SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
Lutheran Brotherhood Realty Fund I, a California Limited
Partnership
(Name of Registrant as Specified in Its Charter)
Paul A. Quiros, 400 Colony Square, Suite 2200, 1201 Peachtree
Street, Atlanta,
Georgia 30361; (404) 817-6000
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-
6(i)(3).
[ ] 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 Units
(2) Aggregate number of securities to which transactions
applies:
63,803 Limited Partnership Units
(3) Per unit price or other underlying value of transaction
computed pursuant
to Exchange Act Rule 0-11: 1
(4) Proposed maximum aggregate value of transaction:
________________________________________________
[ ] 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: ____________________
1 Set forth the amount on which the filing fee is calculated and
state how it
was determined.<PAGE>
LUTHERAN BROTHERHOOD REALTY FUND I
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415
NOTICE OF SPECIAL MEETING OF THE LIMITED PARTNERS
TO THE LIMITED PARTNERS
OF LUTHERAN BROTHERHOOD REALTY FUND I
NOTICE IS HEREBY GIVEN that a Special Meeting of the Limited
Partners of
Lutheran Brotherhood Realty Fund I (the "Partnership") will be
held on April
____, 1996, at _____ a.m. local time at the Partnership's offices
at 625 Fourth
Avenue South, Minneapolis, Minnesota 55415 for the purpose of
considering and
voting upon the following proposal:
The liquidation of the Partnership and the sale of the
property owned by
the Partnership and the properties owned by joint ventures in
which the
Partnership is a co-venturer (collectively, the "Properties"),
over a period of
time which will begin on the date of Limited Partner approval and
not exceed
two years from such date, followed by the dissolution and winding
up of the
Partnership, as set forth in this Proxy Statement (the
"Liquidation Proposal").
The Liquidation Proposal has been the subject of careful
consideration by
the General Partner of the Partnership, Lutheran Brotherhood Real
Estate
Products Company (the "General Partner"). For the reasons
described in the
attached Proxy Statement under "PROPOSAL," THE GENERAL PARTNER
BELIEVES THAT
THE APPROVAL OF THE LIQUIDATION PROPOSAL IS IN THE BEST INTERESTS
OF THE
LIMITED PARTNERS OF THE PARTNERSHIP AND RECOMMENDS A VOTE FOR THE
LIQUIDATION
PROPOSAL.
The accompanying Proxy Statement includes information
concerning the
Liquidation Proposal and other relevant information about the
Partnership. You
should study all of this information carefully.
Only holders of limited partnership interests of the
Partnership at the
close of business on March 29, 1996, will be entitled to vote on
the
Liquidation Proposal contained herein.
TO ENSURE A QUORUM FOR THE SPECIAL MEETING, PLEASE SIGN,
DATE AND PROMPTLY
RETURN THE ENCLOSED PROXY CARD IN THE SELF-ADDRESSED AND POSTAGE
PAID ENVELOPE
PROVIDED WITH THE PROXY CARD. YOUR PROMPT RESPONSE AND
COOPERATION WILL BE
APPRECIATED. IF YOU ATTEND THE SPECIAL MEETING YOU MAY REVOKE
YOUR PROXY AND
VOTE IN PERSON.
