the
"Purchaser"), disclosed in a Tender Offer Statement on Schedule 14D-1 filed with
the Commission on November 21, 1996, to purchase up to 5,117 of the
Partnership's issued and outstanding Units of Investor Limited Partnership
Interests (the "Units") at a purchase price of $315 per Unit, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Purchaser's Offer to Purchase dated November 21, 1996 and the
related Letter of Transmittal. The purpose of this Amendment No. 1 is to amend
Items 4 and 9 of the Schedule 14D-9, as set forth below. Terms defined in the
Schedule 14D-9 are used in this Amendment No. 1 with the same meanings as
provided in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Item 4(b)(i) of the Schedule 14D-9 is hereby deleted and replaced
with the following:
(i) While the value of the Units is not readily ascertainable,
since there is neither an established trading market nor a
consistent historical pattern of making annual or periodic
distributions in respect of the Units, the price specified in the
Krescent Offer of $315 per Unit represents a significant discount
from the Corporate General Partner's estimate of the inherent value
of such Units. The Corporate General Partner has estimated the net
asset value of each Unit to be $661. Such estimate assumes a sale of
all of the Partnership's properties at their estimated values, and
the distribution of the net proceeds of such sale to the Unit
holders. The estimated values of the properties were determined
based on the forecasted net operating income of such properties for
calendar year 1996, to which cap rates were applied. Such cap rates,
which range from 9.5% to 10.0%, vary by property (depending on the
age and condition of each property) and were determined by officers
of the Corporate General Partner, based on their expertise in the
real estate industry. An amount equal to 6% of the estimated value
of each property was deducted (before applying the cap rate) to
reflect estimated transaction costs in connection with an assumed
sale of each property. (Actual sale prices, transaction costs and
market conditions will affect the actual amount available for
distribution.) While the actual amount of liquidation proceeds
distributed in respect of a Unit may be either above or below the
estimate, the Corporate General Partner believes its estimate of the
net asset value of a Unit is representative of current value. The
Krescent
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Offer is less than 48% of such estimate. The Corporate General
Partner recognizes that, in exchange for receiving the certainty of
a cash purchase price from the Purchaser in connection with the
Krescent Offer, Unit holders may prefer to forego the opportunity to
hold their Units and receive proceeds upon the potential future
liquidation of the Partnership's assets in excess of the amount
being offered by the Purchaser. However, the Corporate General
Partner believes that the price specified in the Krescent Offer
reflects too great a discount to value.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Item 9 of the Schedule 14D-9 is hereby amended by adding the
following:
(a)(iii) Form of cover letter to Unit holders from the Partnership
dated December 11, 1996
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SIGNATURE
After reasonable 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: December 11, 1996
KRUPP REALTY FUND, LTD. - III
By: The Krupp Corporation, a
general partner
By: s/Laurence Gerber
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Name: Laurence Gerber
Title: President
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EXHIBIT INDEX
A new Exhibit 8 is hereby added to the Exhibit Index, as follows:
Exhibit Description
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8. Form of cover letter to Unit holders from the
Partnership dated December 11, 1996
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Exhibit 8
KRUPP REALTY FUND, LTD. - III
December 11, 1996
Dear Limited Partner:
As you are by now aware, Krescent Partners L.L.C., a Delaware
limited liability company, has made an offer (the "Krescent Offer") to purchase
limited partnership units ("Units") of Krupp Realty Fund, Ltd. - III (the
"Partnership") for $315 per Unit.
Enclosed is a copy of the Partnership's Amendment No. 1 to its
Statement on Schedule 14D-9, which has been filed with the Securities and
Exchange Commission. The Amendment amends the Partnership's Schedule 14D-9 which
set forth the Partnership's response to the Krescent Offer.
Please do not hesitate to call our Investor Communication
representatives at 1-800-255-7877 for assistance in any Partnership matter.
Sincerely yours,
Laurence Gerber
The Krupp Corporation, a General
Partner
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