SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
INDEPENDENCE TAX CREDIT PLUS L.P. IV
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(Name of Issuer)
BENEFICIAL ASSIGNMENT CERTIFICATES
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(Title of Class of Securities)
45378R 10 9
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(CUSIP Number)
J. Michael Fried
Lehigh Tax Credit Partners III L.L.C.
c/o Related Capital Company
625 Madison Avenue
New York, NY 10022
(212) 421-5333
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
January 15, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check
the following box |_|.
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
Page 1 of 9 Pages
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CUSIP No. 45378R 10 9 SCHEDULE 13D Page 2 of 9 Pages
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1) Name of Reporting Persons I.R.S Identification Nos. Of Above Persons
(entities only)......................................................
LEHIGH TAX CREDIT PARTNERS III L.L.C.
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2) Check The Appropriate Box If a Member of a Group (See Instructions)
(a) [x]..............................................................
(b) [ ]..............................................................
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3) SEC Use Only.........................................................
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4) Source of Funds (See Instructions)...................................
BK; WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e)......................................................................[ ]
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6) Citizenship or Place of Organization.................................
Delaware
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(7) Sole Voting Power...........................
2,864.3125 Beneficial Assignment
Certificates (representing
assignments of limited
Number of partnership interests)
Shares -----------------------------------------------------
Beneficially (8) Shared Voting Power.........................
Owned by 0
Each Reporting -----------------------------------------------------
Person (9) Sole Dispositive Power......................
With 2,864.3125 Beneficial Assignment
Certificates (representing
assignments of limited
partnership interests)
-----------------------------------------------------
(10) Shared Dispositive Power....................
0
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11) Aggregate Amount Beneficially Owned by Each Reporting Person.........
2,864.3125 Beneficial Assignment Certificates (representing
assignments of limited partnership interests)
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12) Check Box if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)....................................[ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)...................
6.2%
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14) Type of Reporting Person (See Instructions)..........................
OO
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<PAGE>
CUSIP No. 45378R 10 9 SCHEDULE 13D Page 3 of 9 Pages
- --------------------------------------------------------------------------------
1) Name of Reporting Persons I.R.S Identification Nos. Of Above Persons
(entities only)......................................................
LEHIGH TAX CREDIT PARTNERS, INC.
- --------------------------------------------------------------------------------
2) Check The Appropriate Box If a Member of a Group (See Instructions)
(a) [x]..............................................................
(b) [ ]..............................................................
- --------------------------------------------------------------------------------
3) SEC Use Only.........................................................
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)...................................
AF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e)...................................................................[ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization.................................
Delaware
- --------------------------------------------------------------------------------
(7) Sole Voting Power...........................
2,864.3125 Beneficial Assignment
Certificates (representing
assignments of limited
Number of partnership interests)
Shares -----------------------------------------------------
Beneficially (8) Shared Voting Power.........................
Owned by 0
Each Reporting -----------------------------------------------------
Person (9) Sole Dispositive Power......................
With 2,864.3125 Beneficial Assignment
Certificates (representing
assignments of limited partnership
interests)
------------------------------------------------------
(10) Shared Dispositive Power....................
0
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person.........
2,864.3125 Beneficial Assignment Certificates (representing
assignments of limited partnership interests)
- --------------------------------------------------------------------------------
12) Check Box if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions).........................................[ ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)...................
6.2%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions)..........................
CO
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<PAGE>
STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "ACT")
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Item 1. Security and Issuer
This statement relates to Beneficial Assignment Certificates ("BACs")
representing assignments of limited partnership interests in Independence Tax
Credit Plus L.P. IV, a Delaware limited partnership (the "Partnership"), which
has its principal executive offices at 625 Madison Avenue, New York, New York
10022.
Item 2. Identity and Background
This Statement is filed jointly by Lehigh Tax Credit Partners III
L.L.C., a Delaware limited liability company ("Lehigh"), and Lehigh Tax Credit
Partners, Inc., a Delaware corporation (the "Managing Member"). Lehigh and the
Managing Member are sometimes collectively referred to herein as the "Reporting
Persons."
