-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W2o3GK8H/eQm3lZTOsqa8z+kt6TnsAtty/fRH1Z7xAdpQRXO3bzSIEvrzM98GCJY a6K/NdTYPlLAYfSpi+oVMw== 0000950136-97-001842.txt : 19971222 0000950136-97-001842.hdr.sgml : 19971222 ACCESSION NUMBER: 0000950136-97-001842 CONFORMED SUBMISSION TYPE: SC 14D9 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19971219 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL GROWTH FUND CENTRAL INDEX KEY: 0000201529 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942382571 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9 SEC ACT: SEC FILE NUMBER: 005-42782 FILM NUMBER: 97741462 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL GROWTH FUND CENTRAL INDEX KEY: 0000201529 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942382571 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 SC 14D9 1 SCHEDULE 14D-9 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------ SCHEDULE 14D-9 ------------------------------------ SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 CONSOLIDATED CAPITAL GROWTH FUND, A CALIFORNIA LIMITED PARTNERSHIP (Name of Subject Company) CONSOLIDATED CAPITAL GROWTH FUND, A CALIFORNIA LIMITED PARTNERSHIP (Name of Person(s) Filing Statement) UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class of Securities) N/A (Cusip Number of Class of Securities) ----------------------- WILLIAM H. JARRARD, JR. PRESIDENT CONCAP EQUITIES, INC. ONE INSIGNIA FINANCIAL PLAZA GREENVILLE, SOUTH CAROLINA 29602 (864) 239-1300 (Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications on Behalf of the person(s) filing statement) ------------------------------------ ITEM 1. SECURITY AND SUBJECT COMPANY. The name of the subject company is Consolidated Capital Growth Fund, a California limited partnership (the "Partnership"), and the address of the principal executive offices of the Partnership is One Insignia Financial Plaza, Greenville, South Carolina 29602. The title of the class of equity securities to which this statement relates is the units of limited partnership interest ("Units") of the Partnership. ITEM 2. TENDER OFFER OF THE BIDDER. This statement relates to an offer by Madison River Properties, L.L.C., a Delaware limited liability company (the "Purchaser"), to purchase up to 15,000 of the outstanding Units at a purchase price of $300 per Unit, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in an Offer to Purchase dated December 19, 1997 (the "Offer to Purchase") and related Assignment of Partnership Interest (which collectively constitute the "Offer"). A Tender Offer Statement on Schedule 14D-1 with respect to the Offer has been filed by the Purchaser, Insignia Properties, L.P., a Delaware limited partnership ("IPLP"), Insignia Properties Trust, a Maryland real estate investment trust ("IPT") and Insignia Financial Group, Inc., a Delaware corporation ("Insignia") (collectively, the "Bidders"). The address of the Purchaser's principal executive offices is One Insignia Financial Plaza, P.O. Box 19059, Greenville, South Carolina 29602. 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's general partner is ConCap Equities, Inc., a Delaware corporation and an affiliate of the Purchaser (the "General Partner"). Upon the Partnership's formation in 1976, five individuals were the general partners of the Partnership. These individuals were all shareholders of Consolidated Capital Equities Corporation, a Colorado corporation ("CCEC"). As a result of a succession of agreements, CCEC became the Partnership's Managing Agent. In 1988, through a series of transactions, Southmark Corporation acquired control of CCEC. In December 1988, CCEC filed for reorganization under Chapter 11 of the United States Bankruptcy Code. In 1990, as part of CCEC's reorganization plan, the General Partner acquired CCEC's interest as Managing Agent in the Partnership and its general partner interests in 15 other affiliated public limited partnerships (the "Affiliated Partnerships") and the General Partner replaced CCEC as the managing general partner of the Partnership (and as the managing general partner of each of the Affiliated Partnerships). The selection of the General Partner as the general partner of the Partnership (and of each of the Affiliated Partnerships) was approved by a majority of the Limited Partners in the Partnership (and by a majority of the limited partners in each of the Affiliated Partnerships) pursuant to solicitations commenced in August 1990. Insignia acquired the stock of the General Partner through two transactions in December 1994 and October 1995, and contributed that stock to IPT in December 1996 in connection with IPT's formation. By reason of these relationships, the General Partner has conflicts of interest in considering the Offer. 