SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
and
AMENDMENT NO. 1
to
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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BOSTON FINANCIAL TAX CREDIT FUND VIII,
A LIMITED PARTNERSHIP
(Name of Subject Company)
BOSTON FINANCIAL TAX CREDIT FUND VIII,
A LIMITED PARTNERSHIP
(Name of Person(s) Filing Statement)
UNITS
(Title of Class of Securities)
10065E100
CUSIP Number of Class of Securities)
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Michael H. Gladstone, Esq.
c/o Boston Financial Securities, Inc.
101 Arch Street
Boston, MA 02110
(617) 439-3911
(Name, Address and Telephone Number of
Persons Authorized to Receive Notices and Communications on
Behalf of the Person(s) Filing Statement)
Copies to:
Joseph T. Brady, Esq.
Peabody & Brown
101 Federal Street
Boston, MA 02110
(617) 345-1000
Item 1. Security and Subject Company.
The name of the subject company is Boston Financial Tax Credit Fund VIII,
A Limited Partnership, a Massachusetts limited partnership (the
"Partnership"), which has its principal executive offices at 101 Arch Street,
Boston, Massachusetts 02110. The general partner of the Partnership is Arch
Street VIII Limited Partnership, a Massachusetts limited partnership, with
principal executive offices at 101 Arch Street, Boston, Massachusetts 02110
(the "General Partner"). The title of the class of equity securities to
which this statement relates is the Partnership's Units (the "Units")
representing units of limited partnership interests in the Partnership.
Item 2. Tender Offer of the Bidder.
This Schedule 14D-9 relates to the following two offers:
1. The Oldham Offer: The offer by Oldham Institutional Tax Credits LLC
("Oldham"), a Massachusetts limited liability company and an affiliate of the
General Partner, disclosed in a Tender Offer Statement on Schedule 14D-1
dated July 24, 1997, as amended by Amendment No. 1 dated August 18, 1997 (the
"Oldham Schedule 14D-1"), to purchase up to 9,125 issued and outstanding
Units upon the terms and subject to the conditions set forth in the Offer to
Purchase dated July 24, 1997, as supplemented August 18, 1997, and the
related Letter of Transmittal, as each may be supplemented, modified or
amended from time to time (which collectively constitute the "Oldham Offer"
and are contained within the Oldham Schedule 14D-1). Oldham has increased
the purchase price for the Oldham Offer from $800 to $880 per Unit, net to
the seller in cash (the "Oldham Purchase Price"), without interest thereon.
The address of Oldham's principal executive offices is 101 Arch Street,
Boston, Massachusetts 02110.
2. The Everest Offer: The offer by Everest Tax Credit Investors, LLC, a
California limited liability company, and Everest Tax Credit Investors II,
LLC, a California limited liability company (together, "Everest"), disclosed
in a Tender Offer Statement on Schedule 14D-1 dated August 11, 1997 (the
"Everest Schedule 14D-1"), to purchase up to 1,825 issued and outstanding
Units upon the terms and subject to the conditions set forth in the Offer to
Purchase dated August 11, 1997, and the related Letter of Transmittal, as
each may be supplemented, modified or amended from time to time (which
collectively constitute the "Everest Offer" and are contained within the
Everest Schedule 14D-1). The purchase price for the Everest Offer is $840
per Unit, net to the seller in cash (the "Everest Purchase Price"), without
interest thereon.
The address of Everest's principal executive offices is 199 South Robles
Avenue, Suite 440, Pasadena, California 91101.
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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 does not have any employees, directors or
executive officers. All decisions with respect to the management of the
Partnership and its affairs are made only with the consent of its General
Partner. Oldham is an affiliate of the General Partner. There is no
affiliation between Everest and the Partnership, the General Partner or any
of their affiliates. Except as described below, there are no material
contracts, agreements, arrangements or understandings or any actual or
potential conflicts of interest between the General Partner or its affiliates
and the Partnership and its affiliates.
