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
SECURED INCOME L.P.
(Name of Subject Company)
SECURED INCOME L.P.
(Name of Person(s) Filing Statement)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
813901105
(CUSIP Number of Class of Securities)
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GINA S. SCOTTI
SECRETARY OF GENERAL PARTNER
SECURED INCOME L.P.
C/O WILDER RICHMAN RESOURCES CORPORATION
599 WEST PUTNAM AVENUE
GREENWICH, CT 06830
(203) 869-0900
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications on Behalf of
the Person(s) Filing Statement)
Copies to:
Abbe L. Dienstag, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
212-715-9100
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ITEM 1. SUBJECT COMPANY INFORMATION.
The name of the subject company is Secured Income L.P., a
Delaware limited partnership (the "Partnership"), and the address of the
principal executive offices of the Partnership is c/o Wilder Richman Resources
Corporation, 599 W. Putnam Avenue, Greenwich, CT 06830. The general partners of
the Partnership (the "General Partners") are Wilder Richman Resources
Corporation ("WRRC"), Real Estate Equity Partners, L.P. ("REEP") and WRC-87A
Corporation ("WRC-87A").
The title of the class of equity securities to which this
Statement relates is the units of limited partnership interest ("Units") of the
Partnership. As of May 18, 2000, there were 984,369 Units issued and
outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
The name and business address of the Partnership, which is the
Person filing this Statement, are set forth in Item 1 above.
This statement relates to an offer (the "Bond Purchase Offer")
by Bond Purchase, L.L.C. (the "Purchaser"), to purchase up to 49,000 of the
outstanding Units at a purchase price (the "Offer Price") of $7.27 per Unit,
less the amount of any cash distributions declared or paid with respect to the
Units between May 4, 2000 (the "Offer Date") and June 15, 2000 or such other
date to which the Bond Purchase Offer may be extended, upon the terms and
subject to the conditions set forth in an Offer to Purchase dated May 4, 2000
(the "Offer to Purchase") and the related Agreement of Transfer and Power of
Attorney/Proxy (which collectively constitute the "Offer Documents").
The Offer Documents indicate that the principal business
address of the Purchaser is P.O. Box 26730, Kansas City, MO 64196.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
The Partnership is a limited partnership and has no executive
officers or directors. There are no material contracts, agreements, arrangements
or understandings or any actual or potential conflicts of interest between the
Partnership or its affiliates on the one hand and the Partnership, the General
Partners (including the officers and directors of the General Partners) or any
other affiliates of the Partnership on the other, except to the extent noted in
Item 4 below and in Item 13 of the Partnership's Annual Report on Form 10-K
(including the Financial Statements and notes thereto filed therewith) with
respect to the year ended December 31, 1999, which is filed with the SEC as
Exhibit 99.2 to this Schedule 14D-9 and is incorporated herein by reference in
its entirety.
There are no material contracts, agreements, arrangements or
understandings or any actual or potential conflicts of interest between the
Partnership or its affiliates on the one hand and the Purchaser, its executive
officers, directors or affiliates on the other, except that an affiliate of WRRC
has advised the Partnership that it is currently considering making an offer to
acquire Units for cash. See Item 4 below.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION.
This Statement relates to the recommendation by the
Partnership with respect to the Bond Purchase Offer. A letter to the holders of
Units (the "Unit Holders") communicating the Partnership's views is filed as an
exhibit hereto and is incorporated herein by reference.
For the reasons set forth below, the Partnership and the
General Partners are making no recommendation as to whether Unit Holders should
tender their Units in response to the Bond Purchase Offer.
In considering whether to tender Units, the Partnership
believes that Unit Holders should carefully consider all of the surrounding
circumstances and available information, including the considerations noted
below.
Price
The Bond Purchase Offer is offering $7.27 for each Unit. The
Offer to Purchase for the Bond Purchase Offer notes that this price has been
determined solely at the discretion of the Purchaser and does not necessarily
reflect the true market value of each Unit. The Partnership believes that there
is no active trading market for the Units. The Partnership understands that
within the past 12 months certain Units have been sold in private transactions
at prices ranging from $1.63 to $8.60 per Unit. The Partnership also understands
that other tender offers for Units have been made in recent years by other
parties. In 1998, there were two offers by parties that were unaffiliated with
the Partnership, one at $3.50 and one at $5.00 per Unit. In 1999, there were two
tender offers, one at $7.00 per Unit by an affiliate of the Partnership (see
below) and one at $8.00 by a party that was unaffiliated with the Partnership.
In March 2000, there was a tender offer at $8.25 by a party that was
unaffiliated with the Partnership.
The Partnership does not believe that the offer price in the
Bond Purchase Offer necessarily reflects fully the underlying value of the
Partnership's assets or the potential value that might be attributed to the
Units under certain circumstances. However, Unit Holders whose individual
investment goals or financial requirements lead them to consider selling Units
for cash at this time may find that the Bond Purchase Offer represents an
opportunity to do so.
