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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NASHVILLE SUPER 8, LTD.
-----------------------
(Name of Registrant as Specified In Its Charter)
NASHVILLE SUPER 8, LTD.
-----------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Limited Partnership Interests
(2) Aggregate number of securities to which transaction applies: 5900
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
GHG HOSPITALITY, INC.
1466 9TH AVENUE
SAN DIEGO, CALIFORNIA 92101
October 17, 1998
Dear Limited Partners:
Nashville Super 8, Ltd., a California Limited Partnership, formerly Motels of
America Series XI, a California Limited Partnership (the Partnership) was formed
on September 24, 1988 pursuant to the California Revised Uniform Limited
Partnership Act. The Partnership was organized to acquire and develop a parcel
of land in the Nashville area of Tennessee and build and operate thereon a
106-room Super 8 motel as a franchise of Super 8 Motels, Inc. The land was
initially acquired from a nonaffiliated party by Motels of America, Inc. (MOA)
and transferred to the Partnership February 9, 1989.
The motel was opened for business in December 1988 under a twenty-year franchise
agreement with Super 8 Motels, Inc. under which the franchisor was to provide
the Partnership with consultation in the areas of design, construction, and
operation of the motel. Since January 1, 1990, the motel has been operated
pursuant to a management agreement with the general partner, GHG Hospitality,
Inc., formerly Grosvenor Hospitality Group, Inc. ("GHG" or the "General
Partner").
Although no required date was specified, it was initially anticipated the
Partnership would consider selling or refinancing the motel after operating it
for a period of approximately six to ten years. The motel is nearing its tenth
year of operations. In early 1998, GHG informally surveyed a number of Limited
Partners concerning what course of action they would like to pursue with respect
to the Property. A clear majority of those polled indicated a desire to sell the
Property. The Limited Partners polled represented a small sample of the Limited
Partners. The majority of the Limited Partners were not contacted. In early 1998
the Partnership listed the Property for sale with a broker specializing in hotel
properties.
On July 7, 1998 the Partnership entered into a Hotel Purchase and Sale Agreement
with Escrow Instructions with Welcome Hospitality, LLC ("Welcome") whereby
Welcome was to purchase the motel from the Partnership for $3,300,000 plus
assumption of certain contractual obligations. The purchase price was to be
payable in cash and by assignment of the contractual obligations at closing. The
purchase price was subject to adjustment to reflect certain prorations as of the
closing date. Welcome terminated the agreement without penalty during the period
allowed under the agreement for its examination of the Property. The General
Partner was advised the decision to terminate was primarily due to the decline
in occupancy experienced over the 1998 summer months.
On August 14, 1998, the Partnership entered into a Hotel Purchase and Sale
Agreement With Escrow Instructions ("Purchase Agreement") with AM & PS, LLC, a
Tennessee Limited Liability Company ("Purchaser") whereby Purchaser will
purchase the motel from the Partnership for a price of $2,900,000, plus
assumption of certain obligations ("Purchase Price") The Purchase Price is
payable in cash and by assignment of the contractual obligations at closing. The
Purchase price is subject to adjustment to reflect certain prorations as of the
Closing Date set forth in the Purchase Agreement.
SALE OF THE MOTEL REQUIRES THE CONSENT OF HOLDERS OF A MAJORITY OF THE
PARTNERSHIP'S 3,975 LIMITED PARTNERSHIP INTERESTS AND YOUR APPROVAL IS VERY
IMPORTANT. Votes will be counted at the close of business at 5:00 p.m.
California time on November 5, 1998. Please return your consent card as soon
as possible before November 5, 1998. The Partnership Agreement provides a
failure to return a consent card has the same effect as a "Yes" vote.
However, the General Partner believes it is important to receive as many
consent cards as possible with respect to such an important decision.
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Following sale of the motel property, GHG intends to cause the Partnership to
pay cash distributions to the Partners from the net sales proceeds after paying
all expenses and liabilities of the Partnership and to establish a reserve
account in the presently anticipated approximate amount of $300,000 to cover
remaining liabilities, and unexpected claims. Any amount remaining in the
reserve account will be distributed to the Partners at such time as GHG
determines all contingent liabilities have been either discharged or provided
for, whereupon GHG intends to cause the Partnership to be dissolved. Overall,
the sale of the motel is anticipated to result in liquidating distributions of
approximately $2,289,400, or approximately $575.95 per Limited Partnership
Interest. For further information, see the discussion under "THE PLAN--Use of
Proceeds From Property Sale, Distributions to Limited Partners Per Interest, and
Results of Partnership on Liquidation" in the enclosed Solicitation Statement.
GHG believes the sale of the Property at this time would be in the best
interests of the Limited Partners and recommends you complete and return the
consent card. GHG bases its recommendation on, among other things, the following
factors:
- The proposed sale will result in sale of the motel within the
originally anticipated six-to-ten-year holding period.
- Market conditions are such that GHG believes the proposed sale of the
motel will be at as high a price as would be likely within the near
future, considering current mortgage interest rates and prevailing
conditions within the Nashville motel market.
- The motel has experienced a decline in occupancy, revenue and net
operating income during the current year which GHG believes may
continue in the near future, further reducing the value and
marketability of the motel.
- By selling the motel now, the Partnership will eliminate the risks
inherent in the ownership of real property, including, among other
things, the decline in value that could occur as a result of rising
interest rates, increasing real estate investor expectations and
continued changes in competition factors in local motel markets.
- The sale of the motel will provide liquidity to the Limited Partners.
At present, there is no established public trading market for the
Limited Partnership Interests, and liquidity has been limited.
- In the opinion of GHG, the motel is presently in good repair, and it is
advantageous to sell it before aging, obsolescence and wear in the
ordinary course of business occurs, thereby requiring more substantial
cash expenditures for repairs and refurbishment.
Among the disadvantages which would result to holders of Limited Partnership
Interests from the sale of the motel are the following:
- The motel has experienced a decrease in occupancy and room rates this
year, as compared to prior years. GHG has identified the closing of
Opryland amusement park last year and recent adverse weather conditions
as significant contributors to this trend. In the event recent
decreases in occupancy and room rates prove to be temporary, benefit
from potential increase in value that may result from improved
occupancy and room rates.
- The Partnership will not benefit from other possible future
improvements in economic and market conditions, which could produce
increased cash flow and enhance the sales price of the motel. Future
development of the area surrounding the motel or improvement in the
area's general economy could cause the value of the motel to increase
substantially in the future. For example, the property on which the
former Opryland amusement park operated is the intended site for a
regional shopping center. The developer of this shopping center
considers its properties to include an entertainment element which
makes its centers a tourist draw, as well as a local and regional draw
for shoppers.