The General Partner and its affiliates have received or will receive
certain types of compensation, fees or other distributions in connection with
the operations of the Partnership. The arrangements for payment of
compensation and fees, as set forth in the Partnership's Amended and Restated
Agreement of Limited Partnership, dated as of December 6, 1993, as amended to
date (the "Partnership Agreement"), the Partnership's prospectus and other
publicly filed documents, were not determined in arm's-length negotiations
with the Partnership.
In accordance with the Partnership Agreement, the Partnership is required
to pay certain fees to and reimburse expenses of the General Partner and
others in connection with the organization of the Partnership and the
offering of its Units. Selling commissions, fees and accountable expenses
related to the sale of the Units totaling $4,664,369 have been charged
directly to Limited Partners' equity. In connection therewith, $2,828,918 of
selling expenses and $1,835,451 of offering expenses incurred on behalf of
the Partnership have been paid to an affiliate of the General Partner. The
Partnership may be required to pay a non-accountable expense allowance for
marketing expense equal to a maximum of 1% of gross offering proceeds. The
Partnership has capitalized an additional $50,000 which was reimbursed to an
affiliate of the General Partner. Total organization and offering expenses
exclusive of selling commissions and underwriting advisory fees did not
exceed 5.5% of the gross offering proceeds and organizational and offering
expenses, inclusive of selling commissions and underwriting advisory fees,
did not exceed 15.0% of the gross offering proceeds. Payments made and
expenses reimbursed in the years ended March 31, 1997, 1996 and 1995, are as
follows:
1997 1996 1995
Organizational fees and
expenses and selling expenses $--- $(5,832) $3,958,903
In accordance with the Partnership Agreement, the Partnership is required
to pay acquisition fees to and reimburse acquisition expenses of the General
Partner or
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its affiliates for selecting, evaluating, structuring, negotiating, and
closing the Partnership's investments in Local Limited Partnerships.
Acquisition fees total 6% of the gross offering proceeds. Acquisition
expenses which include such expenses as legal fees and expenses, travel and
communications expenses, costs of appraisals, accounting fees and expenses,
are totaled 1.5% of the gross offering proceeds. Acquisition fees totaling
$2,189,820 for the closing of the Partnership's investments in Local Limited
Partnerships were paid to an affiliate of the General Partner. Acquisition
expenses totaling $335,196 were reimbursed to an affiliate of the General
Partner. Payments made and expenses reimbursement in the years ended March
31, 1997, 1996 and 1995 are as follows:
1997 1996 1995
Acquisition fees
and expenses $888 $144,429 $2,068,027
Pursuant to the Partnership Agreement, an affiliate of the General
Partner is entitled to a fee (the "Asset Management Fee") for its services in
connection with the administration of the affairs of the Partnership
(including, without limitation, coordination of communications between the
Partnership and Limited Partners and with the Local Limited Partnerships).
The Asset Management Fee is payable annually and is calculated by multiplying
0.50% by the consumer price index and then multiplying the product by the
gross proceeds of the offering. This formula currently results in the amount
of .544% being multiplied by the gross proceeds of the offering. The Asset
Management Fees during the years ended March 31, 1997, 1996 and 1995 are as
follows:
1997 1996 1995
Asset Management Fees 193,635 188,630 221,684
According to the Partnership Agreement, the General Partner is also
entitled to receive a subordinated disposition fee (the "Subordinated
Disposition Fee") for services rendered in connection with the sale of a
property or the sale of the Partnership's interest in a Local Limited
Partnership. Payment of such fee shall be subordinated to the return of
Limited Partners 6% return as set forth in the Partnership Agreement. Each
Subordinated Disposition Fee is equal to 1% of the sale price in respect of
any such sale (including the principal amount of any mortgage loans and any
related seller financing with respect to a property to which such sale is
subject). . For the year ended March 31, 1997, the General Partner did not
earn any Subordinated Disposition Fee.
