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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
Winthrop California Investors Limited Partnership
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(Name of Subject Company)
Winthrop California Investors Limited Partnership
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(Name of Person Filing Statement)
Units of Limited Partnership Interest
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(Title of Class of Securities)
None
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(CUSIP Number of Class of Securities)
Carolyn Tiffany
Winthrop Financial Associates, A Limited Partnership
5 Cambridge Center, 9th Floor
Cambridge, Massachusetts 02142
(617) 234-3000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) filing Statement)
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1. Security and Subject Company
The name of the subject company is Winthrop California Investors
Limited Partnership, a Delaware limited partnership (the "Partnership"), and the
address of the principal executive offices of the Partnership is 5 Cambridge
Center, 9th Floor, Cambridge, Massachusetts 02142. The title of the class of
equity securities to which this statement relates is limited partnership units
("Units") of the Partnership.
2. Tender Offer of the Bidder
This Statement relates to the tender offer of Sutter/Jamboree
Acquisition Fund, LLC ("Sutter"), to purchase up to 1,000 Units at a purchase
price of $1,500 per Unit, pursuant to the terms and conditions of an Offer to
Purchase dated November 24, 1999, and the related Letter of Transmittal
(together, the "Sutter Offer"). The Offer is being made pursuant to a tender
offer statement on Schedule 14D-1 dated November 24, 1999.
According to the Sutter Offer, the principal business address of
Sutter's executive offices is c/o Sutter Capital Management, LLC, 595 Market
Street, Suite 2100, San Francisco, California 94105.
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) Certain Relationships. The general partners (the "General
Partners") of the Partnership are Three Winthrop Properties, Inc. and Winthrop
Financial Associates, a Limited Partnership ("WFA"). Affiliates of the General
Partners own 1,023 Units representing approximately 29.2% of the outstanding
Units, and are allocated or receive approximately 29.2% of profit and loss and
distributions allocated or distributed to holders of Units.
In addition, under the terms of the Partnership's Agreement of Limited
Partnership, the General Partners and their affiliates are entitled to receive
certain cash distributions from, and be allocated taxable profits and losses of,
the Partnership. In addition, the General Partners and their affiliates receive
certain fees and compensation for services rendered in connection with the
operations of the Partnership.
In this regard, the Partnership is required to pay WFA an annual asset
management fee of $750,000. $750,000 was paid for 1998 and, as of September 30,
1999, $562,500 has been paid in the current year.
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In addition, an affiliate of the General Partners holds a 1% general
partnership interest in Winthrop California Management Limited Partnership ("WC
Management"), the entity that acquired the right to manage an approximately 1.6
million square foot office facility owned by Jamboree LLC. The Partnership holds
a 99% limited partnership interest in WC Management and an indirect 9.9%
interest in Jamboree LLC. In 1998, the affiliate of the General Partners which
is the general partner of WC Management received a distribution of $14,384 in
respect of its 1.0% interest. WC Management has retained Winthrop Management LLC
("Winthrop Management"), an affiliate of the General Partners, to perform
management and leasing services at the office facility. WC Management is
entitled to receive a fee of 2% of gross receipts from the office facility. From
this amount, WC Management reimburses Winthrop Management for the compensation
paid by Winthrop Management to certain senior level on-site employees as well as
for accounting and other support functions performed off-site by Winthrop
Management. WC Management is also entitled to receive (i) certain incentive fees
based on reductions it is able to achieve, if any, in certain operating and
other expenses and (ii) leasing commissions, consistent with prevailing market
rates, for all third-party leases it procures for the office facility.
A conflict of interest exists for the General Partners between
continuing the Partnership and receiving the fees described above and
liquidating the Partnership.
On November 30, 1999, the Partnership received a letter from counsel to
Sutter notifying it of the Sutter Offer and providing a copy of the offering
materials related thereto. The letter also contained a request that the
Partnership comply with certain provisions of the Securities Exchange Act of
1934 as amended (the "Exchange Act") by either providing Sutter with a list of
the name and address of, and the number of Units held by, each limited partner
of the Partnership, or agreeing to mail the Sutter Offer offering materials to
limited partners.
