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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
CONSOLIDATED CAPITAL PROPERTIES V,
A CALIFORNIA LIMITED PARTNERSHIP
(Name of Subject Company)
CONSOLIDATED CAPITAL PROPERTIES V,
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)
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WILLIAM H. JARRARD, JR.
PRESIDENT
CONCAP EQUITIES, INC.
ONE INSIGNIA FINANCIAL PLAZA
GREENVILLE, SOUTH CAROLINA 29602
(864) 239-1300
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications on Behalf of
the person(s) filing statement)
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Consolidated Capital
Properties V, 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 Madison River Properties,
L.L.C., a Delaware limited liability company (the "Purchaser"), to purchase up
to 70,000 of the outstanding Units at a purchase price of $30 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 December 19, 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, P.O. Box 19059, 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 general partner is ConCap Equities,
Inc., a Delaware corporation and an affiliate of the Purchaser (the "General
Partner").
ConCap Equities, Inc., which is the general partner of the
Partnership (the "General Partner"), is a wholly-owned subsidiary of Insignia
Properties Trust, a Maryland real estate investment trust ("IPT"). The
Purchaser is a newly-formed, wholly-owned subsidiary of Insignia Properties,
L.P., a Delaware limited partnership ("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
Financial Group, Inc., a Delaware corporation ("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. Since late December 1994, Insignia
Residential Group, L.P. ("IRG") and Insignia Commercial Group, Inc. ("ICG"),
which are affiliates of the Purchaser and the General Partner, have provided
property management services to the Partnership, and Insignia (directly or
through affiliates) has performed asset management, partnership administration
and investor relations services for the Partnership. By reason of these
relationships, the General Partner has conflicts of interest in considering the
Offer.
In late December 1994, IRG and ICG (which are affiliates of the
Purchaser and the General Partner) assumed day-to-day property management
responsibilities for the Partnership's properties (other than one property,
which was managed by a third party until such property was sold in December
1995). The Partnership paid IRG and ICG property management fees for property
management services in the amounts of approximately $204,000 and $246,000 for
the
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years ended December 31, 1996 and 1995, respectively, and has paid IRG and ICG
property management fees equal to $153,000 during the first nine months of
1997. The Partnership reimbursed the General Partner and its affiliates
(including Insignia) for expenses incurred in connection with asset management
and partnership administration services performed by them for the Partnership
during 1996 and 1995 in the amounts of $167,000 and $173,000, respectively, and
has reimbursed them for such services in the amount of $94,000 through
September 30, 1997 (including $14,000 for reimbursements of costs incurred in
connection with construction oversight services). The Partnership paid an
affiliate of the General Partner $72,000 of commercial leasing commissions
during the nine months ended September 30, 1997. In 1996, the Partnership paid
an affiliate of the General Partner approximately $36,000 for loan costs
incurred in connection with refinancing the debt encumbering two of the
Partnership's properties. On July 1, 1995, the Partnership 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 has been immaterial.
As described above, the General Partner has conflicts of interest
with respect to the Offer, including conflicts resulting from its affiliation
with IPT and the Purchaser. The General Partner also would have a conflict of
interest (i) as a result of the fact that a sale or liquidation of the
Partnership's assets would result in a decrease or elimination of the fees paid
to the General Partner and/or its affiliates and (ii) as a consequence of the
Purchaser's ownership of Units, because 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 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. See
Section 12. 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
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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.
In general, 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 interest 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 other Limited Partners. This could (i) prevent
non-tendering Limited Partners from taking action they desire but that IPT
opposes and (ii) enable IPT to take action desired by IPT but opposed by
non-tendering 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 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.
(a) Except as described in Schedule I attached hereto, no
transactions in the Units have been effected during the past 60 days by the
Partnership or the General Partner or, to the knowledge of the General Partner,
by any of its current or former executive officers, directors or affiliates.
(b) To the knowledge of the Partnership, neither the General
Partner nor any of its current or former executive officers, directors or
affiliates intends to tender pursuant to the Offer any Units beneficially owned
by them.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
None.
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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 December 19, 1997.
(b) None.
(c) None.
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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 19, 1997
CONSOLIDATED CAPITAL PROPERTIES V,
a California limited partnership
By: ConCap Equities, Inc.
Its General Partner
By: /s/ William H. Jarrard, Jr.
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William H. Jarrard, Jr.
President
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SCHEDULE I
TRANSACTIONS IN THE UNITS
EFFECTED BY IPLP WITHIN THE PAST 60 DAYS
Number of Price
DATE Units Purchased Per Unit
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11/25/97 30 13.67
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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(a) Form of cover letter to Limited Partners from the Partnership
dated December 19, 1997.
(b) None.
(c) None.
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Exhibit (a)
Consolidated Capital Properties V
December 19, 1997
Dear Limited Partner:
Enclosed is the Schedule 14D-9 which was filed by Consolidated Capital
Properties V (the "Partnership") with the Securities and Exchange Commission in
connection with an offer (the "Offer") by Madison 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 Properties V
