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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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AMERICAN INCOME PARTNERS III-B
LIMITED PARTNERSHIP
(NAME OF SUBJECT COMPANY)
AMERICAN INCOME PARTNERS III-B
LIMITED PARTNERSHIP
(NAME OF PERSON FILING STATEMENT)
UNITS REPRESENTING LIMITED PARTNERSHIP INTERESTS
(TITLE OF CLASS OF SECURITIES)
NONE
(CUSIP NUMBER OF CLASS OF SECURITIES)
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GEOFFREY A. MACDONALD
AFG LEASING INCORPORATED
98 NORTH WASHINGTON STREET
BOSTON, MASSACHUSETTS 02114
(617)854-5800
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is American Income Partners III-B Limited
Partnership, a Massachusetts limited partnership (the "Partnership"), which
has its principal executive offices at 98 North Washington Street, Boston,
Massachusetts 02114. The title of the class of equity securities to which this
Statement relates is units (the "Units") representing limited partnership
interests of the Partnership.
ITEM 2. TENDER OFFER OF THE BIDDER.
This Statement relates to the tender offer of Atlantic Acquisition Limited
Partnership, a Massachusetts limited partnership (the "Purchaser"), to
purchase up to 507,299 of the outstanding Units at a purchase price of $1.50
per Unit, net to the seller in cash, without interest, pursuant to the terms
and conditions of an Offer to Purchase dated August 18, 1995, and the related
Letter of Transmittal (together, the "Offer"). The Offer is being made
pursuant to a tender offer statement on Schedule 14D-1 dated August 18, 1995.
The address of the principal executive offices of the Purchaser is 98 North
Washington Street, Boston, Massachusetts 02114.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of the Partnership, which is the person
filing this Statement, are set forth in Item 1 above.
(b) The Purchaser is related to AFG Leasing Incorporated and Geoffrey A.
MacDonald, the general partners of the Partnership (the "General Partners"),
to American Finance Group ("AFG"), the sponsor of the Partnership, and to
parties related to AFG.
Certain Relationships. The General Partners own a 1% interest (with certain
exceptions not expected to apply) in the Partnership of distributable cash
from operations and from sales or refinancings. Further, subject to certain
limitations contained in the Partnership Agreement of the Partnership, the
Partnership will reimburse the General Partners and their affiliates for
certain expenses incurred by them in connection with Partnership operations
and will pay certain fees pursuant to the terms of the Partnership Agreement.
For information as to the amounts paid to the General Partners and their
affiliates during the last three fiscal years and the six months ended June
30, 1995, see Note 4 to the Financial Statements of the Partnership in the
Form 10-K of the Partnership for the fiscal year ended December 31, 1994, and
Note 5 to the Financial Statements of the Partnership in the Form 10-Q of the
Partnership for the six months ended June 30, 1995.
The general partner of the Purchaser is AAL, Inc., a newly-formed
Massachusetts corporation ("AAL, Inc."). The directors, officers and
stockholders of AAL, Inc. are Gary D. Engle and James A. Coyne. Mr. Engle
controls AFG and the Purchaser. Messrs. Engle and Coyne and Geoffrey A.
MacDonald are the initial limited partners of the Purchaser. AFG controls AFG
Leasing Incorporated, one of the General Partners. Mr. MacDonald is the other
General Partner.
Tender Offer Loan. As disclosed in the Offer, the Purchaser will obtain a
loan in connection with the consummation of the Offer. The Purchaser plans to
service the loan with cash distributions attributable to the Units it
acquires. A primary possible source of such cash distributions is the
Purchaser's distributable portion of the proceeds of any sale or refinancing
of the Partnership's equipment. Consequently, the General Partners may have a
conflict of interest in determining whether and when to sell and/or refinance
the Partnership's equipment.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Because of the inherent conflict of interest resulting from the
relationships among the General Partners, the Purchaser and AFG, the
Partnership is making no recommendation and is remaining neutral as to whether
Unitholders should tender their Units pursuant to the Offer.
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ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Neither the Partnership nor any person acting on its behalf has or currently
intends to employ, retain or compensate any person or class of persons to make
solicitations or recommendations to Unitholders on its behalf concerning the
Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) None.
(b) Neither the Partnership nor either General Partner, or any executive
officer, director, affiliate or subsidiary of the Partnership or either
General Partner, owns any Units.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
None.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
None.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit (a)(i) --Cover Letter to Unitholders from the Partnership dated
August 18, 1995.
Exhibit (b) --None.
Exhibit (c)(i) --Note 4 to the Financial Statements of the Partnership
included in the Form 10-K of the Partnership for the fiscal
year ended December 31, 1994.
Exhibit (c)(ii)--Note 5 to the Financial Statements of the Partnership
included in the Form 10-Q of the Partnership for the six
months ended June 30, 1995.