By Order of the General Partner
LUTHERAN BROTHERHOOD REAL ESTATE
PRODUCTS COMPANY
By:
________________________________
________________________________, President
<PAGE>
LUTHERAN BROTHERHOOD REALTY FUND I
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415
PROXY STATEMENT
FOR SPECIAL MEETING
OF LIMITED PARTNERS TO BE HELD ________, 1996
INTRODUCTION
This Proxy Statement is being furnished to the Limited
Partners of
Lutheran Brotherhood Realty Fund I (the "Partnership"), in
connection with the
solicitation of proxies by Lutheran Brotherhood Real Estate
Products Company,
the General Partner of the Partnership (the "General Partner"),
to be voted at
a Special Meeting of the Limited Partners of the Partnership (the
"Special
Meeting") to be held on ____________, 1996, at the Partnership's
offices at 625
Fourth Avenue South, Minneapolis, Minnesota 55415 at _______
a.m. local time,
and at any adjournment thereof. On March 29, 1996, the record
date for
determination of Limited Partners entitled to vote at the Special
Meeting (the
"Record Date"), there were 63,803 limited partnership units
outstanding (the
"Units"), which entitle the holders to one vote for each Unit;
provided,
however, that as discussed below, 1,801 Units held by affiliates
of the General
Partner may not be voted with respect to the Liquidation Proposal
(defined
below) and the number of outstanding Units for calculating the
percentages
required for a quorum and for the approval of the Liquidation
Proposal at the
Special Meeting will be reduced by such 1,801 Units. The holders
of a majority
of the Units present in person or represented by proxy will
constitute a quorum
for the transaction of business at the Special Meeting.
Pursuant to the terms of the Partnership's Amended and
Restated Agreement
of Limited Partnership (the "Partnership Agreement"), the holders
of a majority
of the Units must approve the following proposal to begin to
liquidate and wind
up the affairs of the Partnership, to be effected on the terms
described
herein:
The liquidation of the Partnership and the sale of the
property
owned by the Partnership and the properties owned by joint
ventures
in which the Partnership is a co-venturer (collectively, the
"Properties"), over a period of time which will begin on the
date of
Limited Partner approval and not exceed two years from such
date,
followed by the dissolution and winding up of the
Partnership, as set
forth in this Proxy Statement (the "Liquidation Proposal").
The General Partner is seeking the approval of the
Liquidation Proposal at
this time based on the original anticipated holding period for
the
Partnership's properties. The other co-venturer in the joint
ventures which
own some of the Properties has agreed to the sales of such
Properties following
the Limited Partners' approval of the Liquidation Proposal. See
"PROPOSAL - Investment Objectives of Partnership." Limited Partner
approval of
the Liquidation Proposal will also act as the approval of
subsequent sales of
all of the Partnership's Properties and the liquidation and
winding up of the
Partnership and the Limited Partners will not have the
opportunity to vote on
the specific terms of any such subsequent sales of any of the
Properties.
Additionally, there can be no assurance that all of the
Properties can be sold
pursuant to the Liquidation Proposal.
This Proxy Statement and the Form of Proxy will be sent to
the Limited
Partners on or about April 2, 1996.
If the Limited Partners do not approve the Liquidation
Proposal, the
Partnership will continue to own and operate the Properties.
There can be no
assurance, however, that such Properties will continue to
generate sufficient
cash flow to pay their expenses or the expenses to maintain the
Partnership.
Additionally, under the terms of the Partnership Agreement, the
Partnership
must solicit Limited Partner approval to sell, within a
twelve-month period,
all or substantially all of its properties or to liquidate and
wind-up the
Partnership, which could require at least one additional proxy
solicitation at
the Partnership's expense. See "PROPOSAL - Orderly Sales Through
Approval of
Liquidation Proposal." The Partnership Agreement does allow the
General
Partner, without Limited Partner approval, to sell individual
Properties if
such sales do not constitute sales of substantially all of the
Properties in a
twelve-month period and the General Partner may seek to make such
sales if the
Liquidation Proposal is not approved by the Limited Partners.
FOR THE REASONS SET FORTH HEREIN, THE GENERAL PARTNER
RECOMMENDS YOUR
APPROVAL OF THE LIQUIDATION PROPOSAL BY VOTING FOR THE
LIQUIDATION PROPOSAL ON
THE ENCLOSED PROXY CARD, DATING AND SIGNING THE CARD IN THE SAME
MANNER AS YOUR
NAME APPEARS ON THE ADDRESS LABEL AND RETURNING IT BY MAIL TO THE
GENERAL
PARTNER IN THE SELF-ADDRESSED AND POSTAGE PAID ENVELOPE PROVIDED
WITH THE PROXY
CARD.