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- It is not anticipated that, upon receipt of the final liquidating
distributions, the Limited Partners will have received aggregate
distributions from the sale of the Partnership Property which will
equal the amounts originally invested in the Partnership, plus the
cumulative 8% return set forth in the Partnership Agreement.
It should be noted that sale of the motel will eliminate any future liability of
the General Partner for Partnership liabilities and risks to the Partnership
which could arise from continued operation of the Partnership. The General
Partner will receive no fees in connection with the sale of the Property or the
termination and liquidation of the Partnership. It is not anticipated the
General Partner will receive any distributions from the proceeds of the sale
under the distribution provisions of the Partnership Agreement. The sale of the
motel will result in elimination of the management fees and operating
distributions which GHG presently receives.
The sale of the motel will result in the termination and liquidation of the
Partnership, which is an action that must be approved by the Limited Partners.
Accordingly, GHG is soliciting the written consent of each Limited Partner to
both elements of the Plan, which are more fully described in the enclosed
Solicitation Statement. Under the Partnership Agreement and California law,
Limited Partners do not have rights of appraisal or similar rights if the sale
is approved.
YOU ARE URGED TO READ CAREFULLY THE SOLICITATION STATEMENT IN ITS ENTIRETY FOR A
COMPLETE DESCRIPTION OF THE PROPOSED SALE. If you have any questions, please
feel free to contact Stephen D. Burchett at (619) 699-6100.
Very truly yours,
GHG HOSPITALITY, INC.
General Partner
By: /s/ Stephen D. Burchett
-------------------------------------
Stephen D. Burchett,
Vice President and General Counsel
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NASHVILLE SUPER 8, LTD.
1466 9th Avenue
San Diego, CA 92101
NOTICE OF CONSENT SOLICITATION
To the holders of Limited Partnership Interests of Nashville Super 8, Ltd.:
NOTICE IS HEREBY GIVEN to the holders (the "Limited Partners") of the limited
partnership interests (the "Interests"), Nashville Super 8, Ltd., a
California limited partnership (the "Partnership"), that GHG Hospitality Inc.
(the "General Partner") on behalf of the Partnership is soliciting the
written consents of the Limited Partners (the "Consents") to approve a plan
of action (the "Plan") which includes (i) sale of substantially all of the
assets of the Partnership on the terms and conditions described in the
enclosed Solicitation Statement and (ii) the complete termination and
liquidation of the Partnership, resulting in cash distributions to the
Limited Partners, all as more fully described in the accompanying
Solicitation Statement. The Plan is comprised of two (2) proposals, each of
which must be approved by Limited Partners holding a majority of the
Interests. Limited Partners may indicate approval, disapproval or abstention
with respect to each of the two elements of the Plan. However, the Plan will
not be implemented unless Limited Partners holding a majority of the
Interests approve each element.
Only Limited Partners of record at the close of business on September 1, 1998
are entitled to notice of the solicitation of Consents and to give their
consent to the Plan. In order to be valid, all Consents must be received
before November 5, 1998 unless such date or time is extended, in the sole
discretion of the General Partner by notice to all Limited Partners. The
Limited Partners' approval of the Plan is intended to be obtained through the
solicitation of written Consents, and no meeting of Limited Partners will be
held. GHG will act as the agent of the Partnership in soliciting and counting
Consents. A Consent may be revoked by written notice of revocation or by a
later dated instrument containing different instructions received by GHG at
any time on or before the expiration of the time by which the Consent card
must be received.
YOUR APPROVAL IS IMPORTANT. PLEASE READ THE SOLICITATION STATEMENT CAREFULLY
AND THEN COMPLETE, SIGN AND DATE THE ENCLOSED CONSENT CARD AND RETURN IT IN THE
SELF-ADDRESSED PREPAID ENVELOPE. Any Consent card which is signed and does not
specifically disapprove the Plan or abstain will be treated as approving the
`Plan. Although the Partnership Agreement provides a failure to return a Consent
card has the same effect as "Yes" vote, GHG believes it is important to receive
as many Consent cards as possible with respect to such an important decision.
Your prompt response will be appreciated.
Dated: October 17, 1998 GHG HOSPITALITY, INC.
General Partner
By: /s/ Stephen D. Burchett
----------------------------------
Stephen D. Burchett,
Vice President and General Counsel
<PAGE>
NASHVILLE SUPER 8, LTD.
1466 9th Avenue
San Diego, CA 92101
STATEMENT FURNISHED IN CONNECTION WITH THE
SOLICITATION OF CONSENTS
INTRODUCTION
This Statement Furnished in Connection with the Solicitation of Consents
("Solicitation Statement") is furnished to the holders ("Limited Partners") of
limited partnership interests (the "Interests") in Nashville Super 8, Ltd., a
California limited partnership (the "Partnership"). The Solicitation Statement
is furnished to the Limited Partners in connection with the solicitation of
written consents ("Consent(s)") on behalf of the Partnership by GHG Hospitality,
Inc. ("GHG"), the general partner of the Partnership, to approve (i) the sale of
substantially all of the assets of the Partnership (the "Sale") and (ii) the
subsequent termination and liquidation of the Partnership pursuant to the terms
of the Partnership Agreement (the "Plan of Liquidation"), all as more fully
described under "THE PLAN." Approval by Limited Partners of each of the Sale and
the Plan of Liquidation (collectively, the "Plan") is required to implement the
Plan. If approved and consummated, the Plan will result in the sale of
substantially all of the Partnership's assets, the termination of the
Partnership's business and the distribution of the net sales proceeds and any
other remaining Partnership assets to the Limited Partners of the Partnership,
after payment of all liabilities and expenses and creation of reasonable
reserves. Under the Partnership Agreement and California law, Limited Partners
do not have appraisal or similar rights if the Plan is approved. See "NO
APPRAISAL RIGHTS."
THIS SOLICITATION STATEMENT HAS BEEN PREPARED
AND IS BEING FURNISHED BY GHG ON BEHALF OF THE PARTNERSHIP.
GHG does not intend to call a meeting of the Limited Partners in connection with
this solicitation of Consents. If the Plan is approved, there will be no further
meetings of the Partners. Approval or disapproval by a Limited Partner of the
Plan is to be indicated by marking and signing the enclosed form of Limited
Partner Consent and returning it to GHG in the enclosed self-addressed envelope,
which requires no postage if mailed in the United States. The enclosed form of
Consent permits a Limited Partner to indicate approval, disapproval or
abstention with respect to each element of the Plan. However, the Plan will not
be implemented unless Limited Partners holding a majority of the outstanding
Interests approve both elements.