According to the Form 10-K, the Partnership does not have any employees,
but an affiliate of the General Partner is reimbursed for the cost of certain
salaries and benefits expenses which are incurred by an affiliate of the
General Partner on behalf of the Partnership. The reimbursements are based
upon the size and complexity of
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the Partnership's operations. Reimbursements made in the years ended March
31, 1997, 1996 and 1995 are as follows:
1997 1996 1995
Salaries and benefits expense
reimbursement $108,120 $119,711 $100,693
Boston Financial Property Management ("BFPM"), an affiliate of the
General Partner, currently manages Beaverdam Creek, a property in which the
Partnership has invested. The property management fee charged is equal to 4%
of cash receipts. BFPM earned such fees in the amount of $27,556 and $11,388
of fees earned by BFPM for the years ended March 31, 1997 and 1996,
respectively. Property construction was completed in September, 1995, as a
result, no fees were earned prior to the year ended March 31, 1996.
In accordance with the Partnership Agreement, the General Partner of the
Partnership receives 1% of cash distributions made to partners. As of March
31, 1997, the Partnership has not paid any cash distributions to partners.
In accordance with the Partnership Agreement, an affiliate of the General
Partner (SLP, Inc.) is entitled to receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership, if such affiliate is
still a limited partner of that Local Limited Partnership at the time of such
transaction.
The General Partner and its officers and directors are entitled to
indemnification under certain circumstances from the Partnership pursuant to
provisions of the Partnership Agreement. Generally, the General Partner is
also entitled to reimbursement of expenditures made on behalf of the
Partnership.
In addition, under the terms of the Partnership Agreement, upon the
removal of a General Partner by the Limited Partners of the Partnership (the
"Limited Partners") or upon the occurrence of an "Event of Withdrawal," as
defined in the Partnership Agreement, the General Partner may be entitled to
the fair market value of its interest, which will be payable over a five-year
period.
(2) Except as described below, there are no material contracts,
agreements, arrangements or understandings or any actual or potential
conflicts of interest between the General Partner or its affiliates and
Oldham or any of its executive officers, directors or affiliates or Everest
or any of its executive officers, directors or affiliates. Oldham is an
affiliate of the General Partner of the Partnership. The executive officers
and directors of Oldham also serve as executive officers and directors of the
managing general partner of the General Partner. Therefore, Oldham and the
General Partner, subject to their fiduciary duties, may have a conflict of
interest with respect to certain matters involving the Partnership and its
partners.
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The Partnership has been informed that Oldham expects to borrow all of
the funds to purchase Units pursuant to the Oldham Offer from an affiliate of
one of its members, on substantially the same economic terms and conditions
that such affiliate obtains those funds under an existing credit facility
with a national bank or that Oldham may seek alternative financing from that
bank or other national banks on different terms.
Item 4. The Solicitation or Recommendation.
(a) 1. The Oldham Offer: Following receipt of the terms of the Oldham
Offer as supplemented August 18, 1997, the General Partner again reviewed and
considered the Oldham Offer. Because of the conflict of interest resulting
from the affiliation between Oldham and the General Partner, the General
Partner is expressing no opinion and is remaining neutral with respect to the
Oldham Offer.
2. The Everest Offer: Following receipt of the terms of the
Everest Offer, the General Partner reviewed and considered the Everest Offer.
Because of the conflict of interest resulting from the affiliation between
Oldham and the General Partner, the General Partner is expressing no opinion
and is remaining neutral with respect to the Everest Offer.
(b) Although the General Partner is not making a recommendation with
respect to either the Oldham Offer or the Everest Offer, the General Partner
believes that Limited Partners should carefully consider the following factors
in making their own decisions of whether to accept or reject either offer:
- - Oldham is an affiliate of the General Partner. The executive officers and
directors of the managing member of Oldham also serve as the executive
officers and directors of the managing general partner of the General
Partner. Therefore, the General Partner, subject to its fiduciary duties,
may have a conflict of interest with respect to certain matters involving
the Partnership and its Limited Partners:
- There may be a conflict of interest in responding to the Oldham Offer.
