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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Brauvin Income Plus L.P. III, a Delaware limited partnership
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(Name of Registrant as Specified in its Charter)
Janet Toolson
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[x] $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 applied:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PRELIMINARY MATERIALS
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JANET TOOLSON
c/o The Mills Firm
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300 Drake's Landing
Suite 155
Greenbrae, California 94904
Telephone: 415-464-4770
Fax: 415-464-4777
SOLICITATION STATEMENT
Relating to the Special Meeting of Limited Partners
of Brauvin Income Plus L.P. III
Held October 9, 1996
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INTRODUCTION
This Solicitation Statement and the enclosed Cancellation of Revocation are
being first mailed to the beneficial owners ("Limited Partners") of the limited
partnership interests ("Units") of Brauvin Income Plus L.P. III, a Delaware
limited partnership (the "Partnership"), on or about October __, 1996 by the
undersigned Limited Partner (the "Dissenting Partner") regarding the revocation
of proxies that may have been granted to the Corporate General Partners of the
Partnership, or its designees, for use at a special meeting of the Limited
Partners (the "Special Meeting") held at the offices of the Partnership, 150
South Wacker Drive, Chicago, Illinois 60606, on Wednesday, October 9, 1996, at
3:00 p.m., Chicago Time. [At that meeting, the matters presented for vote were
not passed by the Limited Partners.]
On September 27, 1996, on behalf of the Dissenting Partner, our counsel,
The Mills Firm, sent a letter requesting that you revoke proxies that you may
have granted to the Corporate General Partners of our Partnership regarding
proposals (the "Proposals") to (i) merge the Partnership with Brauvin Real
Estate Funds, LLC, a Delaware limited liability company ("Purchaser") and (ii)
adopt an amendment to the Partnership's Partnership Agreement to permit a
majority vote of the Limited Partners to determine the outcome of the merger
without the vote of the General Partners ("September 27 Letter"). A number of
Limited Partners responded favorably to the September 27 Letter and sent in
revocations ("REVOCATIONS") as requested. The exact number of REVOCATIONS that
were sent in is not known to the Dissenting Partner.
The Corporate General Partners and the Securities and Exchange Commission
("SEC") have questioned whether the September 27 Letter complies with the SEC's
rules regarding vote solicitations sent to investors in publicly-held entities.
This Solicitation Statement supersedes the September 27 Letter.
The purpose of this Solicitation Statement is is twofold: first, to urge
Limited Partners not to cancel REVOCATIONS which have already been submitted to
the Corporate General Partners merely because the September 27 Letter may not
have been in compliance with the SEC's rules for such solicitations; and second,
to also give Limited Partners a chance to cancel REVOCATIONS submitted in
response to the September 27 Letter, if, after reading this document which was
processed in accordance with SEC rules prior to its mailing, they deem such
cancellation appropriate. The effect of such cancellation of REVOCATION will be
a vote in favor of the Proposals. The Dissenting Partner has commenced class
action litigation against the Corporate General Partners and the Purchaser in
the United States District Court, Northern District of Illinois, Eastern
Division, for breach of fiduciary duty (the "Class Action Lawsuit"). For the
reasons described in the next captioned section of this Solicitation Statement,
the Dissenting Partner STRONGLY URGE ALL LIMITED PARTNERS WHO HAVE REVOKED
PREVIOUSLY SUBMITTED PROXIES NOT TO CANCEL SUCH REVOCATIONS.
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REASONS TO VOTE AGAINST THE "PROPOSALS"
Conflicts of Interest
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The General Partners which are recommending the Proposals, Mr. Jerome J.
