0000916002-01-500104.txt : 20011010
0000916002-01-500104.hdr.sgml : 20011010
ACCESSION NUMBER: 0000916002-01-500104
CONFORMED SUBMISSION TYPE: DFAN14A
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20011005
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: BOND PURCHASE LLC
CENTRAL INDEX KEY: 0001058983
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 431722871
STATE OF INCORPORATION: MO
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DFAN14A
BUSINESS ADDRESS:
STREET 1: 1100 MAIN
STREET 2: SUITE 2100
CITY: KANSAS CITY
STATE: MO
ZIP: 64105
BUSINESS PHONE: 8164214670
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: REAL ESTATE ASSOCIATES LTD III
CENTRAL INDEX KEY: 0000318986
STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500]
IRS NUMBER: 953547611
STATE OF INCORPORATION: CA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DFAN14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-10673
FILM NUMBER: 1753272
BUSINESS ADDRESS:
STREET 1: 9090 WILSHIRE BLVD
STREET 2: STE 201
CITY: BEVERLY HILLS
STATE: CA
ZIP: 90211
BUSINESS PHONE: 3102782192
MAIL ADDRESS:
STREET 1: 9090 WILSHIRE BLVD
STREET 2: STE 201
CITY: BEVERLY HILLS
STATE: CA
ZIP: 90211
DFAN14A
1
fight_letter.txt
Bond Purchase, L.L.C.
104 Armour Road
North Kansas City, Missouri 64116
October 5, 2001
During this time of national grief, Bond Purchase would like to
extend our deepest sympathies to the families, friends and associates
of the victims of this tragic event.
David L. Johnson
Dear Fellow Limited Partner:
In its August 22, 2001 letter to you, NAPICO boldly claimed we could not
describe the "Numerous Questionable Transactions" we uncovered during our review
of the Partnership books and records. What NAPICO failed to tell you was that it
vigorously argued before the court to limit our dissemination of any information
contained in the approximately 300 boxes of records we received.
Contained in an August 31, 2001 letter from NAPICO's attorneys addressed to
the Honorable Gregory C. O'Brien, Jr., Los Angeles Superior Court, a public
document, NAPICO asserts in part that:
o "On August 21, 2001 the parties [representatives for Bond Purchase and
NAPICO] appeared before the court..." to modify the preliminary
injunction dated July 6, 2001.("PI Order" );
o "Included within the PI Order was a protective order that PREVENTED Bond
Purchase from disseminating documents it obtained from its inspection
of the REAL Partnerships' book and records..." [Emphasis added];
o "Bond Purchase ... wishes to desseminate certain information that it has
gathered from its inspection of the books and records of the REAL
Partnerships at issue in this case to its fellow limited partners."
[Emphasis added] ; and
o "This letter..." [to the court on behalf of NAPICO] is "...additional
briefing material on the issue of whether a limited partner has the right
to disseminate information..."
NAPICO's letter to the Court goes on to argue:
o "Bond Purchase's request to modify the PI Order should therefore be
denied."
o "...it is respectfully submitted that the Court ordered restrictions on
Bond Purchase's ability to do so remain in place.";
o "The limitations the Court placed on Bond Purchase's ability to use this
information are reasonable and appropriate in this circumstances.";
o "Bond Purchase has not demonstrated any reason why these limitations are
unreasonable or inappropriate."
o "The Order should stand in its current form."
o "Bond Purchase should not be given the benefit of the doubt by this
court."
o "It [Bond Purchase] made no showing that any of its fellow limited
partners have any interest in the information it wishes to disseminate.";
and
o "...Bond Purchase's request should be denied and the PI Order should
remain unchanged."
HAVING THEIR CAKE AND EATING IT TOO.
We hope it is clear to limited partners that we would like nothing more
than to describe the "Numerous Questionable Transactions" we have uncovered. In
fact, we have prepared a 22-page document containing questionable transactions,
remaining unanswered questions, and our analysis of the books and records of the
Partnership. Furthermore, we hope it is clear to limited partners why we cannot
release our findings to you. NAPICO has argued before the Court to prohibit our
dissemination of our findings while complaining to you that we have failed to
identify these serious and questionable breaches of fiduciary duty by NAPICO.
We hope you see NAPICO's subterfuge for what it is: A clear attempt to
continue in its efforts to avoid full disclosure while seeking desperately to
maintain its lucrative management position. We believe such tactics are cause
enough to replace NAPICO as the general partner.
