Exhibit 2.9
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B545305.1
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF FLORIDA
Case No. 98-8030-CIV-HURLEY
LEONARD ROSENBLUM, J/B INVESTMENT PARTNERS, SMALL and REBECCA BARMACK, PARTNERS,
BARBARA HALL, HENRY R. GRAHAM, ANNE R. GRAHAM, MARGO CORTELL, PATRICK M. RHODES,
BERNICE M. HUELS, GARRETT N. VOIGHT, CLAIRE E. FULCHER, MARCELLA LEVY, RICHARD
HODGSON, CITY PARTNERSHIPS, HELMAN PARSONS AND CLEVA PARSONS, on behalf of
themselves and all others similarly situated and derivatively on behalf of the
Nominal Defendants,
Plaintiffs,
v.
EQUIS FINANCIAL GROUP LIMITED PARTNERSHIP, a Massachusetts Limited Partnership,
EQUIS CORPORATION, a Massachusetts Corporation, GDE ACQUISITION LIMITED
PARTNERSHIP, a Massachusetts Limited Partnership, AFG LEASING INCORPORATED, a
Massachusetts Corporation, AFG LEASING IV INCORPORATED, a Massachusetts
Corporation, AFG LEASING VI INCORPORATED, a Massachusetts Corporation, AFG
AIRCRAFT MANAGEMENT CORPORATION, a Massachusetts Corporation, AFG ASIT
CORPORATION, a Massachusetts Corporation, AF/AIP PROGRAMS LIMITED PARTNERSHIP, a
Massachusetts Limited Partnership, GARY D. ENGLE and GEOFFREY A. MACDONALD,
Defendants,
AIRFUND I INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts Limited
Partnership, AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP, a Massachusetts
Limited Partnership, AMERICAN INCOME 4 LIMITED PARTNERSHIP, a Massachusetts
Limited Partnership, AMERICAN INCOME 5 LIMITED PARTNERSHIP, a Massachusetts
Limited Partnership, AMERICAN INCOME 6 LIMITED PARTNERSHIP, a Massachusetts
Limited Partnership, AMERICAN INCOME 7 LIMITED PARTNERSHIP, a Massachusetts
Limited Partnership, AMERICAN INCOME 8 LIMITED PARTNERSHIP, a Massachusetts
Limited Partnership, AMERICAN INCOME PARTNERS III-A LIMITED PARTNERSHIP, a
Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-B LIMITED
PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS III-C
LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME
PARTNERS III-D LIMITED PARTNERSHIP, a Massachusetts Limited Partnership,
AMERICAN INCOME PARTNERS IV-A LIMITED PARTNERSHIP, a Massachusetts Limited
Partnership, AMERICAN INCOME PARTNERS IV-B LIMITED PARTNERSHIP, a Massachusetts
Limited Partnership, AMERICAN INCOME PARTNERS IV-C LIMITED PARTNERSHIP, a
Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS IV-D LIMITED
PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME PARTNERS V-A
LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN INCOME
PARTNERS V-B LIMITED PARTNERSHIP, a Massachusetts Limited Partnership, AMERICAN
INCOME PARTNERS V-C LIMITED PARTNERSHIP, a Massachusetts Limited Partnership,
AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP, a Massachusetts Limited
Partnership, AMERICAN INCOME FUND I-B, a Massachusetts Limited Partnership,
AMERICAN INCOME FUND I-C, a Massachusetts Limited Partnership, AMERICAN INCOME
FUND I-D, a Massachusetts Limited Partnership, AMERICAN INCOME FUND I-E, a
Massachusetts Limited Partnership, AFG INVESTMENT TRUST A, a Delaware business
trust, AFG INVESTMENT TRUST B, a Delaware business trust, AFG INVESTMENT TRUST
C, a Delaware business trust, and AFG INVESTMENT TRUST D, a Delaware business
trust,
Nominal Defendants.
JOINT MOTION FOR PRELIMINARY APPROVAL
OF REVISED STIPULATION OF SETTLEMENT
AND REQUEST FOR A HEARING
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Plaintiffs and Defendants jointly move this Court, pursuant to Fed. R. Civ.
