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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d) (4) OF THE
SECURITIES EXCHANGE ACT OF 1934
Courtyard by Marriott II Limited Partnership
(Name of Subject Company)
CBM Two LLC
(Names of Person(s) Filing Statement)
Units of limited partnership interests
(Title of Class of Securities)
None
(CUSIP Number of Class of Securities)
Christopher G. Townsend
Courtyard by Marriott II Limited Partnership
10400 Fernwood Road
Bethesda, Maryland 20817
(301) 380-2070
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of the Person(s)
Filing Statement)
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Copies to:
J. Warren Gorrell, Jr. Bruce W. Gilchrist Hogan & Hartson LLP Columbia Square,
555 Thirteenth Street, N.W. Washington, D.C. 20004-1109 (202) 637-5600
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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Item 1. Subject Company Information.
The name of the subject company is Courtyard by Marriott II Limited
Partnership, a Delaware limited partnership (the "Partnership"). The principal
executive office of the Partnership is located at 10400 Fernwood Road,
Bethesda, Maryland 20817 and its telephone number is (301) 380-2070. The sole
general partner of the Partnership (the "General Partner"), with a 5% general
partnership interest, is CBM Two LLC, a Delaware limited liability company.
The principal executive office of the General Partner is located at 10400
Fernwood Road, Bethesda, Maryland 20817 and its telephone number is (301) 380-
2070. The class of equity securities to which this Statement relates is the
units of limited partnership interest in the Partnership (the "Units"). As of
August 2, 2000, there were 1,470 Units outstanding.
Item 2. Identity and Background of Filing Person.
The name, business address and business telephone number of the General
Partner, which is the filing person, are set forth in Item 1 above. The
General Partner is the sole general partner of the Partnership.
This Statement relates to an offer by CBM II Holdings LLC, a Delaware
limited liability company (the "Purchaser") and an indirect, wholly owned
subsidiary of CBM Joint Venture LLC (the "Joint Venture"), a Delaware limited
liability company that is a joint venture between MI CBM Investor LLC ("MI
Investor"), a Delaware limited liability company and a wholly owned indirect
subsidiary of Marriott International, Inc., a Delaware corporation ("Marriott
International"), and Rockledge Hotel Properties, Inc., a Delaware corporation
("Rockledge"), to purchase (the "Purchase Offer") all outstanding Units (other
than Units owned by the General Partner) at $147,959 per Unit (or a pro rata
portion thereof) in cash, upon the terms and subject to the conditions set
forth in the Purchase Offer and Consent Solicitation dated August 7, 2000 and
the related Proof of Claim, Assignment and Release, copies of which are
enclosed herewith (which, as amended or supplemented from time to time, are
collectively herein referred to as the "Purchase Offer and Consent
Solicitation"). If the Court (as defined below) approves legal fees and
expenses of approximately $29,000 per Unit to counsel to the class action
plaintiffs ("Class Counsel") in the Milkes Litigation (as defined below), the
net amount that each holder of Unit(s) (a "Unitholder") that is a class member
will receive is approximately $119,000 per Unit (or a pro rata portion
thereof).
The Purchase Offer and the consent solicitation described in the Purchase
Offer and Consent Solicitation are being made pursuant to the terms of a
settlement agreement, dated March 9, 2000 (the "Settlement Agreement"),
relating to a class action lawsuit brought against the predecessor-in-interest
to the General Partner and various related entities and others, in the 285th
Judicial District Court (the "Court") of Bexar County, Texas (the "Milkes
Litigation"). The Settlement Agreement also relates to lawsuits filed with
respect to six other limited partnerships.
Pursuant to the terms of the Settlement Agreement, a subsidiary of the
Purchaser will merge (the "Merger") with and into the Partnership pursuant to
an agreement and plan of merger (the "Merger Agreement") immediately following
the consummation of the Purchase Offer. In the Merger, each outstanding Unit
that has not been tendered in the Purchase Offer (other than Units held by the
General Partner, the Purchaser or holders who have elected to opt out of the
Settlement) will be converted into the right to receive $147,959 per Unit (or
a pro rata portion thereof) in cash. If the Court approves legal fees and
expenses of approximately $29,000 per Unit to Class Counsel, the net amount
that each Unitholder that is a class member will receive is approximately
$119,000 per Unit (or a pro rata portion thereof). In addition, each
outstanding Unit held by a holder who has elected to opt out of the Settlement
will be converted in the Merger into the right to receive a cash amount equal
to the appraised value of such Unit (or a pro rata portion thereof), as
determined in accordance with the appraisal provisions of the Merger Agreement
and the Settlement Agreement. The appraised value of Units will not include
any amount representing the value of the settlement of the claims asserted in
the Milkes Litigation. The amount to be received by any Unitholder in the
Merger will be reduced by any amount owed by such holder on the original
purchase price of his or her Units.
The Purchase Offer and Consent Solicitation also relates to the solicitation
by the General Partner of consents to the Merger and to certain amendments to
the Partnership's partnership agreement (the "Amendments").