Pursuant to the Partnership Agreement, the approval of the
holders of a
majority of the outstanding Units is required to approve the
Liquidation
Proposal. Units held by any Limited Partner who abstains from
voting, by
marking the box labeled "Abstain" on the enclosed proxy card, or
not submitting
a proxy card will be treated the same as a vote against the
Liquidation
Proposal, because such abstentions (or non-submissions) are not
affirmative
votes for the Liquidation Proposal. To the best of the General
Partner's
knowledge, neither the General Partner, nor any officer, director
or other
affiliate thereof is the holder of any Units, except for 970
Units that are
held by the General Partner, 30 Units that are held by an officer
of the
General Partner and 1,801 Units that are held by affiliates of
the General
Partner. The General Partner and the officer of the General
Partner intend to
vote their Units in favor of the Liquidation Proposal. Pursuant
to the terms
of the Partnership Agreement, the 1,801 Units held by affiliates
of the General
Partner may not be voted with respect to the Liquidation Proposal
and the
number of outstanding Units for calculating the quorum and voting
percentages
will be reduced by such 1,801 Units. The General Partner is not
aware of the
manner in which any Limited Partner (other than as described
above) intends to
vote his, her or its Units.
You may revoke your proxy at any time before it is voted by
executing and
filing with the General Partner, a revocation of your proxy or a
subsequently
dated proxy or by voting in person at the Special Meeting. Units
represented
by properly executed proxies will be voted as specified, unless
such proxies
are subsequently revoked as provided above. If no choice is
specified on a
valid, unrevoked proxy, the Units will be voted as recommended by
the General
Partner.
YOUR PARTICIPATION IN THIS PROCESS IS CRITICAL. WITHOUT THE
APPROVAL OF
THE HOLDERS OF A MAJORITY OF THE OUTSTANDING UNITS OF THE
LIQUIDATION PROPOSAL,
THE GENERAL PARTNER LACKS AUTHORITY UNDER THE PARTNERSHIP
AGREEMENT TO PROCEED
WITH THE LIQUIDATION PROPOSAL.
BACKGROUND
The Partnership was organized on August 4, 1987, as a
limited partnership
under the laws of the State of California for the purpose of
preserving and
protecting the Limited Partners' invested capital by investing,
either alone or
in association with others, in income-producing, residential or
commercial real
properties. The Partnership's principal executive office is
currently located
at 625 Fourth Avenue South, Minneapolis, Minnesota 55415, and
its telephone
number at such office is (612) 339-8091.
The Partnership directly acquired one of the Properties, a
warehouse/distribution center in New Hope, Minnesota, and is a
co-venturer in
three joint ventures holding four other residential and
commercial Properties.
The General Partner was incorporated in Minnesota, in July
1987 to act as
the General Partner of the Partnership.
Lutheran Brotherhood, a fraternal benefit society existing
and operating
under the laws of Minnesota ("Lutheran Brotherhood"), is the
parent of the
General Partner and is the Partnership's joint venture partner in
the ownership
of four of the Properties (discussed above). Lutheran
Brotherhood, directly
and through its subsidiaries, is principally engaged in the
business of
marketing financial services and individual life insurance
products for
Lutherans. The address and telephone number of the General
Partner and
Lutheran Brotherhood are the same as those of the Partnership.
PROPOSAL
VOTING RIGHTS OF LIMITED PARTNERS
Under the terms of the Partnership Agreement, written
approval of the
holders of a majority of the Units is required to approve the
Liquidation
Proposal. If the Limited Partners approve the Liquidation
Proposal, such
approval will also act as the approval of subsequent sales of the
Properties
and the Limited Partners will not have the opportunity to vote on
the specific
terms of any of such subsequent sales.
Section 2.02(b) of the Partnership Agreement provides that
the Limited
Partners have the right to vote on and approve:
- dissolving the Partnership; and
- selling substantially all of the Partnership's
Properties
in a single sale or in multiple sales in the same
12-month
period, except in the orderly liquidation and winding
up of
the business of the Partnership upon its termination
and
dissolution.