Brault and Brauvin Realty Advisors, Inc. (collectively, the "Corporate General
Partners"), will control the entity into which the Partnership will be merged as
described in the first Proposal. Neither the Corporate General Partners nor the
Partnership have taken additional steps necessary to support the price being
paid to the Limited Partners or, indeed, to obtain a higher price for Limited
Partners, such as attempting to market the property to third parties or
subjecting the property to an auction procedure. Clearly, the Corporate General
Partners want the properties for themselves, creating the ultimate conflict of
interest. General partners of limited partnerships are obligated to exercise
the highest standard of care in connection with transactions entered into by the
partnership, particularly in connection with related party transactions and
self-dealing. Mere disclosure of self-dealing is not adequate. Thus, a vote
against the merger Proposal would obtain time during which to test alternative
means for determining the true value of the property and the Units in unrelated
third party transactions and procedures.
In addition, after the merger is completed, any significant increase in the
value of the Partnership's properties would inure totally to the benefit of the
Corporate General Partners. This possibility should be considered in deciding
how to vote. You may want to continue to share in the potential appreciation.
Leaving in place a REVOCATION of any proxies approving the Proposals will allow
you to continue as ultimate "owners" of the properties.
The Valuation Process
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The Corporate General Partners have obtained an appraisal from Cushman &
Wakefield which is based on one recommended method of appraising properties. It
does not take into account other property valuation methods, and the valuation
is not to be tested against the market. In addition, Cushman & Wakefield was
asked to render a financial "fairness" opinion with respect to the transaction
contemplated by the Proposals as a whole. Having already valued the
Partnership's assets, being asked to opine on the financial fairness of the
transaction to the Limited Partners placed that firm in a rather untenable
conflict position. It would have been more traditional, and provided more
comfort to the Limited Partners, had a reputable independent investment banking
firm been engaged to evaluate the overall transaction and render the fairness
opinion.
Leaving in place a REVOCATION of your vote for the Proposals would allow
for the process of obtaining a more complete appraisal and a wholly independent
fairness opinion.
Failure of Recommendation by Independent General Partner
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In the proxy material prepared by the Corporate General Partners and
distributed to you, disclosure is made that one of the individual General
Partners who is not related to Mr. Brault or Brauvin Realty Advisors, Inc.,
Cezar M. Froelich (the "Independent General Partner"), is not
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recommending the Proposals "since he believes that the most advantageous
methodology for a fair price for the assets would be to seek third-party offers
through an arm's-length bidding process." In fact, as also disclosed in the
Corporate General Partners' proxy material, Independent General Partner has
announced his intention to resign as a General Partner of the Partnership. It is
clear from the positions taken by the Independent General Partner that the
second of the Proposals, namely the amendment to the Partnership Agreement
permitting the merger without the consent of the General Partners, is a bold
self-serving tactic to avoid a result which, because of the announced positions
of the Independent General Partner, would negate the possibility of a successful
merger on the terms proposed. Thus, the affiliated Corporate General Partners
are asking for your consent to eliminate the necessity for the exercise of
judgment on the part of the Independent General Partner of the Partnership.
Frankly, they are also asking you to override the judgment of the Independent
General Partner that this is not the best course of action to be taken now.
Presumably, the provision of the Partnership Agreement requiring both the
approval of the Limited Partners and the General Partners to transactions such
as those contemplated by the Proposals was to satisfy fiduciary obligations on
the part of General Partners to Limited Partners, as well as to obtain the
consent and advice of the persons most affected by and knowledgeable about the
assets owned by the Partnership. This protection is clearly lost by virtue of
the second Proposal.
Leaving in place the REVOCATION of a prior "yes" vote on the second
Proposal therefore, would be a confirmation that you, as Limited Partners,
desire the protection originally afforded to you by the Partnership Agreement.
CANCELLATION OF YOUR EARLIER SUBMITTED REVOCATION WILL HAVE THE EFFECT OF
VOTING "YES" FOR THE PROPOSALS. YOU ARE URGED NOT TO CANCEL YOUR REVOCATION.