Consents of the Limited Partners to the Plan will be solicited until the
earlier to occur of: (i) receipt by the General Partner of the consent of a
majority of the Interests; or (ii) November 5, 1998 subject to extension in
GHG's sole discretion, by notice to all Limited Partners.
The close of business on September 1, 1998 (the "Record Date") has been fixed
by GHG for determining the Limited Partners entitled to notice of the
solicitation of Consents and to consent to the Plan. On the Record Date,
there were 3,975 outstanding Interests entitled to vote on the Plan held by
approximately 525 Limited Partners. This Solicitation Statement and the
enclosed form of Consent are anticipated to be mailed to Limited Partners on
or about October 17, 1998.
Limited Partners will be notified as soon as possible as to the results of this
solicitation.
Pursuant to the Partnership Agreement, the Consent of Limited Partners
holding a majority of the outstanding Interests is required to approve the
sale of properties representing all or substantially all of the Partnership's
assets and the termination of the Partnership. Under California law and the
Partnership Agreement, any matter upon which the Limited Partners are
entitled to act may be submitted for a vote by written Consent without a
meeting. Any Consent given pursuant to this solicitation may be revoked by
the person giving it at any time before November 5, 1998 unless such date
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or time is extended, by sending a written notice of revocation or a later dated
Consent containing different instructions to GHG before such date. Any written
notice of revocation or subsequent Consent should be sent to GHG.
In addition to solicitation by use of the mails, officers, directors, employees
and agents of GHG and its affiliates may solicit Consents in person or by
telephone, facsimile or other means of communication. Any such directors,
officers and employees will not receive additional compensation for such
services but may be reimbursed for reasonable out-of-pocket expenses in
connection with such solicitation. Arrangements have been made with custodians,
nominees and fiduciaries for the forwarding of Consent solicitation materials to
beneficial owners of Interests held of record by such custodians, nominees and
fiduciaries, and the Partnership will reimburse such custodians, nominees and
fiduciaries for reasonable expenses incurred in connection therewith. All costs
and expenses of this solicitation of Consents, including the costs of preparing
and mailing this Solicitation Statement, will be paid by the Partnership. The
Partnership will not seek a separate Consent of the Limited Partners for such
reimbursement. The aggregate expenses to be incurred relating to this
solicitation are estimated to be approximately $20,000.
GHG recommends Limited Partners consent to the Plan. See "SPECIAL
FACTORS--Fairness of the Plan; Recommendation of GHG."
THE TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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SUMMARY
The following is a summary of certain information contained elsewhere in this
Solicitation Statement. This Summary does not purport to be complete and is
qualified in its entirety by The more detailed information contained in this
Solicitation Statement and the exhibits hereto. Unless otherwise specifically
provided, terms used in this Summary have the respective meanings ascribed to
them elsewhere in this Solicitation Statement or, if not defined herein, in the
Partnership Agreement. Limited Partners are urged to read this Solicitation
Statement and the exhibits in their entirety.
THE PARTNERSHIP
<TABLE>
<CAPTION>
<S> <C>
Nashville Super 8, Ltd.......... The Partnership is a California limited
partnership which owns the real property
(the "Property") consisting of the motel
known as Super 8 Motel located at 720 Royal
Parkway, Nashville, Tennessee together with
a motel building consisting of 106 guest
rooms and related improvements. GHG is the
General Partner of the Partnership. The
offices of the Partnership are located at
1466 9th Avenue, San Diego, California 92101
and its telephone number is (619) 699-6100.
ACTION BY WRITTEN CONSENT
Purpose of the Solicitation..... Consents are being solicited by GHG to
approve the Sale of the Property which
comprises substantially all of the assets of
the Partnership, and which will be sold to
an unaffiliated third party, AM & PS, LLC
for $ 2,900,000 cash plus assumption of
certain liabilities; and (ii) the subsequent
termination and liquidation of the
Partnership and the distribution to the
Limited Partners of the net sales proceeds
and other cash held by the Partnership at
the time of distribution, other than certain
reserve amounts set aside to provide for the
payment of all expenses and other
liabilities of the Partnership (the "Plan of
Liquidation").
Record Date; Interests
Entitled to Consent......... Limited Partners of record at the close of
business on September 1, 1998 are entitled
to vote by written Consent. At such date,
there were outstanding 3,975 Interests, each
of which will entitle the record owner
thereof to one vote.
Vote Required.................. The Plan will not be implemented unless
Limited Partners of record holding a
majority of all outstanding Interests
approve each of the elements of the Plan.
Termination of Consent
Solicitation.................. Consents must be received by November 5,
1998 (unless such date or time is extended,
in the sole discretion of GHG, by notice to
all Limited Partners, permitting further
solicitation of Consents if majority
approval has not been obtained by such
date).
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
THE PLAN
General......................... The Plan is two proposals consisting of the
Sale and the Plan of Liquidation.
Background of the Plan.......... See "SPECIAL FACTORS--Background of the
Plan."
Security Ownership and Voting of
the General Partner........... As of the Record Date, neither the General
Partner, nor any executive officer or
director of the General Partner, owned
directly or beneficially any Interest other
than its general partner interest.
Consummation of the Sale........ The Sale will be consummated on satisfaction
of the terms and conditions contained in the
Hotel Purchase and Sale Agreement ("Purchase
Agreement") with Escrow Instructions and is
anticipated to close on or before November
6, 1998.
No Appraisal Rights............. Limited Partners have no appraisal rights in
connection with the Plan. See "NO APPRAISAL
RIGHTS."
Federal Income Tax
Consequences.................. The Partnership will generate taxable gain
or loss upon its sale of the Property. Such
gain or loss will be allocated to the
partners in accordance with the Partnership
Agreement, and generally will constitute
Section 1231 gain or Section 1231 loss. Any
Section 1231 gains would be eligible for a
reduced tax rate. See "FEDERAL AND STATE
INCOME TAX CONSEQUENCES--Capital Gains Tax."
See "FEDERAL AND STATE INCOME TAX
CONSEQUENCES--Sale of Properties."
Distributions to a Limited Partner generally
will not be taxable to the extent the
distributions do not exceed the Limited
Partner's adjusted tax basis in the
Interests. The tax basis in the Interests
will be reduced by the distributions, and
those in excess of the tax basis generally
will be treated as capital gain, which will
be long-term if the applicable Interests
have been held for more than eighteen (18)
months. Limited Partners who have remaining
tax basis in their Interests after
termination of the Partnership generally
will have a capital loss. See "FEDERAL AND
STATE INCOME TAX CONSEQUENCES."
