SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(AMENDMENT No. 1)
_______________________
GROWTH HOTEL INVESTORS II,
a California Limited Partnership
(Name of Subject Company)
DEVON ASSOCIATES
CAYUGA ASSOCIATES L.P.
FLEETWOOD CORP.
(Bidders)
LIMITED PARTNERSHIP ASSIGNEE UNITS
(Title of Class
of Securities)
NONE
(CUSIP Number of Class
of Securities)
_______________________
Michael L. Ashner
Devon Associates Edward Mattner
Cayuga Associates L.P. Fleetwood Corp.
100 Jericho Quadrangle 114 West 47th Street
Suite 214 19th Floor
Jericho, New York 11735-2717 New York, New York 10036
(516) 822-0022 (212) 921-3340
Copies to:
Mark I. Fisher G. David Brinton
Rosenman & Colin LLP Rogers & Wells
575 Madison Avenue 200 Park Avenue
New York, New York 10022-2585 New York, New York 10166
(212) 940-8877 (212) 878-8276
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of Bidders)
(Continued on following pages)
(Page 1 of 8 Pages)
CUSIP NO. NONE 14D-1 Page 2 of 8 Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Devon Associates
2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Sources of Funds (See Instructions)
WC; OO
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) of 2(f)
[ ]
6. Citizenship or Place of Organization
New York
7. Aggregate Amount Beneficially Owned by Each Reporting
Person
1 Unit
8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
[ ]
9. Percent of Class Represented by Amount in Row (7)
Less than 1%
10. Type of Reporting Person (See Instructions)
PN
CUSIP NO. NONE 14D-1 Page 3 of 8 Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Cayuga Associates L.P.
2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Sources of Funds (See Instructions)
WC; OO
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) of 2(f)
[ ]
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned by Each Reporting
Person
0 Units*
8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
[X]*
9. Percent of Class Represented by Amount in Row (7)
0
10. Type of Reporting Person (See Instructions)
PN
_______________
* Does not include 2,942 Units owned by QALA III Associates,
a New York general partnership and affiliate of Cayuga
Associates L.P.
CUSIP NO. NONE 14D-1 Page 4 of 8 Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Fleetwood Corp.
2. Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only
4. Sources of Funds (See Instructions)
WC; OO
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) of 2(f)
[ ]
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned by Each Reporting
Person
0 Units**
8. Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares (See Instructions)
[X]**
9. Percent of Class Represented by Amount in Row (7)
0
10. Type of Reporting Person (See Instructions)
CO
_____________
** Does not include 15 Units owned by LTBD, Inc., a Delaware
corporation and affiliate of Fleetwood Corp.
AMENDMENT No. 2 TO SCHEDULE 14D-1
This Amendment No. 2 further amends and supplements the
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
filed with the Commission on February 15, 1996 by Devon
Associates, a New York general partnership (the "Purchaser"), as
amended and supplemented by Amendment No. 1 to the Schedule 14D-1
filed with the Commission by the Purchaser on March 8, 1996,
relating to the offer of the Purchaser to purchase up to 21,000
of the outstanding limited partnership assignee units ("Units") of
Growth Hotel Investors II, a California limited partnership (the
"Partnership"), at a purchase price of $750 per Unit, net to the
seller in cash, upon the terms set forth in the Offer to Purchase
dated February 15, 1996 and the related Letter of Transmittal
(which collectively constitute the "Offer"), to include the
information set forth below. Terms not otherwise defined herein
shall have the meaning ascribed to them in the Schedule 14D-1 and
the Offer to Purchase.
Item 10. Additional Information.
Item 10(f) is hereby amended by adding after the only
sentence thereof the following sentence:
"Reference is hereby also made to Supplement No. 1, a copy of
which is attached hereto as Exhibit (a)(5), and which is
incorporated herein in its entirety by reference."
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended by adding the following, which are
attached as exhibits:
(a)(5) Supplement No. 1 to Offer to Purchase dated
March 18, 1996.