Partnership Business and Prospects; Possible Partnership
Distribution
The Partnership believes that Unit Holders should also
carefully review and consider the Partnership's business and prospects. The
Partnership is invested in two operating partnerships, Columbia Associates,
which owns the Westmont property in New York City, and Carrollton X Associates
Limited Partnership, which owns the Fieldpointe Apartments property in
Frederick, Maryland. A discussion of these investments is contained in the
Partnership's Annual and Quarterly Reports which have been distributed to
Limited Partners, are available from the SEC (including the SEC's website,
www.sec.gov) or by contacting MMS Escrow & Transfer Agency, the Investor
Services Agent for the Partnership, at 1-888-594-1397.
In particular, Limited Partners should consider possible cash
distributions from a potential refinancing or from possible cash flows from the
operating partnerships. As discussed
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in the Partnership's most recent Quarterly Report, the general partners of
Columbia Associates have engaged an agent of the Federal Home Loan Mortgage
Corporation ("Freddie Mac") for a refinancing and related transactions regarding
Columbia Associates. As explained below, such a refinancing could result in a
distribution to Limited Partners which may exceed the offer price in the Bond
Purchase Offer.
The Partnership understands that the general partners of
Columbia Associates intend to replace Citibank as the credit enhancer with
Freddie Mac, refinance Columbia Associates' mortgages, modify the structure and
utilization of the mortgage escrows and eliminate the current cash distribution
restrictions. Pursuant to current discussions, credit enhancement would be
provided for $24.2 million in tax exempt bonds and an $8.55 million conventional
mortgage. At present, both Freddie Mac's agent and the issuer of the new bonds
have issued a commitment letter, and a closing has been tentatively scheduled
for June 2000.
After the payment of costs expected to be incurred in
connection with the refinancing of Columbia Associates and the establishment of
certain reserves, Columbia Associates is expected to have an estimated surplus
of between $11.5 million and $12.5 million. The General Partners understand that
the general partners of Columbia Associates intend to use a substantial portion
of such surplus to make a distribution to the Partnership and repay operating
deficit loans and other advances that the general partners of Columbia
Associates have provided (including accrued interest) of approximately
$3,275,000. The General Partners anticipate that most funds received from
Columbia Associates would be distributed to the Partnership's limited partners
in an amount of between $7 and $10 per Unit. The amount of any distribution to
the Partnership's limited partners will be impacted by, among other things, the
amount distributed by Columbia Associates to the Partnership following the
refinancing, the payment of outstanding obligations of the Partnership and the
potential establishment of an operating reserve.
There can be no assurance that the general partners of
Columbia Associates will succeed in closing with Freddie Mac, replacing Citibank
as the credit enhancer and in achieving the other related goals. Even if the
proposed refinancing does occur, the terms of such refinancing and, accordingly,
the amount of the distribution to the Partnership, may be substantially
modified. In addition, in the event of a change in current market conditions,
such change could materially impact both Columbia Associates' distribution to
the Partnership and the Partnership's distribution to the limited partners. If
the refinancing does not occur, the Partnership's distribution to the limited
partners is unlikely to occur. There can be no assurance as to the timing of any
distribution by Columbia Associates to the Partnership, a portion of which the
Partnership would distribute to the limited partners.
Alternative Transactions
The Partnership recommends that any Unit Holders who do wish
to sell Units for cash at this time be alert to alternative transactions that
may be available, including any other offer that may be announced prior to the
June 15, 2000 expiration of the Bond Purchase Offer.
WRRC, which is one of the three General Partners of the
Partnership and one of the two shareholders of WRC-87A, another of the General
Partners of the Partnership, has advised the Partnership that affiliates of WRRC
are currently considering making an offer to
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acquire Units for cash. In 1999, another entity affiliated with WRRC made a
tender offer for Units at $7.00 per share in which it purchased 40,961 Units or
4.2% of the outstanding Units. Unlike the Bond Purchase Offer, that tender offer
was filed with the Securities and Exchange Commission, and the full disclosure
required by the SEC was furnished to holders of Units.
There can be no assurance that any such additional offer to
purchase Units, from affiliates of WRRC or any other party, will proceed or, if
it does proceed, as to the time of commencement, price or other terms of such an
offer. In light of, among other things, the potential conflicts of interest that
could exist in the event of any offer by affiliates of WRRC, the Partnership
would anticipate making no recommendation as to whether Limited Partners should
tender their Units in response to any such offer, if made, or in any alternative
offer that might then exist.
Other Considerations
The Partnership urges all Unit Holders to carefully consider
all the information contained herein and consult with their own advisors, tax,
financial or otherwise, in evaluating the terms of the Bond Purchase Offer
before deciding whether to tender Units. There will be certain tax consequences
to individual Unit Holders as a result of accepting the Bond Purchase Offer or
any other tender offer and those tax consequences could vary significantly for
each Unit Holder based on such Unit Holder's unique tax situation or other
circumstances. No independent person has been retained by the Partnership to
evaluate or render any opinion with respect to the fairness of the Offer Price
in the Bond Purchase Offer.
Intent to Tender
To the knowledge of the Partnership, none of the General
Partners and none of the current or former executive officers, directors or
affiliates of any of the General Partners or the Partnership intends to tender
pursuant to the Bond Purchase Offer any Units beneficially owned by them.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED, OR USED.
