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. 1)
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SENIOR INCOME FUND L.P.
(NAME OF SUBJECT COMPANY)
SENIOR INCOME FUND L.P.
(NAME OF PERSON FILING STATEMENT)
Units of Limited Partnership Interests
(TITLE OF CLASS OF SECURITIES)
820930 10 5
(CUSIP NUMBER OF CLASS OF SECURITIES)
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Moshe Braver
SENIOR INCOME FUND INC.
3 World Financial Center, 29th Floor
New York, New York 10285
(212) 526-3237
(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT)
Copies to:
Patrick J. Foye, Esq.
SKADDEN, ARPS, SLATE
MEAGHER & FLOM LLP
919 Third Avenue
New York, New York 10022
(212) 735-2274
This Amendment No. 1 amends and supplements the following
Item of the Solicitation/Recommendation Statement on Schedule
14D-9 of Senior Income Fund L.P. filed with the Securities
Exchange Commission on November 21, 1996 (the "Schedule 14D-
9"). Unless otherwise indicated, all capitalized terms used
but not defined in this Amendment No. 1 have the meanings set
forth in the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
Item 9 is hereby supplemented by adding the following:
(a)(2) Form of letter from the Senior Income Fund L.P.
to Unitholders, dated December 5, 1996.
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: December 5, 1996
SENIOR INCOME FUND L.P.
By: Senior Income Fund Inc.,
its General Partner
By: /s/ Moshe Braver
-------------------------
Name: Moshe Braver
Title: President
EXHIBIT INDEX
Exhibit Description Page
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(a)(2) Form of letter from Senior Income Fund
L.P. to the Unitholders, dated
December 5, 1996.
Exhibit (a)(2)
December 5, 1996
Dear Unitholder:
We recently forwarded to you amended offering materials from
LAVRA, Inc. and ARV Assisted Living, Inc. (together, the "Bidders")
which reflect the Bidders' revised offer to purchase a portion of the
outstanding units of limited partnership interests ("Units") of
Senior Income Fund L.P. (the "Partnership") at $6.50 per Unit, less
the amount of any distributions made by the Partnership after
November 8, 1996 (the "ARV Offer").
IMPORTANT: The Partnership has declared a $0.60 per Unit special
cash distribution to be paid to all Unitholders on or about December
12, 1996. Accordingly, the ARV Offer is really $5.90 net cash to
you, not $6.50.
WE RECOMMEND THAT YOU REJECT THE ARV OFFER FOR THE FOLLOWING REASONS:
* RECEIPT OF HIGHER OFFERS. The Partnership has recently received
unsolicited bona fide offers from credible third parties
involved in the congregate care industry to purchase all its
assets. One offer is currently at a price which, together with
the $0.60 per Unit special cash distribution discussed above,
would result in cash distributions in excess of the ARV Offer to
all Unitholders who do not tender their Units. In addition, as
discussed below, such cash distributions would be made in
respect of all your Units as opposed to only 51% of your Units
if all outstanding Units are tendered to the Bidders. Although
there can be no assurance that any sale actually will be
consummated or that any particular price can be obtained, THE
PARTNERSHIP BELIEVES THAT COMPETITIVELY MARKETING ALL ITS
PROPERTIES FOR SALE WILL ENABLE IT TO PAY A GREATER RETURN TO
YOU IN RESPECT OF ALL YOUR UNITS THAN IF YOU TENDER THEM TO THE
BIDDERS.
* BIDDERS' COERCIVE PARTIAL OFFER. The Bidders are offering to
purchase 51% of the outstanding Units, just enough to give them
majority control of your Partnership. If all outstanding Units
are tendered in the ARV Offer, the Bidders will purchase only
51% of your Units, leaving the other half of your investment in
a partnership controlled by the Bidders. In addition, keep in
mind that the Bidders are offering to buy your Units so that
they can make a profit for themselves -- and ask yourself how
much of that profit may come in the future at your expense.
Finally, remember that the Bidders have stated in filings with
the Securities and Exchange Commission that they may attempt to
remove the current manager of the Partnership's properties, a
company unaffiliated with the Partnership, and install
themselves as the manager.
* ADVERSE TAX CONSEQUENCES. By purchasing a majority interest in
the Partnership, the Bidders will automatically cause a
constructive termination of the Partnership for tax purposes, an
event that under tax laws currently in effect may be
disadvantageous to many Unitholders.