(c)(2) Memorandum of Understanding, dated March 15,
1996.
(z)(iii) Letter, dated March 12, 1996, from Promus to
the Partnership and Growth Hotel Investors,
a California limited partnership.
(z)(iv) Letter, dated March 15, 1996, from Promus to
the Partnership and Growth Hotel Investors,
a California limited partnership.
Signatures
After due 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: March 18, 1996
DEVON ASSOCIATES
By: Cayuga Associates L.P.
By: Cayuga Capital Corp.,
its General Partner
By: /s/ Michael L. Ashner
Name: Michael L. Ashner
Title: President
By: Fleetwood Corp.
By: /s/ Edward E. Mattner
Name: Edward E. Mattner
Title: President
CAYUGA ASSOCIATES L.P.
By: Cayuga Capital Corp.,
its General Partner
By: /s/ Michael L. Ashner
Name: Michael L. Ashner
Title: President
FLEETWOOD CORP.
By: /s/ Edward E. Mattner
Name: Edward E. Mattner
Title: President
Exhibit Index
Sequentially
Exhibit No. Description Numbered Page
(a)(5) Supplement No. 1 to Offer to Purchase 9
dated March 18, 1996
(c)(2) Memorandum of Understanding, dated 12
March 15, 1996
(z)(iii) Letter, dated March 12, 1996, from Promus
to the Partnership and Growth Hotel
Investors II, a California limited partnership*
(z)(iv) Letter, dated March 15, 1996 from Promus 24
to the Partnership and Growth Hotel
Investors II, a California limited partnership
* Incorporated by reference to Exhibit(c)(15) to Schedule
14D-9 filed with the Commission by Growth Hotel Investors on
February 29, 1996 in connection with the Offer, and amended by
Amendment No.1 thereto filed with the Commission on March 7, 1996
and Amendment No.2 thereto dated March 13, 1996
EXHIBIT (a)(v
Supplement
to
Offer to Purchase
Up to 21,000 Units of Limited Partnership Assignee Units
of
GROWTH HOTEL INVESTORS II,
a California Limited Partnership
for
$750 Net Per Unit
by
DEVON ASSOCIATES
THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MARCH 25, 1996 UNLESS EXTENDED. LIMITED
PARTNERS MAY WITHDRAW UNITS THAT HAVE ALREADY BEEN TENDERED BY
FOLLOWING THE
PROCEDURES SET FORTH BELOW IN THIS SUPPLEMENT.
Devon Associates, a New York general partnership (the "Purchaser") hereby
supplements and amends its offer (the "Purchaser's Offer") to purchase up to
21,000 of the outstanding Limited Partnership Assignee Units ("Units") of
Growth Hotel Investors II, a California limited partnership ("GHI II"), for
$750 per Unit, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated February 15, 1996, in this Supplement, and in the
related Letter of Transmittal, as each may be supplemented or amended from time
to time.
I. EXTENSION OF THE PURCHASER'S OFFER
On March 7, 1996, the Purchaser agreed to extend its offer to March 25,
1996, in conjunction with expedited discovery being conducted in two class and
derivative action lawsuits entitled Wallace, et al. v. Devon Associates, et al.
and R&S Asset Partners, et al. v. Devon Associates, et al., filed in,
respectively, the Supreme Court of New York and the Superior Court for the
State of California against the Purchaser, Montgomery Realty Company-85 (the
"General Partner"), which is the managing general partner of GHI II and the
general partner of Growth Hotel Investors ("GHI" and together with GHI II, the
"Partnerships"), and various affiliated or related persons and entities (the
"Actions").
The Plaintiffs in the Actions assert claims for, inter alia, breaches of
fiduciary duty and aiding and abetting such breaches and seek, among other
things, to require the General Partner to explore and pursue all transactions
that would maximize the value of the Units of the Partnerships, including the
solicitation of offers to purchase all, or substantially all, of the 28
properties directly or indirectly owned by the Partnerships (the "Properties").