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 Unit Holders on the Partnership's behalf concerning the Bond
Purchase Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
No transactions in the Units have been effected during the
past 60 days by the Partnership or any of the General Partners or, to the
knowledge of the Partnership, by any of the current or former executive
officers, directors or affiliates of any of the General Partners or the
Partnership.
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ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
The Partnership is not currently involved in any negotiation
in response to the Bond Purchase Offer regarding a tender offer for or other
acquisition of securities by or of the Partnership. However, the Partnership is
aware that affiliates of WRRC are currently considering making an offer to
acquire Units for cash. See Item 4 above. The Partnership is not engaged in any
negotiation in response to the Bond Purchase Offer which relates to or would
result in: (1) an extraordinary transaction such as a merger or reorganization,
involving the Partnership; (2) a purchase, sale or transfer of a material amount
of assets by the Partnership; or (3) any material change in the present
capitalization or distribution policy of the Partnership.
ITEM 8. ADDITIONAL INFORMATION.
None.
ITEM 9. EXHIBITS.
99.1 Form of letter to Unit Holders of the Partnership
dated May 18, 2000.
99.2(1) The Partnership's Annual Report on Form 10-K, dated
March 30, 2000.
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(1) Filed with the SEC (File No. 0-17412), and incorporated herein by reference.
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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: May 18, 2000
SECURED INCOME L.P.
By: Wilder Richman Resources Corporation
General Partner
By: /s/ Richard P. Richman
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Name: Richard P. Richman
Title: President
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99.1 Letter to Unit Holders from the Partnership dated May 18,
2000.
99.2(1) The Partnership's Annual Report on Form 10-K, dated March
30, 2000.
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(1) Filed with the SEC (File No. 0-17412), and incorporated herein by reference.
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Exhibit 99.1
SECURED INCOME L.P.
Sponsored by Affiliates of: P.O. Box 7090
WILDER RICHMAN CORPORATION Troy, MI 48007-7090
(888) 594-1397
(248) 614-4536 FAX
May 18, 2000
INVESTOR REPORT AND STATEMENT
Re: Secured Income L.P. (the "Partnership")
Dear Unit Holder:
As you may know, a tender offer to purchase up to 4.9% of the
outstanding Units of Secured Income L.P. (the "Partnership") has been announced
by Bond Purchase, L.L.C., a Missouri limited liability company (the "Bond
Purchase Offer").
The Partnership has filed with the Securities and Exchange
Commission a statement on Schedule 14D-9 relating to the Bond Purchase Offer. A
copy of that Schedule 14D-9, which you should read carefully, is enclosed with
this letter.
As set forth in the Schedule 14D-9, the Partnership and the
General Partners of the Partnership are making no recommendation as to whether
Unit Holders should tender their Units in response to the Bond Purchase Offer.
In considering whether to tender Units, the Partnership
believes that Unit Holders should carefully consider all of the surrounding
circumstances and available information. Considerations that could affect your
decision may include, but are by no means limited to, the following:
o The Partnership understands that tender offers for Units other
than the Bond Purchase Offer have been made in recent years by
other parties, and that within the past 12 months Units have
been sold in private transactions, including other tender
offers, at prices ranging up to $8.60 per Unit.
o Consistent with previous discussions in Annual and Quarterly
Reports to Unit Holders, it is possible, but not certain, that
existing indebtedness of one of the Partnership's underlying
operating partnership investments may be refinanced or
restructured. As discussed in the March 31, 2000 Quarterly
Report (copy enclosed), such refinancing and restructuring may
occur within the next month, in a manner that could reduce, or
eliminate altogether, the
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prohibitions on potential distributions of cash flow from that
operating partnership or otherwise have implications for the
Partnership and the Unit Holders. Such a refinancing or
restructuring may result in a distribution to Unit Holders of
$7 to $10 per Unit. There can be no assurance that any such
refinancing or restructuring that would result in a
distribution to Unit Holders will be completed. Even if such a
refinancing or restructuring is completed, there can be no
assurance as to the timing or amount of any distribution to
Unit Holders.
o The Partnership understands that an affiliate of one of the
General Partners is currently considering making an offer to
acquire Units for cash. There can be no assurance that any
such offer to purchase Units, from such affiliate or any other
party, will proceed or, if it does proceed, as to the time of
commencement, price or other terms of such an offer.
The foregoing are only some of the considerations that may be
relevant to Unit Holders. These and certain other matters are mentioned in
greater detail in the enclosed Schedule 14D-9, which you should read carefully
in its entirety.
The Bond Purchase Offer states that tenders of Units will be
accepted until 5:00 p.m., on June 15, 2000 unless such date is extended, and
properly tendered Units will be accepted on a "first-received, first-buy" basis.
All Unit Holders are advised to carefully consider the Bond Purchase Offer and
the alternatives.
Very truly yours,
SECURED INCOME L.P.
By: Wilder Richman Resources Corporation,
General Partner
Gina S. Scotti
Gina S. Scotti
Secretary