Final Distributions and
Liquidation................... As promptly as practicable following the
sale of the Property, after payment or
reserving for payment of all costs of the
Sale and this Consent solicitation, the
General Partner will establish a contingency
reserve in the approximate amount of
$300,000 and the balance of the
Partnership's funds will be distributed to
the Limited Partners in accordance with the
Partnership Agreement. Once all known
estimable and reasonably contingent
liabilities have been satisfied, the
Partnership will distribute its remaining
net assets, if any, and terminate. Upon
termination any remainder of the contingency
reserve at the expiration of such period as
the General Partner may determine in its
sole discretion, will be distributed to the
Limited Partners in accordance with the
Partnership Agreement.
</TABLE>
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SPECIAL FACTORS
Before consenting to the Plan, Limited Partners should carefully consider
certain factors regarding the Plan:
BACKGROUND OF THE PLAN
The Partnership was formed in 1988 with the primary purpose of acquiring,
developing, investing in, holding, managing, selling, disposing of and otherwise
acting with respect to the Property. The Partnership's investment objectives at
formation were to preserve and protect Partnership capital, to provide partially
tax-sheltered cash distributions from operations and to provide long-term
capital appreciation. In 1989, the Partnership commenced operation of the
Property as a motel. See "The Property" below.
Although the Partnership Agreement provides the term of the Partnership will,
unless previously terminated, continue until December 31, 2027, the prospectus
of the Partnership for its original public offering of Interests stated the
Partnership anticipated it would dispose of its Properties within six to 10
years after acquisition.
Following its appointment as general partner in 1990, GHG has periodically
evaluated the desirability of sale of the Property. The potential to sell the
Property generally has been enhanced by recent improvements in the national real
estate investment market. Pension funds, real estate investment trusts and other
institutional buyers are now actively seeking new investment properties, as
compared to the early 1990's, when these same institutional buyers were fewer
and less active. The emergence of securitized mortgage financing and lower
mortgage interest rates have also contributed to an improved market for real
estate such as the Property, as entrepreneurial buyers who require debt
financing to purchase properties are able to borrow funds at attractive rates.
During the early 1990's, the Property also experienced devaluation due to a
nationwide slump in real estate values. Although future economic conditions are
difficult to predict, GHG believes that it is unlikely that continuing to hold
the Property would significantly enhance the Partnership's ultimate realization
on sale of the Property, or that the relative economic benefits of continued
ownership would justify the risks of such continued ownership.
In contrast to the national market trend, the local motel industry in Nashville
has experienced recent declines in occupancy and room rates. GHG believes such
declines result from the closing of Opryland amusement park last year and recent
adverse weather conditions. Whatever portion of such declines is a result of
adverse weather conditions will be temporary. However, any portion of the
decline which is attributable to the closing of Opryland will be of indefinite
duration. The site of Opryland is the intended location of a regional shopping
center, projected by its developer to open in the Spring of 2000. The shopping
center is intended to include an entertainment element which its developer
believes will become a tourist attraction, as well as a draw to local and
regional resident shoppers. If this occurs, or if the general economic
conditions in the area improve through additional development or otherwise, cash
flow, occupancy rates and the value of the motel may increase following the sale
of the motel.
The sale of all or substantially all of the assets of the Partnership requires
the approval of Limited Partners holding a majority of the Interests.
The purpose of the Plan, from the Partnership's perspective is to further its
investment objective of preserving and protecting capital by returning to the
Limited Partners a portion of their capital contributions, in order to eliminate
the possibility of further losses. The Sale proceeds will be used to repay all
outstanding indebtedness of the Partnership, and establish a contingency reserve
in the approximate amount of $300,000 in order to provide for unanticipated
contingencies and pay for the costs of terminating and liquidating the
Partnership. Upon termination of the Partnership after paying all remaining
Partnership liabilities, the remainder of the proceeds of the Sale proceeds and
all other Partnership assets shall be distributed to the partners of the
Partnership in accordance with the Partnership Agreement.
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EFFECTS OF THE PLAN
If the Plan is approved and implemented as proposed, the effects of the Plan
will be the sale of substantially all of the Partnership's assets, the
termination of the Partnership's business, the winding up of the Partnership's
affairs and the distribution to the Limited Partners of the net proceeds of the
Sale after payment of liabilities, liquidation expenses and establishment of a
contingency reserve of approximately $300,000. Assuming the Property is sold for
$ 2,900,000, GHG estimates the Limited Partners will receive an initial cash
distribution of approximately $575.95 per Interest upon completion of the Sale
of the Property, and anticipates the Limited Partners will receive an additional
small distribution upon termination of the Partnership. See "THE
PLAN--Anticipated Results of Sale, Use of Proceeds and Cash Distributions." The
amount distributed to each Limited Partner generally will not be taxable to the
extent the distributions do not exceed the Limited Partner's adjusted tax basis
in the Interests. See "FEDERAL AND STATE INCOME TAX CONSEQUENCES."
REASONS FOR THE TIMING OF THE SALE
The decision to proceed with the sale of the Property at this time was based
upon GHG's determination that improvement of the national real estate market,
and general economic factors, coupled with relatively low interest rates make
this a good time to sell. In addition, the recent declines in occupancy and room
rates, as well as prices, in the local motel and real estate markets, together
with the historical performance of the Property indicated to GHG it was unlikely
continued operation of the Property would generate significantly increased
distributable cash.
The Partnership has a finite legal existence of 39 years, approximately 10 of
which have passed. It was not intended, however, that the Partnership would hold
its Property for its full legal term of existence. Although it was not possible
at the outset of the Partnership to determine precisely how quickly the
investment objectives with respect to the Property would be achieved, the
Partnership's Prospectus disclosed an anticipated holding period for the
Property of six (6) to ten (10) years.
GHG generally considered the benefits to the Limited Partners that might be
derived by holding the Property for an additional period of time. GHG assumed
the Property would probably appreciate in value over time and, as a result, the
Property might be able to be sold for a greater sale price in the future. GHG
weighed these assumptions against the potential risks to investors from a longer
holding period, i.e., the risk that competitive market or general economic
developments could cause the Property to continue its current decline in value,
which could result in a lesser sale price in the future. Weighing all of these
factors, GHG concluded that now rather than later was the time to sell the
Property.
The Partnership's decision to sell the Property at this time was also influenced
by the fact the originally contemplated holding period of six (6) to ten (10)
years has nearly passed. The Property was not sold earlier because of uncertain
and then adverse economic and market conditions prevailing in the early 1990's.
Another reason for the timing of the Sale from GHG's perspective is the
increased competition faced by the Property in the form of decreased tourism and
abundant hotels and motels located in the vicinity of the Property.
In July 1997, GHG obtained an independent appraisal of the Property which
concluded the then current fair market value of the Property was $3.2 million.