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INFORMATION ABOUT DISSENTING PARTNER
The Dissenting Partner is Janet Toolson of Kent, Washington. She is a
Customer Service Representative for the City of Kent, Washington., and hold 500
Units of the Partnership. She has been certified as class representatives for
the Limited Partners of the Partnership in the above described Class Action
Lawsuit. Her only interest in the Proposals is to see that the value of the
Units is maximized by the General Partners of the Partnership in any
transaction, or series of transactions, in which the Partnership properties are
disposed of.
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INFORMATION CONCERNING THE MILLS FIRM
The Mills Firm is a law firm located in Greenbrae, California. It is
acting as counsel for the Dissenting Partner. The Mills Firm will derive fees
from representing the Dissenting Partner which has been certified as class
representative for other Limited Partners in the Class Action Lawsuit. As a
part of its engagement with the Dissenting Partner, The Mills Firm agreed to
bear the costs of the preparation and dissemination of this Solicitation
Statement and the September 27 Letter. Except for legal fees to be derived from
such representation, The Mills Firm has no other interest in transactions
described by the Proposals. The Mills Firm has no economic interest in the
outcome of the vote being sought by the Corporate General Partners.
GENERAL
The REVOCATION was solicited by and on behalf the Dissenting Partners. The
Dissenting Partners encourage you not to revoke it. Solicitation will be made
by mail.
Each Unit is entitled to one vote. A majority of the Units must be voted
in favor of the Proposals for them to be approved. Revocation of a "yes" vote,
as well as failure to vote affirmatively, is effectively a "NO" vote. The
effect of a cancellation of a REVOCATION will be a "yes" vote for the Proposals.
Even though received by the Corporate General Partners after the Special
Meeting, cancellation of a REVOCATION could have the effect of re-opening the
vote counting process with the possible result of the Proposals being deemed
approved.
Any Limited Partner submitting the accompanying Cancellation of Revocation
has the right to revoke it by notifying the Corporate General Partners of the
Company in writing at any time prior to any duly authorized re-count of the
voting at the Special Meeting.
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"Dissenting Partner"
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SPECIAL MEETING - OCTOBER 9, 1996
THE REVOCATION OF YOUR APPROVAL VOTE IS EXTREMELY IMPORTANT
YOU ARE STRONGLY URGED NOT TO CANCEL IT.
1. If you wish to cancel a Revocation previously submitted in response to the
September 27 Letter, you must submit the enclosed Cancellation of
Revocation on or before October__, 1996.
4. If your Units are held for you in "street name" by a bank or broker, the
bank or broker may not cancel your Revocation without your instruction.
Call your bank or broker and instruct your representative to cancel your
earlier submitted Revocation.
5. If you have any questions or require any additional information concerning
this Solicitation Statement, please contact :
The Mills Firm
300 Drake's Landing
Suite 155
Greenbrae, California 94904
Telephone: 415-464-4770
Fax: 415-464-4777
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CANCELLATION OF REVOCATION
IF YOU WISH TO CANCEL AN EARLIER SUBMITTED REVOCATION OF PROXY, SIGN, DATE AND
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RETURN THIS DOCUMENT PROMPTLY TO: The Herman Group, Inc., 2121 San Jacinto
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Street, 26th Floor, Dallas, Texas 75201; Fax nos. 214-999-9323 or 214-999-9348.
If you have any questions, please call 415-464-4770.
To: The Herman Group, Inc.
2121 San Jacinto Street
26th Floor
Dallas, Texas 75201
This shall advise you that I hereby cancel my earlier submitted Revocation
of Proxy relating to actions proposed to be taken at a Special Meeting of the
Partnership called by the General Partners in a notice and proxy statement dated
August 23, 1996. This cancellation of revocation shall apply to the following
limited partnership:
Brauvin Income Plus L.P. III
Dated: , 1996
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[This document must be dated to be valid]
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Signature of Limited Partner Signature of Joint Holder (if any)
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Print Name
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Title Address
Please sign exactly as name appeared on your earlier proxy. When interests are
held by joint tenants, both should sign. When signed as an attorney, as
executor, administrator, trustee or guardian, please give full title as such.
If a corporation, please sign in corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
