-----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, JFAbiq8FZSMGZPcqmbEiH0kWZKS3OWsNUQ7UDLyIZiJtdBra4KxHZaMfI29mBRq5 86g5JiYHUc8k2jEgUM8o4w== 0001037955-02-000007.txt : 20020712 0001037955-02-000007.hdr.sgml : 20020712 20020712133753 ACCESSION NUMBER: 0001037955-02-000007 CONFORMED SUBMISSION TYPE: DFAN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020712 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PROMETHEUS INCOME PARTNERS CENTRAL INDEX KEY: 0000803026 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 770082138 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-16950 FILM NUMBER: 02701785 BUSINESS ADDRESS: STREET 1: 350 BRIDGE PKWY CITY: REDWOOD CITY STATE: CA ZIP: 94065 BUSINESS PHONE: 6505965300 MAIL ADDRESS: STREET 1: 350 BRIDGE PKWY CITY: REDWOOD CITY STATE: CA ZIP: 94065 FORMER COMPANY: FORMER CONFORMED NAME: PROMETHEUS DEVELOPMENT INCOME PARTNERS DATE OF NAME CHANGE: 19861229 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EVEREST PROPERTIES II LLC CENTRAL INDEX KEY: 0001037955 IRS NUMBER: 954599059 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A BUSINESS ADDRESS: STREET 1: 199 SOUTH LOS ROBLES AVENUE STREET 2: SUITE 440 CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 6265855920 MAIL ADDRESS: STREET 1: 199 SOUTH LOS ROBLES AVENUE STREET 2: SUITE 440 CITY: PASADENA STATE: CA ZIP: 91101 DFAN14A 1 prometh_dfan14afinal.txt SOLICITING MATERIALS UNDER RULE 14A-12 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: [ ] Preliminary Proxy Statement [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [X] Soliciting Materials Under Rule 14a-12 Prometheus Income Partners, a California limited partnership (Name of Registrant as Specified in Its Charter) Everest Investors 12, LLC Everest Properties II, LLC (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transactions applies: ....................................................................... (2) Aggregate number of securities to which transactions applies: ....................................................................... (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. ....................................................................... (4) Proposed maximum aggregate value of transaction: ....................................................................... (5) Total fee paid: ....................................................................... [ ] 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: (2) Form, Schedule or Registration Statement no.: (3) Filing Party: (4) Date Filed: Everest Properties 199 S. Los Robles Ave., Suite 440 Pasadena, CA 91101 Tel: (626) 585-5920 Fax: (626) 585-5929 July 12, 2002 Via facsimile Mr. John J. Murphy Prometheus Development Company, Inc. 350 Bridge Parkway Redwood City, CA 94065 Re: Prometheus Income Partners (the "Partnership") Dear Mr. Murphy: We are in receipt of your letter to limited partners dated July 3, 2002, filed with the Securities and Exchange Commission on July 5, 2002. We are disturbed by the grossly misleading and untruthful statements contained in your letter. First, you contend that you have attempted to contact Aspen Square Management, Inc. ("Aspen") on several occasions without getting a response from Aspen. We are aware that in-fact you have had lengthy conversations with Aspen during which Aspen answered your questions and subsequently provided you with information about Aspen and their ability to effectuate their offer. Further, you claim that Aspen's offer price is not clear. We do not know how Aspen could be any clearer than offering $54,500,000 for both properties, which is $1,300,000 above the price offered for the properties under the proposed merger. The $1,600,000 in expense savings under the Aspen offer is also obvious from Aspen's letter and your own explanation of the calculation of the merger consideration on page 65 of your proxy statement. Your letter fails to mention this savings, the resulting increase in proceeds to limited partners, or the fact that you are charging a disposition fee which is not authorized by the partnership agreement. Further, you state that Aspen's offer has significant and substantial contingencies. You must know that this statement is misleading. Aspen's offer only requires a 15 day due diligence period, which is an extremely short time given the size of the transaction. Aspen has also specifically stated in its offer that it maintains the liquid funds to proceed with an all cash transaction, without a financing contingency. You also failed to disclose in your letter that your proposed merger has both due diligence and financing contingencies that were more uncertain than Aspen's. We are truly puzzled when you tell the limited partners that Everest's own best interest may not be consistent with that of the limited partners. We have brought to the limited partners an unaffiliated and very qualified third party to purchase the properties for a higher price than you are offering and which would result in a higher distribution to the limited partners. We want all limited partners to receive the highest price from a disposition of this investment. Page 2 Mr. Murphy 7/12/2002 Also, your comments regarding the manner in which proceeds from a sale to Aspen would be distributed conveniently fail to mention that all of those results are entirely in your control as the general partner of the Partnership. Nothing, other than the general partner's own decision, would delay the immediate distribution of the proceeds of a full-value sale of the properties to an unaffiliated purchaser, such as Aspen. The only interest that is inconsistent with the limited partners' interest is the self-interest of the general partner. Finally, your sudden concern for an accelerated closing is unwarranted. The partnership has been in existence for over 14 years; a full value liquidation is worth a short delay (which, by the way, is the fault of the general partner for not openly marketing these properties earlier). We expect you to contact Aspen, pursue a sale in good faith and present a transaction to limited partners which is consistent with your fiduciary obligations. We further request that you disclose to limited partners an accurate description of the Aspen offer, which is superior to the offer made under your merger proposal, without any misrepresentations and extend the date of the