In early 1998, GHG conducted an informal sampling of the Limited Partners,
wherein a significant majority of those asked indicated they favored selling the
Property. Only a small minority of Limited Partners was contacted.
Following the survey in early, 1998, the Partnership entered into an Exclusive
Listing Agreement with Hotel Partners, Inc. (the "Broker") to sell the Property.
The Broker conducted a thorough analysis of the Property and actively sought out
a number of interested potential buyers. The Partnership received several offers
to purchase the property.
After review of the offers GHG accepted an offer to purchase the Property for
$ 3,300,000 in cash, subject to the approval of the Limited Partners. GHG's
decision to accept the offer was influenced both by the fact the offer was
6
<PAGE>
$100,000 more than the July 1997 appraisal, and the fact the offer was the
highest received for the property. The Partnership entered into a Hotel Purchase
and Sale Agreement With Escrow Instructions on July 7, 1998. Welcome terminated
the agreement without penalty during the period allowed under the agreement for
its examination of the Property. The General Partner was advised the decision to
terminate was primarily due to additional declines in occupancy during Summer
1998 operations.
The Partnership continued negotiations with other potential purchasers following
execution of the initial purchase agreement as a means to mitigate the impact on
the Partnership in the event the sale failed to close for any reason.
Accordingly, on August 14, 1998, the brokers representing the Partnership
advised they believed the value of the Property has gone down in recent months
and their current estimate of the value of the Property is approximately $2.8 -
$2.9 million.
Following termination of the initial purchase transaction, the Partnership
sought additional offers for the Property. On August 14, 1998, the Partnership
entered into a Hotel Purchase and Sale Agreement With Escrow Instructions with
AM & PS, LLC, a Tennessee limited liability company. The purchase price is
$2,900,000 plus the assumption of certain liabilities and is subject to the
approval of the Limited Partners.
FAIRNESS OF THE PLAN; RECOMMENDATION OF GHG
GHG reasonably believes the Plan is fair to the Limited Partners and recommends
approval of the Plan. The most recent appraisal of the Property was obtained
approximately one (1) year ago and the sale price is 9.4% lower than such
appraisal. No independent evaluation of the fairness of the Plan to Limited
Partners has been made. However, GHG believes the purchase price is an accurate
reflection of the Property's current market value. In reaching its conclusion to
recommend approval of the Plan, GHG considered the following factors:
(1) the Property has now been held for its originally anticipated
holding period, which militates in favor of a sale of the
Property at this time;
(2) increased availability of investor capital, increased
purchasing activity and a favorable interest rate environment,
which may not continue in the future, also militate in favor
of sale;
(3) declines in occupancies and revenues in the current year,
which contribute to realization of a lower sale price for the
Property than the most recent appraisal may militate in favor
of holding the Property to seek later appreciation, but may
also militate in favor of a current sale in order to mitigate
the potential for further losses;
(4) the potential for future operating performance increases and a
possible increase in the value of the Property, due to further
development activity in the Nashville Airport area might
militate in favor of holding the Property, but which also
might enhance its current marketability and sales price;
alternatively, there can be no assurance further development
activity in the area would have any positive impact on either
the operation or the value of the Property.
(5) the currently satisfactory physical condition of the Property
and the increasing likelihood there may be a higher need for
expenditures for repairs, replacements and improvements to be
incurred in the future, which militates in favor of a sale
now;
(6) the presence of competition and the possibility of increased
future competition, which suggest a sale now may be advisable;
(7) the relative illiquidity of the Interests, which militates in
favor of sale;
7
<PAGE>
(8) the historic levels of cash distributions to the Limited
Partners which suggest Limited Partners may benefit from
recovering their remaining investment now;
(9) the potential for an increase in the amounts of distributions,
which might militate in favor of holding the Property, if such
future distributions would represent a rate of return
equivalent to that available in other investments; and
(10) it is anticipated aggregate distributions from the
Partnership, including proceeds from the Sale and any
eventually remaining contingency reserve will be less than the
capital contributions of the Limited Partners, which might
militate in favor of holding the Property for additional
future appreciation, but which might also militate in favor of
a current sale in order to mitigate the potential for
additional losses.
VOTE REQUIRED TO APPROVE THE PLAN
Implementation of the Plan requires that GHG receive Consents approving each
element of the Plan from Limited Partners of record holding a majority of all
outstanding Interests.
OTHER OFFERS
At the time GHG accepted the initial offer to purchase the Property for
$ 3,300,000 in cash, it had received several other offers, with purchase
prices less than $ 3,300,000. The other offers received included relatively
comparable terms, other than the purchase price. Accordingly, GHG believed
the offer which was accepted to be the best offer received and was otherwise
on relatively beneficial terms.
Following termination of the original purchase agreement, GHG sought additional
offers. All other offers or expressions of interest involved purchase prices
lower than $2,900,000. Accordingly, GHG believes the offer accepted to be the
best offer received following termination of the original purchase transaction.
Notwithstanding the foregoing proposed terms of sale, there can be no assurance
the sale will be consummated. In the event Purchaser defaults on its purchase
obligations, a liquidated damage clause in the Purchase Agreement limits the
Partnership's potential recovery of damages equal to the deposits then held by
Escrow Holder ($100,000).
FAILURE TO APPROVE THE PLAN
If the Limited Partners fail to approve the Plan, the Partnership will continue
to own the Property. In such event, GHG expects the Partnership will operate the
Property for an indefinite period, which over time may entail substantial
expenditures for repairs and refurbishment. Consistent with the Partnership
Agreement, the General Partner may receive or solicit offers for the sale of the
Property as opportunities arise. In any such sale, the Partnership would benefit
from any increase in value of the Property over the current value and would
suffer a detriment to the extent of any decrease in such value. Failure by the
Limited Partners to approve the Plan will not affect their rights under the
Partnership Agreement.
8
<PAGE>
THE PLAN
GENERAL
The Plan was developed by and is being proposed by GHG for the written Consent
by Limited Partners to each element of the Plan--the Sale and the Plan of
Liquidation. See "INTRODUCTION" and "SPECIAL FACTORS--Background of the Plan."
GHG recommends the Limited Partners approve the Plan, which will result in the
sale of all of the Partnership's assets, followed by the termination and
liquidation of the Partnership. If the Plan is approved, the Property will be
sold on the terms set forth below. See "Proposed Sale of Property" below.
