SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
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MEDICAL INCOME PROPERTIES 2B LIMITED PARTNERSHIP
(Name of Subject Company)
JDF AND ASSOCIATES, LLC
PREVIOUSLY OWNED PARTNERSHIPS INCOME FUND II, L.P.;
SPECIFIED INCOME FUND, L.P.
MACKENZIE PATTERSON SPECIAL FUND, L.P.
MACKENZIE FUND VI, A CALIFORNIA LIMITED PARTNERSHIP;
STEVEN GOLD; MORAGA GOLD, LLC; AND
CAL KAN, INC.
(Bidders)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NONE
(CUSIP Number of Class of Securities)
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Copy to:
C.E. Patterson Paul J. Derenthal, Esq.
MacKenzie Patterson, Inc. Derenthal & Dannhauser
1640 School Street, Suite 100 455 Market Street, Suite 1600
Moraga, California 94556 San Francisco, California 94105
(510) 631-9100 (415) 243-8070
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
<PAGE>
This schedule is amended to incorporate a revised Exhibit (a)(3).
<PAGE>
Item 11. Material to be Filed as Exhibits.
(a)(3) Form of Letter to Unitholders dated July 25, 1997
<PAGE>
SIGNATURES
After due 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: July 25, 1997
JDF & ASSOCIATES, LLC
By: /s/ J. David Frantz
J. David Frantz, General Manager
PREVIOUSLY OWNED PARTNERSHIPS INCOME FUND II, L.P.;
By MacKenzie Patterson, Inc., General Partner
By: /s/ Victoriaan Tacheira
Victoriaann Tacheira, Senior Vice President
SPECIFIED INCOME FUND, L.P.
By MacKenzie Patterson, Inc., General Partner
By: /s/ Victoriaann Tacheira
Victoriaann Tacheira, Senior Vice President
MACKENZIE PATTERSON SPECIAL FUND, L.P.
By MacKenzie Patterson, Inc., General Partner
By: /s/ Victoriaann Tacheira
Victoriaann Tacheira, Senior Vice President
MACKENZIE FUND VI, a California Limited Partnership
By MacKenzie L.P., a California Limited Partnership, General Partner
By MacKenzie Securities Partners, Inc., General Partner
By: /s/Victoriaann Tacheira
Victoriaann Tacheira, Vice President
2
<PAGE>
/s/ Steven Gold
STEVEN GOLD
MORAGA GOLD, LLC
By Moraga Partners, Inc., Managing Member
By: /s/ C. E. Patterson
C.E. Patterson, President
3
<PAGE>
July 25, 1997
TO: MEDICAL INCOME PROPERTIES 2B, LIMITED PARTNERSHIP
SUBJECT: OFFER TO PURCHASE 100% OF THE PARTNERSHIP UNITS FOR $28 PER UNIT
Dear Fellow Limited Partner:
Enclosed with this letter is an offer to pay you $28 per Unit, less a $15
transfer fee which Qualicorp, the general partner of Medical Income Properties
2B charges to transfer each account, for any and all Units you own in Medical
Income Properties 2B Limited Partnership ("MIP 2B"). MacKenzie Patterson, Inc.
has recently been informed by Qualicorp that the transfer fee is $15 for
accounts with less than 6 units and $25 for accounts with 6 or more units. The
Purchasers will pay any additional transfer costs above the $15 the seller is
currently paying. This offer is for 100% of the 10,907 units outstanding.
MacKenzie Patterson, Inc. ("MPI") represents a group of investment entities
which currently own 205 (approximately 1.9%) of MIP 2B, JDF and Associates, LLC,
Previously Owned Partnerships Income Fund II, LP, Specified Income Fund,LP,
MacKenzie Patterson Special Fund, LP, MacKenzie Fund VI, LP, Steve Gold and
Moraga Gold, LLC, (the "Purchasers") are making this offer. The Purchaser does
not intend to request a change in control or from the current general partner.
The Purchaser is interested in acquiring units of MIP 2B for investment purposes
only.
As you are aware, MIP 2B has sold all of its properties and has announced plans
for the liquidation of the partnership over approximately three years. Limited
Partners in MIP 2B have just recently received distributions in the total amount
of $878 per unit. The general partner of MIP 2B has now announced the intention
of distributing only one additional payment: of up to $83 prior to July, 2000.