2 In 1992, LP Acceptance Corporation ("LP Corporation") acquired 19,112 (or approximately 39%) of the outstanding Units, at a purchase price of $200 per Unit, pursuant to a tender offer commenced in November, 1992. LP Corporation was affiliated with the General Partner at the time, but was not an affiliate of the Purchaser, IPT or Insignia. Insignia acquired, as a result of a transaction that occurred in December 1994, those Units and contributed such Units to IPLP following the formation of IPT in December 1996. Under the Limited Partnership Agreement, the General Partner holds an interest in the Partnership and is entitled to participate in certain cash distributions made by the Partnership to its partners. The General Partner received from the Partnership in respect of its interest in the Partnership cash distributions of $933,000 to date in 1997, $82,000 in 1996 and $2,665,000 in 1995. In late December 1994, IRG (which is an affiliate of the Purchaser and the General Partner) assumed day-to-day property management responsibilities for the Partnership's properties. The Partnership paid IRG property management fees for property management services in the amounts of approximately $554,000 and $536,000 for the years ended December 31, 1996 and 1995, respectively, and has paid IRG property management fees equal to $423,000 during the first nine months of 1997. The Partnership reimbursed the General Partner and its affiliates (including Insignia) for expenses incurred in connection with asset management and partnership administration services performed by them for the Partnership during 1996 and 1995 in the amounts of $269,000 (including reimbursement of $15,000 paid to an affiliate of the General Partner for costs incurred in connection with construction oversight services) and $227,000, respectively, and has reimbursed them for such services in the amount of $141,000 through September 30, 1997. Pursuant to the Limited Partnership Agreement, the General Partner is entitled to receive a partnership management fee equal to 9% of the Partnership's adjusted cash from operations, as and when cash from operations is distributed to the Limited Partners. The fees paid to the General Partner pursuant to this provision were $82,000 for the nine months ended September 30, 1997, $213,000 in 1996 and $613,000 in 1995. On July 1, 1995, the Partnership began insuring its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the General Partner who receives payments on these obligations from the agent. Insignia and the General Partner believe that the aggregate financial benefit derived by Insignia and its affiliates from the arrangement described in the three preceding sentences has been immaterial. The General Partner has conflicts of interest with respect to the Offer, including conflicts resulting from its affiliation with IPT and the Purchaser. The General Partner also would have a conflict of interest (i) as a result of the fact that a sale or liquidation of the Partnership's assets would result in a decrease or elimination of the fees paid to the General Partner and/or its affiliates and (ii) as a consequence of the Purchaser's ownership of Units, because the Purchaser (which is an affiliate of the General Partner) may have incentives to seek to maximize the value of its ownership of Units, which in turn may result in a conflict for the General Partner in attempting to reconcile the interests of the Purchaser (which is an affiliate of the General Partner) with the interests of the other Limited Partners. In addition, the Purchaser (which is an affiliate of the General Partner) is making the Offer with a view to making a profit. Accordingly, there is a conflict between the desire of the Purchaser (which is an affiliate of the General Partner) to purchase Units at a low price and the desire of the Limited Partners to sell their Units at a high price. 3 As described in the Offer to Purchase, the Purchaser (which is an affiliate of the General Partner) expects to pay for the Units it purchases pursuant to the Offer with funds provided by IPLP as capital contributions. IPLP in turn intends to use its cash on hand to make such contributions. See Section 12. It is possible, however, that in connection with its future financing activities, IPT or IPLP may cause or request the Purchaser (which is an affiliate of the General Partner) to pledge the Units as collateral for loans, or otherwise agree to terms which provide IPT, IPLP and the Purchaser with incentives to generate substantial near-term cash flow from the Purchaser's investment in the Units. This could be the case, for example, if a loan has a "balloon" maturity after a relatively short time or bears a high or increasing interest rate. In such a situation, the General Partner may experience a conflict of interest in seeking to reconcile the best interests of the Partnership with the need of its affiliates for cash flow from the Partnership's activities. If the Purchaser is successful in acquiring more than 5,292.35 Units pursuant to the Offer, IPT (which is an affiliate of the General Partner) will own in excess of 50% of the total Units outstanding and, accordingly, will be able to control the outcome of all voting decisions with respect to the Partnership, including decisions concerning liquidation, amendments to the Limited Partnership Agreement, removal and replacement of the General Partner and mergers, consolidations and other extraordinary transactions. Even if the Purchaser acquires a lesser number of Units pursuant to the Offer, however, because IPT already owns (through IPLP) approximately 39.2% of the outstanding Units it will be able to significantly influence