On December 2, 1999, a representative of the Partnership telephoned a
representative of Sutter and stated that the Partnership would neither provide
the requested list of limited partner information nor agree to mail the Sutter
Offer offering materials, and that a letter from the Partnership's legal counsel
would be forthcoming.
On December 2, 1999, the Partnership's legal counsel mailed a letter
written on behalf of the Partnership to counsel for Sutter. In the letter
counsel indicated that (i) the Partnership's agreement of limited partnership
required (A) the prior written consent of the managing general partner to any
assignment or transfers of Units and (B) that any transfers of Units comply with
applicable Federal securities laws, (ii) as a
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result of the absence of current financial information with respect to the
Partnership, the managing general partner will not consent to any transfer of
Units made pursuant to the Sutter Offer, and (iii) the Sutter Offer does not
comply with the disclosure requirements of the Securities Exchange Act of 1934
applicable to tender offers for limited partnership units, and, accordingly, the
Partnership is not required to comply with the request received on November
30th.
On December 7, 1999, a representative of Sutter Opportunity Fund, LLC,
an affiliate of Sutter, appeared at the Partnership's office and delivered a
letter demanding that they be permitted to inspect and copy the register of
holders of Units pursuant to the provisions of the Partnership's limited
partnership agreement and Delaware law. A representative of the Partnership
advised them that the Partnership needed to consult with its counsel before
responding. The Partnership was advised by the representative of Sutter
Opportunity Fund, LLC that a response should be directed to Smith, Katzenstein &
Furlow, LLC.
On December 8, 1999, Sutter Opportunity Fund, LLC commenced an action
in the Delaware Chancery Court against the Partnership and WFA to obtain a list
of the limited partners of the Partnership.
In a letter to limited partners dated December 9, 1999, the Partnership
indicated, among other things, that based on the absence of current financial
information on the Partnership sufficient to enable limited partners to make an
informed decision as to whether to transfer Units, it had suspended the
processing of all transfers of units other than transfers by operations of law.
The Partnership disclosed that the transfer restriction would be lifted once
current financial information is available. The Partnership also disclosed that
an affiliate of the General Partner may be making an offer to purchase Units at
a price substantially above the price provided for in the Sutter Offer.
4. The Solicitation or Recommendation
Due to the ongoing dispute between the Partnership and its partner in
Crow Winthrop Development Limited Partnership ("CWDLP"), the Partnership had
been unable to obtain sufficient financial information to complete its financial
statements. Because of its inability to obtain the requisite financial
information, despite bringing an action against the partner in an effort to
obtain such information, the Partnership has not been able to make its required
quarterly and annual filings with the Securities and Exchange Commission since
the beginning of 1998. The Partnership has now obtained additional information
on the operations of CWDLP and believes that within the next few weeks it will
be able to deliver to limited partners financial
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statements of the Partnership for 1998 as well as the nine months ended
September 30, 1999. However, until such time as current financial information is
available, the Partnership has suspended the processing of all transfers of
Units other than transfers by operation of law.
As a result of the lack of current financial information on the
Partnership sufficient to enable Limited Partners to make an informed decision
and the Partnership's belief that the Sutter offer is substantially below the
value of the Units, the Partnership recommends that Limited Partners reject the
Sutter offer.
5. Persons Retained, Employed or to be Compensated
None
6. Certain Negotiations and Transactions by the Subject Company
None
7. Additional Information to be Furnished
None.
8. Material to be Filed as Exhibits
The following Exhibits are filed herewith:
Exhibit (a)(i) - Letter from the Partnership to the limited partners,
dated December 9, 1999
Exhibit (b) - None
Exhibit (c)(i) - Letter from legal counsel to Sutter to the General
Partner, dated November 24, 1999
Exhibit (c)(ii) - Letter from legal counsel to the Partnership to
legal counsel to Sutter, dated December 2, 1999
Exhibit (c)(iii) - Letter from Smith, Katzenstein & Furlow LLP to the
Partnership, dated December 7, 1999
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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.
WINTHROP CALIFORNIA INVESTORS
LIMITED PARTNERSHIP
By: WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP,
Managing General Partner
By: /s/ Michael L. Ashner
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Michael L. Ashner
Chief Executive Officer
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