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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) June 14, 1996
Brauvin Income Plus L.P. III
(Exact name of registrant as specified in its charter)
Delaware 0-19219 36-3639043
(State of or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
150 South Wacker Drive, Suite 3200, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 443-0922
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
Brauvin Income Plus L.P. III, a Delaware limited partnership
formed on April 18, 1989 (the "Partnership") has entered into an
agreement and plan of merger dated as of June 14, 1996 (the "Merger
Agreement") with Brauvin Real Estate Funds L.L.C., a Delaware
limited liability company (the "Purchaser"). Pursuant to the terms
of the Merger Agreement, the Partnership proposes to merge with and
into the Purchaser through a merger (the "Merger") of its limited
partnership interests. In connection with the Merger, the
beneficial owners (the "Limited Partners") of the limited
partnership interests of the Partnership (the "Units") will receive
approximately $8.83 per Unit in cash. Promptly upon consummation
of the Merger, the Partnership will cease to exist and the
Purchaser, as the surviving entity will succeed to all of the
assets and liabilities of the Partnership. The affirmative vote of
the Limited Partners holding a majority of the Units is necessary
to approve the Merger.
The Partnership is currently in the process of drafting a
proxy statement, which will require prior review and comment by the
Securities and Exchange Commission (the "Commission"), to solicit
proxies for use at a special meeting of the Limited Partners (the
"Special Meeting") to be held at the offices of the Partnership at
a date in the near future. The purpose of the Special Meeting is
to vote upon the Merger and certain other matters as described
herein. The preliminary proxy materials of the Partnership will be
filed with the Commission shortly and will be substantially
identical to the proxy materials filed by Brauvin High Yield Fund
L.P., a Delaware limited partnership that is affiliated with the
Partnership.
By approving the Merger, the Limited Partners will also be
approving an amendment of the Restated Limited Partnership
Agreement of the Partnership, as amended (the "Partnership
Agreement") allowing the Partnership to sell or lease property to
affiliates (this amendment, together with the Merger shall be
referred to herein as the "Transaction"). In addition, the
Delaware Revised Uniform Limited Partnership Act (the "Act")
provides that a merger must also be approved by the general
partners of a partnership, unless the limited partnership agreement
provides otherwise. The Partnership Agreement does not address
this matter. Therefore, the Limited Partners will be asked to
adopt an amendment (the "Amendment") to the Partnership Agreement
which specifically provides that the general partners of the
Partnership (the "General Partners") will not be required to
approve the Transaction. If the Amendment is approved, the vote of
the Limited Partners holding a majority of the Units will be the
only vote necessary to approve the Transaction. Neither the Act
nor the Partnership Agreement provide the Limited Partners not
voting in favor of the Transaction with dissenters' appraisal
rights.
The actual redemption price will be based on the fair market
value of the properties of the Partnership (the "Assets") as
determined by an independent appraiser at such time as is specified
in the certificate of merger (the "Effective Time"), plus all
remaining cash of the Partnership (which will include earnings only
through July 31, 1996), less the Partnership's actual costs
incurred and accrued through the Effective Time, including
reasonable reserves in connection with: (i) the proxy
solicitation; (ii) the Transaction (as detailed in the Merger
Agreement); and (iii) the winding up of the Partnership, including
preparation of the final audit, tax return and K-1s (collectively,
the "Transaction Costs") and less all other Partnership
obligations.
Cushman & Wakefield Valuation Advisory Services ("Cushman &
Wakefield"), the largest real estate valuation and consulting
organization in the United States, was engaged by the Partnership
to prepare an appraisal of the Assets. Cushman & Wakefield was
subsequently engaged to provide an opinion as to the fairness of
the Transaction to the Limited Partners from a financial point of
view. Cushman & Wakefield has preliminarily determined that the
fair market value of the Assets of the Partnership is $19,129,150,
which is approximately $8.58 per Unit. In addition, Cushman &
Wakefield is finalizing its opinion as to the fairness of the
Transaction to the Limited Partners from a financial point of view.
The General Partners are Jerome J. Brault, the managing
general partner of the Partnership (the "Managing General
Partner"), Brauvin Realty Advisors III, Inc., the corporate general
partner of the Partnership (the "Corporate General Partner") and
Cezar M. Froelich. Mr. Froelich gave notice of his intent to
resign as a General Partner of the Partnership on May 23, 1996.
Pursuant to the terms of the Partnership Agreement, Mr. Froelich's
resignation will become effective on the 90th day following notice
to the Limited Partners. The General Partners will not receive any
payment in exchange for the redemption of their general partnership
interests nor will they receive any fees from the Partnership in
connection with the Transaction.
The Managing General Partner and his son, James L. Brault, an
executive officer of the Corporate General Partner, will have a
minority ownership interest in the Purchaser. Therefore, the
Braults have an indirect economic interest in consummating the
Transaction that is in conflict with the economic interests of the
Limited Partners. Mr. Froelich has no affiliation with the
Purchaser.
The Transaction is one of a series of related transactions
whereby the Purchaser seeks to acquire the Assets of the
Partnership and the assets, through purchase or merger, of Brauvin
High Yield Fund L.P., Brauvin High Yield Fund L.P. II and Brauvin
Corporate Lease Program IV L.P., Delaware limited partnerships
affiliated with the Partnership.
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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, thereunto duly authorized.
BRAUVIN INCOME PLUS L.P. III
(Registrant)
By: Brauvin Realty Advisors III, Inc.,
Corporate General Partner
DATE: June 24, 1996 By: /s/ Jerome J. Brault
Name: Jerome J. Brault
Title: President
