SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
(Series 10)
(Name of Subject Company)
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
(Name of Person(s) Filing Statement)
Series - Beneficial Assignee Certificates
(Title of Class of Securities)
None
(CUSIP Number of Class of Securities)
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Richard J. DeAgazio, Executive Vice President
Boston Capital Partners, Inc.
One Boston Place
Suite 2100
Boston MA 02108
(617) 624-8900
(Name, Address and Telephone Number of
Persons Authorized to Receive Notices and Communications on
Behalf of the Person(s) Filing Statement)
Copies to:
Scott M. Nemeroff, Esq.
Peabody & Brown
1255 23rd Street NW
Suite 800
Washington DC 20037
(202) 973-7700
Item 1. Security and Subject Company.
The name of the subject company is Boston Capital Tax Credit
Fund II Limited Partnership, a Delaware limited partnership (the
"Partnership"), which has its principal executive offices at One
Boston Place, Suite 2100, Boston, Massachusetts 02108. The
General Partner of the Partnership is Boston Capital
Associates II L.P., a Delaware corporation with principal
executive offices at One Boston Place, Suite 2100, Boston,
Massachusetts 02108 (the "General Partner"). The title of the
class of equity securities to which this statement relates is the
Partnership's Series 10 beneficial assignee certificates ("BACs")
representing assignments of limited partnership interests in the
Partnership issued to BCTC II Assignor Corp., a Delaware
corporation (the "Assignor Limited Partner"). Each BAC
represents a pro rata assignment of the beneficial interest in
the Series 10 limited partnership interest held by the Assignor
Limited Partner. The Assignor Limited Partner does not retain
any beneficial interest in its Series 10 limited partnership
interest, all of which has been assigned to the BAC Holders.
Item 2. Tender Offer of the Bidder.
This Schedule 14D-9 relates to the offer by Valley Creek
Capital LLC, a Delaware limited liability company (the
"Purchaser") disclosed in a Tender Offer Statement on Schedule
14D-1 dated April 24, 1998 (the "Schedule 14D-1"), to purchase up
to 240,000 issued and outstanding BACs at a purchase price of
$2.50 per BAC, net to the seller in cash (the "Purchase Price"),
without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 24,
1998 and the related Letter of Transmittal, as each may be
supplemented, modified or amended from time to time (which
collectively constitute the "Valley Creek Offer" and are
contained within the Schedule 14D-1).
The address of the Purchaser's principal executive offices
is 601 Carlson Parkway, Suite 200, Minnetonka, Minnesota 55305.
Item 3. Identity and Background.
(a) The name and business address of the Partnership, which
is the person filing this statement, are set forth in Item 1
above.
(b) (1) The Partnership does not have any employees,
directors or executive officers. All decisions with respect to
the management of the Partnership and its affairs are made by the
General Partner. Except as described below, there are no
material contracts, agreements, arrangements or understandings or
any actual or potential conflicts of interest between the General
Partner or its affiliates and the Partnership and its affiliates.
The General Partner and its affiliates have received or will
receive certain types of compensation, fees or other
distributions in connection with the operations of the
Partnership. The arrangements for payment of compensation and
fees, as set forth in the Partnership's Amended and Restated
Agreement of Limited Partnership, dated as of June 28, 1981, as
amended to date (the "Partnership Agreement"), the Partnership's
prospectus and other publicly filed documents, were not
determined in arm's-length negotiations with the Partnership.
In accordance with the Partnership Agreement, the
Partnership was required to pay certain fees to and reimburse
expenses of the General Partner and others in connection with the
organization of the Partnership and the offering of its BACs.
Commissions, fees and expenses related to the sale of the BACs
totaling $3,207,709 have been paid. In connection therewith,
$459,131 of selling, organizational and offering expenses
incurred on behalf of the Partnership have been paid to an
affiliate of the General Partner. Total organization and
offering expenses inclusive of selling commissions did not exceed
14% of the gross offering proceeds.
In accordance with the Partnership Agreement, the
Partnership is required to pay acquisition fees to and reimburse
acquisition expenses of the General Partner or its affiliates for
selecting, evaluating, structuring, negotiating, and closing the
Partnership's investments in Operating Partnerships. Acquisition
fees total 8.5% of the gross offering proceeds. Acquisition
expenses, which include such expenses as legal fees and expenses,
travel and communications expenses, costs of appraisals,
accounting fees and expenses, totalled 2.46% of the gross
offering proceeds. As of March 31, 1998 acquisition fees
totaling $2,428,925 for the closing of the Partnership's
investments in Operating Partnerships were paid to an affiliate
of the General Partner. Acquisition expenses totaling $29,157
were reimbursed to an affiliate of the General Partner.