P. 23(e), for an order preliminarily approving the proposed settlement set forth
in the Revised Stipulation of Settlement dated January 29, 2002, conditionally
certifying the settlement class and providing for notice of, and a final
fairness hearing on, the proposed settlement.
As grounds for its Motion, Plaintiffs and Defendants state as follows:
1. On January 15, 1998, the Plaintiffs commenced this action by filing
a Derivative and Class Action Complaint (the "Complaint"). The Plaintiffs are
owners of Units and/or Interests in one or more of the twenty-eight investment
programs managed and controlled by affiliates of defendant Equis Financial Group
Limited Partnership, as successor-in-interest to American Finance Group
("Equis"). The Plaintiffs asserted claims derivatively on behalf of all of the
investment programs named as Nominal Defendants in the Action -- twenty-four
(24) limited partnerships and four (4) investment trusts -- and directly on
behalf of a proposed class of persons who owned Units or Interests of the
Nominal Defendants.
2. On August 20, 1998, the Court preliminarily approved a Stipulation of
Settlement and conditionally certified a Settlement Class consisting of three
sub-classes. The three sub-classes include: (a) the "RSL Sub-Class"; (b) the
"Operating Partnership Sub-Class"; and (c) the "Trust Sub-Class." After a final
fairness hearing, the Court entered a final order and judgment on May 26, 1999,
approving the settlement with respect to the RSL and Trust Sub-Classes, and
those settlement proceeds have been distributed to the Class Members.
Therefore, the remaining allegations of the Complaint relate solely to the
eleven (11) operating partnerships (the "Operating Partnerships").
3. The original Settlement terms included, among other things, a
proposed transaction whereby the eleven Operating Partnerships' Units would be
exchanged for the common stock of a new publicly-traded corporation (the
"Exchange Transaction") that would be formed to acquire the Operating
Partnerships' assets and to engage in financial services ("Newco"). In
accordance with the original Settlement, the Defendants prepared a consent
solicitation statement to obtain approval of the proposed Exchange Transaction
and filed the statement for review by the United States Securities and Exchange
Commission ("SEC").
4. After encountering numerous delays in the SEC review process, the
parties entered into an Amended Stipulation of Settlement dated March 15, 1999
(the "Amended Stipulation"), and requested the Court's permission to allow the
Operating Partnerships to reinvest a certain portion of the money (40% of the
total aggregate net asset value of the Partnerships) they received from the
leases and sales of equipment ("New Investments"). As the parties informed the
Court, they believed that the inability to reinvest cash during the SEC's review
process would likely cause the Operating Partnerships to lose business
opportunities that could be available to the new public company. Accordingly,
the Court's March 22, 1999 Order also permitted the Operating Partnerships to
make certain New Investments on two conditions. First, in the event that an
Operating Partnership acquired New Investments and was not a party to the
exchange, Newco would acquire all such New Investments from such
Non-Participating Partnership for an amount equal to the Non-Participating
Partnership's net equity investment in such New Investments plus an annualized
return thereon of 7.5%. Second, in the event that a Partnership acquired New
Investments and the exchange was not consummated, the General Partners were
required to (i) use their best efforts to divest all such New Investments in an
orderly and timely fashion, and (ii) cancel or return to each Partnership any
accumulated or deferred fees on New Investments.
5. Thereafter, the SEC review extended over many months with the parties
unable to resolve certain issues to the staff's satisfaction. The Defendants
determined that the additional expense and time necessary to resolve those
issues and complete the Exchange Transaction would be excessive. Accordingly,
the Defendants and Class Counsel have negotiated a Revised Stipulation of
Settlement ("Revised Stipulation") which, among other things, requires the
Defendants to pursue the sale of all remaining assets and the liquidation of the
Operating Partnerships and eliminates the proposed Exchange Transaction and the
need to disseminate a consent solicitation statement (the "Settlement"). As
described more fully in the Revised Stipulation, the proposed Settlement
consists principally of three parts: (i) a minimum $15 million cash
distribution to the Settlement Class members; (ii) an orderly liquidation and
sale of the remaining assets and dissolution of the Operating Partnerships; and
(iii) the Defendants' purchase of the Echelon Notes for a price equal to their
aggregate outstanding $32 million principal amount plus an annualized return of
7.5% simple interest.