- If Oldham is successful in acquiring a significant number of Units
pursuant to the Oldham Offer, Oldham could be in a position to
significantly influence all Partnership decisions on which Limited
Partners may vote. This voting ability could prevent nontendering
Limited Partners from taking action that they desired but Oldham and
the General Partner opposed and enable Oldham and the General Partner
to take action desired by the Partnership but opposed by the
nontendering Limited Partners.
- There may also be a conflict of interest if Oldham's acquisition of
Units has the effect of making any future change in the Partnership's
current management by the General Partner more difficult.
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- - The Everest Offer is for $840 per Unit. The Oldham Offer exceeds the
Everest Offer by $40 per Unit.
- - The Everest Offer is NOT net of transfer fees, which means that a Limited
Partner who tenders to Everest will be required to pay a transfer fee of
$10 per Unit transferred ($100 minimum).
- - The Everest Offer is for a maximum of 1,825 Units, which is less than
Oldham's maximum of 9,125 Units. It is a more likely possibility that
Everest may not be able to accept all the Units tendered to it because
proration, or rejection, of some tendered Units may occur at the lower
maximum level established by Everest.
- - Both offers will provide Limited Partners with an immediate opportunity to
liquidate their investment in the Partnership. Limited Partners who have a
present or future need for the tax credits and/or tax losses from the Units
may, however, prefer to retain their Units and not tender them pursuant to
either offer.
- - As stated by Oldham in the Oldham Offer, there may be a conflict of
interest between Oldham's desire to purchase the Units at a low price and a
Limited Partner's desire to sell its Units at a high price. Therefore,
Limited Partners might receive greater value if they hold their Units,
rather than tender. Furthermore, Limited Partners should be aware that a
secondary market exists for the Units.
- - The Partnership Agreement of the Partnership provides that no sale or
transfer of Units may be made if such sale, when aggregated with all other
transfers during the same year would result in both (i) the transfer of
Units (excluding certain transfers permitted under the Partnership
Agreement ("Permitted Transfers")) representing more than a 5% interest in
Partnership capital or profits and (ii) the transfer of Units (excluding
Permitted Transfers and transfers made through a "Matching Service" (as
such term is used in Internal Revenue Service Notice 88-75)) representing
more than a 2% interest in Partnership capital or profits (the "Safe Harbor
Percentages"), unless the General Partner shall have received an opinion of
counsel that such sale or transfer may be made without material adverse tax
consequence to any partner of the Partnership. Since the Partnership has
permitted transfers during taxable year 1997, Oldham has stated in its
Offer that it will obtain an opinion of counsel that consummation of the
Oldham Offer will not result in material adverse tax consequences to the
Partnership's partners. Everest does not make a similar statement in its
offer. However, in order to comply with the Partnership Agreement, if the
Units acquired by Everest pursuant to the Everest Offer, when aggregated
with all other transfers during 1997, would result in the Partnership
exceeding the Safe Harbor Percentages, the General Partner will require
that Everest obtain an opinion of counsel that consummation of the Everest
offer will not result in adverse tax consequences to the partners.
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- - LIMITED PARTNERS WILL NO LONGER RECEIVE THE TAX CREDITS AND/OR TAX LOSSES
FROM THE UNITS SHOULD THEY TENDER PURSUANT TO EITHER OFFER.
- - Limited Partners who tender their Units will lose the right to receive any
future distributions from the Partnership, including distributions from any
refinancing or sale of the Partnership's properties. The Partnership has
made no distributions to Limited Partners in the past, and there can be no
assurance as to the timing, amount or occurrence of any future
distributions.
- - Limited Partners should consult with their respective advisors about the
financial, tax, legal and other consequences of both offers.
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 to make solicitations or recommendations to Limited Partners on its
behalf concerning either the Oldham Offer or the Everest Offer.