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SIGNATURES
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: August 18, 1995
AMERICAN INCOME PARTNERS III-B
LIMITED PARTNERSHIP
By: AFG Leasing Incorporated, its
general partner
By: /s/ Geoffrey A. MacDonald
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Name: Geoffrey A. MacDonald
Title:President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
------- ----------- -------------
<C> <S> <C>
Exhibit (a)(i) Cover Letter to Unitholders from the
Partnership dated August 18, 1995.
Exhibit (b) None.
Exhibit (c)(i) Note 4 to the Financial Statements of the
Partnership included in the
Form 10-K of the Partnership for the fiscal
year ended December 31, 1994.
Exhibit (c)(ii) Note 5 to the Financial Statements of the
Partnership included in the
Form 10-Q of the Partnership for the six
months ended June 30, 1995.
</TABLE>
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AMERICAN INCOME PARTNERS III-B
LIMITED PARTNERSHIP
98 North Washington Street
Boston, Massachusetts 02114
August 18, 1995
Dear Unitholder:
Enclosed is a copy of the Schedule 14D-9 which was filed by American Income
Partners III-B Limited Partnership (the "Partnership") with the Securities and
Exchange Commission in connection with the offer by Atlantic Acquisition
Limited Partnership (the "Purchaser") to purchase Units representing limited
partnership interests of the Partnership.
The Purchaser is related to the general partners of the Partnership, to
American Finance Group ("AFG"), which is the sponsor of the Partnership, and
to parties related to AFG. Accordingly, the Partnership is making no
recommendation and is remaining neutral as to whether Unitholders should
tender their Units pursuant to the offer.
Unitholders are advised to read carefully the enclosed Schedule 14D-9.
AMERICAN INCOME PARTNERS III-B
LIMITED PARTNERSHIP
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AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP
FORM 10-K--DECEMBER 31, 1994
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4--RELATED PARTY TRANSACTIONS
All operating expenses incurred by the Partnership are paid by AFG on behalf
of the Partnership and AFG is reimbursed at its actual cost for such
expenditures. Fees and other costs incurred during each of the three years in
the period ended December 31, 1994, which were paid or accrued by the
Partnership to AFG or its Affiliates, are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Equipment management fees........................ $ 92,431 $104,953 $217,961
Administrative charges........................... 12,000 14,955 12,000
Reimbursable operating expenses due to third par-
ties............................................ 146,185 92,152 131,794
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Total........................................ $250,616 $212,060 $361,755
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</TABLE>
As provided under the terms of the Management Agreement, AFG is compensated
for its services to the Partnership. Such services include all aspects of
acquisition, management and sale of equipment. For acquisition services, AFG
is compensated by an amount equal to 4.75% of Equipment Base Price paid by the
Partnership. For management services, AFG is compensated by an amount equal to
the lesser of (i) 5% of gross lease rental revenue or (ii) fees which the
General Partner reasonably believes to be competitive for similar services for
similar equipment. Both of these fees are subject to certain limitations
defined in the Management Agreement. Compensation to AFG for services
connected to the sale of equipment is calculated as the lesser of (i) 3% of
gross sale proceeds or (ii) one-half of reasonable brokerage fees otherwise
payable under arm's length circumstances. Payment of the remarketing fee is
subordinated to Payout and is subject to certain limitations defined in the
Management Agreement.
Administrative charges represent amounts owed to AFG, pursuant to Section
10.4 of the Restated Agreement, as amended, for persons employed by AFG who
are engaged in providing administrative services to the Partnership.
Reimbursable operating expenses due to third parties represent costs paid by
AFG on behalf of the Partnership which are reimbursed to AFG.
All equipment was purchased from AFG, one of its affiliates, including other
equipment leasing programs sponsored by AFG, or from third-party sellers. The
Partnership's Purchase Price was determined by the method described in Note 2.
All rents and proceeds from the sale of equipment are paid by the lessees
directly to either AFG or to a lender. AFG temporarily deposits collected
funds in a separate interest-bearing escrow account prior to remittance to the
Partnership. At December 31, 1994, the Partnership was owed $125,811 by AFG
for such funds and the interest thereon. These funds were remitted to the
Partnership in January 1995.
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AMERICAN INCOME PARTNERS III-B LIMITED PARTNERSHIP
FORM 10-Q--JUNE 30, 1995
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5--RELATED PARTY TRANSACTIONS
All operating expenses incurred by the Partnership are paid by AFG on behalf
of the Partnership and AFG is reimbursed at its actual cost for such
expenditures. Fees and other costs incurred during each of the six month
periods ended June 30, 1995 and 1994, which were paid or accrued by the
Partnership to AFG or its Affiliates, are as follows:
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Equipment management fees................................... $26,226 $55,012
Administrative charges...................................... 10,500 6,000
Reimbursable operating expenses due to third parties........ 56,308 40,153
------- --------
Total................................................... $93,034 $101,165
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</TABLE>
All rents and proceeds from the sale of equipment are paid directly to
either AFG or to a lender. AFG temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the
Partnership. At June 30, 1995, the Partnership was owed $48,073 by AFG for
such funds and the interest thereon. These funds were remitted to the
Partnership in July 1995.