Pursuant to the Partnership Agreement, an affiliate of the
General Partner is entitled to a fee (the "Fund Management Fee")
for its services in connection with the administration of the
affairs of the Partnership. The Fund Management Fee is payable
annually and is calculated by multiplying 0.5% by the Aggregate
Cost of the Apartment Complexes in Series 10 acquired by the
Partnership. The Fund Management Fees earned during the years
ended March 31, 1998, 1997 and 1996 are as follows:
1998 1997 1996
Asset Management Fees $355,511 $355,511 $355,511
The General Partner and its respective partners, officers
and directors, are each entitled to indemnification under certain
circumstances from the Partnership pursuant to provisions of the
Partnership Agreement. Generally, the General Partner is also
entitled to reimbursement of expenditures made on behalf of the
Partnership.
Under the Partnership Agreement, the General Partner is
entitled to receive 1% of cash distributions to the partners of
the Partnership. The Partnership has not paid any cash
distributions to the General Partner in the three years ended
March 31, 1998.
(2) There are no material contracts, agreements,
arrangements or understandings or any actual or potential
conflicts of interest between the General Partner or its
affiliates and the Purchaser, its members, executive officers,
directors or affiliates.
Item 4. The Solicitation or Recommendation.
(a) Following receipt of the terms of the Valley Creek
Offer, the General Partner reviewed and considered the Valley
Creek Offer. The General Partner recommends that BAC Holders
reject the Valley Creek Offer for the following reasons:
The Purchaser is only offering $2.50 per BAC. As stated in
the "Introduction" on page 1 of the Purchaser"s Offer to
Purchase dated April 24, 1998, the last known price paid for
the BACs on the secondary market was $4.00, which is more than
the proposed Purchase Price. Since secondary market selling
prices do not take into account commissions charged, the net
proceeds to a BAC Holder in a secondary market sale would be
reduced by approximately 5% to 8%. In addition, the current
value of a BAC may have also been reduced from the last
selling date because there are fewer Tax Credits remaining due
to the passage of time.
(b) The General Partner also believes that BAC Holders
should carefully consider the following factors in making their
own decisions of whether to accept or reject the Valley Creek
Offer:
BAC HOLDERS WILL NO LONGER RECEIVE THE TAX CREDITS AND/OR TAX
LOSSES FROM THE BACS SHOULD THEY TENDER PURSUANT TO THE VALLEY
CREEK OFFER.
BAC Holders who tender their BACs will lose the right to
receive any future distributions from the Partnership from any
refinancing or sale of the Partnership's properties. Although
the General Partner cannot predict the future value of the
Partnership's assets on a per BAC basis, the Purchase Price
could differ significantly from the amount that may be
realized from the sale or refinancing of the Partnership's
assets. There can be no assurance as to the timing, amount or
occurrence of any future distributions.
Limited Partners should consult with their respective advisors
about the financial, tax, legal and other consequences of the
Valley Creek Offer.
While the Valley Creek Offer will provide BAC Holders with an
immediate opportunity to liquidate their investment in the
Partnership, BAC Holders who have a present or future need for
the tax credits and/or tax losses from the BACs may, however,
prefer to retain their BACs and not tender them pursuant to
the Valley Creek Offer.
As stated by the Purchaser in the Valley Creek Offer, there
may be a conflict of interest between the Purchaser's desire
to purchase the BACs at a low price and a BAC Holder's desire
to sell their BACs at a high price. Therefore, BAC Holders
might receive greater value if they hold their BACs, rather
than tender. Furthermore, BAC Holders should be aware that a
secondary market exists for the BACs.
Item 5. Persons Retained, Employed or to Be Compensated.
Neither the Partnership nor any person acting on its behalf
has employed, retained or compensated, or intends to employ,
retain or compensate, any person to make solicitations or
recommendations to BAC Holders on their behalf concerning the
Valley Creek Offer.
Item 6. Recent Transactions and Intent With Respect to
Securities.