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The Purchaser has not yet established an office and can be contacted through
MI Investor or Rockledge. The business address of MI Investor is 10400
Fernwood Road, Bethesda, Maryland 20817 and its telephone number is (301) 380-
3000. The business address of Rockledge is 10400 Fernwood Road, Bethesda,
Maryland 20817 and its telephone number is (301) 380-9000.
Item 3. Past Contacts, Transactions, Negotiations and Agreements.
The information set forth in the sections of the Purchase Offer and Consent
Solicitation captioned "Risk Factors" and "Special Factors--Certain
Transactions with the Partnership," is incorporated herein by reference.
Item 4. The Solicitation or Recommendation.
The General Partner is a defendant in the Milkes Litigation. Therefore, the
General Partner has a conflict of interest with respect to the Purchase Offer,
the Merger and the Amendments and, accordingly, is not making a recommendation
to any Unitholder as to whether to tender or to refrain from tendering his or
her Units in the Purchase Offer or whether or not to consent to the Merger and
the Amendments. Each Unitholder must make his or her own decision whether or
not to tender his or her Units in the Purchase Offer and whether or not to
consent to the Merger and the Amendments, based upon a number of factors,
including several factors that may be personal to Unitholders, such as their
financial position, their need or desire for liquidity, their preferences
regarding the timing of when they might wish to sell their Units, other
financial opportunities available to them, and their tax position and the tax
consequences to them of selling their Units.
The General Partner owns a total of 21.5 Units representing a 1.39% limited
partnership interest in the Partnership. The General Partner will not tender
its Units in the Purchase Offer. Instead, in the Merger, the General Partner's
Units will be converted into a 1.39% limited partnership interest in the
surviving partnership, and its 5% general partnership interest will be
converted into a 5% general partnership interest in the surviving partnership.
Other than as described herein, none of the executive officers, managers,
affiliates or subsidiaries of the General Partner and none of the affiliates
or subsidiaries of the Partnership (other than the General Partner) own any
Units.
Item 5. Persons/Assets Retained, Employed, Compensated or Used.
Neither the Partnership nor the General Partner has retained any person to
make solicitations or recommendations in connection with the Purchase Offer.
Class Counsel has retained GEMISYS Corporation to act as the claims
administrator in connection with the Purchase Offer and the Consent
Solicitation. The information set forth in the section of the Purchase Offer
and Consent Solicitation captioned "Other Matters--Fees and Expenses" is
incorporated herein by reference.
Item 6. Interests in Securities of the Subject Company.
Neither the Partnership or any of its subsidiaries or affiliates, nor the
General Partner or any of its executive officers, managers, affiliates or
subsidiaries, has effected any transaction in the Units during the past 60
days.
Item 7. Purposes of the Transaction and Plans or Proposals.
Except as described or referred to in this Statement, no negotiations are
being undertaken or engaged in by the General Partner on behalf of the
Partnership in response to the Purchase Offer that relate to (i) a tender
offer or other acquisition of the Units by the Partnership, any of its
subsidiaries, or any other person, (ii) an extraordinary transaction, such as
a merger, reorganization or liquidation, involving the Partnership or any
subsidiary of the Partnership, (iii) a purchase, sale or transfer of a
material amount of assets by the Partnership or any subsidiary of the
Partnership, or (iv) any material change in the present dividend rate or
policy, or indebtedness or capitalization of the Partnership.
Except as described or referred to in this Statement, there are no
transactions, resolutions of the Managers of the General Partner, agreements
in principle or signed contracts that were entered into in response to the
Purchase Offer that relate to one or more of the matters referred to in this
Item 7.
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Item 8. Additional Information.
The information contained in the Purchase Offer and Consent Solicitation and
the Proof of Claim, Assignment and Release is incorporated herein by
reference.
Item 9. Exhibits.
(1) Purchase Offer and Consent Solicitation dated August 7, 2000.*
(2) Form of Agreement and Plan of Merger by and among the Joint Venture,
Merger Sub and the Partnership.**
(3) Settlement Agreement dated as of March 9, 2000 among the Milkes
Plaintiffs (as defined therein), the Haas Plaintiffs (as defined
therein), the Palm and Equity Intervenors (as defined therein) and the
Defendants (as defined therein), each by and through their respective
counsel of record.**
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* Incorporated by reference to the Proxy Statement and the Tender Offer
Statement on Schedule TO filed by the Purchaser, the Joint Venture,
Marriott International, MI Investor, Rockledge, Host Marriott Corporation
and Host Marriott, L.P. with the Securities and Exchange Commission on
August 7, 2000.
** Incorporated by reference to Amendment No. 1 to the Tender Offer Statement
on Schedule TO filed by the Purchaser, the Joint Venture, Marriott
International, MI Investor and Rockledge with the Securities and Exchange
Commission on June 27, 2000.
SIGNATURE
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.
COURTYARD BY MARRIOTT II LIMITED
PARTNERSHIP
By: CBM TWO LLC, its general partner
/s/ C. G. Townsend
Dated: August 7, 2000 By: ______________________________
Name:C. G. Townsend
Title:Executive Vice President
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