SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) Securities
Exchange Act of 1934
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Filed by a party other than the Registrant [X]
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
REAL ESTATE ASSOCIATES LIMITED III
(Name of Registrant as Specified in Its Charter)
BOND PURCHASE, L.L.C.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction 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 (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
(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:
Bond Purchase, L.L.C.
104 Armour Road
North Kansas City, Missouri 64116
June 20, 2001
The "Partnership WILL NOT SELL ... if the cash proceeds would be less
than the taxes at the then maximum state and federal tax rates..."
Section 9.3(d) of the Partnership Agreement.
Dear Fellow Limited Partner:
WE WILL ABIDE BY THE PARTNERSHIP AGREEMENT
It is our intention that when we sell the remaining
assets of the Partnership, we will distribute sufficent cash to
the limited partners, after deduction of all fees and expenses,
to cover the tax liability resulting from
Partnership allocations to the limited partners.
In 1998 NAPICO sold 20 local limited partnerships to an affiliate that were
assets of Real Estate Associates Limited III, our Partnership. Based on
conversations with unitholders, we understand that many unitholders incurred a
tax liability in connection with the sale of these assets without receiving a
cash distribution to cover the resulting tax obligation. Many unitholders
believe that the price paid by the NAPICO affiliate for the 20 local limited
partnerships was insufficient to cover the tax liability - in direct violation
of the Partnership Agreement. Although we cannot say for certain due to NAPICO's
refusal to provide us access to the Partnership's records, we believe the price
paid by the NAPICO affiliate for the 20 local limited partnerships was well
below its market value.
We believe that definitive answers to what transpired in connection with
the sale of the 20 local limited partnerships in 1998 are contained in the books
and records of the Partnership -- books and records that we are still attempting
to obtain, which NAPICO has refused to produce.
NAPICO claimed in 1998 that it and its affiliates would "eventually"
liquidate the Partnership. As we see it, a unitholder can hope for one of three
outcomes:
o if "eventually" never comes to pass: settle for the status quo by
allowing NAPICO to run the Partnership forever with no annual pay out to
you, while NAPICO may continue to (i) extract management fees and
expenses year after year, (ii) hold on to your cash year after year and
(iii) issue K-1 forms late, causing you additional expense and
aggravation at tax time;
o if "eventually" does come to pass: allow NAPICO to negotiate the sale of
the remaining 11 local limited partnerships and the one general
partnership, possibly to an affiliate without the benefit of independent
third party bidding as it did in 1998 and possibly repeating its creation
of a tax liability on your behalf; or
o vote for a change; by voting FOR on proposal number 1, supporting Bond
Purchase, L.L.C. to remove NAPICO and by voting FOR on proposal number
2, to elect New G.P. as the new general partner.
It is our intention that when we sell the remaining assets of the
Partnership, we will make cash distributions, after deduction of all fees and
expenses, that will be sufficient to cover the tax liability resulting from the
sale of the remaining assets of the Partnership. We believe in complying with
the Spirit, as well as the Letter of the Partnership Agreement.
NAPICO REBUFFED
In an effort to invalidate Bond Purchase's solicitation of unitholders,
NAPICO requested the United States District Court for the Central District of
California, Western District, to issue a Temporary Restraining Order. However,
the Court rejected NAPICO's claims and denied the Order.
Time is short, we ask that you also reject NAPICO now.
A vote FOR on proposals 1 and 2 will remove NAPICO and elect New G.P. If we
are successful, we intend to:
o distribute the cash on hand, over $5.6 million (retaining only funds
necessary for day to day operations);
o reduce management fees by at least 10%; and
o liquidate the Partnership WITHOUT creating a tax liability for
unitholders.
This letter is being mailed to all unitholders on or about June 20, 2001.
Very Truly Yours,
Bond Purchase, L.L.C.
[Insert to letter]
---- IMPORTANT NEWS ----
We have received support from unitholders representing more than 50% of the
outstanding units of REAL III on proposals 1 and 2 -- to remove NAPICO as the
general partner and to elect New G.P. as the new general partner. However,
without the benefit of knowing how many unitholders may inadvertently have
signed a revocation, we are continuing to solicit unitholders to increase our
margin of support and have extended the solicitation period fo July 2, 2001
We appreciate your patience while we continue this important soliciation. As
the largest unitholder in REAL III, we know how important it is to you to
protect your investment by removing NAPICO as the general partner and we thank
you for your continued support.
---- 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
(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 June 18, 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)
[Limited Partner Name,
address and units held]
___________________________________Signature/Title
___________________________________Signature/Title
__________________________________Telephone Number