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
(Amendment No. 2)
BALCOR PENSION INVESTORS-VII
(Name of Subject Company)
BALCOR PENSION INVESTORS-VII
(Name of Person(s) Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Thomas E. Meador
Chairman
The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
(847) 267-1600
(Name, Address and Telephone Number of Persons Authorized to Receive Notice
and Communications on Behalf of the Person(s) Filing Statement)
Copy To:
Herbert S. Wander
Lawrence D. Levin
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, Illinois 60661-3693
(312)902-5200
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This Amendment No. 2 to Schedule 14D-9 amends the Schedule 14D-9 (the
"Schedule 14D-9") filed by Balcor Pension Investors-VII, an Illinois limited
partnership (the "Partnership"), with the Securities and Exchange Commission on
May 29, 1996 and previously amended by Amendment No. 1 filed June 3, 1996. All
capitalized terms used herein but not otherwise defined shall have the meanings
ascribed to such terms in the Schedule 14D-9.
Item 4. The Solicitation or Recommendation
Item 4(v)(iv) hereby is amended to include the following additional
information:
"In addition, the sale of Jonathan's Landing apartments has been
approved by the Partnership. The negotiated price is approximately 14%
above the Alex. Brown valuation for this property. If the sale is
consummated at the negotiated price, the net proceeds would result in a
distribution to holders of Units of approximately $24.75 per Unit, or
approximately 25% of the Walton Street offer and the Partnership will
still own six assets. No assurance can be given that a contract will be
entered into with respect to the Jonathan's Landing apartments, or what
the final distribution will be if this transaction is consummated. The
Partnership is continuing its marketing efforts with respect to the other
properties. If the marketing and sales efforts are successful, the
previously communicated liquidation time frame may be accelerated."
Item 7. Certain Negotiations and Transactions by the Subject Company
Item 7 hereby is amended by removing the information presently provided in
Item 7(a) and inserting the following as a new Item 7(a):
"On June 3, 1996, the Partnership received a non-binding proposal
from Heitman/JMB Advisory Corporation ("Heitman") to purchase all of the
Partnership's remaining real properties and the Partnership's one
remaining mortgage loan. Inasmuch as this proposal included certain
Partnership properties which are already under contract or otherwise
committed to third parties (see the Letter to Investors filed herewith as
Exhibit 1 ("Letter") and in addition contained terms and conditions which
are not acceptable to the Partnership, representatives of the General
Partner spoke with representatives of Heitman in an attempt to determine
the viability of the Heitman proposal and to request additional
information on certain matters, including Heitman's source of capital. On
June 6, 1996, the Partnership delivered a non-binding counterproposal to
Heitman setting forth the Partnership's asking price for the assets which
would be available for sale, and the basic terms and conditions upon which
the Partnership would be agreeable to pursuing negotiations. As of this
time, Heitman has not responded to this counterproposal and accordingly,
the General Partner does not know whether or not the terms and conditions
thereof are acceptable to Heitman.
Even if Heitman and the Partnership proceed with negotiations, the
Heitman Proposal is contingent on many factors including among others
Heitman's satisfactory due diligence review of the Partnership's
properties, the negotiation of a mutually acceptable purchase agreement
and Heitman's ability to obtain adequate capital to consummate the
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transaction. Additionally, a sale of all or substantially all of the
Partnership's assets will require the approval of the holders of a
majority of the outstanding Units. If a contract for the sale of the
assets is executed with Heitman, the General Partner will attempt to
obtain the necessary Limited Partner approval through a proxy
solicitation.
As a result of the significant contingencies and conditions alluded
to above, there can be no assurance that a sale to Heitman will ultimately
be consummated, and in fact there is a very substantial risk that it will
not be. However, in the event that a sale of the assets is consummated at
the price contemplated in the Partnership's counterproposal, the net
proceeds from a sale to Heitman which would be available for distribution
to Limited Partners, when added to the available proceeds of the potential
sales described in the Letter and Partnership cash reserves, would be
materially greater than the amount of the Walton Street Offer. Even in
the event that the sale to Heitman and the other sales described in the
Letter are consummated, there can be no assurance what actual dollar
amount of distributions to the Limited Partners will be achieved.
Except as set forth above, no negotiations are being undertaken or
are underway by the Partnership in response to the Offer which relate to
or would result in: (1) an extraordinary transaction such as a merger or
reorganization involving the Partnership or any affiliate controlled by
the Partnership; (2) a purchase, sale or transfer of a material amount of
assets by the Partnership or any affiliate controlled by the Partnership;
or (3) any material change in the present capitalization or distribution
policy of the Partnership."
Item 8. Additional Information to be Furnished.
Item 8(b)(i) hereby is amended to include the following additional
information:
"On June 5, in response to Motions to Dismiss filed by Walton Street
and Insignia, the Circuit Court of Cook County, Illinois, Chancery
Division, granted Walton Street's Motion to Dismiss and also granted
Insignia's Motion to Dismiss with leave to amend within 28 days. An
amended complaint asserting claims against Walton Street, Insignia and
Balcor was filed on June 11, 1996. Walton Street and Insignia have moved
to dismiss the amended complaint. Balcor's answer or other response to
the amended complaint is due on or before July 10, 1996."
