<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
SCHEDULE 14D-9
------------------------------------
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/2,
A CALIFORNIA LIMITED PARTNERSHIP
(Name of Subject Company)
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/2,
A CALIFORNIA LIMITED PARTNERSHIP
(Name of Person(s) Filing Statement)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
N/A
(Cusip Number of Class of Securities)
-----------------------
WILLIAM H. JARRARD, JR.
PRESIDENT
CONCAP EQUITIES, INC.
ONE INSIGNIA FINANCIAL PLAZA
GREENVILLE, SOUTH CAROLINA 29602
(864) 239-2747
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications on Behalf of
the person(s) filing statement)
------------------------------------
<PAGE>
ITEM 1. SECURITY AND SUBJECT COMPANY
The name of the subject company is Consolidated Capital
Institutional Properties/2, a California limited partnership (the
"Partnership"), and the address of the principal executive offices of the
Partnership is One Insignia Financial Plaza, Greenville, South Carolina 29602.
The title of the class of equity securities to which this statement relates is
the units of limited partnership interest ("Units") of the Partnership.
ITEM 2. TENDER OFFER OF THE BIDDER.
This statement relates to an offer by Reedy River Properties,
L.L.C., a Delaware limited liability company (the "Purchaser"), to purchase up
to 300,000 of the outstanding Units at a purchase price of $40 per Unit, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in an Offer to Purchase dated October 30, 1997 (the "Offer
to Purchase") and related Assignment of Partnership Interest (which
collectively constitute the "Offer"). A Tender Offer Statement on Schedule
14D-1 with respect to the Offer has been filed by the Purchaser, Insignia
Properties, L.P., a Delaware limited partnership ("IPLP"), Insignia Properties
Trust, a Maryland real estate investment trust ("IPT") and Insignia Financial
Group, Inc., a Delaware corporation ("Insignia") (collectively, the "Bidders").
The address of the Purchaser's principal executive offices is
One Insignia Financial Plaza, Greenville, South Carolina 29602.
ITEM 3. IDENTITY AND BACKGROUND
(a) The name and business address of the Partnership, which
is the person filing this statement, are set forth in Item 1 above.
(b)(1) The Partnership's sole general partner is ConCap
Equities, Inc., a Delaware corporation (the "General Partner") and an affiliate
of the Purchaser.
The General Partner is a wholly-owned subsidiary of IPT. The
Purchaser is a newly-formed, wholly-owned subsidiary of IPLP, which is the
operating partnership of IPT. IPT is the sole general partner of IPLP (owning
approximately 66% of the total equity interests in IPLP) and Insignia is the
sole limited partner of IPLP (owning approximately 34% of the total equity
interests in IPLP). Insignia and its affiliates also own approximately 67% of
the outstanding common shares of IPT.
The Partnership owns a debt obligation (the "Loan") owed by
Consolidated Capital Equity Partners/Two, L.P., a California limited
partnership ("CCEP/2") in respect of amounts previously borrowed from the
Partnership by CCEP/2 and a predecessor partnership of CCEP/2. The Loan is
secured by mortgages or deeds of trust on real properties owned by CCEP/2.
ConCap Holdings, Inc., a Texas corporation ("ConCap Holdings"), is the sole
general partner of CCEP/2 and a wholly-owned subsidiary of the General Partner.
Since late December 1994, Insignia Residential Group, L.P. ("IRG") and Insignia
Commercial Group, Inc. ("ICG"), which are affiliates of Insignia and the
Purchaser, have provided property management services
2
<PAGE>
to the Partnership (until the sale of the Partnership's sole remaining property
in 1996) and CCEP/2, and Insignia (directly or through affiliates) has
performed asset management and partnership administration services for the
Partnership and CCEP/2.
By reason of the relationships described in the two preceding
paragraphs, the General Partner has conflicts of interest in considering the
Offer.