Lehigh was organized for the purpose of acquiring tax credits,
including the BACs pursuant to a tender offer on Schedule 14D-1, commenced on
October 14, 1998 (the "Tender Offer"). The address of Lehigh's principal office
is c/o Related Capital Company, 625 Madison Avenue, New York, New York 10022.
The managing member of Lehigh is the Managing Member, which is ultimately
controlled by Messrs. J. Michael Fried, Stuart J. Boesky, Alan P. Hirmes and
Marc D. Schnitzer and Ms. Denise L. Kiley. The Managing Member is principally
engaged in the business of serving as managing member of Lehigh and certain
affiliates of Lehigh which were organized for purposes similar to Lehigh. The
address of the Managing Member's principal office is c/o Related Capital
Company, 625 Madison Avenue, New York, New York 10022.
Attached hereto as Appendix A is information concerning the executive
officers, directors and control persons of the Managing Member, which
information is required to be disclosed in response to Item 2 and General
Instruction C to Schedule 13D.
None of the Reporting Persons nor any of the persons or entities
referred to in Appendix A hereto has, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations and similar misdemeanors)
or been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
As of the date hereof, the Reporting Persons are deemed to
beneficially own 2,864.3125 BACs. The source of all funds used to acquire
beneficial ownership of the BACs is a promissory note dated as of January 12,
1999 (the "Note") obtained by Lehigh from one of its members, RCC Credit
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Facility, L.L.C. ("Credit Facility L.L.C."), containing substantially the same
economic terms and conditions that such member borrowed or will borrow such
funds under an existing credit facility that such member has available to it
with BankBoston, N.A (formerly known as The First National Bank of Boston)
("BankBoston") and Fleet Bank, National Association (collectively, the
"Lenders"). The existing credit agreement is among the Lenders and Credit
Facility L.L.C., Related Capital Company ("RCC") and The Related Companies, L.P.
The stated interest rate is the "Base Rate" (as publicly announced by
BankBoston, from time to time) plus 0.125%, which is presently equal to 7.875%
per annum or, at the election of Credit Facility L.L.C., the "Euroloan Rate"
which is equal to the "Eurodollar Rate" plus 2.0%. All of the BACs owned by
Lehigh and all of Lehigh's membership interests have been pledged to the Lenders
to secure the Note. Additionally, RCC has guaranteed all amounts borrowed under
such credit facility. Lehigh expects to repay all amounts borrowed from its
member by selling additional membership interests to persons or entities that
have a need for the tax credits and/or tax losses attributable to the BACs. No
plans or arrangements have been made with regard to the payment of periodic
interest required by the terms of the Note. However, it is expected that if
interest payments are due and payable, Lehigh may borrow those funds from its
affiliates. The discussion herein of the Note is subject to and qualified in its
entirety by reference to such Note, a copy of which is attached hereto as an
exhibit and incorporated herein by reference. The Managing Member is deemed to
beneficially own the BACs beneficially owned by Lehigh. The BACs beneficially
owned by the Reporting Persons were acquired as described below.
Pursuant to the Tender Offer, Lehigh purchased an aggregate of
2,854.3125 BACs on January 15, 1999 for an aggregate purchase price of
approximately $ 2,140,734.38. Lehigh obtained all of such funds from the Note as
described above. Prior to commencing the Tender Offer, Lehigh was assigned and
acquired, a total of 10 BACs from and affiliate of Lehigh, which obtained such
BACs through open market transactions.
Item 4. Purpose of Transaction
Each of the Reporting Persons acquired beneficial ownership of the
BACs for investment purposes and not with the purpose of changing or influencing
control of the Partnership. Each of the Reporting Persons retains the right,
however, to change such investment intent, to acquire additional BACs or to sell
or otherwise dispose of all or part of the BACs beneficially owned by such
Reporting Person in any manner permitted by law.