LIQUIDATION PROPOSAL
The Liquidation Proposal involves the liquidation of the
Partnership and
the sale of the Properties in an orderly fashion, over a period
of time
beginning on the date of Limited Partner approval of the
Liquidation Proposal
and not to exceed two years from such date. The General Partner
intends to
actively seek the sales of the Properties during 1996 on the most
advantageous
terms available and it will attempt to maximize any potential
return to the
Limited Partners, followed by the dissolution and winding up of
the
Partnership. Lutheran Brotherhood has agreed to allow the
Partnership to
market and sell the Properties in which it is a co-venturer
following the
approval of the Liquidation Proposal by the Limited Partners.
The General
Partner will not offer to sell the Properties to its affiliates.
The
Liquidation Proposal represents the General Partner's belief that
the
Partnership should begin an orderly process of liquidation based
on the
original anticipated holding period for the Property. See
"PROPOSAL - Investment
Objectives of Partnership."
The General Partner will attempt to sell the Properties for
all cash or a
combination of cash and promissory notes. The General Partner
does not intend
to accept securities as consideration, unless such a proposal is
submitted to
the Limited Partners for their approval.
The General Partner recommends a vote FOR the Liquidation
Proposal.
INVESTMENT OBJECTIVES OF PARTNERSHIP
The Prospectus dated December 4, 1987, and updated February
11, February
22 and October 18, 1988, used by the Partnership to sell the
Units (the
"Prospectus"), stated the Partnership's intention to sell or
refinance its
properties between the fifth and seventh years after acquisition
with no
obligation to sell or refinance at any particular time. The
Partnership is
entering into its seventh year of operations. The General
Partner believes
that the timing of the Liquidation Proposal reflects the
Partnership's
objectives relating to beginning the process of liquidation of
the Partnership
between the fifth and seventh years of operations. The General
Partner
believes that an orderly sale of the Properties will maximize any
potential
returns to the Limited Partners. Under the terms of the
Partnership Agreement,
the General Partner may sell Properties representing less than
substantially
all of the Properties without Limited Partner approval and the
General Partner
may make such sales if the Liquidation Proposal is not approved,
however, in
such event, subsequent sales of substantially all of the
Properties in a 12-
month period and the eventual liquidation of the Partnership
would require at
least one additional proxy solicitation at the Partnership's
expense.
ORDERLY SALE OF PROPERTIES THROUGH APPROVAL OF LIQUIDATION
PROPOSAL
The General Partner believes that the Partnership should
begin the
liquidation process and have the flexibility to sell the
Properties when such
sale or sales appears to be most advantageous to the Partnership.
The
requirement to obtain the approval of the holders of a majority
of the Units
before a sale of all or substantially all of the Properties would
likely delay
a potential sale or otherwise negatively impact the sales price.
The approval
of the Liquidation Proposal may provide the Partnership the
flexibility to sell
the Properties in an orderly fashion on an individual basis or as
packages to
maximize any potential return to the Limited Partners. The
approval of the
Liquidation Proposal will also allow the General Partner to begin
the winding
up and dissolution of the Partnership without the expense of
additional proxy
solicitations to obtain separate Limited Partner approval of each
sale and of
the winding-up and dissolution of the Partnership following the
final sale.
The approval of the Liquidation Proposal will act as the approval
of all future
sales of the Properties without the approval by the Limited
Partners of the
specific terms of any of such future sales.
If the Limited Partners do not approve the Liquidation
Proposal, the
Partnership will continue to own and operate the Properties or
sell individual
Properties as discussed above. There can be no assurance,
however, that the
Properties will generate sufficient cash flow to pay their
expenses or the
expenses to maintain the Partnership.
PREVIOUS DISTRIBUTIONS
The Partnership sold 63,803 Units and raised $6,365,000 in
gross proceeds.
The Partnership acquired one property in September 1989, and is a
co-venturer
with Lutheran Brotherhood in three joint ventures which acquired
three
properties in 1989 and one property in 1987. The Partnership
made
distributions to the Limited Partners of $4.00, $4.00, $4.00,
$4.50 and $5.00
per $100 Unit in 1995, 1994, 1993, 1992, and 1991, respectively.