Under the Limited Partnership Agreement, the General Partner
holds an interest in the Partnership and is entitled to participate in certain
cash distributions made by the Partnership to its partners. The General Partner
received from the Partnership in respect of its interest in the Partnership
cash distributions of $10,000 to date in 1997 and $30,000 in 1995. There were
no distributions made to the General Partner in 1996. In late December 1994,
IRG and ICG (which are affiliates of Insignia and the General Partner) assumed
day-to-day property management responsibilities for all of the Partnership's
and CCEP/2's properties. The Partnership and CCEP/2 paid IRG and ICG property
management fees for property management services, in the aggregate, amounts of
approximately $946,000 and $948,000 for the years ended December 31, 1996 and
1995, respectively, and have paid IRG and ICG property management fees equal to
$437,000 during the first six months of 1997. The Partnership and CCEP/2
reimbursed the General Partner, ConCap Holdings and their affiliates (including
Insignia) for expenses incurred in connection with asset management and
partnership administration services performed by them for the Partnership for
the years ended December 31, 1996 and 1995 in the amounts of $654,000 and
$708,000, respectively, and have reimbursed them in the amount of $270,000
through June 30, 1997. The amounts of reimbursements include approximately
$45,000 for the year ended December 31, 1996 for construction oversight costs.
CCEP/2 paid an affiliate $295,000 and $615,000, respectively, for the years
ended December 31, 1996 and 1995, and $214,000 for the six months ended June
30, 1997 for lease commissions. In addition, CCEP/2 is subject to an Investment
Advisory Agreement between CCEP/2 and an affiliate of ConCap Holdings (which is
an affiliate of the General Partner). This agreement provides for an annual
fee, payable in monthly installments, to an affiliate of ConCap Holdings for
advisory and consulting services for CCEP/2's properties. Advisory fees paid
pursuant to this agreement were $154,000 and $178,000, respectively, for the
years ended December 31, 1996 and 1995, and $77,000 for the six months ended
June 30, 1997. On July 1, 1995, each of the Partnership and CCEP/2 began
insuring its properties under a master policy through an agency and insurer
unaffiliated with the General Partner. An affiliate of the General Partner
acquired, in the acquisition of a business, certain financial obligations from
an insurance agency which was later acquired by the agent who placed the
current year's master policy. The current agent assumed the financial
obligations to the affiliate of the General Partner who receives payments on
these obligations from the agent. Insignia and the General Partner believe that
the aggregate financial benefit derived by Insignia and its affiliates from the
arrangement described in the three preceding sentences during the 18-month
period ended December 31, 1996 and since that date was immaterial.
As described above, the Purchaser, the General Partner and
ConCap Holdings (the general partner of CCEP/2) are affiliates of and
controlled by IPT, which is controlled by Insignia. Consequently, the General
Partner has conflicts of interest in considering the Offer, including (i) as a
result of the fact that a sale or liquidation of the Partnership's or CCEP/2's
3
<PAGE>
assets would result in a decrease or elimination of the fees paid to the
General Partner and/or its affiliates and (ii) the fact that as a consequence
of the Purchaser's ownership of Units, the Purchaser (which is an affiliate of
the General Partner) may have incentives to seek to maximize the value of its
ownership of Units, which in turn may result in a conflict for the General
Partner in attempting to reconcile the interests of the Purchaser (which is an
affiliate of the General Partner) with the interests of the other holders of
Units ("Limited Partners"). In addition, the Purchaser (which is an affiliate
of the General Partner) is making the Offer with a view to making a profit.
Accordingly, there is a conflict between the desire of the Purchaser (which is
an affiliate of the General Partner) to purchase Units at a low price and the
desire of the Limited Partners to sell their Units at a high price.
As described in the Offer to Purchase, the Purchaser (which
is an affiliate of the General Partner) expects to pay for the Units it
purchases pursuant to the Offer with funds provided by IPLP as capital
contributions. IPLP in turn intends to use its cash on hand to make such
contributions. It is possible, however, that in connection with its future
financing activities, IPT or IPLP may cause or request the Purchaser (which is
an affiliate of the General Partner) to pledge the Units as collateral for
loans, or otherwise agree to terms which provide IPT, IPLP and the Purchaser
with incentives to generate substantial near-term cash flow from the
Purchaser's investment in the Units. This could be the case, for example, if a
loan has a "balloon" maturity after a relatively short time or bears a high or
increasing interest rate. In such a situation, the General Partner may
experience a conflict of interest in seeking to reconcile the best interests of
the Partnership with the need of its affiliates for cash flow from the
Partnership's activities.