Each of the Properties is operated as a Hampton Inn Hotel under a license
agreement with Hampton Inns, Inc. ("Hampton"). In addition, 18 of the Hampton
Inn Hotels are owned in a joint venture with Hampton in which the Partnerships,
through Growth Hotel Investors Combined Fund No. 1, own an 80% interest and
Hampton owns a 20% subordinated interest.
II. RECEIPT OF OFFER FROM PROMUS HOTEL CORPORATION TO
PURCHASE ALL PROPERTIES OWNED BY THE PARTNERSHIPS
On March 12, 1996, the Partnerships advised the Purchaser that they had
received from Promus Hotel Corporation ("Promus") an offer (the "Promus Offer")
to purchase, through a subsidiary of Promus, all of the Properties owned
directly or indirectly by the Partnerships free and clear of all debts and
encumbrances for an aggregate purchase price of $147,400,000 in cash. As of
December 31, 1995, the Properties were encumbered by indebtedness having an
aggregate principal balance of approximately $55,600,000 (approximately
$37,100,000 and $18,500,000 of which are attributable to interests owned by GHI
II and GHI, respectively). Furthermore, the amount ultimately distributed to
limited partners (as of December 31, 1995, there were outstanding 58,982 Units
and 36,932 Units in GHI II and GHI, respectively) if the Promus Offer was
closed would be increased by the amount of net current assets of each
Partnership (as of December 31, 1995, GHI II and GHI had net current assets of
approximately $5,400,000 and $4,300,000, respectively) and decreased as a
result of the general partners' entitlement to receive 2% of the proceeds
distributed by each Partnership. Based on the information set forth above, the
allocation of the purchase price among the Properties in the manner set forth
in the Promus Offer and assuming that the Partnerships incur liquidation costs
equal to 3% of the purchase price, the Purchaser estimates that GHI II limited
partners would receive approximately $994 per Unit if the Promus Offer was
closed on the foregoing terms. However, the Promus Offer is subject to a
number of substantial conditions described below and, accordingly, there can be
no assurance that a transaction with Promus will be consummated or, if
consummated, that it will close on the terms referred to above.
The Promus Offer is contingent on satisfaction of the following
conditions: (1) a 30-day due diligence period and satisfaction with respect to
title, survey, environmental matters, alcoholic beverage control matters, third
party consents, governmental approvals, engineering matters, physical condition
of the properties, financial statements, litigation, compliance with law, labor
matters, insurance, taxes, employee benefit matters, intellectual property,
material contracts, antitrust, compliance with standards manual and other
customary matters regarding the assets to be purchased; (2) receipt of
governmental and other required consents and approvals; and (3) documentation
of the purchase transactions on terms and conditions satisfactory to all
parties within a reasonable time. The Promus Offer expires at 5:00 p.m. on
March 31, 1996.
Promus, an affiliate of Hampton, is a publicly-traded corporation and the
franchisor and operator of the Embassy Suites, Hampton Inn, Hampton Inn &
Suites and Homewood Suites hotel brands. Promus has indicated that it believes
its offer represents substantially greater value to the limited partners of GHI
II than the Purchaser's Offer.