PROPOSED SALE OF PROPERTY
Pursuant to the terms and conditions of the Purchase Agreement entered into
August 14, 1998, by and between the Partnership and AM & PS, LLC ("Purchaser"),
the Partnership has (subject to receiving the requisite Consents of the Limited
Partners) agreed to sell the Property to Purchaser. The sale of the Property
will be accounted for using the purchase method of accounting. The Purchaser is
not affiliated with the Partnership or GHG and the terms of the Purchase
Agreement were negotiated at arm's length. The Purchase Agreement contains
numerous representations, warranties and conditions common to such transactions.
Assuming receipt of the requisite approval of the Limited Partners by
November 5, 1998, the Closing is anticipated to occur on or before November
6, 1998. Because the closing is conditioned upon, among other things, the
approval of the Limited Partners, there can be no assurance the proposed sale
will occur. If all conditions precedent to the Purchaser's obligation to
close are not eventually satisfied or waived, its obligation to purchase the
Property will terminate.
THE PROPERTY
The Property consists of a 106 room motel situated on approximately 1.94 acres
of land subject owned in fee simple. The Property is located at 720 Royal
Parkway, Nashville, Tennessee.
The Property is subject to a security interest securing a loan with a balance of
approximately $ 159,263 as of July 31, 1998. The loan terms require monthly
payments in the amount of $2,150, including interest at 8% until paid in full.
PURCHASE PRICE
Subject to prorations and adjustments provided in the Purchase Agreement, the
purchase price for the Property is $2,900,000.
RESULTS OF OPERATIONS
Net income was $ 27,528 in 1997 and $ 13,563 in 1996. Total revenues were
$ 1,215,655 in 1997 and $ 1,078,565 in 1996. The property operated at an
average occupancy of 61.79 in 1997 and 51.81% in 1996. The average daily room
rate was $ 49.63 in 1997 and $ 52.50 in 1996.
In 1997, the Partnership incurred costs of $28,716 associated with a proposal to
reorganize the Partnership into a real estate investment trust (REIT). The
efforts were discontinued when management and the proposed sponsor of the REIT
were unable to negotiate mutually acceptable terms and conditions for a
reorganization.
9
<PAGE>
LIQUIDATION
As soon as practical following the closing of the Sale, GHG will cause the
Partnership (i) to pay all costs associated with the Sale, including the
solicitation of Consents from Limited Partners, if not previously paid; and
(ii) to provide a contingency reserve in the approximate amount of $300,000
for the remaining costs of terminating and liquidating the Partnership, as
well as potential unforeseen costs and liabilities. This reserve shall be
maintained for a period to be determined by GHG in its sole discretion. The
remaining assets of the Partnership, and any remainder of the contingency
reserve, will be distributed to the Limited Partners upon the termination of
the Partnership in the manner set forth in the Partnership Agreement.
Section 17.1.2 of the Partnership Agreement provides the Partnership will
terminate and be dissolved upon the vote of a majority in interest of the
Limited Partners.
DISTRIBUTIONS AND FEES
As set forth under "Use of Proceeds and Distributions" and based on the
assumptions therein stated, GHG currently estimates upon completion of the
Sale of the Property, the General Partner will not have received any cash
distributions from liquidation and the Limited Partners will have received
cash distributions of approximately $2,289,400 in addition to those
previously received.
GHG will not receive any fees in connection with the Sale of the Property or
the liquidation and dissolution of the Partnership. Upon the Sale, the
management fees equal to 6% of gross receipts of the motel, which GHG
presently receives, will be eliminated. The Sale will also terminate GHG's
ability to receive 10% of all operating distributions, which it is currently
receiving. Sale of the Property and liquidation of the Partnership will also
eliminate any liability of GHG for future Partnership obligations which might
otherwise arise from continued operation of the Partnership.
10
<PAGE>
USE OF PROCEEDS FROM PROPERTY SALE
The following is a brief summary of the Partnership's estimated use of the
proceeds from the sale of the Property. All of the following selected financial
information is based upon amounts as of June 30, 1998 and certain estimates of
liabilities at closing. Final results may differ from these estimates. A more
detailed discussion of the financial consequences of the sale of the Property is
set forth below under the caption "Unaudited Pro Forma Financial Information."
All Limited Partners are encouraged to review carefully the unaudited pro forma
financial statements.
If the holders of a majority of the Interests approve the proposed Sale of the
Property and the Sale is closed, the Partnership will pay all of its
indebtedness, set up a contingency reserve and then distribute the remaining net
sale proceeds pursuant to the terms of the Partnership Agreement. The estimated
uses of the sale proceeds are as follows:
<TABLE>
<CAPTION>
<S> <C>
Contract Sales Price ................................................................................ $2,900,000
Costs of Sale ....................................................................................... $ (112,027)
Repayments of Debt .................................................................................. $ (157,844)
Real Estate Taxes Paid from Escrow................................................................... $ (40,729)
Establishment of Contingency Reserve................................................................. $ (300,000)
Cash Initially Available for Distribution by the Partnership from the Sale of the Property........... $ 2,289,400
Return of Limited Partners' Initial Capital Not Previously Distributed ..................... $2,289,400
Partial Distribution of Limited Partners' Priority Return .................................. $ _______0
Estimated Residual Proceeds from Sale of Property .......................................... $ _______0
Limited Partners' Share of Residual Proceeds from Sale of Property (85%) ................... $ _______0
General Partner's Share of Residual Proceeds from Sale of Property (15%) ................... $ _______0
Total Distribution .................................................................................. $2,289,400
</TABLE>
DISTRIBUTIONS TO LIMITED PARTNERS PER INTEREST
Based upon financial information as of June 30, 1998, below is an estimate of
all cash distributions that will have been made to Limited Partners after the
initial distribution of the estimated proceeds from the Sale of the Property is
completed.
Summary of Estimated Cash Distributions to Limited Partners:
<TABLE>
<CAPTION>
<S> <C>
Limited Partners' Share of previous distributions........................................... $ 692,542
Limited Partners' Share of Proceeds from Sale of the Property .............................. $ 2,289,400
Limited Partners' Share of previously undistributed cash from operations ................... $ 44,823
Total Estimated Cash Received by Limited Partners ................................................... $ 3,026,765
Total Cash Received per $1,000 of Limited Partnership Capital ....................................... $ 761.45
</TABLE>
The above figures assume the Limited Partners do not receive any final
liquidating distribution. Subject to unforeseen contingencies, GHG anticipates
there will be a small liquidating distribution to the Limited Partners upon
termination of the Partnership.