Item 6. Recent Transactions and Intent With Respect to Securities.
(a) Neither the Partnership nor the General Partner or any of their
affiliates have effected any transactions in the Units during the past 60 days
(b) Neither the General Partner nor, to the knowledge of the General
Partner, any of its executive officers, directors, affiliates or subsidiaries
intend to tender Units owned by them pursuant to either the Oldham Offer or the
Everest Offer.
Item 7. Certain Negotiations and Transactions by the Subject Company.
(a) No negotiation is being undertaken or is underway by the Partnership
in response to either the Oldham Offer or the Everest Offer which relates to
or would result in: (1) an extraordinary transaction such as a merger or
reorganization, involving the Partnership or any subsidiary of the
Partnership; (2) a purchase, sale or transfer of a material amount of assets
by the Partnership or any subsidiary; (3) tender offer for or other
acquisition of securities by or of the Partnership; or (4) any material
change in the present capitalization or dividend policy of the Partnership.
(b) Except as described above or in Item 3(b), there are no
transactions, board resolutions, agreements in principle or signed contracts
in response to either the Oldham Offer or the Everest Offer which relate to
or would result in one or more of the matters referred to in Item 7(a).
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Item 8. Additional Information to Be Furnished.
On or about July 22, 1997, a representative of Everest Properties, LLC,
and/or its affiliates (collectively, the "Everest Group") contacted an
affiliate of the General Partner (the "GP Affiliate") and indicated that it
would like to obtain a list of the limited partners in one or more of the
public limited partnerships (collectively, the "Boston Financial
Partnerships") in which affiliates of the GP Affiliate were general partners.
The Partnership was not mentioned specifically but neither was it excluded
from that group. It was the perception of the GP Affiliate, based on prior
experiences with the Everest Group, that if given this list the Everest Group
probably would commence a tender offer for less than 5% of the units in such
funds and otherwise conduct it so that the requirement to publicly file such
an offer with the Securities and Exchange Commission (the "SEC") and to
comply with certain SEC rules adopted to advance investor protection would
not be applicable. The GP Affiliate views "mini-tenders" as not necessarily
being in the best interest of the limited partners in the Boston Financial
Partnerships because of the lack of public scrutiny of such offers and the
non-applicability of certain SEC rules mandating certain proration and
withdrawal rights. Accordingly, the GP Affiliate did not provide such list.
On July 30, approximately a week after Oldham commenced the Oldham Offer, the
Everest Group contacted Oldham indicating that it was prepared to commence a
publicly-filed competing tender offer at a higher price unless Oldham allowed
it to purchase a percentage of the Units tendered to Oldham in the Oldham
Offer. The Everest Group stated a similar intention concerning two other
Boston Financial Partnerships for which Oldham is currently making tender
offers (collectively, the "Tendered Partnerships"). Oldham rejected this
offer. On August 6, representatives of the Everest Group sent a notice to
representatives of Oldham and the General Partner reiterating the intent of
the Everest Group to commence a publicly-filed tender offer at a higher price
($840 per Unit). On August 11, 1997, the Everest Group commenced a
publicly-filed tender offer for the Partnership and one of the other Tendered
Partnerships.
Item 9. Material to be Filed as Exhibits.
(a)(1) Letter from Boston Financial Tax Credit Fund. VIII, A Limited
Partnership, to Limited Partners, dated August 18, 1997.
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SIGNATURES
After due 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: August 18, 1997
BOSTON FINANCIAL TAX CREDIT FUND VIII,
A LIMITED PARTNERSHIP
By: ARCH STREET VIII LIMITED
PARTNERSHIP, General Partner
By: ARCH STREET VIII, INC., its General
Partner
By: /s/ Jenny Netzer
Name: Jenny Netzer
Title: President
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EXHIBIT INDEX
EXHIBIT NO. TITLE
(a)(1) Letter from Boston Financial Tax Credit
Fund VIII, A Limited Partnership, to Limited
Partners, dated August 18, 1997.
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