AND THERE IS AN ALTERNATIVE
WE BELIEVE THAT A PROPERLY CONDUCTED SALE OF THE PARTNERSHIP'S
PROPERTIES WILL BRING YOU AN AMOUNT IN EXCESS OF THE ARV OFFER FOR
ALL (NOT 51%) OF YOUR UNITS. The Partnership has already begun to
implement the first stages of its plan to competitively market all
its assets for sale, including selecting a recognized real estate
broker with expertise in the congregate care industry. This process
will be open to all interested buyers, including the Bidders, and is
anticipated to be completed during 1997. This marketing effort
should facilitate the Partnership's goal of obtaining the highest
price for all its assets, thereby maximizing the value of all (not
51%) of your Units. Although there can be no assurance that any sale
actually will be consummated or that any particular price can be
obtained, THE PARTNERSHIP EXPECTS THAT PROCEEDS FROM A SALE OF THE
PARTNERSHIP'S PROPERTIES, TOGETHER WITH ITS REMAINING CASH, WOULD
RESULT IN CASH DISTRIBUTIONS BEING MADE TO ALL UNITHOLDERS IN EXCESS
OF THE ARV OFFER. ALL UNITHOLDERS WHO SELL THEIR UNITS IN THE ARV
OFFER WILL LOSE THEIR RIGHT TO RECEIVE THE BENEFIT OF ANY
DISTRIBUTIONS, INCLUDING DISTRIBUTIONS FROM ANY SALE OF THE
PARTNERSHIP'S PROPERTIES.
THE PARTNERSHIP'S CONTINUOUS AND ONGOING EFFORTS TO MAXIMIZE THE
VALUE OF YOUR UNITS HAS RESULTED IN AN INCREASE OF OVER 300% FROM THE
FIRST OFFER FOR YOUR UNITS. You can check the facts:
First, on October 18, 1996, Equity Resource Bay Fund commenced a
tender offer for up to 4.9% of the outstanding Units at a purchase
price of $1.50 (the "Equity Offer"). We recommended that you reject
the offer because it was grossly inadequate and did not reflect the
true value of your Units.
Second, the Bidders contacted us and offered $4.25 per Unit for
all the Partnership's assets. We explained to them that their offer
was grossly inadequate and did not reflect the true value of the
Units because, among other things, the Partnership was in the process
of negotiating a settlement with its insurance carrier regarding
certain claims for earthquake damage to two of its properties and
attempting to resolve certain other partnership matters, all of which
together would significantly enhance the value of the Units.
Third, the Bidders commenced the ARV Offer for 42% of the
outstanding Units at a purchase price of $5.00 per Unit. We
recommended that you reject the offer because it was inadequate and
not in the best interests of either you or the Partnership. We also
informed you that the Partnership had reached a settlement with its
insurance carrier which will result in a cash payment of $3.2 million
to the Partnership and a cash distribution being made to all
Unitholders before the end of the year. Finally, we disclosed that
the Partnership had accelerated its existing plan to competitively
market all of its assets for sale and anticipated completing such
process early next year.
Fourth, just over five weeks after the Equity Offer, the Bidders
revised the ARV Offer to purchase approximately 51% of the
outstanding Units at a purchase price of $6.50 per Unit, less the
amount of certain distributions, resulting in net cash to you of
$5.90 per Unit. Once again we are recommending that you reject the
ARV Offer because it is not in the best interests of either you or
the Partnership. As discussed above, the Partnership has begun the
process of marketing all its properties for sale and declared a $0.60
per Unit special cash distribution to all Unitholders. THE
PARTNERSHIP EXPECTS THAT PROCEEDS FROM A SALE OF THE PARTNERSHIP'S
PROPERTIES TOGETHER WITH ITS REMAINING CASH WOULD RESULT IN TOTAL
CASH DISTRIBUTIONS BEING MADE TO ALL UNITHOLDERS IN EXCESS OF THE ARV
OFFER.
Although the ARV Offer provides Unitholders who desire immediate
liquidity the opportunity to receive cash for a portion of their
Units currently and avoid the inherent business, real estate, timing
and other general economic risks associated with the Partnership's
marketing of its properties followed by a subsequent distribution of
the sale proceeds to Unitholders, the sale of the Partnership's
properties, which is currently being undertaken, would result in cash
distributions to you in respect of all of your Units (not 51%). THE
PARTNERSHIP RECOMMENDS THAT YOU REJECT THE ARV OFFER AND NOT TENDER
YOUR UNITS.
If you have any questions concerning this letter, please contact
D.F. King & Co., Inc., which has been engaged by the Partnership to
assist in our response to investors' inquiries, toll free at (800)
758-5378.
Very truly yours,
/s/ Moshe Braver
Moshe Braver
President
Senior Income Fund Inc., General Partner