III. PROPOSED SETTLEMENT OF THE ACTIONS AND THE GENERAL PARTNER'S
AGREEMENT TO SOLICIT ADDITIONAL OFFERS FOR THE PROPERTIES
On March 15, 1996, the parties to the Actions entered into an agreement
to settle the Actions and all claims that were asserted, or could have been
asserted, in the Actions for inter alia, the following consideration:
(1) the General Partner's agreement to take any such actions as
are reasonably necessary and consistent with its fiduciary duties to procure
offers for the purchase of the Properties which maximize the value of the
Units. If after taking such actions, the General Partner determines,
consistent with its fiduciary duties, to accept an offer or offers to purchase
all or substantially all of the Properties, it will prepare a proposed plan of
liquidation for each Partnership and submit such proposals to a vote of the
Unitholders. Thereafter, such plans shall be implemented if approved by a
majority of outstanding Units in the Partnerships, as required by the
Partnership Agreements of the Partnerships;
(2) the General Partner's agreement to allow counsel for the
Plaintiffs in the Actions ("Plaintiffs' Counsel") to comment upon the
solicitation process. The General Partner will make available to Plaintiffs'
Counsel all materials and correspondence sent by the General Partner in
connection with the solicitation of interested bidders and sent by the General
Partner in response to any offers or expression of interest, and all
correspondence received by the General Partner in response to any solicitation
and any offer which was not solicited; and
(3) the Purchaser's agreement to mail this Supplement to all
limited partners.
As set forth above, pursuant to the terms of the agreement to settle the
Actions, the General Partner will now solicit offers from any and all parties
(including Promus) that may be interested in purchasing all, or substantially
all, of the Properties. If any such offers are forthcoming, such offers could
result in the receipt by limited partners of amounts in excess of that provided
by the Purchaser's Offer or the current Promus Offer. However, there can be no
assurance that any offers other than the Promus Offer will be received, or, if
received, that such offers will be accepted.
IV. PROCEDURES FOR THE WITHDRAWAL OF UNITS PREVIOUSLY TENDERED
IN ACCORDANCE WITH SECTION 4 OF THE OFFER TO PURCHASE, LIMITED
PARTNERS
WHO HAVE TENDERED UNITS PURSUANT TO THE PURCHASER'S OFFER AND WHO NOW
WISH TO
WITHDRAW THEIR UNITS, MAY DO SO BY DELIVERING TO THE PURCHASER A WRITTEN
NOTICE
OF WITHDRAWAL ON OR PRIOR TO MARCH 25, 1996. TO BE EFFECTIVE, ANY SUCH NOTICE
OF WITHDRAWAL MUST SPECIFY THE NAME OF THE PERSON WHO TENDERED THE UNITS,
MUST
BE SIGNED BY THE PERSON(S) WHO SIGNED THE LETTER OF TRANSMITTAL IN THE SAME
MANNER AS THE LETTER OF TRANSMITTAL WAS SIGNED.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT THE
HERMAN
GROUP, INC. AT (800) 530-4966.
DEVON ASSOCIATES
March 18, 1996
EXHIBIT (z)(iii
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
R & S ASSET PARTNERS, a Florida General
Partnership, and JESSIE B. SMALL, on
their own behalves, on behalf of all
others similarly situated, and
derivatively on behalf of the Nominal
Defendants,
Plaintiffs, Civil No. BC145220
Action No. 1
v.
DEVON ASSOCIATES, CAYUGA ASSOCIATES,
L.P., CAYUGA CAPITAL CORP., FLEETWOOD
CORP., CARL C. ICAHN, MICHAEL L. ASHNER,
MARTIN LIFTON, ARTHUR N. QUELER,
INSIGNIA FINANCIAL GROUP, INC., IFGP,
CORP., NATIONAL PROPERTIES INVESTORS,
INC., NPI EQUITY INVESTMENTS II, INC.,
FOX REALTY INVESTORS, PORTFOLIO REALTY
ASSOCIATES, L.P., EMMET J. CASHIN, JR.,
JAROLD A. EVANS, W. PATRICK MCDOWELL,
APOLLO REAL ESTATE ADVISORS, L.P., and
MONTGOMERY REALTY COMPANY-85,
Defendants,
- and -
GROWTH HOTEL INVESTORS, a California
Limited Partnership and GROWTH HOTEL
INVESTORS II, a California Limited
Partnership,
Nominal Defendants.
