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.
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(Name of Subject Company)
SECURED INCOME L.P.
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(Name of Person(s) Filing Statement)
UNITS OF LIMITED PARTNERSHIP INTEREST
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(Title of Class of Securities)
813901105
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(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"). The address of the principal executive
offices of the Partnership is c/o Wilder Richman Resources Corporation, 599 W.
Putnam Avenue, Greenwich, CT 06830, and its telephone number is (203) 869-0900.
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" and, together with WRRC, the
"Affiliated General Partners").
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 June 26, 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 "Offer") by West Putnam
Housing Investors II, LLC (the "Purchaser"), to purchase up to 451,235 of the
outstanding Units at a purchase price (the "Offer Price") of $15.75 per Unit,
net to the seller in cash, subject to reduction as provided below, without
interest, upon the terms and subject to the conditions set forth in an Offer to
Purchase dated June 26, 2000 (the "Offer to Purchase"). Among other things, the
Offer to Purchase provides that by their tender of Units, Unit Holders assign to
the Purchaser any distributions that they may be entitled to receive from the
Partnership in respect of the tendered Units after the acceptance of Units for
payment in the Offer and that the purchase price will be reduced by any amount
per Unit distributed to Unit Holders prior to the acceptance of Units for
payment in the Offer. The Partnership has announced that it intends to make a
distribution of approximately $8.35 per Unit from the proceeds of the
refinancing of the Westmont property in which the Partnership is invested. The
distribution is expected to be paid on or about July 31, 2000 to Unit Holders of
record on June 30, 2000.
Purchaser has filed a Tender Offer Statement on Schedule TO with
respect to the Offer.
The address of the Purchaser's principal executive offices is 599 W.
Putnam Avenue, Greenwich, CT 06830.
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
below in this Item 3 and in Item 13 of the Partnership's Annual Report on Form
10-K (including the
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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.
According to the Offer to Purchase, the Purchaser is a newly-formed
limited liability company with three members: West Putnam Housing Investors LLC,
its sole managing member (the "Purchaser Managing Member"), MJL Westmont, L.L.C.
and Columbus Development Associates, L.P. West Putnam Housing Investors LLC, MJL
Westmont, L.L.C. and Columbus Development Associates, L.P. each own 33-1/3% of
Purchaser. The Purchaser Managing Member's sole managing member is Mr. Richard
P. Richman. Mr. Richman beneficially owns approximately 75% of the equity
interest in the Purchaser Managing Member, and Mr. Robert H. Wilder, Jr. owns
the remaining approximately 25% equity interest. The sole member of MJL
Westmont, L.L.C. is Mr. Michael J. Levitt. Mr. Joel Picket has direct and
indirect beneficial ownership interests in Columbus Development Associates, L.P.
a limited partner in Columbus Westmont Associates L.P. (the "Columbus
Partnership"), one of the operating partnerships in which the Partnership is
invested. The Purchaser Managing Member owns 40,961 Units, or 4.2% of the
outstanding Units, which it acquired in a tender offer consummated in August
1998.
Of the Partnership's three General Partners, Mr. Richman
beneficially owns approximately 50% of the equity interest in WRRC and is
president and a director of that corporation. Mr. Wilder beneficially owns
approximately 50% of the equity interest in WRRC and is executive vice president
and a director of that corporation. WRC-87A is owned one-half by WRRC and
one-half by Real Estate Equity Partners Inc. ("REEPI"), the corporate general
partner of REEP. Mr. Richman is executive vice president, secretary, treasurer
and a director of WRC-87A. Mr. Richman, Mr. Wilder and the other holders of
equity interests in the Purchaser are collectively referred to as the "Purchaser
Affiliates." REEP, until recently, was an affiliate of Lehman Brothers Inc. and
is now controlled by an affiliate of Apartment Investment and Management Company
(together with its successors and assigns, "Aimco"). Since the commencement of
operations of the Partnership, Wilder Richman Management Corp., an affiliate of
the Purchaser and the Affiliated General Partners, has provided property
management services to Carrollton X Associates Limited Partnership, one of the
operating partnerships in which the Partnership has invested (the "Carrollton
Partnership") and has been compensated for those services. Interstate Realty
Management Company, wholly owned by Mr. Levitt and his family members, an
affiliate of the Purchaser and the Affiliated General Partners, has provided
property management services to the Columbia Partnership and has been
compensated for those services. WRC-87A is also a special limited partner of
Columbia Associates and the Carrollton Partnership.