The partnership must delay the final distribution to allow time to collect
outstanding receivables, to allow Medicare to complete its audit of the cost
reports for the facilities in which the partnership had an interest, and the
completion of the period during which the partnership must indemnify the
purchaser of the partnership's properties for certain potential claims. MIP 2B's
general partner has expressed the belief that while there are significant risks
that something less than the estimated receivables will actually be collected,
and further that Medicare may make claims against the partnership larger than
anticipated, notwithstanding the Purchasers believe that the general partner's
estimates are sufficiently conservative to support the likelihood that the
projected distribution amounts will be achieved.
The Purchasers are interested in acquiring the rights to receive the final
distribution, and are willing to pay cash now to limited partners who wish to
terminate their investment rather than to await this final distribution.
The Purchasers recognize that the potential benefits from change in taxation for
an individual limited partner is a complex matter, and can be impacted by a
limited partners circumstances unrelated to the partnership. In fact, if units
are held in an IRA or Qualified Plan account, there will be no TAX benefits from
a sale and thus the economics of the transaction are materially less for such
investors. Therefore, we have asked that the Certified Public Accounting firm of
Cates, Moore and Regalia prepare projections of the impact for a limited partner
who sells to the Purchasers. The Projections are included in the Offering
Material included with this letter as Exhibit A. The Purchasers encourage each
limited partner to review this Offer and the accompanying tax projections with
their own tax counsel to be certain of the ultimate tax impact.
<PAGE>
Based upon hypothetical results to an average unit holder (see Exhibit A) the
Purchasers' offer represents between a 15% and 34% discount to the present value
of the expected distributions and tax benefits depending upon a taxpayers tax
bracket and using an 10% "cost of money" assumption. That is, if one considers
the time value of having cash today versus receiving the benefits from the
partnership over the next three years, then the Purchasers' offer is only
between 15 to 34% less than the present value of those benefits. The Purchaser
believes that these discounts are quite small relative to the risks of
collection of MIP 2B's remaining receivables and to the normal 35-50% discounts
accorded to most limited partnership units traded on the secondary market. The
reason the Purchase Offer discount can be relatively low to the present value of
the future distributions lies in the timing of the taxation and the
distributions relative to the limited partnership interests in the partnership.
In the final analysis, the relative benefits of selling to the
Purchasers or holding until liquidation are very small to most limited
partners. The average holding by limited partners of the partnership is
fewer than 11 units!. The amount of expected distributions over the
next three years is only $83 per unit. The difference between the cash
received by holding rather than selling will be a relatively small
dollar amount for most investors. MPI believes that most investors
would rather terminate their investment in 1997 rather than waiting an
additional three years during which time three additional years of K-1s
or other tax information will have to be filed, filings which may
result in additional accounting costs for investors and thus greatly
diminish the net benefits from their investment.
Limited partners should bear in mind that 1997 will be the last year in which a
selling limited partner will have to file tax information regarding the
partnership, a fact which should result in significant savings in tax
preparation expenses for most partners.
<PAGE>
Limited partners should also be aware that the partnership's GP has stated that
they will consider re-submitting a filing with the SEC requesting permission to
substantially diminish reporting to the SEC. The general partner expects that if
such permission is granted that transfer of the limited partnership units will
generally be prohibited following 1997.
Limited Partners should be clear that the Purchasers are making this offer with
the intent of making a profit on the acquisition of the units. However, the
economics of the investment for the Purchasers are different than for the
existing limited partners because the Purchasers will not be impacted by
taxation until the partnership liquidates. The Purchasers are buying only the
potential to receive $83 over three years for a price of $28, and, in spite of
not insignificant risks that the amount received will be substantially different
than $83, is willing to make the offer so that it might enjoy the potential
profits.
The Purchasers believe that their Offer represents an excellent alternative to
existing limited partners who wish to receive current benefits of approximately
$54 per unit rather than continue to hold their investment for another three
years. (See Exhibit A, Column #2) There are other meaningful risks associated
with accepting the Purchasers' Offer. These risks are detailed on Page 1 and 2
of the Offering materials enclosed herewith. Please review these carefully
before making your decision.
The formal Offer to Purchase enclosed provides more details on all aspects of
the Offer.
We encourage you to review our offer and act promptly as the Offer to Purchase
will expire on September 1, 1997, unless extended.
A transmittal letter (in blue) is also enclosed which you can use for accepting
the offer. Please execute this document and return it in the enclosed
envelope. Please call us at (800) 854-8357 ext. 206 if you have any questions.
Respectfully submitted,
C.E. Patterson
President of MacKenzie Patterson, Inc.