SUPREME COURT FOR THE STATE OF NEW YORK
COUNTY OF NEW YORK
- ----------------------------------------
WILLIAM WALLACE, MILDRED WALLACE, EDITH
G. MARTIN, PAUL ALLEMANG and GWEN
ALLEMANG, on behalf of themselves and
all others similarly situated, and
derivatively on behalf of GROWTH HOTEL
INVESTORS, a California Limited
Partnership, and GROWTH HOTEL INVESTORS
II, a California Limited Partnership,
Plaintiffs, Index No. 96/00866
Action No. 2
- against -
DEVON ASSOCIATES, MONTGOMERY REALTY 85,
GHI ASSOCIATES, CAYUGA ASSOCIATES L.P.,
CAYUGA CAPITAL CORP., INSIGNIA FINANCIAL
GROUP, INC., L.P. and FLEETWOOD CORP.,
Defendants,
- and -
GROWTH HOTEL INVESTORS, a California
Limited Partnership and GROWTH HOTEL
INVESTORS II, a California Limited
Partnership,
Nominal Defendants.
- ----------------------------------------
MEMORANDUM OF UNDERSTANDING
The parties to the class and derivative actions
entitled R&S Asset Partners, et. al. v. Devon Associates, et al.,
Civil No. 145220, and William Wallace, et al v. Devon Associates,
et al., Index No. 96/00866, pending, respectively, in the
Superior Court of the State of California for the County of Los
Angeles and in the Supreme Court for the State of New York,
County of New York (the "Actions"), by their attorneys or
principals, have reached an agreement in principle providing for
the proposed settlement of the Actions on the terms and subject
to the conditions set forth below. This Memorandum of
Understanding embodies the principal terms of the proposed
agreement (the "Settlement") by and between counsel representing
the plaintiffs ("Plaintiffs' Counsel"), suing derivatively on
behalf of the two California limited partnerships named as
nominal defendants in the Actions, Growth Hotel Investors ("GHI")
and Growth Hotel Investors II ("GHI II") (collectively, the
"Partnerships"), and directly on behalf of themselves and a
putative class consisting of all holders of limited partnership
assignee units ("Units") of the Partnerships (the "Class" or
"Unitholders), and the principals or counsel for defendants DEVON
ASSOCIATES, CAYUGA ASSOCIATES, L.P., CAYUGA CAPITAL CORP.,
FLEETWOOD CORP., CARL C. ICAHN, MICHAEL L. ASHNER, MARTIN LIFTON,
ARTHUR N. QUELER, INSIGNIA FINANCIAL GROUP, INC. (referred to in
Action No. 2 as "Insignia Financial Group, Inc., L.P."), IFGP,
CORP., NATIONAL PROPERTIES INVESTORS, INC., NPI EQUITY
INVESTMENTS II, INC., FOX REALTY INVESTORS, PORTFOLIO REALTY
ASSOCIATES, L.P., EMMET J. CASHIN, JR., JAROLD A. EVANS, W.
PATRICK MCDOWELL, APOLLO REAL ESTATE ADVISORS, L.P., and
MONTGOMERY REALTY COMPANY-85 (referred to in Action No. 2 as
"Montgomery Realty-85"), and GHI ASSOCIATES (Plaintiffs and
Defendants are referred to collectively as the "Parties").
1. The Parties will in good faith execute an
appropriate stipulation of settlement (the "Stipulation of
Settlement") and such other documentation as may be required to
obtain court approval of the Settlement upon the terms set forth
in this Memorandum of Understanding and such other terms to which
the Parties may hereafter agree. The Stipulation of Settlement
will expressly provide, inter alia, that all Defendants have
denied, and continue to deny, that they have committed any
wrongdoing or violations of law or of any fiduciary or other
obligation, and that they are entering into the Stipulation of
Settlement solely because the proposed Settlement will eliminate
the burden, expense and risk of further litigation. The
Stipulation of Settlement will expressly provide, inter alia, for
a release by Plaintiffs, the Class and the Partnerships of all
claims arising out of or relating to the outstanding tender
offers of Devon Associates for Units (the "Tender Offers") and
any and all claims, whether direct or derivative, which have been
or could have been asserted in the Actions. In exchange for the
settlement of the Actions and release of all claims made therein,
the Defendants agree to provide the following.