By reason of these relationships and their affiliation with the
Purchaser, the Affiliated General Partners have conflicts of interest with
respect to the Offer. In the case of WRC-87A, this conflict is limited to the
interests of Messrs. Richman and Wilder in WRRC, which owns 50% of WRC-87A,
since Aimco, which owns (through its interest in REEPI) half of the equity
interest in WRC-87A, has no interest in the Purchaser or in the Offer. The
Purchaser is making the Offer with a view towards realizing a profit for the
benefit of the Purchaser Affiliates, which collectively own 33-1/3% of the
equity of the Purchaser. Messrs. Richman and Wilder, who also control or share
control over the Affiliated General Partners, and the other Purchaser Affiliates
may be expected to realize a greater profit on the Purchaser's investment in
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the Units to the extent that the Purchaser is able to acquire the Units in an
offer with a lower purchase price. It is in the interest of the Unit Holders
desiring to sell their Units to receive the highest possible price for such
Units available in the circumstances. This may result in a conflict between the
fiduciary obligations of the Affiliated General Partners to act in the best
interests of the holders of Units and the desire of the persons controlling the
Affiliated General Partners to further their own economic interests.
The Purchaser has stated that it will seek to be admitted to the
Partnership as a substituted Unit Holder upon consummation of the Offer and,
when admitted, will have the right to vote each Unit purchased pursuant to the
Offer. Even if the Purchaser is not admitted to the Partnership as a substituted
Unit Holder, the Purchaser has indicated that it will have the right to vote
each Unit purchased in the Offer pursuant to the irrevocable appointment by
tendering Unit Holders of the Purchaser and its managing member and designees as
proxies with respect to the Units tendered by such Unit Holders and accepted for
payment by the Purchaser. As a result, if the Purchaser is successful in
acquiring a significant number of Units pursuant to the Offer, the Purchaser
will have the right to vote those Units and thereby significantly influence all
voting decisions of the Unit Holders with respect to the Partnership. If the
maximum number of Units sought to be acquired by Purchaser in the Offer are
purchased, the Purchaser, together with the Purchaser Managing Member, would own
a majority interest and a majority of the voting power of the limited partners
in the Partnership. In general, the Purchaser has indicated that it will vote
the Units owned by it in whatever manner it deems to be in its and the Purchaser
Affiliates' best interests, which, because of their relationship with the
Affiliated General Partners, also may be in the interest of the Affiliated
General Partners, but may not be in the interest of other Unit Holders. This
could (i) prevent the other Unit Holders from taking action that the Purchaser
opposes, and (ii) enable the Purchaser to take action opposed by the other Unit
Holders. Under the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Limited Partnership Agreement"), Unit Holders holding a
majority of the Units are entitled to take action (without concurrence of the
General Partners) 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. Because of different financial, tax and
other circumstances of affiliates of the Purchaser and the other Unit Holders,
it may be in the interest of the Purchaser to cause the liquidation of the
Partnership, or the sale or refinancing of the assets in which the Partnership
is invested through the Operating Partnerships, at a time when such action is
not in the best interest of the other Unit Holders, or vice versa. This could
result in a conflict for the Affiliated General Partners in attempting to
reconcile the interests of the Purchaser and its controlling persons with whom
they are affiliated and the interests of the other Unit Holders.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
This Statement relates to the recommendation by the Partnership with
respect to the 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.
Because of the existing and potential future conflicts of interest
described in Item 3 above and for the reasons set forth below, the Partnership
and the General Partners are making
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no recommendation as to whether Unit Holders should tender their Units in
response to the 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, among other things, the Partnership's most
recent Annual Report and Quarterly Report and the considerations noted below.
Price
The Offer to Purchase notes that the Offer Price of $15.75 per Unit
has been determined solely by the Purchaser and does not necessarily reflect the
fair 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, and one additional offer at $7.00 per Unit by
the Purchaser Managing Member. In 1999, there was one tender offer at $8.00 per
Unit 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. In May 2000, there was another tender offer at $7.27 per Unit by a
party that was unaffiliated with the Partnership.
The Partnership does not believe that the offer price in the 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 Offer represents an opportunity to do so.
Partnership Business and Prospects; 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, the Columbia Partnership, which owns the
Westmont property in New York City, and the Carrollton 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, Inc., the Investor Services Agent for the Partnership, at
1-888-594-1397.
On June 7, 2000, the Columbia Partnership refinanced mortgages on
the Westmont property. In connection with such refinancing, the Columbia
Partnership caused Freddie Mac to replace Citibank as the credit enhancer,
modified the structure and utilization of the mortgage escrows, and eliminated
the cash distribution restrictions. The Partnership understands that after the
payment of costs related to the refinancing of the Columbia Partnership
mortgages and the establishment of certain reserves, the Columbia Partnership
will have cash available for distribution of approximately $11.8 million. The
Partnership further understands
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that the Columbia Partnership intends to use such amount to (a) make a
distribution to the Partnership of approximately $8.3 million, (b) repay
operating deficit loans and other advances that the general partners of the
Columbia Partnership have provided (including interest) of approximately
$3,246,000, and (c) pay accrued investor service fees of approximately $160,000.
