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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 10, 1996
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
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(Exact name of Registrant as specified in charter)
California 33-22857 95-4166241
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
9090 Wilshire Boulevard
Suite 210
Beverly Hills, California 90211
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Address of Principal Executive Offices
Registrant's telephone number, including area code: 310/278-2191
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ITEM 5. OTHER EVENTS.
The Registrant recently became aware that an entity identified
as MacKenzie Patterson, Inc. ("MacKenzie") was apparently conducting a tender
offer for Units in the Registrant pursuant to an undated "Offer to Purchase
Limited Partnership Interests." Registrant has no further information about
this "Offer" or MacKenzie. Within ten days of confirming that Limited Partners
were receiving the "Offer," the General Partners on behalf of the Registrant,
by letter, mailed on or about December 10, 1996, advised the Limited Partners
that the General Partners recommended rejecting the "Offer" because they
believe that it does not reflect the true value of the Units. Copies of the
"Offer" and the Registrant's letter are attached hereto as Exhibits.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
The following exhibits are attached to this Current Report and thereby
made a part thereof:
1. Copy of the "Offer to Purchase Limited Partnership
Interest" documents as received from Registrant's
Limited Partners.
2. Copy of the Registrant's letter to Limited Partners.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: December 11, 1996
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
BY: NATIONAL PARTNERSHIP INVESTMENTS CORP.,
A CALIFORNIA CORPORATION,
ITS GENERAL PARTNER
By: Patricia W. Toy
Its: Senior Vice President and
Assistant Secretary
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EXHIBIT 1
[MP LOGO] MacKenzie Patterson, Inc.
MacKenzie Patterson Advisors, Inc.
MacKenzie Securities Partners, Inc.
Patterson Financial Services, Inc.
Moraga Partners, Inc.
TO: THE HOLDERS OF LIMITED PARTNERSHIP INTERESTS IN:
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
RE: OFFER TO PURCHASE LIMITED PARTNERSHIP INTERESTS @ $4.25 PER UNIT
MacKenzie Patterson, Inc. and its Affiliates (collectively "MPI"),
hereby offer to purchase up to 320,000 of the outstanding Limited Partnership
Units (the "Units") of Century Hillcreste Apartment Investors, L.P., (the
"Partnership"), for $4.25 per Unit (the "Purchase Price"), net to the seller
in cash which amount will be reduced by any cash distributions made to you by
the Partnership after November 30, 1996. The 320,000 Units sought pursuant to
this offer represent approximately 4.4% of the total outstanding Units at
November 19, 1996. MPI does not charge any transactional fees. To calculate
the total proceeds that would be paid to you, multiply the number of Units you
own by $4.25 per Unit. To accept this offer, please execute the enclosed
Assignment Form, and return it in the enclosed envelope. THE UNITS WILL BE
PURCHASED ON A FIRST-COME, FIRST-BUY BASIS. Please respond quickly as we are
limited to purchasing 320,000 Units. Our Offer will expire at 12:00 a.m. on
December 31, 1996.
MPI will be acquiring the Units for investment purposes, and does not
intend to resell them. The $4.25 Purchase Price was determined as a result of
MPI's own independent analysis. The Purchase Price does not necessarily
represent the fair market value or liquidation value of each Unit, nor does
the Purchase Price necessarily correspond with recent trade prices for the
Units in the secondary market where such Units may trade (please see below).
MPI believes the value of the Units exceeds the Purchase Price. No independent
person was retained to evaluate or render any opinion with respect to the
fairness of the Purchase Price.
Neither MacKenzie Patterson, Inc., nor any of its affiliates are
affiliated in any way with the Partnership or its general partner. Affiliates
of MPI currently own less than one half of one percent of the outstanding
units. MPI may purchase, from time to time, additional Units on the secondary
market, or through registered tender offers, at prices which may vary from the
price offered herein.
Reasons to consider selling your interest in Century Hillcreste
Apartment Investors, L.P. include:
o NO FUTURE IRS FILING REQUIREMENTS. If you sell all your units to us, 1996
will be the final year for which you will be obligated to file a K-1 for
Century Hillcreste Apartment Investors, L.P., with your tax return. This may
represent a substantial reduction in costs associated with filing complicated
tax returns.
o ILLIQUIDITY OF UNITS. The relative illiquidity of the Units resulting from
the absence of a formal trading market make the Units difficult to sell.