11
<PAGE>
RESULTS OF PARTNERSHIP ON LIQUIDATION
Based on financial information available as of June 30, 1998, the following
table presents the estimated results of the Partnership assuming it has
completed the sale of the Property as proposed herein:
<TABLE>
<CAPTION>
<S> <C>
Dollar Amount Raised ....................................................................................$3,975,000
Number of Properties Purchased Directly ..........................................................................1
Number of Properties Purchased Indirectly ........................................................................0
Date of Closing of Offering......................................................................... February, 1989
Estimated Date of Sale of Property ....................................................................October 1998
Estimated Distribution Data per $1,000 of Limited Partnership Capital:
Distributions to Limited Partners from Operations .................................................$185.50
Estimated Initial Distributions to Limited Partners from the Sale of the Property..................$575.95
Total Distribution..........................................................................................$761.45
</TABLE>
The above figures assume the Limited Partners do not receive any final
liquidating distribution. Subject to unforeseen contingencies, GHG anticipates
there will be a small liquidating distribution to the Limited Partners upon
termination of the Partnership.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
THE PARTNERSHIP
The following unaudited pro forma balance sheet assumes that as of June 30,
1998, the Partnership had sold the Property for $2,900,000. Such funds will be
used to repay indebtedness and the balance will be distributed to the Partners
pursuant to the terms of the Partnership Agreement, which generally will be
first, to the Limited Partners in an amount that equals the amount initially
contributed to the partnership capital by the Limited Partners plus a cumulative
but non-compounded 8% per annum return thereon; with the balance distributed 85
percent to the Limited Partners and 15 percent to the General Partner.
The unaudited pro forma balance sheet should be read in conjunction with the
appropriate notes to the unaudited pro forma balance sheet.
ALL OF THE FOLLOWING UNAUDITED PRO FORMA FINANCIAL INFORMATION IS BASED UPON
AMOUNTS AS OF JUNE 30, 1998 AND CERTAIN ESTIMATES OF LIABILITIES AT CLOSING
FINAL RESULTS MAY DIFFER FROM SUCH INFORMATION.
12
<PAGE>
NASHVILLE SUPER 8 MOTEL, LTD.
A CALIFORNIA LIMITED PARTNERSHIP
PROFORMA BALANCE SHEET
AS OF OCTOBER 15, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS OCTOBER 15, 1998
<S> <C>
Current Assets:
Cash $2,589,400
Accounts Receivable 17,317
----------
Total Current Assets 2,606,717
----------
Total Assets $2,606,717
----------
----------
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
Current Liabilities:
Accounts Payable 11,106
Interco Payable 5,937
----------
Total Current Liabilities 17,043
----------
Total Liabilities 17,043
----------
Partners' Capital Accounts:
General Partners:
Cumulative net earnings (9,067)
Cumulative cash distributions (76,950)
----------
(86,017)
----------
Limited Partners:
Capital contributions 3,449,823
Cumulative net earnings (81,591)
Cumulative cash distributions (692,541)
----------
2,675,691
----------
Total Partners' Capital Accounts 2,589,674
----------
Total Liabilities and Capital $2,606,717
----------
----------
</TABLE>
13
<PAGE>
FEDERAL AND STATE INCOME TAX CONSEQUENCES
The purpose of the following discussion of the income tax consequences of the
proposed transaction is to inform the Limited Partners of the Partnership of the
federal and state income tax consequences to the Partnership and to its partners
arising from the sale of the Property. The tax information included herein was
prepared by the General Partner. The tax information is taken from tax data
compiled by the General Partner in its role as the Partnership's tax
administrator and is not based upon the advice or formal opinion of counsel. The
tax discussion that follows is merely intended to inform the Limited Partners of
factual information and should not be considered tax advice.
PASSIVE ACTIVITY LOSSES
Application of the passive activity loss limitation may have limited deductible
losses in prior years and created passive loss carryovers to the year of sale.
The gain on sale will incorporate all prior losses disallowed under the loss
limitations that are deductible in the year of sale.
SALE OF PROPERTIES
Any such gain or loss generally will constitute Section 1231 gain or Section
1231 loss (i.e., gains or losses from disposition of real property or
depreciable personal property used in a trade or business and held for more than
one year, other than property held for sale to customers in the ordinary course
of business). A Limited Partner's share of the gains or losses from the Sale
would be combined with any other Section 1231 gains or Section 1231 losses of
the Limited Partners for the year. Net Section 1231 gains or net Section 1231
losses generally would be treated as long-term capital gain or ordinary loss, as
the case may be. However, a Limited Partner's net Section 1231 gains would be
treated as ordinary income rather than capital gain to the extent of his or her
net Section 1231 losses, if any, incurred in the five preceding years.
Furthermore, in the event that a Property is sold at a gain, the depreciation
expense may be recaptured as ordinary income under Section 1245 or Section 1250
of the Code to the extent of the realized gain. In general, under Section 1250,
if real property is depreciated on an accelerated basis rather than on a
straight-line basis, then the lessor of (i) any gain realized on disposition of
the property or (ii) the excess of accelerated depreciation over straight-line
depreciation as of the date of Sale will be treated as ordinary income in the
year the Property is sold. The Partnership does not expect to have any gain from
the Sale of the Property subject to recapture under Section 1250 of the Code.
Limited Partners classified as corporations for federal income tax purposes may
be required, under Section 291(a) of the Code, to treat 20% of the gain from the
sale of a Property attributable to depreciation expense not subject to recapture
under Section 1250 as ordinary income instead of Section 1231 gain.
Under Section 702(a)(3) of the Code, a Partnership is required to state
separately, and the Partners are required to account separately for, their
distributive share of all gains and losses of their Partnership. Accordingly,
each Limited Partner's allocable share of the gains or losses from the Sale
(including each Limited Partner's allocable share of Section 291(a) gain,
Section 1245 gain, Section 1231 gain or Section 1231 loss) will be separately
stated and reflected on the applicable Schedule K-1 forms provided to the
Limited Partners by the Partnership.
CAPITAL GAINS TAX
With respect to individuals, trusts and estates, the Taxpayer Relief Act of 1997
("TRA") generally reduces the maximum tax rate on net capital assets held for
more than 18 months to 20% and provides a maximum tax rate on net capital gains
derived from capital assets held for more than one year and for not more than 18
months ("mid-term gains") of 28%. TRA does not affect the taxation of capital
gains realized by corporations. Substantially all of the Partnership's assets
have been held for longer than 18 months. Accordingly, a substantial portion of
any Section 1231 gains of the Partnership realized on the sale of assets and
allocable to Limited Partners who are individuals, trusts and estates may be
taxed at a maximum federal income tax rate of 20% (if such gains are not
recharacterized as ordinary income as described above under "Sale of
Properties," or are not subject to the special tax rate described in the next
paragraph).