2. Defendant Montgomery Realty Company-85, the
general partner of the Partnerships (the "General Partner"),
agrees to take any such actions as are reasonably necessary and
consistent with its fiduciary duties to procure offers for the
purchase of the assets (or the underlying real estate) of the
Partnerships which maximize the value of the Units. In
connection therewith, the General Partner shall deal fairly and
in good faith with persons or entities expressing an interest in
making a bona fide offer to purchase the assets or underlying
real estate of the Partnerships, and, consistent with the General
Partner's fiduciary duties and subject to execution and
compliance with customary confidentiality agreements, will
provide all bona fide offerors with access to the Partnerships'
books and records for purposes of due diligence. If after taking
such actions, the General Partner determines, consistent with its
fiduciary duties, to accept an offer or offers to purchase all or
substantially all of the Partnerships' assets or underlying real
estate, it will, consistent with its fiduciary duties and
contractual obligations to others, prepare a proposed plan of
liquidation for each Partnership and submit such plans to a vote
of the Unitholders and, thereafter, shall implement such plans if
approved by the holders of the requisite number of outstanding
Units in the Partnerships as required by the Amended and Restated
Partnership Agreements of the Partnerships (the "Partnership
Agreements"). To the extent anything in this paragraph 2 or in
any paragraph of this Memorandum of Understanding conflicts with
the express obligations of the General Partner set forth in the
Partnership Agreements, the Partnership Agreements shall govern.
3. The General Partner shall make available to
Plaintiffs' Counsel all materials and correspondence (a) sent by
the General Partner in connection with the solicitation of
interested bidders, (b) sent by the General Partner in response
to any offers or expressions of interest; and (c) all
correspondence received by the General Partner in response to any
solicitation and any offers which were not solicited. The
General Partner agrees to allow Plaintiffs' Counsel to comment
upon the solicitation process.
4. Upon the execution of this Memorandum of
Understanding, Devon Associates will mail to all Unitholders
copies of the Supplemental Disclosure that is attached hereto as
Exhibit A.
5. The consummation of the Settlement is expressly
conditioned upon the entry of a final order dismissing the
Actions and the entry of an order barring with prejudice and
without costs any and all class and derivative claims arising out
of or relating to the Tender Offers and any and all claims,
direct or derivative, that have been or could have been asserted
in the Actions, in any other forum or proceeding, against the
Defendants, their subsidiaries, parents, affiliates,
predecessors, officers, directors, agents, successors or assigns,
or the employees, agents, representatives, officers or directors
of any of them, by or on behalf of the Class, the Partnerships or
all persons or entities who own Units, as well as their
successors and assigns (whether express, by implication or by
operation of law).
6. The Parties will present the Stipulation of
Settlement either to the Superior Court of California or to the
Supreme Court of New York (the "Court") for approval as soon as
practicable, and will use their best efforts to obtain Final
Approval of the Settlement (defined below) and the dismissal of
the Actions with prejudice and without costs to any party (except
such attorneys' fees and expenses as may be awarded by the Court
and the expenses of notice as provided in paragraph 11 hereof).
Final Approval of the Settlement shall not be deemed to have
taken place until the Court shall have approved the Settlement
and the dismissal of the Actions with prejudice and without
costs, final judgment has been entered, and the time for all
appeals therefrom shall have expired ("Final Approval").
7. Prior to the submission of a Stipulation of
Settlement and supporting papers to the Court, Plaintiffs shall
be entitled to conduct such additional investigation and
reasonable discovery (whether formal or informal) to further
confirm the fairness and reasonableness of the Settlement as they
deem reasonably necessary under the circumstances. The Parties
and their counsel will cooperate in arranging for such discovery
in an expeditious manner at mutually convenient times.