According to the most recently reported trading
1640 School Street, Suite 100, Moraga, CA 94558
510-631-9100 FAX 510-651-9119
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prices in leading industry publications, the Partnership Spectrum(1) and
the Stanger Report(2), units of Century Hillcreste Apartment Investors,
L.P. have traded at prices ranging from of $2.85 - $4.46 per unit during
the first nine months of 1996. The reported trading prices do not take
into consideration any fees that a seller would pay, including General
Partner Transfer Fees, and therefore; may not be the actual amount the
seller was paid for their units.
o SIMPLIFIED IRA CONSOLIDATION. If you own more than one IRA and are
trying to consolidate your IRA accounts, selling your limited
partnership investment for cash can make consolidation easier and more
cost effective.
o POTENTIAL TAX BENEFITS FROM THE SALE OF YOUR UNITS. We believe that most
investors will realize a taxable loss upon the sale of their Units to
us, which can be utilized by all investors to offset capital gains and
by individual investors to offset up to $3,000 of earned income in any
taxable year. You should consult your tax advisor as to how this might
benefit you.
Sincerely,
MACKENZIE PATTERSON, INC.
For an efficient transfer of units and quicker payment of sales proceeds, please
be sure to do the following:
1. Please completely fill out Box A including name(s) of owner(s), social
security number(s) and address. It is important that all registered
owners be included on, and sign this assignment form.
2. If you are unaware of how many units you own, please call us at (800)
854-8357. Or, simply write "All" next to units tendered if you wish to
tender all your units.
3. If the units are held in a custodial account (IRAs, Keoghs, etc.), the
custodian also has to execute the assignment form (see Box "B"). For
custodians, please include a copy of the corporate resolution that
denotes appropriate signatories.
4. For Trusts and Corporations, please enclose a copy of the Trust
Agreement and/or corporation resolution naming the authorized
signatories, including signature pages.
5. Estates should enclose a copy of the death certificate, and/or an
affidavit of domicile, and a court appointment as executor or personal
representative.
If you have any questions, or are having difficulties obtaining your
custodian's signature please give us a call at (800) 854-8357.
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(1) Partnership Spectrum. Partnership Profiles, Inc., September/October 1996.
(2) The Stanger Report. Robert Stanger & Co., Fall, 1996.
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ASSIGNMENT FORM
FOR LIMITED PARTNERSHIP UNITS
OF
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
Subject to and effective upon acceptance for payment, the undersigned ("the
Seller"), hereby sells, assigns, transfers, conveys, and delivers and
irrevocably directs any custodian or trustee to sell, assign, transfer, convey
and deliver (the "Transfer") to MacKenzie Patterson, Inc., or its Assigns (the
"Purchaser"), all of the Seller's right, title and interest in limited
partnership units (the "Units") in Century Hillcreste Apartment Investors,
L.P., a Delaware limited partnership ("the Partnership"), for $4.25 per Unit,
net to the Seller in cash, which amount shall be reduced by any distributions
made to the Seller by the Partnership after November 30, 1996. MacKenzie
Patterson, Inc., may name any of its affiliates as assigns.
Such Transfer shall include, without limitation, all rights in, and claims to,
any Partnership profits and losses, cash distributions, voting rights and other
benefits of any nature whatsoever distributable or allocable to such Units
under the Partnership's Agreement of Limited Partnership, as amended (the
"Partnership Agreement"). The Seller hereby irrevocably constitutes and
appoints the Purchaser as the true and lawful agent and attorney-in-fact of the
Seller with respect to such Units, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to vote, inspect Partnership books and records or act in such manner as any
such attorney-in-fact, in its sole discretion, deem proper with respect to such
Units, to deliver such Units and transfer ownership of such Units on the
Partnership's books maintained by the General Partner of the Partnership,
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Purchaser, to direct any custodian or trustee holding
record title to the Units to do any of the foregoing, including the execution
and delivery of a copy of this Agreement of Transfer, and upon payment by the
Purchaser of the purchase price, to receive all benefits and cash
distributions, change the address therefore on the Partnership's records,
endorse Partnership checks payable to the Seller, and otherwise exercise all
rights of beneficial ownership of such Units. The Purchaser shall not be
required to post bond of any nature in connection with this power of attorney.
