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
July 6, 2001
JUSTICE!
THE SUPERIOR COURT OF THE STATE OF CALIFORNIA HAS SPOKEN.
Dear Fellow Limited Partner:
Finally, after many months and repeated attempts to view the books and
records of REAL III, the Superior Court of the State of California has ordered
NAPICO to grant us access on July 9, 2001. It is unfortunate that any limited
partner is forced to use the courts against its own general partner to enforce
the Partnership Agreement. However, we believe our determination, the expenses
we have incurred and ultimately, our results, will benefit all limited partners.
Due to the court ruling we have determined to extend the solicitation period
until July 31, 2001. This additional time will allow for our review of the
Partnership's book and records. While reserving the right to extend further this
solicitation for unforeseen extraordinary reasons, it is our intention that this
solicitation will terminate on July 31, 2001. We apologize for any confusion
unitholders may have experienced due to our previous extensions and multiple
mailings. However, the need to base our actions on complete and accurate
information paramount.
BOND PURCHASE'S COMMITMENTS TO YOU
During the consent solicitation period of our fellow limited partners in REAL
III which commenced on March 13, 2001, we have attempted to address the concern
of ALL unitholders. As expressed to us, these concerns are:
Liquidation The goal of Bond Purchase L.L.C. and its affiliate, New G.P.,
L.L.C. if elected as the new general partner of REAL III, is
to take immediate, positive steps toward liquidating the
Partnership. Unlike NAPICO which committed over three years
ago to liquidate the partnership "eventually," we are
committed to a time certain liquidation.
Our original intention was to seek limited partner consents to
amend the Partnership Agreement to liquidate the
Partnership on or before January 1, 2006. However, with
considerable input from our fellow limited partners, it is
clear to us that most unitholders want the liquidation to
occur even sooner. We are now committed, in writing, to seek
consents from limited partners to amend the Partnership
Agreement to liquidate the Partnership on or before December
31, 2004, a year earlier.
We believe this self imposed maximum time limit will provide
for the prudent and orderly sale of the Partnership assets and
will eliminate two additional years of K-1 tax reporting. Of
course, we will pursue a sale of Partnership assets and the
subsequent liquidation of the Partnership, earlier if the sale
of Partnership can be negotiated more quickly while still
maximizing the benefits to limited partners. (The Partnership
Agreement currently provides the Partnership does not have to
be liquidated until the year 2032.)
Taxes Many of our fellow limited partners are fearful of liquidation
if such action will create a tax liability for them. We are
committed, in writing, to follow the letter and the spirit of
the Partnership Agreement that explicitly calls for the sale
of any assets to exceed the then current maximum Federal and
state tax rate.
Our intention is to negotiate with the local general partners
and to maximize the attractiveness of the local limited
partnerships by including all reserves, other unidentified
assets and the value of the right to manage the properties. In
addition, we intend to solicit independent, unaffiliated,
third party bids for the Partnership assets.
We believe if NAPICO had pursued such a course in 1998 when it
sold 22 of the local limited partnerships they would have
increased the sale price for the assets thereby maximizing the
value to REAL III unitholders. Also, the negative tax
consequences many limited partners have expressed to us
surrounding that sale would have been minimized or eliminated.
Instead, NAPICO sold REAL III assets to a NAPICO affiliate
without the benefit of independent third party bidding and we
believe, without including the value of all of the local
limited partnerships' assets, which we believe it then
transferred to itself through its affiliate.
Bond Purchase Several limited partners have expressed the opinion that while
they are very dissatisfied with NAPICO, its management record
and the total return on their investment in REAL III, they
needed additional information on Bond Purchase to make an
informed decision.
We stand by our record of liberating value for limited
partners trapped in non-performing partnerships such as
NAPICO's REAL III. In other partnerships or corporations in
which we have been involved in the management, we have
reinstated suspended dividends, increased dividend
distributions, reduced management fees, reduced trustee fees
and negotiated the sale of multi-million dollar real estate
assets, in one instance for a 50% increase over what the prior
management was planning to sell the same asset for to an
affiliate. Does this sound familiar?
We are proud of our record of increasing unitholder value and
we stand by it.
Other limited partner concerns include the length of this solicitation, the
appointment of Bond Purchase as attorney-in-fact and the question "I signed the
BLUE consent form, why do you keep sending them?"
Contrary to NAPICO's implications in their two most recent letters to you
claiming that we commenced this solicitation on November 8, 2000 - for the
record - this solicitation commenced on March 13, 2001. It is clear that NAPICO
knows the facts to be other than what was stated in their letters to you. In
their lawsuit filed against Bond Purchase L.L.C. et al., on April 20, 2001 they
acknowledge that definitive proxy material was filed on March 13, 2000 and that
it was disseminated to a substantial number of limited partnership's on March
23, 2001. Apparently NAPICO knows better than to massage the facts when they
file court documents; unfortunately, when dealing with limited partners they are
at ease with taking such liberties. Many limited partners have asked us "How can
both sides make completely opposite statements?" This is one example.
In any event, we are somewhat surprised to learn of NAPICO's sudden concern
for the timeliness of events. In the last 5 years there are no less than 4
examples of NAPICO's failure to file the Partnership's annual report within the
required time and in the last 6 years there are no less than 8 examples of
NAPICO's failure to file the Partnership's quarterly reports in a timely manner,
in each case forcing NAPICO to file for an extension. Also, many limited
partners we have spoken with have expressed concern over the timeliness of the
year end tax reporting on Form K-1 sent by NAPICO.
While our preference would be for a very short, successful solicitation, we
are most interested in satisfying the concerns of ALL our fellow limited
partners with regard to the very complex issues surrounding this limited
partnership and its future. For this reason and others including numerous
incomplete and incorrect addresses supplied to us by NAPICO, and our newly
granted court ordered access to the Partnership's books and records we have
determined that one final extension to this solicitation is needed. It is our
intention that this solicitation will terminate on July 31, 2001.
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Many limited partners have also told us that NAPICO or its representatives have
made the claim that appointing Bond Purchase as your attorney-in-fact is somehow
detrimental to you. Contrary to NAPICO's alleged claim, voting on the blue
consent form to support Bond Purchase is limited to the proposals listed - the
removal of NAPICO and the continuation of the Partnership under the new general
partner, New G.P. No other authority is granted by you to Bond Purchase and no
other action can or will be taken by Bond Purchase on your behalf. Any claim to
the contrary is inaccurate.
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Why have you received so many blue consent forms? It is common practice when
involved in a contested solicitation to include a new consent form for your
convenience with each new mailing to unitholders. If you have executed a valid
consent by marking, dating and signing exactly as your name appears on the
Partnership's registration, including your title as trustee or corporate officer
if appropriate AND HAVE NOT SIGNED A REVOCATION, you do not need to sign a new
blue consent form. If you are unsure, please take this opportunity to mark, sign
and date the enclosed BLUE consent form.
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We have received support from unitholders representing more than 50% of the
outstanding units of REAL III. We thank those limited partners for their support
of our plan for the future of the Partnership. If you have not yet taken the
opportunity to vote, we urge you to do so now by marking, signing and dating the
enclosed BLUE consent form. If you remain undecided or need additional
information, please call N.S. Taylor & Associates, Inc. who is assisting us with
this solicitation. They can be reached toll free at 1.800.711.8662 and will
answer any remaining questions you may have.
This letter is being mailed to all unitholders on or about July 7, 2001.
Very Truly Yours,
Bond Purchase, L.L.C.
(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 July 6, 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)
__________________________________
Signature / Title
__________________________________
Signature / Title
__________________________________
Telephone Number