To date, the
Limited Partners have received an aggregate of $2,092,712 in
distributions and
the General Partner has received an aggregate of $10,744 in
distributions.
Cash from the Partnership's operations in 1996 is expected
to be
sufficient to satisfy substantially all of the Partnership's
working capital
and normal capital expenditure needs, which include anticipated
capital
expenditures of $139,000. However, cash available as
Distributable Cash From
Operations (as defined below) may not be sufficient to provide
distributions to
Limited Partners at prior levels. Distributable Cash From
Operations means
funds provided from the operations of the Partnership, as
determined in
accordance with generally accepted accounting principles
("GAAP"), including
lease payments on net leases from sellers and interest on the
Partnership's
cash and short-term investments, and net cash proceeds from the
sale of
Property previously deducted from Distributable Cash from
Operations and
allocable to such Property, without deduction for non-cash
expenses (such as
depreciation and amortization of imputed interest), but after
deducting cash
funds used to pay any other expenses (including fees payable to
the General
Partner and Affiliates), and reserves, but including the amount
of such
reserves when and as they become available for distribution.
DISTRIBUTIONS OF SURPLUS FUNDS AND LIQUIDATION PROCEEDS
The Partnership Agreement provides that Surplus Funds (as
defined below)
available for distribution upon the sale of a Partnership
property are
distributed quarterly 99% to the Limited Partners and 1% to the
General
Partner.
"Surplus Funds" means, (i) the net cash funds or proceeds
(including lump
sum prepayments by buyers) resulting from the financing,
refinancing, sale,
exchange, condemnation, eminent domain taking, casualty or other
disposition of
Properties after deduction of all expenses incurred in connection
therewith,
including any real estate commissions, securities, and brokerage
fees paid to
the General Partner, or its Affiliates, (ii) all net cash
proceeds, including
interest and principal payments subsequently received on any
installment
payments on promissory notes and/or installment contracts held by
the
Partnership in connection with the sale of a Property after
payment of any
underlying indebtedness related to Properties sold, less (iii)
such amounts for
working capital reserves as the General Partner deems reasonably
necessary for
future Partnership operations. The General Partner does not
expect any
commission or fee to be paid to it or its Affiliates upon the
sales of the
Properties.
The Partnership Agreement also provides for a Subordinated
Incentive
Compensation Fee to be paid to the General Partner equal to 14%
of actual
distributions to Limited Partners of the Surplus Funds after the
Limited
Partners receive distributions of Surplus Funds equal to their
capital
contributions plus distributions of Distributable Cash From
Operations and/or
Surplus Funds equal to 10% per annum on such capital
contributions. The
Limited Partners are unlikely to receive such distributions and
the General
Partner will not receive this fee from the Surplus Funds
generated by the sales
of the Properties.
"Liquidating Distributions" means, upon liquidation of the
Partnership or
any Partner's Interest in the Partnership, liquidating
distributions made in
accordance with the positive Capital Account balances of the
Partners, as
determined after taking into account all Capital Account
adjustments for the
Partnership taxable year during which such liquidation occurs, by
the end of
such taxable year (or, if later, within ninety (90) days after
the date of such
liquidation).
If the Liquidation Proposal is approved by the holders of a
majority of
the Units, the General Partner expects to distribute Surplus
Funds and
Liquidating Distributions to the Limited Partners, although there
can be no
assurance that sufficient proceeds will be available for
distribution. The
Limited Partners may only look to the assets of the Partnership
for all
distributions. Upon dissolution and termination of the
Partnership, the
General Partner would be required to contribute certain amounts
to the
Partnership if there was a deficit balance in its capital account
at
termination. The General Partner anticipates that no additional
funds will be
available for distribution to the Limited Partners other than any
proceeds of
the sale of the Properties. Upon liquidation, any such amounts
available for
distribution will be distributed to the Limited Partners and
General Partner as
described above.