Our request to modify the PI Order was denied on September 14, 2001. We
will now amend our current lawsuit to include additional breaches of fiduciary
duty. These additional claims arise from the findings of our expert's review of
the books and records. As we cannot communicate specific information from our
review to limited partners, we are forced to bring the following issues to the
Court's attention:
o self dealing;
o improperly taking management fees;
o charging excessive management fees;
o improperly reimbursing the general partners and/or its affiliates;
o taking and charging improper administrative fees;
o taking and charging improper reimbursements; and
o improperly withholding cash that should be distributed to the limited
partners.
We will continue to keep you advised of our progress with the Court and our
pending lawsuit. We also intend to bring you additional information regarding
the status of the pending class action lawsuit against NAPICO. The pending class
action lawsuit was initiated by several of your fellow limited partners who are
unaffiliated with Bond Purchase. Their claims arise out of the sale of
Partnership assets to a NAPICO affiliate in 1998.
We are dismayed that NAPICO would stoop to what we believe is a deceptive
action in an effort to have you read its material. NAPICO's most recent letter
to you was sent in an envelope describing its contents as "TAX INFORMATION" in
an attempt to grab your attention. We urge you to reject NAPICO; its underhanded
tactics, its stonewalling, its deceit and its failed management of your
Partnership.
Enclosed for your review is a History of Century Hillcreste. This brief
history of Century Hillcreste will highlight the tactics used by NAPICO in the
past. We believe that the tactics employed by NAPICO to maximize its gain at the
expense of the limited partners are similar to the problems we have uncovered in
the REAL III Partnership. It appears to us that with regard to NAPICO, past
performance is a guarantee of future problems. The history of Century Hillcreste
and REAL III clearly demonstrate a pattern to us. We hope that you will reject
NAPICO's attempt to continue to maximize its gain at your expense by voting for
a change by voting to replace NAPICO with Bond Purchase's affiliate, New G.P.
Our plan for the Partnership is to:
o distribute the excessive cash held by NAPICO - your cash;
o negotiate the sale of the Partnership's remaining assets to unaffiliated
third parties thereby maximizing your return;
o liquidate the Partnership on or before December 31, 2004 (currently, the
Partnership can continue until 2032); and
o reduce management fees by 10% until such time as the Partnership is
liquidated.
We urge you to support this plan by voting FOR proposals 1 and 2 on the
enclosed BLUE consent form.
Due to the constant delaying tactics of NAPICO and our continuing desire to
get at the truth, we have extended our solicitation until November 15, 2001. If
you have executed a valid BLUE consent by marking, dating and signing exactly as
your name appears on the Partnership's registration, including your title as
trustee or corporate officer if appropriate AND HAVE NOT SIGNED A REVOCATION,
you do not need to sign a new BLUE consent
form. If you have any doubt whether or not you have ever executed a white
consent revocation, please take this opportunity to mark, sign and date the
enclosed BLUE consent form.
If you have not voted, please take this opportunity to mark, sign, date and
return the enclosed BLUE consent form in the postage paid envelope provided. If
you inadvertently signed a NAPICO consent revocation, you have every right to
change your vote. Properly executing a BLUE consent form to remove NAPICO and
elect New G.P., L.L.C. as the new general partner will replace your prior vote.
Only your latest dated, properly executed consent form will be voted.
If you need additional information, please call N.S. Taylor & Associates,
Inc. who is assisting us with this solicitation. They can be reached toll free
at 1.800.711.8662 and will answer any additional questions you may have.
This letter is being mailed to all unitholders on or about October 5, 2001.
Very Truly Yours,
Bond Purchase, L.L.C.
---- IMPORTANT ----
Please be sure to mark, sign, date and return your BLUE consent
form. We urge you not to sign any consent card which is sent to
you by Real Estate Associates Limited III. If you execute a white
consent card it will invalidate your consent to remove the general
partners.
WE URGE YOU NOT TO SIGN A WHITE CONSENT CARD.
If you have questions or need assistance in voting your units,
please contact N.S. Taylor & Associates, Inc. who is assisting us
with this matter:
N.S. Taylor & Associates, Inc.
1.800.711.8662
You may also fax your completed consent
TOLL FREE 1.866.470.4300
History of Century Hillcreste
("Century" or the "Partnership")
October 1988 Investors buy units of Century Hillcreste
June 1995 Los Angeles Superior Court o A lawsuit is filed by
Hillcreste Properties Inc. and others against CooGeneral
Partner NAPICO and its affiliates.