If the Purchaser is successful in acquiring a significant
number of Units pursuant to the Offer, the Purchaser (which is an affiliate of
the General Partner) will have the right to vote those Units and thereby
significantly influence all voting decisions with respect to the Partnership,
including decisions concerning liquidation, amendments to the Limited
Partnership Agreement, removal and replacement of the General Partner and
mergers, consolidations and other extraordinary transactions. This means that
(i) non-tendering Limited Partners could be prevented from taking action they
desire but that IPT (which is an affiliate of the General Partner) opposes and
(ii) IPT (which is an affiliate of the General Partner) may be able to take
action desired by IPT but opposed by the non-tendering Limited Partners.
Under the Limited Partnership Agreement, Limited Partners
holding a majority of the Units are entitled to take action with respect to a
variety of matters, including removal of a general partner and in certain
circumstances election of new or successor general partners, dissolution of the
Partnership, the sale of all or substantially all of the assets of the
Partnership, and most types of amendments to the Limited Partnership Agreement.
When voting on those and other matters, IPLP and the Purchaser (which are
affiliates of the General Partner) will vote the Units owned by them in
whatever manner they deem to be in the best interests of IPT, which because of
their relationship with the General Partner, also may be in the interest of the
General Partner, but may not be in the interest of the Limited Partners.
To the best knowledge of the General Partner, except as
described in this Schedule 14D-9, there are no other material agreements,
arrangements, understandings or any actual or
4
<PAGE>
potential conflicts of interest between the Partnership, the General Partner
and their affiliates and the Bidders, their executive officers, directors or
affiliates.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
Because of the existing and potential future conflicts of
interest described in Item 3 above, the Partnership and the General Partner are
remaining neutral and making no recommendation as to whether Limited Partners
should tender their Units in response to the Offer.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
Neither the Partnership nor any person acting on its behalf
has employed, retained or compensated, or intends to employ, retain or
compensate, any person or class of person to make solicitations or
recommendation to Limited Partners on its behalf concerning the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTEREST WITH RESPECT TO SECURITIES
None.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
None.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) Form of cover letter to Limited Partners of the
Partnership dated October 30, 1997.
(b) None.
5
<PAGE>
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: October 30, 1997
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/2,
a California limited partnership
By: ConCap Equities, Inc.
Its General Partner
By: /s/ William H. Jarrard, Jr.
---------------------------
William H. Jarrard, Jr.
President
6
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(a) Form of cover letter to Limited Partners from the
Partnership dated October 30, 1997
(b) None.
(c) None.
7
<PAGE>
Exhibit (a)
Consolidated Capital Institutional Properties/2
October 30, 1997
Dear Limited Partner:
Enclosed is the Schedule 14D-9 which was filed by Consolidated Capital
Institutional Properties (the "Partnership") with the Securities and Exchange
Commission in connection with an offer (the "Offer") by Reedy River Properties,
L.L.C., a Delaware limited liability company (the "Purchaser"), Insignia
Properties, L.P., a Delaware limited partnership ("IPLP"), Insignia Properties
Trust, a Maryland real estate investment trust ("IPT"), and Insignia Financial
Group, Inc., a Delaware corporation ("Insignia," and together with IPLP, IPT
and the Purchaser, the "Bidders"), to purchase units of limited partnership
interest ("Units") in the Partnership.
The Partnership's sole general partner (the "General Partner") is
ConCap Equities, Inc., which is an affiliate of the Bidders. Due to the
affiliation between the General Partner of the Partnership and the Bidders, the
General Partner is subject to certain conflicts of interest in connection with
the response to the Offer.
AS A RESULT OF THE EXISTING AND POTENTIAL CONFLICTS OF INTEREST,
NEITHER THE PARTNERSHIP NOR THE GENERAL PARTNER EXPRESSES ANY OPINION AS TO THE
OFFER AND EACH IS REMAINING NEUTRAL AND MAKING NO RECOMMENDATION AS TO WHETHER
LIMITED PARTNERS SHOULD TENDER THEIR UNITS IN RESPONSE TO THE OFFER.
Limited Partners are advised to carefully read the enclosed Schedule
14D-9.
Consolidated Capital Institutional Properties/2