8. The Settlement reflected in this Memorandum of
Understanding is subject to approval of the Court. In the event
the Court declines to approve this Settlement, this Memorandum of
Understanding, together with any Stipulation of Settlement and
any order approving the representative Plaintiffs shall be null
and void and shall have no continuing effect, and no reference to
the fact of a proposed settlement or the terms thereof shall be
made to any court or shall be used in any proceeding against the
Defendants or the Plaintiffs as a concession of liability or lack
thereof or for any purpose whatsoever by any person or entity.
9. This Memorandum of Understanding shall in no event
be construed or be deemed to be evidence of an admission or
concession on the part of any Defendant with respect to any claim
or any fault or liability or damages whatsoever. Each Defendant
denies any and all wrongdoing of any kind whatsoever in
connection with the Partnerships, denies any liability in the
Actions, and does not concede any infirmity in the defenses which
each Defendant may assert. Each Defendant is entering into this
Memorandum of Understanding solely to avoid further expense,
inconvenience, and delay and to dispose of expensive, burdensome
and protracted litigation.
10. Notwithstanding any other paragraph hereof, the
Defendants will pay the reasonable out-of-pocket costs and
expenses of notification to the Class of this Settlement,
regardless of whether Final Approval of the Settlement is
obtained.
11. The consummation of the Settlement is subject to
the completion by Plaintiffs of discovery described above, final
agreement as to appropriate Stipulation(s) of Settlement, and
such other documentation as may be required to effect Final
Approval of the Actions. The Settlement contemplated by this
Memorandum of Understanding will not be binding upon any party
until such discovery has been completed and appropriate
Stipulation(s) of Settlement have been signed, the Settlement and
the Dismissal of the Actions with prejudice and without costs has
been obtained, and judgments are final. This Memorandum of
Understanding shall be null and void and of no force and effect
should any of these conditions not be met or should Plaintiffs'
Counsel reasonably determine that any Party has failed to act in
material compliance with their obligations hereunder. In that
event, this Memorandum of Understanding shall not be deemed to
prejudice in any way the positions of the Parties or any
Defendants with respect to the Actions. In all events, this
Memorandum of Understanding shall not be deemed, utilized or
offered to prejudice in any way the position of any of the
Parties or any Defendants with respect to the Actions or
otherwise.
12. Except as may be provided for in paragraph 7
above, all dates for the service of responsive pleadings or for
the taking of any other action in connection with the Actions are
hereby adjourned without date, subject to reinstatement upon
reasonable notice to the Parties.
Dated: New York, New York
March 14, 1996
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
By: _____________________________
Andrew D. Friedman, Esq.
Attorneys for Plaintiffs
R&S Asset Partners and
Jessie B. Small
805 Third Avenue, 7th Floor
New York, New York 10022
(212) 935-7400
GOODKIND LABATON RUDOFF
& SUCHAROW, LLP
By: ______________________________
Lynda J. Grant, Esq.
Attorneys for Plaintiffs
William and Mildred Wallace,
Edith G. Martin and
Paul and Gwen Allemang
100 Park Avenue
New York, New York 10017
(212) 907-0700
BEIGEL SCHY LASKY RIFKIND
FERTIK & GELBER
By: _____________________________
Leigh Lasky, Esq.
Attorneys for Defendants
Devon Associates, Cayuga
Associates, L.P., Cayuga
Capital Corp., Michael L.
Ashner, Martin Lifton,
Arthur N. Queller, Apollo
Real Estate Advisors, L.P.
Emmet J. Cashin, Jr., Jarold A.
Evans and W. Patrick McDowell
750 Lexington Avenue
New York, New York
(212) 705-5300
NIXON, HARGRAVE, DEVANS & DOYLE LLP
By: _______________________________
Adam B. Gilbert, Esq.
Attorneys for Defendants
Montgomery Realty Company-85
Growth Hotel Investors,
Growth Hotel Investors II
and GHI Associates
437 Madison Avenue
New York, New York 10022
(212) 940-3000
ROGERS & WELLS
By: ______________________________
David Schulz, Esq.