6. The parties request that the Court set a hearing date for the preliminary
approval of the proposed Settlement at the Court's earliest possible
convenience, and thereafter set a hearing date for the final approval of the
proposed Settlement.
7. An unopposed order for preliminary approval of the Settlement,
conditionally certifying the settlement class and providing for notice of, and a
final fairness hearing on, the proposed Settlement, is attached as Exhibit 1.
WHEREFORE, the parties request that the Court enter an order:
1. Set a hearing date for the preliminary approval of the proposed
Settlement at the Court's earliest possible convenience;
2. Preliminarily approving the proposed Settlement, conditionally certifying
settlement class and providing for notice of, and hearing on, the proposed
Settlement; and
3. Grant such other further relief the Court deems just and proper.
Respectfully submitted,
this __ day of February 2002,
ATTORNEYS FOR DEFENDANTS:
RICHMAN GREER WEIL BRUMBAUGH
MIRABITO & CHRISTENSEN, P.A.
Gerald F. Richman, Esq.
250 Australian Ave. South - Suite 1504
West Palm Beach, Florida 33401
Tel. (561) 803-3500
and
NIXON PEABODY LLP
Deborah L. Thaxter, P.C.
Gregory P. Deschenes
101 Federal Street
Boston, MA 02110-1832
Tel. (617) 345-1000
ATTORNEYS FOR PLAINTIFFS:
LERNER & PEARCE, P.A.
Allan M. Lerner
2888 East Oakland Park Boulevard
Ft. Lauderdale, FL 33306
(954) 563-8111
_________________________________
WECHSLER HARWOOD HALEBIAN & FEFFER LLP
Andrew D. Friedman
488 Madison Avenue, 8th Floor
New York, NY 10022
(212) 935-7400
LAW OFFICES OF VINCENT T. GRESHAM
Vincent T. Gresham
6065 Roswell Road, Ste. 1445
Atlanta, GA 30328
(770) 552-5270
GILMAN AND PASTOR
Peter A. Lagorio
One Boston Place
Boston, MA 02108-4400
(617) 589-3750
BENJAMIN S. SCHWARTZ, CHARTERED
Benjamin S. Schwartz
4600 Olympic Way
Evergreen, CO 80439
(303) 670-5941
LAW OFFICES OF LIONEL Z. GLANCY
Lionel Z. Glancy
1801 Avenue of the Stars, Suite 306
Los Angeles, CA 90067
(310) 201-9150
LAW OFFICES OF JAMES V. BASHIAN
500 Fifth Avenue, Ste. 2700
New York, NY 10110
(212) 921-4100
THOMAS A. HOADLEY, PA
310 Australian Avenue
Palm Beach, FL 33480
(561) 792-9006
GOODKIND, LABATAN, RUDOFF & SUCHAROW, LLP
Lynda J. Grant
Robert N. Cappucci
100 Park Avenue
New York, NY 10017
(212) 907-0700
LASKY & RIFKIND, LTD.
Leigh Lasky
30 North LaSalle Street, Ste. 2140
Chicago, IL 60602
(312) 759-7670
HAROLD B. OBSTFELD, P.C.
Harold B. Obstfeld
260 Madison Avenue
New York, NY 10116
(212) 696-1212
Dated: February __, 2002
The Partnership Agreements prohibited the reinvestment of cash except in
limited circumstances.
In a letter dated May 10, 2001 sent to this Court, the SEC staff asserted that
certain of the Operating Partnerships were "investment companies," as defined in
Section 3(a)(1)(c) of the Investment Company Act of 1940, as amended (the "1940
Act"). Defendants and Class Counsel believe that the proposed liquidation and
dissolution of the partnerships will satisfactorily resolve the issues the SEC
raised concerning the possible violation of the 1940 Act.