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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 21, 1997
COMMISSION FILE NO. 0-13563
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DAMSON/BIRTCHER REALTY INCOME FUND-I
(NAME OF SUBJECT COMPANY)
DAMSON/BIRTCHER REALTY INCOME FUND-I
(NAME OF PERSON(S) FILING STATEMENT)
LIMITED PARTNERSHIP INTERESTS
(TITLE OF CLASS OF SECURITIES)
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(CUSIP NUMBER OF CLASS OF SECURITIES)
DAVID J. WOHLBERG
TROY & GOULD PROFESSIONAL CORPORATION
1801 CENTURY PARK EAST, SUITE 1600
LOS ANGELES, CALIFORNIA 90067
(310) 553-4441
(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
This statement relates to the limited partnership interests ("Interests")
of Damson/Birtcher Realty Income Fund-I, a Pennsylvania Limited Partnership (the
"Partnership"), whose principal executive offices are located at 27611 La Paz
Road, P.O. Box A-1, Laguna Niguel, California 92677-0100.
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to a tender offer (the "Offer") by Grape Investors,
LLC, a Delaware Limited Liability Company ("Grape Investors"), whose principal
executive offices are located at 1650 Hotel Circle North, Suite 200, San Diego,
California 92108.
ITEM 3. IDENTITY AND BACKGROUND
(a) This statement is being filed by the Partnership, whose business
address is 27611 La Paz Road, Laguna Niguel, California 92656.
(b) In March of this year, the Partnership's limited partners consented to
dissolve the Partnership and liquidate its remaining properties. The Partnership
currently is actively marketing its properties for sale. Limited partners who
tender to Grape Investors will not receive any proceeds from the sale and
liquidation of the Partnership's properties or any distributions from operations
pending completion of the liquidation. In its Schedule 14D-1 filed on June 10,
1997 with the Securities and Exchange Commission (the "Commission"), as amended
by Amendment No. 1 thereto filed with the Commission on August 8, 1997 (as so
amended, the "Schedule 14D-1"), Grape Investors represents that it has no
present plan or intention with respect to a liquidation, sale of assets or
refinancing of the Partnership's properties. Based on this representation, the
Partnership believes that its liquidation and eventual dissolution and winding
up poses no actual or potential conflict with Grape Investors. The Partnership
also is not aware of any actual or potential conflict between Grape Investors
and the Partnership's general partner or its other affiliates.
There is no material contract, agreement, arrangement or understanding
between the Partnership and Grape Investors.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) The Partnership recommends that limited partners reject the Offer.
(b) The Partnership's recommendation that limited partners reject the Offer
is based on the factors set forth in the letter to limited partners attached as
an exhibit to this Schedule and incorporated herein by reference.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The Partnership has retained The Herman Group of Dallas, Texas, to provide
investor relations services to the Partnership. As part of its ongoing services,
The Herman Group will be available to respond to inquiries about the Offer at
(800) 657-8930. The Herman Group will make no solicitation or recommendation
with respect to the Offer and will not be specifically compensated for
responding to inquiries relating to the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
(a) Not applicable.
(b) Certain family members of the partners of the Partnership's general
partner own Interests representing less than 1% of all outstanding Interests. To
the Partnership's knowledge, these individuals currently intend to hold their
Interests and to not tender them in response to the Offer.
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ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) There is no negotiation undertaken or underway by the General Partner
or the Partnership in response to the Offer.
(b) See the information in Item 3(b) of this Schedule regarding the sale
and liquidation of the Partnership's properties currently underway, which
information is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
(a) Not applicable.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
(a) Exhibit 99 -- Letter dated June 23, 1997 to the limited partners of the
Partnership, as supplemented by letter dated August 21, 1997 from the
Partnership to the limited partners.
(b) Not applicable.
(c) Not applicable.
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Signature. After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
DAMSON/BIRTCHER REALTY INCOME FUND-I,
a Pennsylvania limited partnership
By: DAMSON/BIRTCHER PARTNERS
General Partner
Damson/Birtcher Realty Income Fund-I
By: BIRTCHER PARTNERS,
a California general partnership
By: BIRTCHER INVESTMENTS,
a California general partnership,
General Partner of Birtcher Partners
By: BIRTCHER LIMITED,
a California limited partnership,
General Partner of Birtcher Investments
By: BREICORP,
a California corporation,
formerly known as Birtcher Real Estate Inc.,
General Partner of Birtcher Limited
By: /s/ ROBERT M. ANDERSON
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Robert M. Anderson
Executive Director
BREICORP
Date: August 21, 1997
By: LF Special Fund II, L.P.,
a California limited partnership
By: Liquidity Fund Asset Management, Inc.,
a California corporation,
General Partner of LF Special Fund II, L.P.
By: /s/ BRENT R. DONALDSON
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Brent R. Donaldson
President
Liquidity Fund Asset Management, Inc.