Item 9. Material to be Filed as Exhibits
2. Item 9 hereby is amended to include the following exhibit:
"6. (c)(5) Letter to Investors, dated June 17, 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: June 17, 1996 BALCOR PENSION INVESTORS-VII
By: Balcor Mortgage Advisors-VII,
its general partner
By: The Balcor Company,
a general partner
By: /s/Thomas E. Meador
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Thomas E. Meador, Chairman
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BALCOR PENSION INVESTORS-VII
P.O. BOX 7190
DEERFIELD, ILLINOIS 60015-7190
June 17, 1996
Dear Investor:
As you know, on May 20, 1996, Walton Street Capital Acquisition Co. II, L.L.C.
("Walton Street") announced an unsolicited offer to purchase up to
approximately 33% of the outstanding limited partnership interests ("Units") of
Balcor Pension Investors-VII (the "Partnership") at a price of $109 per Unit.
In our letter to you dated May 29, 1996, we informed you that we were
expressing no opinion and remaining neutral with respect to Walton Street's
offer. While our position with respect to the offer has not changed, we wanted
to provide you with certain additional information that may be useful to you in
evaluating the offer.
On June 3, 1996, the Partnership received a non-binding proposal from
Heitman/JMB Advisory Corporation ("Heitman") to purchase all of the
Partnership's remaining real properties and the Partnership's remaining
mortgage loan. Inasmuch as this proposal included certain terms and
conditions which are not acceptable to the Partnership, representatives of the
General Partner spoke with representatives of Heitman in an attempt to
determine the viability of the Heitman proposal and to request additional
information on certain matters, including Heitman's source of capital. On June
6, 1996, the Partnership delivered a non-binding counterproposal to Heitman
setting forth the Partnership's asking price for the assets which would be
available for sale, and the basic terms and conditions upon which the
Partnership would be agreeable to pursuing negotiations. As of this time,
Heitman has not responded to this counterproposal and accordingly, the General
Partner does not know whether or not the terms and conditions thereof are
acceptable to Heitman or whether there will be further negotiations.
It must be kept in mind that even if Heitman and the Partnership proceed with
negotiations, the Heitman proposal is contingent on many factors including
among others Heitman's satisfactory due diligence review of the Partnership's
properties, the negotiation of a mutually acceptable purchase agreement and
Heitman's ability to obtain adequate capital to consummate the transaction.
Additionally, a sale of all or substantially all of the Partnership's assets
will require the approval of the holders of a majority of the outstanding
Units. If a contract for the sale of the assets is executed with Heitman, the
General Partner will attempt to obtain the necessary investor approval through
a proxy solicitation.
As a result of the significant contingencies and conditions stated above, there
can be no assurance that a sale to Heitman will ultimately be consummated or if
a sale is completed what the final terms will be. In fact there is a very
substantial risk that a sale will not be consummated. However, in the event
that a sale of the assets is consummated at the price contemplated in the
Partnership's counterproposal, the net proceeds from a sale to Heitman which
would be available for distribution to investors, when added to the Partnership
cash reserves, would be materially greater than the amount of the Walton Street
offer. Even in the event that the sale to Heitman and the other sales
<PAGE>
described in our May 29 letter are consummated, there can be no assurance what
actual dollar amount of distributions to the limited partners will be achieved.
Subsequent to our May 29 letter, wherein we communicated that we were marketing
the Partnership's residential properties for sale, we have approved the sale of
the Jonathan's Landing apartments. The negotiated price is approximately 14%
above the Alex. Brown valuation for the property. If the sale is consummated
at the negotiated price, the net proceeds would result in a distribution to
investors of approximately $24.75 per Unit or approximately 25% of the Walton
Street offer and the Partnership will still own six assets. No assurance can
be given that a contract will be entered into with respect to the Jonathan's
Landing apartments, or what the final distribution will be if the transaction
is consummated. We are continuing our marketing efforts with respect to the
Partnership's other properties. If those marketing and sales efforts are
successful, the previously communicated liquidation time frame for the
Partnership may be accelerated.
Under the terms of Walton Street's offer, as revised, Walton Street cannot,
until June 27, 1996, purchase and pay for any Units tendered prior to that
time, and you may withdraw Units tendered to Walton Street at any time prior to
5:00 p.m. Eastern Standard Time on June 27, 1996. If you wish to withdraw any
Units tendered to Walton Street, you may do so by complying with the withdrawal
procedures set forth in Walton Street's offer. Your General Partner will
continue to act in the manner it believes to be in the best interests of the
limited partners.
Very truly yours,
/s/Thomas E. Meador
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Thomas E. Meador, Chairman
Balcor Mortgage Advisors-VII
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