August 1995 NAPICO enters into a Memorandum of Understanding with its
CooGeneral Partner, Hillcreste Properties, Inc., on behalf
of the Partnership:
o NAPICO will compensate the Partnership and its Limited
Partners for payments that were not made on a timely basis
for the years 1991, 1992 and 1993, including $135,000
which represents interest;
o Casden Properties will pay to the Partnership $350,000,
representing the amount of a Real Estate tax rebate, which
had previously been offset against amounts due from Casden
Properties;
o NAPICO agrees that it and its affiliates will pay to the
Partnership any amounts properly determined to be owed to
the Partnership as a result of an analysis of the books
and records of the Partnership, including the master
disbursement account maintained by the Partnership's
property management company, Mayer Management, Inc., a
NAPICO affiliate;
o a NAPICO affiliate will relinquish management
responsibility for the Hillcreste property which will be
transferred to an independent property management company
away from the NAPICO affiliate;
o the Partnership will employ an independent Cash Manager to
manage the bank accounts and reserves, distributions to
the Limited Partners and other accounts payable; and
o the Partnership will reimburse Hillcrests Properties, Inc.
$150,000 for professional fees incurred during the
Memorandum of Understanding.
June 1997 NAPICO IS CENSURED BY THE SECURITIES COMMISSION
o NAPICO enters into a consent decree with the SEC, 3
members of NAPICO's senior management and 3 affiliated
entities in connection with their roles in two separate
series of securities violations, including paying the
expenses of properties that were not owned by the
Partnership that were managed by an affiliate. NAPICO also
consents to cease and desist from committing securities
violations, and to pay $100,000 in penalties.
June 1998 NAPICO solicits limited partners to sell assets to an
affiliate without listing the property for sale to third
parties.
July 1999 Actual proceeds from the June 1998 sale of assets are
reduced by $1,572,434 due to an undisclosed payment to a
NAPICO affiliate. The disclosure is made one year later on
the July 1999 Form 10oQ.
June - Aug. 1999 Bond Purchase demands an explanation of the reduced
distribution and asks for access to the Books and Records of
the Partnership.
April 2001 Bond Purchase sues NAPICO et al. for:
o Access to Books and Records
o Breach of Contract
o Breach of Fiduciary Duty
(form of consent)
Real Estate Associates Limited III
a California Limited Partnership (the "Partnership")
CONSENT OF LIMITED PARTNER
THIS CONSENT IS SOLICITED ON BEHALF OF BOND PURCHASE, L.L.C.
LIMITED PARTNERS WHO RETURN A SIGNED CONSENT BUT FAIL TO INDICATE THEIR APPROVAL
OR DISAPPROVAL AS TO ANY MATTER WILL BE DEEMED TO HAVE VOTED TO APPROVE SUCH
MATTER. THIS CONSENT IS VALID FROM THE DATE OF ITS EXECUTION UNLESS DULY
REVOKED.
THIS CONSENT CARD WILL REVOKE ANY PREVIOUSLY EXECUTED REVOCATION OF CONSENT.
The undersigned has received the Consent Solicitation Statement dated March
13, 2001, as amended September 25, 2001 ("Consent Solicitation Statement") by
Bond Purchase, L.L.C., a Missouri limited liability company ("Bond Purchase."),
seeking the approval by written consent of the following proposals:
(1) the removal of the current general partners, National Partnership
Investments Corp., a California corporation and Coast Housing Investments
Associates, a California limited partnership; and
(2) the continuation of the Partnership and the election of New G.P. as the new
general partner of the Partnership (which is conditioned on the approval of
proposal (1) above).
Each of the undersigned, by signing and returning this Consent, hereby
constitutes and appoints Bond Purchase, acting through its officers and
employees as his or her attorney-in-fact for the purposes of executing any and
all documents and taking any and all actions required under the Partnership
Agreement in connection with this Consent and the Consent Solicitation Statement
or in order to implement an approved proposal; and hereby votes all limited
partnership interests of the Partnership held of record by the undersigned as
follows for the proposals set forth above, subject to the Consent Solicitation
Statement.
Proposal FOR AGAINST ABSTAIN
1. Removal of General Partners [ ] [ ] [ ]
2. Continuation of the Partnership and [ ] [ ] [ ]
election of new general partner, New G.P.
(Please sign exactly as your name appears on the Partnership's records. Joint
owners should each sign. Attorneys-in-fact, executors, administrators, trustees,
guardians, corporation officers or others acting in representative capacity
should indicate the capacity in which they sign and should give FULL title, and
submit appropriate evidence of authority to execute the Consent)
Dated: _______________________, 2001
(Important - please fill in)
__________________________________
Signature / Title
__________________________________
Signature / Title
__________________________________
Telephone Number