FEDERAL INCOME TAX CONSEQUENCES TO LIMITED PARTNERS
The following paragraphs describe certain federal income tax
consequences
to individual Limited Partners that may result from the sale or
sales of the
Partnership's Properties. The Partnership will not request a
ruling from the
Internal Revenue Service regarding such tax consequences, and the
following
discussion does not represent an opinion of counsel. In addition
to the
federal income tax consequences discussed below, a Limited
Partner may be
subject to state income taxes imposed by various jurisdictions as
a result of
the sale or the sales of the Properties. Each Limited Partner is
urged to
consult his own tax adviser with respect to the federal and state
tax
consequences of a sale or sales of the Properties.
Upon the sale of a Partnership Property, the Partnership
will either
realize a gain or loss on such sale compared to the Partnership's
tax basis in
the Property. In some situations a gain on a sale of an
individual Property
could be greater than the cash proceeds resulting from the sale.
This could
result in taxes being owed by the Limited Partners in a single
year on the gain
without a corresponding Partnership distribution to the Limited
Partners to pay
the taxes. However, in the aggregate, the sale of all of the
Partnership's
assets and the liquidation of the Partnership should not result
in tax
liability in excess of cash distributions and may result in
losses. It is
possible that a Limited Partner could have taxable income in one
year, offset
by a taxable loss in a following year. The General Partner will
attempt to
structure and time sales of the Properties to mitigate negative
tax
implications to the Limited Partners. The Partnership's
depreciable property,
if held more than one year, should be considered "Section 1231
assets." All
gains realized by the Partnership during a taxable year on sales
of Section
1231 assets, in excess of any depreciation recapture, and all
losses realized
during such year, are combined to determine the net Section 1231
gain or loss.
A Limited Partner's allocable share of such net gain or loss is
combined with
any other Section 1231 gains and losses incurred by such Limited
Partner in
that year from other sources. If a net Section 1231 gain
results, all such
gains and losses comprising the net Section 1231 gain will be
treated as long-
term capital gains and losses. If a net loss results, all such
gains and
losses comprising the net loss will be treated as ordinary gains
and losses.
If a net Section 1231 gain results in any such year, a five-year
lookback rule
applies to recharacterize the current year's net Section 1231
gain as ordinary
income to the extent of the net Section 1231 losses in the
lookback period.
All depreciation claimed by the Partnership on tangible personal
property will
be subject to recapture as ordinary income on the sale of such
property to the
extent of gain recognized on the sale, regardless of how long the
Partnership
has owned such property.
Under the Partnership Agreement, any Surplus Funds will be
distributed to
the Limited Partners following the sale of a Property. The tax
treatment of
those distributions will depend on whether they are "current"
distributions or
"liquidating" distributions. A liquidating distribution is a
distribution in
liquidation of a partner's interest; i.e., the termination of a
partner's
entire interest in a partnership by means of a distribution, or a
series of
distributions. The Regulations provide that a series of
liquidating
distributions may span more than one taxable year. A current
distribution is
any distribution that is not a liquidating distribution.
Liquidating
distributions will be taxed as capital gains. In general,
current
distributions to a Limited Partner will not be taxable except to
the extent
they exceed the tax basis of his Units, in which case gain will
be recognized
by the Limited Partner as if he had sold or exchanged his Units
and taxed as a
capital gain. A capital gain will be long-term capital gain if
the Limited
Partner has held his Units for more than one year. The General
Partner will
attempt to structure and time the sales of the Properties to
mitigate negative
tax implications to the Limited Partners.
INTERESTS IN PARTNERSHIP AND DISTRIBUTIONS
No individual or group, as defined by Section 13(d)(3) of
the Securities
Exchange Act of 1934, as amended, known to the Partnership, is
the beneficial
owner of more than 5% of the Partnership's securities.
Distributions to the Limited Partners are paid from
Distributable Cash
From Operations of the Properties or from Surplus Funds. The
Partnership has
distributed an aggregate of $2,092,712 to the Limited Partners
and $10,744 to
the General Partner. Distributable Cash From Operations is
distributed 99% to
the Limited Partners and 1% to the General Partner, after
consideration by the
General Partner of the working capital needs of the Partnership.