14
<PAGE>
Under TRA, individuals, trusts and estates are taxed on unrecaptured Section
1250 gain at a maximum federal income tax rate of 25%. Unrecaptured Section 1250
gain generally equals the excess of (i) the lesser of the gain realized on
disposition of depreciable real property or depreciation allowed or allowable on
the property through the date of disposition, over (ii) the amount of
depreciation recapture realized upon the disposition (as described above under
"Sale of Properties").
Net capital losses of such a Limited Partner can be utilized to offset ordinary
income limited to the sum of net capital gains from other sources recognized by
the Limited Partner during the tax year, plus $3,000 ($1,500 in the case of a
married individual filing a separate return). The excess amount of such net
capital loss may be carried forward and utilized in subsequent years subject to
the same limitations but may not be carried back to a prior year.
Limited Partners classified as corporations are taxed on capital gains at the
same rates as ordinary income. A corporate Limited Partner can deduct capital
losses only to the extent of capital gains, with any unused capital losses
generally being carried back three years and forward five years.
Because the Property is located in the State of California, Limited Partners who
are not resident in California are required to report their allocable gain to
California. California law requires the Partnership to withhold a portion of a
nonresident partner's distribution and to remit such amounts withheld to the
California Franchise Tax Board. The amount withheld will be separately stated on
the stub of the distribution check and the General Partner will provide
additional documentation of the amount of the withheld California taxes by
January 31 following the year of sale. The amount of tax withheld will be
treated as a distribution to the Limited Partner. The withheld taxes will be
allowed as a credit against any California income tax. Limited Partners may or
may not have a tax refund after the filing of the required California tax
return.
Limited Partners who are non-resident aliens or foreign corporations ("foreign
persons") are subject to a withholding tax on their share of the Partnership's
income from the sale of the Property. The withholding rates are 39.6 percent for
individual partners and 35 percent for corporate partners. The tax withheld will
be remitted to the Internal Revenue Service and the foreign person will receive
a credit on their U.S. tax return for the amount of the tax withheld by the
Partnership. The tax withheld will be treated as a distribution to the Limited
Partner.
FINAL PARTNERSHIP RETURNS AND FUTURE TAX ISSUES
Upon the termination of the Partnership, the General Partner, on behalf of the
Partnership, will file a final tax return for the Partnership, and on a timely
basis will provide Schedule K-1 forms to all Limited Partners setting forth
their allocable shares of the Partnership's items of income, gain, loss,
deduction and credit. GHG will also have full responsibility and authority for
any other tax-related matter arising after the termination of the Partnership,
including acting as the "tax matters partner" representing the Partnership in
any federal or other audit of returns of the Partnership for its final year or
any prior year.
Limited Partners should understand that while the Partnership will be
terminated, such termination will not eliminate the possibility that the IRS
could challenge the tax treatment of the Partnership's activities for the year
of termination or any prior year for which the statute of limitations for making
adjustments has not elapsed. If any adjustments are made to the Partnership's
income tax return, GHG will so notify the Limited Partners. Any tax audit or
adjustments could result in assessment of additional tax liabilities upon the
Limited Partners which would be payable from their own funds and would not be
reimbursable by the General Partner or the Partnership.
NO APPRAISAL RIGHTS
If Limited Partners owning a majority of the Interests on the Record Date vote
in favor of the Plan, such approval will bind all Limited Partners. The
Partnership Agreement and the California Revised Uniform Limited Partnership
Act, under which the Partnership is governed, do not give rights of appraisal or
similar rights to Limited Partners who dissent
15
<PAGE>
from the vote of the majority in approving or disapproving the Plan.
Accordingly, dissenting Limited Partners do not have the right to have their
Interests appraised or to have the value of their Interests paid to them if they
disapprove of the action of a majority in interest of the Limited Partners.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On the Record Date, there were 3,975 Interests issued and outstanding and
entitled to vote on matters upon which Limited Partners may vote or consent.
According to publicly available information, and to the best knowledge of GHG,
as of the Record Date, no person or entity owned more than 5% of the outstanding
Interests. As of the Record Date, neither the General Partner nor any officer or
director thereof, owned any Interests.
AVAILABLE INFORMATION
This Solicitation Statement does not purport to be a complete description of all
agreements and matters relating to the condition of the Partnership, the
Property and the transactions described herein. Incorporated by reference into
this Solicitation Statement is the Partnership's Annual Report on SEC Form
10-KSB for the year ended December 31, 1997, a copy of which is attached,
provides additional information regarding the Partnership. With respect to
statements contained in this Solicitation Statement as to the content of any
contract or other document filed as an exhibit to the Form 10-K, each such
statement is qualified in all respects by reference to such report and the
schedules thereto, an additional copy of which may be obtained without charge
upon written request to the Partnership. To make such a request, a Limited
Partner must write to GHG, 1466 9th Avenue, San Diego, California 92101.
All documents filed by the Partnership with the Securities and Exchange
Commission after the date of this Solicitation Statement, but before the
Partnership takes action pursuant to this Consent, shall be deemed to be
incorporated by reference into this Solicitation Statement. Copies of these
documents will be available without charge upon request to GHG, 1466 9th Avenue,
San Diego, California 92101. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Solicitation Statement shall
be deemed to be modified or superseded for purposes of this Solicitation
Statement to the extent that a statement contained in this Solicitation
Statement (or in any other subsequently filed document that also is or is deemed
to be incorporated by reference in this Solicitation Statement) modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Solicitation Statement.
16
<PAGE>
NASHVILLE SUPER 8, LTD.
CONSENT PURSUANT TO THE
SOLICITATION DATED OCTOBER 17, 1998
Proposals:
1. To vote to approve and consent to the purchase of substantially all of
the Partnership's properties by AM & PS, LLC and to authorize the
General Partner to take all actions reasonably necessary to complete
such sale on the terms set forth in the Purchase Agreement referenced
in the Solicitation Statement.
/ / For / / Against / / Abstain
2. To vote to dissolve and liquidate the Partnership following the sale of
substantially all of the Partnership's properties and distribute the
proceeds therefrom to the Partners according to the terms of the
Partnership Agreement.
/ / For / / Against / / Abstain
(Please date and sign on the other side)
<PAGE>
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned Limited Partner. If no direction is made, this Proxy will be
voted for the Proposals 1 and 2.
Dated: , 1998
----------------- ------------------------------------
(Signature of Limited Partner)
------------------------------------
(Print Name)
------------------------------------
(Number of Partnership Interests for
which this Consent is given)
Please sign exactly as your name appears on your Subscription Agreement for
Limited Partnership Interests. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If the shares are owned by a
corporation, sign in the full corporate name by the President or other
authorized officer. If the shares are owned by a Partnership, sign in the name
of the Partnership name by an authorized person. Please mark, sign, date and
return the Proxy promptly.