(a) Neither the Partnership nor the General Partner or any
of their affiliates have effected any transactions in the BACs
during the past 60 days
(b) Neither the General Partner nor, to the knowledge of
the General Partner, any of its partners, executive officers,
directors, affiliates or subsidiaries intend to tender BACs owned
by them to the Purchaser pursuant to the Valley Creek Offer.
Item 7. Certain Negotiations and Transactions by the
Subject Company.
(a) No negotiation is being undertaken or is underway by
the Partnership in response to the Valley Creek Offer which
relates to or would result in: (1) an extraordinary transaction
such as a merger or reorganization, involving the Partnership or
any subsidiary of the Partnership; (2) a purchase, sale or
transfer of a material amount of assets by the Partnership or any
subsidiary; (3) tender offer for or other acquisition of
securities by or of the Partnership; or (4) any material change
in the present capitalization or dividend policy of the
Partnership.
(b) Except as described above or in Item 3(b), there are no
transactions, board resolutions, agreements in principle or
signed contracts in response to the Valley Creek Offer which
relate to or would result in one or more of the matters referred
to in Item 7(a).
Item 8. Additional Information to Be Furnished.
None.
Item 9. Material to be Filed as Exhibits.
(a)(1) Letter from Boston Capital Tax Credit Fund II Limited
Partnership to BAC Holders, dated April, 1998.
SIGNATURES
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.
Dated: April 27, 1998
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
By: Boston Capital Associates II L.P., its
General Partner
By: Boston Capital Associates, its general partner
By: /s/ John P. Manning
John P. Manning
Partner
EXHIBIT INDEX
EXHIBIT NO. TITLE
(a)(1) Letter from Boston Capital Tax Credit
Fund II Limited Partnership to BAC
Holders dated April, 1998
BOSTON CAPITAL TAX CREDIT FUND II LIMITED PARTNERSHIP
One Boston Place
Suite 2100
Boston MA 02108
April __, 1998
Dear BAC Holder:
As you are by now aware, Valley Creek LLC, a Delaware
limited liability company (the "Purchaser"), has made an offer
(the "Valley Creek Offer") to purchase assignments of limited
partnership interests ("BACs") of Boston Capital Tax Credit
Fund II Limited Partnership Series 10 (the "Partnership") for a
cash purchase price of $2.50 per BAC (the "Purchase Price").
The Boston Capital Associates II L.P. (the "General
Partner") recommends that BAC Holders REJECT the Valley Creek
Offer for the following reasons:
The Purchaser is only offering $2.50 per BAC. As stated in
the "Introduction" on page 1 of the Purchaser's Offer to
Purchase dated April 24, 1998, the last known price paid for
the BACs on the secondary market was $4.00, which is more than
the proposed Purchase Price. Since secondary market selling
prices do not take into account commissions charged, the net
proceeds to a BAC Holder in a secondary market sale would be
reduced by approximately 5% to 8%. In addition, the current
value of a BAC may have also been reduced from the last
selling date because there are fewer Tax Credits remaining due
to the passage of time.
The General Partner also believes that BAC Holders should
carefully consider the following factors in making their own
decisions of whether to accept or reject the Valley Creek Offer:
BAC HOLDERS WILL NO LONGER RECEIVE THE TAX CREDITS AND/OR TAX
LOSSES FROM THE BACS SHOULD THEY TENDER PURSUANT TO THE VALLEY
CREEK OFFER.
BAC Holders who tender their BACs will lose the right to
receive any future distributions from the Partnership from any
refinancing or sale of the Partnership's properties. Although
the General Partner cannot predict the future value of the
Partnership's assets on a per BAC basis, the Purchase Price
could differ significantly from the amount that may be
realized from the sale or refinancing of the Partnership's
assets. There can be no assurance as to the timing, amount or
occurrence of any future distributions.
BAC Holders should consult with their respective advisors
about the financial, tax, legal and other consequences of the
Valley Creek Offer.
Enclosed is a copy of the Partnership's Statement on
Schedule 14D-9 which has been filed with the Securities and
Exchange Commission and sets forth the Partnership's response to
the Offer. BAC Holders are advised to carefully read the
Schedule 14D-9.
Please do not hesitate to call the Partnership at (800) 866-
2282 for assistance in any Partnership matter.
BOSTON CAPITAL TAX CREDIT FUND II LIMITED
PARTNERSHIP