Distributions of Distributable Cash From Operations and
Surplus Funds to
Limited Partners are paid out of cash available after payment of
the expenses
of the Partnership, including fees paid to affiliates of the
General Partner.
See "INFORMATION CONCERNING MANAGEMENT OF PARTNERSHIP - Certain
Relationships
and Related Transactions."
SUMMARY OF LIQUIDATION PROPOSAL
The Partnership Agreement requires the approval of the
holders of a
majority of the Units to allow the General Partner to begin the
process of
liquidating the Partnership and to sell substantially all of the
Properties
within a twelve-month period and for the dissolution and winding
up of the
Partnership. If a potential purchaser is interested in buying
any of the
Properties, such purchaser may be unwilling to wait for the
Partnership to
solicit the approval of its Limited Partners or such delay might
otherwise
negatively impact the sales prices.
The General Partner believes that the Liquidation Proposal
is consistent
with the investment objectives of the Partnership. The
Partnership acquired
its properties beginning in 1987 and ending in 1989, and began
operations in
1989 and stated in the Prospectus its expectation to sell or
refinance the
properties between the fifth and seventh years after acquisition.
The
Partnership is in its seventh year of operations after its final
acquisition.
See "PROPOSAL - Investment Objectives of Partnership."
If the Limited Partners do not approve the Liquidation
Proposal, the
Partnership will continue to own and operate all of the
Properties unless
individual sales are made as described above. There can be no
assurance,
however, that the Properties will generate sufficient cash flow
to pay their
expenses and the expenses to maintain the Partnership.
Additionally, under the
terms of the Partnership Agreement, the Partnership must solicit
Limited
Partner approval to sell, within a twelve-month period, all or
substantially of
its properties or to liquidate and wind-up the Partnership, which
would require
at least one additional proxy solicitation at the Partnership's
expense. See
"PROPOSAL - Orderly Sale of Properties Through Approval of
Liquidation Proposal."
The General Partner believes that the approval of the
Liquidation Proposal
should begin the orderly process of liquidation of the
Partnership and provide
the flexibility to sell the properties individually or as
packages to maximize
any potential return to the Limited Partners. There can be no
assurance,
however, that the General Partner can meet any of these
objectives if the
Liquidation Proposal is approved.
INFORMATION CONCERNING MANAGEMENT OF PARTNERSHIP
EXECUTIVE OFFICERS OF GENERAL PARTNER
The Partnership does not have officers or directors. The
general partner
of the Partnership is the General Partner. The officers and
directors and key
employees of the General Partner who control the affairs of the
Partnership are
set forth in the Partnership's Form 10-K for the fiscal year
ending December
31, 1995, (the "Form 10-K"), which is incorporated herein by this
reference.
The General Partner, its officers and directors and
affiliates, own less
than 5% of the Units.
EXECUTIVE COMPENSATION
No individual principal or principals as a group received
any direct
remuneration from the Partnership during 1995.
The General Partner is not compensated directly for its
services as
general partner of the Partnership but compensation is paid to
the General
Partner and its affiliates of the General Partner as discussed
below.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates, in accordance with
the Partnership
Agreement, may receive compensation or reimbursement for services
rendered.
The following is a summary of compensation paid to the General
Partner or its
affiliates in 1995:
Partnership management fee . . . . . . . . . . . $23,000
Administration of Partnership activities . . . . $33,000
The Partnership Agreement provides for the payment of
management fees to
the General Partner or its affiliates of 9% of actual
distributions of
Distributable Cash From Operations to the Limited Partners.
Additionally, the
Partnership Agreement provides for the reimbursement of expenses
incurred by
the General Partner or its affiliates in performing certain
administrative
functions, including costs for legal and accounting services for
the
Partnership.