the outcome of all voting decisions with respect to the Partnership. This means that (i) non- tendering Limited Partners could be prevented from taking action they desire but that IPT (which is an affiliate of the General Partner) opposes and (ii) IPT (which is an affiliate of the General Partner) may be able to take action desired by IPT but opposed by the non-tendering Limited Partners. Under the Limited Partnership Agreement, Limited Partners holding a majority of the Units are entitled to take action with respect to a variety of matters, including: removal of a general partner and in certain circumstances election of new or successor general partners; dissolution of the Partnership; the sale of all or substantially all of the assets of the Partnership; and most types of amendments to the Limited Partnership Agreement. In general, IPLP and the Purchaser (which are affiliates of the General Partner) will vote the Units owned by them in whatever manner they deem to be in the best interest of IPT, which, because of their relationship with the General Partner, also may be in the interest of the General Partner, but may not be in the interest of other Limited Partners. This could (i) prevent non-tendering Limited Partners from taking action they desire but that IPT opposes and (ii) enable IPT to take action desired by IPT but opposed by non-tendering Limited Partners. To the best knowledge of the General Partner, except as described in this Schedule 14D-9, there are no other material agreements, arrangements, understandings or any actual or potential conflicts of interest between the Partnership, the General Partner and their affiliates and the Bidders, their executive officers, directors or affiliates. ITEM 4. THE SOLICITATION OR RECOMMENDATION. Because of the existing and potential future conflicts of interest described in Item 3 above, the Partnership and the General Partner are remaining neutral and making no recommendation as to whether Limited Partners should tender their Units in response to the Offer. 4 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 or class of person to make solicitations or recommendation to Limited Partners on its behalf concerning the Offer. ITEM 6. RECENT TRANSACTIONS AND INTEREST WITH RESPECT TO SECURITIES. (a) Except as described in Schedule I attached hereto, no transactions in the Units have been effected during the past 60 days by the Partnership or the General Partner or, to the knowledge of the General Partner, by any of its current or former executive officers, directors or affiliates. (b) To the knowledge of the Partnership, neither the General Partner nor any of its current or former executive officers, directors or affiliates intends to tender pursuant to the Offer any Units beneficially owned by them. ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY. None. ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED. None. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS. (a) Form of cover letter to Limited Partners of the Partnership dated December 19, 1997. (b) None. (c) None. 5 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: December 19, 1997 CONSOLIDATED CAPITAL GROWTH FUND, a California limited partnership By: ConCap Equities, Inc. Its General Partner By: /s/ William H. Jarrard, Jr. -------------------------------- William H. Jarrard, Jr. President 6 SCHEDULE I TRANSACTIONS IN THE UNITS EFFECTED BY IPLP WITHIN THE PAST 60 DAYS Number of Price DATE Units Purchased Per Unit ---- --------------- -------- 11/01/97 10 245.00 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- (a) Form of cover letter to Limited Partners from the Partnership dated December 19, 1997. (b) None. (c) None. EX-99.(A) 2 COVER LETTER TO LIMITED PARTNERS Exhibit (a) Consolidated Capital Growth Fund December 19, 1997 Dear Limited Partner: Enclosed is the Schedule 14D-9 which was filed by Consolidated Capital Growth Fund (the "Partnership") with the Securities and Exchange Commission in connection with an offer (the "Offer") by Madison River Properties, L.L.C., a Delaware limited liability company (the "Purchaser"), Insignia Properties, L.P., a Delaware limited partnership ("IPLP"), Insignia Properties Trust, a Maryland real estate investment trust ("IPT"), and Insignia Financial Group, Inc., a Delaware corporation ("Insignia," and together with IPLP, IPT and the Purchaser, the "Bidders"), to purchase units of limited partnership interest ("Units") in the Partnership. The Partnership's sole general partner (the "General Partner") is ConCap Equities, Inc., which is an affiliate of the Bidders. Due to the affiliation between the General Partner of the Partnership and the Bidders, the General Partner is subject to certain conflicts of interest in connection with the response to the Offer. AS A RESULT OF THE EXISTING AND POTENTIAL CONFLICTS OF INTEREST, NEITHER THE PARTNERSHIP NOR THE GENERAL PARTNER EXPRESSES ANY OPINION AS TO THE OFFER AND EACH IS REMAINING NEUTRAL AND MAKING NO RECOMMENDATION AS TO WHETHER LIMITED PARTNERS SHOULD TENDER THEIR UNITS IN RESPONSE TO THE OFFER. Limited Partners are advised to carefully read the enclosed Schedule 14D-9. Consolidated Capital Growth Fund -----END PRIVACY-ENHANCED MESSAGE-----