Although the foregoing currently reflects the present plans and
intentions of the Reporting Persons, the foregoing is subject to change at any
time. The Reporting Persons have and will, on an on-going basis, continue to
evaluate their investment in the Partnership. In the event of a material change
in the present plans or intentions of the Reporting Persons, the Reporting
Persons will amend this Schedule 13D to reflect such change.
Item 5. Interest in Securities of the Issuer
(a) and (b) As of the date hereof, the Reporting Persons are deemed to
beneficially own an aggregate of 2,864.3125 BACs, which constitutes
approximately 6.2% of the BACs outstanding. The Reporting Persons have sole
voting and sole dispositive power of all such BACs beneficially owned.
Affiliates of the Reporting Persons are also affiliates of Related Independence
Associates IV, L.P., the general partner of the Partnership.
(c) Except for the BACs purchased pursuant to the Tender Offer,
neither Lehigh, the Managing Member, and to the best of Lehigh's knowledge, the
persons listed on Appendix A, nor any affiliate thereof has effected any
transaction in the BACs within the past 60 days.
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(d) The Reporting Persons have no knowledge of any persons who have
the right to receive or the power to direct the receipt of distributions from,
or the proceeds from the sale of, any BACs beneficially owned by the Reporting
Persons.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The information set forth in Item 3, Item 4 and Item 5 above is hereby
incorporated herein by reference.
Pursuant to a letter agreement dated October 6, 1998 among the
Partnership, Lehigh and Related Independence Associates IV L.P. ("RIA") (the
"Standstill Agreement"), Lehigh agreed that, prior to October 6, 2008 (the
"Standstill Expiration Date"), it will not and it will cause certain affiliates
not to (i) seek to propose to enter into, directly or indirectly, any merger,
consolidation, business combination, sale or acquisition of assets, liquidation,
dissolution or other similar transaction involving the Partnership, (ii) form,
join or otherwise participate in a "group" (within the meaning of Section
13(d)(3) of the Act) with respect to any voting securities of the Partnership,
except that those affiliates bound by the Standstill Agreement will not be
deemed to have violated it and formed a "group" solely by acting in accordance
with the Standstill Agreement, (iii) disclose in writing to any third party any
intention, plan or arrangement inconsistent with the terms of the Standstill
Agreement, or (iv) loan money to, advise, assist or encourage any person in
connection with any action inconsistent with the terms of the Standstill
Agreement. By the terms of the Standstill Agreement, Lehigh also agreed to vote
its BACs in the same manner as a majority of all voting BACs holders; provided,
however, Lehigh is entitled to vote its BACs as it determines with regard to any
proposal (i) to remove RIA as a general partner of the Partnership or (ii)
concerning the reduction of any fees, profits, distributions or allocations for
the benefit of RIA or its affiliates. The discussion herein of the Standstill
Agreement is subject to and qualified in its entirety by reference to such
agreement, a copy of which is attached hereto as an exhibit and incorporated
herein by reference.
In connection with a tender offer commenced on April 10, 1997 by
Lehigh Tax Credit Partners L.L.C. ("Lehigh I") and the settlement of matters
relating to such tender offer, Lehigh I entered into an agreement with Everest
Properties, Inc. ("Everest"), dated April 23, 1997 (the "Everest Agreement").