MISCELLANEOUS
SOLICITATION OF PROXIES
This solicitation of Limited Partners' proxies is being made
on behalf of
the Partnership by certain officers and employees of the General
Partner or its
affiliates, through the mail, in person, and by telephone and
telecopy. These
individuals will receive no compensation for these services. The
cost of
printing and mailing this Proxy Statement is being borne by the
Partnership.
ADDITIONAL INFORMATION
Additional information regarding the Partnership and the
General Partner
is set forth in the Partnership's Annual Report on Form 10-K for
the fiscal
year ended December 31, 1995 (the "Annual Report"), filed with
the Securities
and Exchange Commission and incorporated herein by reference.
The Annual
Report includes the Partnership's financial statements for the
past three years
and the reports of its independent auditors. A copy of the
Annual Report is
available without charge upon request to the General Partner at
the address set
forth on the first page of this Proxy Statement.
<PAGE>
PRELIMINARY COPIES
FORM OF
PROXY CARD
LUTHERAN BROTHERHOOD REALTY FUND I
THIS PROXY IS SOLICITED ON BEHALF OF LUTHERAN BROTHERHOOD
REALTY FUND I
(THE "PARTNERSHIP") BY LUTHERAN BROTHERHOOD REAL ESTATE PRODUCTS
COMPANY (THE
"GENERAL PARTNER").
The undersigned, a holder of limited partnership interests
in the
Partnership ("Units") on March 29, 1996 (the "Record Date"),
hereby appoints
Mitchell F. Felchle or Otis F. Hilbert, or either of them with
full power of
substitution, as proxies for the undersigned, to vote all Units
which the
undersigned is entitled to vote at the Special Meeting of Limited
Partners to
be held on April ___, 1996, and at any adjournments or
postponements thereof,
on the following matters.
The General Partner recommends that you vote FOR the
following proposal:
1. The liquidation of the Partnership and the sale of the
property
owned by the Partnership and the properties owned by joint
ventures
in which the Partnership is a co-venturer, over a period of
time
beginning on the date of Limited Partner approval and not to
exceed
two years from such date, followed by the dissolution and
winding up
of the Partnership, as described in the Proxy Statement (the
"Liquidation Proposal").
FOR [ ] THE LIQUIDATION PROPOSAL, AS DESCRIBED ABOVE
AND IN THE
PARTNERSHIP'S PROXY STATEMENT.
AGAINST [ ] THE LIQUIDATION PROPOSAL, AS DESCRIBED ABOVE
AND IN THE
PARTNERSHIP'S PROXY STATEMENT.
ABSTAIN [ ] ON WHETHER OR NOT TO APPROVE THE LIQUIDATION
PROPOSAL, AS
DESCRIBED ABOVE AND IN THE PARTNERSHIP'S
PROXY STATEMENT.
2. In their discretion, upon such other matters as may
properly come
before the Special Meeting.
IF A LIMITED PARTNER SIGNS THIS CARD, BUT DOES NOT INDICATE
A VOTE ABOVE,
THE GENERAL PARTNER WILL TREAT SUCH CARD AS A VOTE FOR THE
LIQUIDATION
PROPOSAL.
IMPORTANT: THIS PROXY CARD MUST BE SIGNED AND DATED IN ORDER TO
BE VALID
SIGNATURE(S) REQUIRED:
_______________________________________ Date:
_____________________
_______________________________________
_______________________________________<PAGE>
Note:
Please sign as your name(s) appears on the address label.
All parties
indicated on the address label must sign this card.
INSTRUCTIONS FOR PROXY CARD:
1. Please review the enclosed proxy materials.
2. Indicate your vote by marking one of the boxes on the
Proxy Card
above. Your General Partner recommends that you vote
FOR the
Liquidation Proposal.
3. DATE AND SIGN PROXY CARD AS YOUR NAME(S) APPEARS ON THE
ADDRESS LABEL
ON THE REVERSE SIDE OF THE PROXY CARD.
Your prompt response is appreciated. If you have any questions
concerning this
information, please feel free to contact our Investor Relations
Department at
_____________.