The Partnership currently anticipates that a distribution from the
proceeds of the Westmont refinancing will be made on or about July 31, 2000 to
Unit Holders of record as of June 30, 2000 in the amount of approximately $8.35
per Unit. As noted in the Offer to Purchase, a Unit Holder that does not tender
will in any event receive a distribution of approximately such distribution of
$8.35 per Unit, compared to the Offer Price of $15.75 per Unit. The Offer to
Purchase further notes that Unit Holders who tender in the Offer will not
receive both the Offer Price and the $8.35 per Unit distribution; if the
distribution is made prior to the acceptance of Units for purchase in the Offer,
the amount of the distribution will be deducted from the Offer Price.
The Partnership currently has the right in the case of the Columbia
Partnership to commence the process of liquidating its investment in the
Westmont, subject to certain restrictions. The Partnership intends to explore a
process to market the properties in the near future. However, it is also
anticipated that a potential sale and liquidation of the Partnership would not
occur for at least fifteen months. As the Offer to Purchase notes, Unit Holders
who do not dispose of their Units in the Offer and continue to hold their Units
will maintain the potential to participate in any potential future cash flow
distributions and/or potential residual value in the real estate in which the
Partnership is indirectly invested.
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 July 25,
2000 expiration date of the Offer. However, there can be no assurance that any
such additional offer to purchase Units 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 such offer, the Partnership would anticipate making no
recommendation as to whether Unit Holders should tender their Units in response
to any such offer.
Other Considerations
The Partnership believes that Unit Holders should be aware that,
since the Offer seeks to purchase only some, and not all, of the Units, if any
Unit Holders tender Units in the Offer, the Purchaser may purchase less than all
of the Units tendered by each Unit Holder. Accordingly, each Unit Holder may
continue to hold Units in the Partnership at a time when the Purchaser may hold
a significant number of Units and may seek to vote those Units in a manner
adverse to other Unit Holders. The Offer applies to only a maximum of
approximately 45.84% of the outstanding Units. The Offer will apply to fewer
Units to the extent required so that consummation of the Offer would not result
in a termination of the Partnership for federal income tax purposes. If more
Units are tendered than are sought by the Purchaser in the Offer, the Purchaser
will only accept Units on a pro rata basis, meaning that Unit Holders who wish
to
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sell all of their Units may not be able to do so. Also, the Purchaser will not
accept Units from a tendering holder to the extent that the Holder would remain
with a number of Units that is greater than zero but less than 250 Units (100
Units in the case of Units held in an IRA, Keogh Plan or other qualified plan).
As stated by the Purchaser in the Offer to Purchase, if the Offer is
consummated and the Purchaser is successful in acquiring a significant number of
votes pursuant to the Offer, the Purchaser will be in a position to
significantly influence all voting decisions with respect to the Partnership. As
a practical matter, if the Purchaser acquires a sizeable percentage of Units,
even if the number of Units owned by the Purchaser and its affiliates is less
than a majority of the Units, the Partnership may find it difficult or
impossible to take action requiring a Unit Holder vote (such as liquidation or
sale of substantially all of its assets) without the approval of the Purchaser
and its affiliates.
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 Offer before deciding whether to
tender Units. There will be certain tax consequences to individual Unit Holders
as a result of accepting the 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. Also, the tax consequences
to Unit Holders whose Units are purchased in the Offer may be different from the
tax consequences to Unit Holders who do not tender their Units in the Offer and
receive the distribution from the proceeds of the Westmont refinancing. 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 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
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 recommendations to Unit
Holders on the Partnership's behalf concerning the 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.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
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The Partnership is not currently involved in any negotiation in
response to the Offer regarding a tender offer for or other acquisition of
securities by or of the Partnership. The Partnership is not engaged in any
negotiation in response to the 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 (except for the distribution of the
proceeds of the Westmont refinancing as noted in Item 4 above).
ITEM 8. ADDITIONAL INFORMATION.
None.
ITEM 9. EXHIBITS.
99.1 Form of letter to Unit Holders of the Partnership dated June
26, 2000.
99.2 The Partnership's Annual Report on Form 10-K, dated March 30,
2000 (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: June 26, 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
99.1 Letter to Unit Holders from the Partnership dated June 26,
2000.
99.2 The Partnership's Annual Report on Form 10-K, dated March 30,
2000.
(Filed with the SEC (File No. 0-17412), and incorporated herein by
reference.)
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