Attorneys for Defendants
Fleetwood Corp. and Carl C. Icahn
200 Park Avenue
New York, New York 10166
(212) 878-8000
PROSKAUER ROSE GOETZ & MENDELSOHN
LLP
By: _____________________________
Thomas C. Moore, Esq.
Attorneys for Defendants
Insignia Financial Group, Inc.,
IFGP, Corp., National Properties
Investors, Inc. NPI Equity
Investments II, Inc. and Fox
Realty Investors
1585 Broadway
New York, New York 10036
(212) 969-3000
PORTFOLIO REALTY ASSOCIATES, L.P.
By: _____________________________
W. Patrick McDowell
EXHIBIT (z)(v
[PROMUS HOTEL CORPORATION LETTERHEAD]
March 15, 1996
Via Facsimile
Growth Hotel Investors
Attn: General Partner
One Insignia Financial Plaza
Greenville, South Carolina 29602
Growth Hotel Investors II
Attn: General Partner
One Insignia Financial Plaza
Greenville, South Carolina 29602
Ladies and Gentlemen:
This is to inform you that the Board of Directors of Promus Hotel
Corporation approved our offer to you dated March 11, 1996 and
amended March 12, 1996.
Enclosed is a breakdown of the valuations that were the basis of
our offer on a per property basis. Our offer is for the package
of 28 hotels and we want to discuss allocation of the purchase
price to maximize advantage to all parties. We wish to meet with
you at your earliest convenience to appropriately allocate the
offer among the partnerships as well.
Although we do not have the information necessary to be
completely confident as to the value of our offer on a "per unit"
basis, based upon your estimated $101,500.00 distribution upon
consummation of our offer, and 95,914 units of the two
partnerships outstanding, we calculate an estimated $1,058.24 per
unit for the limited partners of both GHI and GHI II if an equal
amount were to be distributed for each unit.
We are confident that we can finance the proposed purchase with
one of our lenders and our existing credit facilities. Our offer
is not contingent on obtaining financing. We further believe
that in the event of a prompt meeting to fully discuss relevant
information we may be able to reduce the due diligence period to
under 30 days since we are familiar with many of the hotels.
It is our desire to meet with you as soon as possible so that we
both may adequately define our offer in order for you to make a
fully informed comparison between the value of our offer and
other outstanding offers and describe the difference to your unit
holders. Since we believe our offer represents a very
advantageous proposal to your partnerships, we would hope that
the parties can come to a prompt meeting of the minds and closing
of this transaction.
Very truly yours,
/s/
Michael D. Rose
MDR/de
Attachment
PROMUS HOTEL CORPORATION
Growth Hotel Investors & Growth Hotel Investors II
Property Listing & Purchase Price
Property Name Purchase
Price
Memphis - Sycamore View 3,427,834
Columbia, SC 5,641,771
Spartanburg, SC 2,297,904
N. Little Rock, AR 4,720,498
Amarillo, TX 3,988,328
Greenville, SC 4,732,242
Charleston, SC 5,042,739
Memphis - Poplar, TN 7,750,115
Atlanta - Roswell, GA 6,512,365
Dallas - Richardson, TX 4,678,741
Nashville - Briley, TN 6,155,509
Greensboro, NC 6,580,390
Birmingham, AL 6,249,461
San Antonio, TX 3,803,509
Madison Heights, MI 3,870,129
Chapel Hill, NC 8,543,591
Mountain Brook, AL 5,825,253
Atlanta - Northlake, GA 5,702,944
North Dallas 8,511,711
Syracuse 2,842,905
Brentwood 6,132,185
Aurora 5,873,889
Albuquerque North 6,964,874
Kansas City 5,570,852
Eden Prairie 5,089,980
Dublin 4,659,283
St. Louis 5,270,980
Colorado Springs 2,960,018
TOTAL PORTFOLIO VALUE 147,400,000