Pursuant to the Everest Agreement, Lehigh I granted to Everest, among other
things, an option to purchase up to 25% of the BACs tendered in the Tender Offer
on the same terms and conditions as Lehigh I's purchase of BACs (the "Everest
Option"). The Everest Agreement and the Everest Option apply to BACs obtained by
affiliates of Lehigh I, including Lehigh. In consideration of the foregoing,
Everest agreed, among other things, that neither it nor any of its affiliates
will, directly or indirectly: (i) in any manner, including, without limitation,
by tender offer (whether or not pursuant to a filing made with the Securities
and Exchange Commission (the "Commission")), acquire, attempt to acquire or make
a proposal to acquire, directly or indirectly, any securities of the
Partnership, except for (a) the BACs it acquires pursuant to the Everest Option
and (b) purchases of de minimis amounts of securities in the secondary market at
the prevailing secondary market price (it being understood that the purchaser of
such de minimis amounts of securities shall be bound by the terms and conditions
of the Everest Agreement); (ii) seek or propose to enter into, directly or
indirectly, any merger, consolidation, business combination, sale or acquisition
of assets, liquidation, dissolution or other similar transaction involving the
Partnership; (iii) make, or in any way participate, directly or indirectly, in
any "solicitation" of "proxies" or "consents" (as such terms are used in the
proxy rules of the Commission) to vote, or seek to advise or influence any
person with respect to the voting of, any voting securities of the Partnership;
(iv) form, join or otherwise participate in a "group" (within the meaning of
Section 13(d)(3) of the Act) with respect to any voting securities of the
Partnership; (v) disclose in writing to any third party any intention, plan or
arrangement inconsistent with the terms of the Everest Agreement; or (vi) loan
money to, advise, assist or encourage any person in connection with any action
inconsistent with the terms of the Everest Agreement. The foregoing restrictions
shall continue in full force and effect forever, in perpetuity,
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with respect to the securities of the Partnership unless Lehigh fails to perform
its obligations under the Everest Agreement. The discussion herein of the
Everest Agreement is subject to and qualified in its entirety by reference to
such agreement, a copy of which is attached hereto as an exhibit and
incorporated herein by reference. On December 24, 1998, in accordance with the
terms of the Everest Agreement, Lehigh gave Everest notice of the number of BACs
to be tendered pursuant to the Tender Offer. On December 28, 1998, Everest
notified Lehigh in writing that it elected to exercise the Everest Option to
purchase approximately 25% of the BACs tendered pursuant to the Tender Offer.
Except as described above, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships with respect to any
securities of the Partnership.
Item 7. Material to be Filed as Exhibits
EXHIBIT
NO. DESCRIPTION
- ------- -----------
*1. Form of Promissory Note.
*2. Standstill Agreement, dated October 6, 1998, among the
Partnership, Lehigh and RIA.
*3. Letter Agreement, dated April 23, 1997, between Lehigh I and
Everest.
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* Incorporated by reference to the Schedule 14D-1 filed by the
Reporting Persons with respect to the tender offer for BACs of
Independence Tax Credit Plus IV L.P., as filed with the Securities
and Exchange Commission on October 14, 1998, as amended.
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Signature.
After reasonable 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: January 25, 1999
LEHIGH TAX CREDIT PARTNERS III L.L.C.
By: Lehigh Tax Credit Partners, Inc.,
its managing member
By: /s/ J. Michael Fried
-----------------------------------
Name: J. Michael Fried
Title: President
LEHIGH TAX CREDIT PARTNERS, INC.
By: /s/ J. Michael Fried
------------------------------------------
Name: J. Michael Fried
Title: President
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APPENDIX A
The following sets forth information with respect to the executive
officers, directors and control persons of Lehigh Tax Credit Partners, Inc.,
which is the managing member of Lehigh.
Messrs. J. Michael Fried, Stuart J. Boesky, Alan P. Hirmes and Marc D.
Schnitzer and Ms. Denise L. Kiley are executive officers, directors and control
persons of Lehigh Tax Credit Partners, Inc. The present principal occupation of
each of Messrs. Fried, Boesky, Hirmes and Schnitzer and Ms. Kiley, each of whom
is a citizen of the United States, is to act as an officer of Related Capital
Company ("RCC"), a New York general partnership and an affiliate of Lehigh and
the Managing Member. RCC has, directly or indirectly, sponsored 22 public and
238 private real estate investment programs that have raised in excess of $2.8
billion from more than 106,000 investors. The business address of each of
Messrs. Fried, Boesky, Hirmes and Schnitzer and Ms. Kiley is c/o Related Capital
Company, 625 Madison Avenue, New York, New York 10022.
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