The Seller hereby represents and warrants to the Purchaser that the Seller owns
such Units and has full power and authority to validly sell, assign, transfer,
convey and deliver such Units to the Purchaser, and that when any such Units
are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all options,
liens, restrictions, charges, encumbrances, conditional sales agreements or
other obligations relating to the sale or transfer thereof, and such Units will
not be subject to any adverse claim. If the undersigned is signing on behalf
of an entity, the undersigned declares that he has authority to sign this
document on behalf of the entity. The Seller further represents and warrants
that the Seller is a "United States person", as defined in Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended, or if the Seller is not a
United States person, that the Seller does not own beneficially or of record
more than 5% of the outstanding Units of the Partnership.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity or liquidation of the Seller and any obligations of the
Seller shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. This agreement is irrevocable and may not be
withdrawn or rescinded.
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By signing this Letter of Transmittal the Seller is hereby giving authority to
MacKenzie Patterson, Inc. to institute a change of address for all future
distribution checks to be sent directly to MacKenzie Patterson at the address
known as 1640 School Street Suite 100 Moraga California 94556.
Upon request, the Seller will execute and deliver, and irrevocably directs any
custodian to execute and deliver, any additional documents deemed by the
Purchaser to be necessary or desirable to complete the assignment, transfer and
purchase of such Units.
The Seller hereby certifies, under penalty of perjury, that (i) the number
shown below on this form as the Seller's Taxpayer Identification Number is
correct, and (ii) Seller is not subject to back-up withholding either because
Seller has not been notified by the Internal Revenue Service (the "IRS") that
Seller is subject to back-up withholding as a result of a failure to report all
interest or dividends, or the IRS has notified Seller that Seller is no longer
subject to back-up withholding.
The Seller hereby also certifies, under penalties of perjury, that the Seller,
if an individual, is not a non-resident alien for purposes of U.S. income
taxation, and if not an individual, is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax Regulation). The Seller understands
that this certification may be disclosed to the IRS by the Purchaser and that
any false statements contained herein could be punished by fine, imprisonment,
or both.
PLEASE PRINT ALL INFORMATION EXCEPT FOR THE SIGNATURE BOX
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Box A Box B
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Owner(s) Custodian
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Owner(s) Signature Custodian Signature
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Social Security Number Tax ID Number
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Address Address
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Units Units
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Signature Guarantee Signature Guarantee
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EXHIBIT 2
[HILLCRESTE LOGO]
Century HillCreste Apartment Investors, L.P.
RE: Century HillCreste Apartment Investors, L.P.
("Century/HillCreste")
Dear Investor:
We have received calls from the limited partners concerning a certain
unsolicited offer that you may have received recently from MacKenzie Patterson
Inc. ("MacKenzie") for a small percentage of the outstanding interests. We
strongly recommend that you reject this offer which we believe does not reflect
the true value of the Century/HillCreste partnership.
The factors which led us to this conclusion are summarized below:
o The price per unit offered by this firm does not adequately reflect
the value of the units. The price of $4.25 from MacKenzie represents only
80.08% of the Net Asset Value of $6.74 per unit reflected in the independent
appraisal as of December 31, 1995. This Net Asset Value has increased 6.3% over
the 1994 appraisal of $6.34 per unit.
o The current annual distribution of 3% on the original unit cost was
increased in the second quarter as all earthquake-related repairs and
refurbishments have been made. Cash distributions to date total approximately
51.2% of the original investment amount.
o Prices in the informal secondary market as reported in the Requests
to Transfer forms to the Managing General Partner have ranged from $2.70 to
$6.45 per unit. This informal market usually represents distressed sales, the
absence of liquidity and certain transfer costs to investors.
Accordingly, we have determined that the offer by MacKenzie is not in
the best interests of either the Partnership or the Limited Partners and
strongly recommend that you reject it.
The Partnership's semi-annual report for 1996 has been mailed to all
investors. It contains the unaudited financial statements as well as the report
of the first six months operations for 1996. If you have any additional
questions please call Patricia W. Toy at 1-800-666-6274.
Sincerely,
National Partnership Investments Corp.
Managing General Partner
/s/ CHARLES H. BOXENBAUM /s/ BRUCE E. NELSON
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Charles H. Boxenbaum Bruce E. Nelson
Chairman of the Board President
9090 Wilshire Boulevard, Suite 201
Beverly Hills, California 90211
(310) 278-2191
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