limited partners' meeting to allow them to review the offer. We believe that it is also appropriate that you send the Aspen offer to Houlihan Lokey and ask them to provide a reasoned opinion regarding which proposal is financially superior for the limited partners. It is time to put the interest of the limited partners before yours and be honest with all of us regarding which offer will result in higher distributions to the limited partners. Very truly yours, EVEREST PROPERTIES II, LLC EVEREST INVESTORS 12, LLC /s/ W. Robert Kohorst W. Robert Kohorst President WRK/:ll cc: Limited Partners of Prometheus Income Partners Prometheus Income Partners PIP General Partner's Merger Proposal vs. Aspen's Acquisition Offer - --------------- --------------- ------------- ----------------------- Issue Prometheus Aspen Offer Misrepresentations in Merger Prometheus' July 3 Proposal Letter - --------------- --------------- ------------- ----------------------- Purchase $53,200,000 $54,500,000 price - --------------- --------------- ------------- ----------------------- Expense $0 $1,600,000 Not disclosed savings - --------------- --------------- ------------- ----------------------- Per $1,736 $1,888 Not disclosed unit distributions - --------------- --------------- ------------- ----------------------- Allocation of General Partner's Net income and debt Not disclosed net Income and affiliate will reductions between debt reduction receive the March 31, 2002 and between now partnership's net the acquisition and closing income and mortgage closing date debt reduction will go to the limited between partners. Based on a March 31, 2001 and closing date of September the closing date of 30, 2002, and based the transaction. on the first quarter operating results, the limited partners will receive $1,084,000 in net income and $174,000 in reduced debt. - --------------- --------------- ------------- ----------------------- Both transactions The obligations This offer is The Prometheus' have similar of the General structured as an letter misrepresents financing Partner to complete all cash transaction the financing contingencies the merger are and Aspen contingency in the subject to the maintains the Aspen offer. condition that liquid funds the outstanding to purchase indebtedness the properties with with respect to the no financing partnership' contingencies other properties be than the possible refinanced on terms loan assumption. satisfactory to the General Partner in its sole and absolute discretion. - --------------- --------------- ------------- ----------------------- Due diligence The Merger Aspen has asked Prometheus' letter and other proposal for a 15 business misleadingly states conditions specifically states day due diligence that "Aspen's letter that conditions period (very short of intent is subject still exist that for this type of to significant and can prevent the transaction). substantial merger. conditions" without mentioning the conditions that could prevent the merger. - --------------- --------------- -------------- ----------------------- Closing date The earliest that The sale of the The Prometheus the Merger could properties can letter close is August close as early as misleadingly 14, 2002, that is August 31, 2002, states "a sale of if the General which will include the Partnership's Partner does not the timeframe to properties would extend the proxy obtain limited take significant period or the partners' approval time to complete" date of the for the transaction. without mentioning meeting. the similar time frame required to close both transactions. - --------------- --------------- ------------- ----------------------- Cash available Fixed at $1736/unit Cash available In reference to at close with no upside for distribution to the the Aspen offer, or downside limited partners would Prometheus' letter adjustment INCREASE due to states "Cash increases in cash available for positions as well distribution would as reduction of be reduced by mortgage debt these as a result of [contingent] operations between liabilities:. This the March 31, 2001 statement is cutoff date under obviously not the merger and the true. acquisition's closing date. - --------------- --------------- ------------- ----------------------- Payment to Full cash payment It is entirely up The Prometheus' limited at the close of to the General letter partners at the merger Partner to determine misleadingly closing what portion of states that the sales proceeds to "it is unlikely distribute to the you [the limited limited partners. partners] would While the cash receive the available at closing proposed purchase will likely be price in full." subject to a reserve provision, there is no reason that the limited partners should receive anything less than the full amount of the sales proceeds. Additionally, any reserves should earn interest to the benefit of the limited partners until the reserves are released. - --------------- --------------- ------------- ----------------------- Everest's The General Everest is a limited Prometheus' letter Interest Partner is partner just like you states that "We merging the with the interest of believe that partnership getting the highest Everest is acting with a related possible distribution in what it entity which wants to all the limited perceives to be to acquire partners. its own best properties at the interests, which lowest possible may not be price. consistent with those of the other limited partners." Everest interests are not only consistent but the same as other limited partners. - --------------- --------------- ------------- ----------------------- Everest vs. The General Partner Everest introduced Prometheus' letter The General has never presented the properties to states "Everest Partner a competitive offer Aspen and Aspen has made no from unaffiliated submitted an offer proposal to us companies to the that is effectively that would benefit limited partners. over $2,900,000 the interests of There has been no higher than the all the limited true market test merger offer to an . partners." Everest of the properties' entity directly introduced the value. affiliated with the properties to General Partner. Aspen and brought the higher offer to the Partnership. - --------------- --------------- ------------- -----------------------
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