Date: August 21, 1997
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EXHIBIT 99
DAMSON/BIRTCHER PARTNERS
915 Broadway, Fifth Floor
New York, New York 10010
June 23, 1997
Dear Limited Partner:
Damson/Birtcher Partners (the "General Partner") has become aware that
Grape Investors, LLC ("Grape Investors") has recently sent another unsolicited
tender offer to the limited partners of Damson/Birtcher Realty Income Fund-I
(the "Partnership") to purchase up to approximately 20% of the Partnership's
outstanding limited partnership interests for approximately $148 per $1,000 of
original subscription amount (the "Offer"), reduced by any cash distributions
made to you by the Partnership after June 1, 1997.
The General Partner recommends that you reject the Offer. The General
Partner believes that each limited partner should consider each of the factors
listed below in making a decision whether to tender to Grape Investors. The
factors that the General Partner believes to be significant are:
- The Offer was not discussed with, and is not sponsored or endorsed by,
the General Partner. Grape Investors did not afford the General Partner
an opportunity to negotiate on behalf of the limited partners.
- In March of this year, the limited partners consented to dissolve the
Partnership and liquidate its remaining properties. The Partnership
currently is actively marketing its properties for sale. If you tender
to Grape Investors, Grape Investors and not you will receive any
distributions from operations and all sale proceeds from the sale of the
Partnership's properties.
- It is somewhat difficult to determine in easily understandable terms
precisely what the purchase price of the Offer is. It is unclear why
Grape Investors chose to present its Offer in language that is hard to
understand and difficult to compare to other indicators of value. The
General Partner believes that the Offer price is approximately $148 for
$1,000 of original subscription amount.
The Offer price is lower than:
(1) First Trust Co., L.P.'s tender offer price of $200 per $1,000
of original subscription amount, which it offered to limited partners
earlier this year; and
(2) The price of recent bid prices and trade prices on the
secondary market for limited partnership interests.
- Limited partners seeking immediate cash for their interests should check
the secondary market prior to making any decision to tender. Please keep
in mind that the secondary market itself is an inefficient market that
the General Partner does not believe has generally reflected the true
value of Partnership interests. Please also keep in mind that the
secondary market may not be able to accommodate substantial sales of
limited partnership interests over a short period of time at current
prevailing prices.
- In March of this year, the limited partners consented to dissolve the
Partnership and liquidate its remaining properties. The General Partner
is now authorized and directed to settle and close the Partnership's
business in an orderly fashion and dispose of the Partnership's property
as soon as practicable, consistent with selling the Partnership's
properties to the best advantage under the circumstances.
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Limited Partner
June 23, 1997
Page 2
- The General Partner estimates that the Partnership's remaining
properties will be sold for an aggregate price ranging from
approximately $32,000,000 to $39,000,000. If the remaining properties
are sold for an aggregate price within this range, the limited partners
would receive aggregate sale proceeds of between $277 to $347 per $1,000
originally invested in the Partnership. The Grape Investor's Offer is
for $148 per $1,000 originally invested in the Partnership.
- The General Partner's estimates are based upon a variety of assumptions
that are subject to significant uncertainties and contingencies. Such
estimates are inherently imprecise and there can be no assurance they
can be realized.
- The timing of property sales and distributions of sale proceeds are and
will be determined solely by the General Partner. Although the
Partnership is currently actively marketing its properties for sale,
there is no current agreement or understanding to sell or dispose of any
property, and there can be no assurance as to when any or all of the
remaining Partnership properties can be sold or disposed of or when any
sales proceeds will actually be distributed. Accordingly, limited
partners who do not accept the Offer may not receive any distribution of
sale proceeds for a significant period of time following the Offer.
- The General Partner's estimates of sales proceeds do not take into
account Partnership operating expense or net income or net loss of the
Partnership for any period prior to the time the remaining properties
are sold, which could affect the amount of sales proceeds available for
distribution. Therefore, the actual proceeds to be received by the
limited partners may vary materially from the estimates, and therefore
possibly be substantially less.
- The General Partner notes that, although Grape states that it "does not
have any present plans or intentions with respect to a liquidation, sale
of assets or refinancing of the Partnership's properties,' Grape also
states that it sent a letter to the Partnership on October 3, 1996
indicating that "they [sic] had a potential buyer for the Partnership's
properties."
In light of the factors discussed above, the General Partner recommends
that you reject the Offer.
If you have any questions about the Offer that you want to address to the
General Partner, please call The Herman Group at 800-657-8830.
Very truly yours,
DAMSON/BIRTCHER PARTNERS
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DAMSON/BIRTCHER PARTNERS
27611 La Paz Road
Laguna Niguel , CA 92656
August 21, 1997
Dear Limited Partner:
Damson/Birtcher Partners (the "General Partner") has become aware that on
August 8, 1997 Grape Investors, LLC ("Grape Investors") amended its Schedule
14D-1 filing with the Securities and Exchange Commission and has again written
to limited partners soliciting the purchase of up to approximately 20% of the
partnership's outstanding limited partnership interests.
The financial terms of Grape Investors' unsolicited tender offer are
unchanged from those set forth in its letter to you dated June 18, 1997. We
therefore refer you to our response dated June 23, 1997, a copy of which is
enclosed for your ease of reference.
If you have any questions about Grape Investors' offer that you want to
address to the General Partner, please call The Herman Group at 800-657-8830.
Very truly yours,
DAMSON/BIRTCHER PARTNERS
