SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
Maxus Real Property Investors-Four, L.P.
(Name of Subject Company (Issuer))
Maxus Real Property Investors-Four, L.P. (Offeror and Issuer)
(Names of Filing Persons)
LIMITED PARTNERSHIP UNITS
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
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Maxus Real Property Investors-Four, L.P.
Attn: Christine A. Robinson
104 Armour Road
North Kansas City, Missouri 64116
(816) 303-4500
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of
filing persons)
Copy to:
Scott M. Herpich, Esq.
Lathrop & Gage L.C.
2345 Grand Boulevard, Suite 2400
Kansas City, Missouri 64108-2684
(816) 460-5806
[ ] Check box if the filing relates solely to preliminary communications made
before the commencement of a tender offer.
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Item 1. Subject Company Information.
The name of the subject company is Maxus Real Property Investors-Four, L.P.
(the "Partnership"). The principle executive offices of the Partnership are
located at 104 Armour Road, North Kansas City, Missouri 64116; the telephone
number for the Partnership at its principal executive offices is 816-303-4500.
The general partner of the Partnership is Maxus Capital Corporation (the
"General Partner").
The class of equity securities to which this Solicitation/Recommendation
Statement on Schedule 14D-9 (this "Statement") relates is the Partnership's
units of limited partnership interests (the "Units"). As of June 5, 2001, there
were a total of 12,173 outstanding Units.
Item 2. Identity and Background of Filing Person.
The filing person is the subject company. The principal executive offices and
telephone number of the Partnership are set forth in response to Item 1 of this
Statement.
This Statement relates to the tender offer by O. Bruce Mills, an individual
(the "Purchaser"), disclosed in a Tender Offer Statement on a Schedule TO dated
July 10, 2001, to purchase all of the outstanding Units for cash at a price
equal to $400 per Unit, reduced by any backup withholdings, tendered on or
before 12:00 Midnight, Central Daylight Time, on Tuesday, August 7, 2001, and
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated July 10, 2001 (the "Offer to Purchase").
Based on the information in the Schedule TO, the address of the Purchaser is
15480 Elk Ridge Lane, Suite 200, Chesterfield, Missouri 63017; telephone number
212-687-0518.
Item 3. Past Contacts, Transactions, Negotiations and Agreements.
There is no material agreement, arrangement or understanding, or any actual
or potential conflict of interest between: (i) the Partnership and the General
Partner; (ii) the Partnership and the Purchaser or (iii) the General Partner and
Purchaser except as described below.
Effective November 10, 1999, Maxus Properties, Inc. ("Maxus"), an affiliate
of the managing General Partner, became the management company for the
Partnership's properties. Pursuant to a management contract with the
Partnership, Maxus is entitled to receive monthly compensation of five percent
(5.0%) of the monthly gross receipts from the operation of Woodhollow
Apartments, the Partnership's sole remaining property, for property management
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and leasing services, plus reimbursement for administrative expenses. During
fiscal 2000, the Partnership paid property management fees of $143,000 to Maxus.
The General Partner is entitled to receive Partnership management fees as
provided in the Partnership Agreement. Management fees of $40,000 were paid to
the General Partner of the Partnership for the year ended November 30, 2000.
There is an inherent conflict of interest between the General Partner and the
Purchaser because the Purchaser stated in the Offer to Purchase that if he
acquires a majority of the Units the Purchaser will remove the General Partner
as general partner of the Partnership.
Item 4. The Solicitation or Recommendation
(a) Solicitation or Recommendation. The Partnership is advising Unit holders
to reject the tender offer for the following reasons:
(b) Reasons.
o Section 7.1A of the Partnership's Amended and Restated Agreement and
Certificate of Limited Partnership dated April 7, 1982, as amended
December 21, 1999 (the "Partnership Agreement") provides that,
"Each Limited Partner agrees that he will not sell or
exchange any of his interests in the Partnership if the
interest sought to be sold were exchanged, when added to
the total of all other General Partner and Limited Partner
interest sold or exchanged within the period of twelve (12)
consecutive months prior thereto, would, in the opinion of
counsel for the Partnership, resolve in the Partnership
being considered to have terminated within the meaning of
Section 708 of the [Internal Revenue Code of 1986, as
amended]"
Section 7.1D further provides that,
"Any sale, exchange, assignment or other transfer in
contravention of any of the provisions of this Section 7.1
shall be void and ineffectual and shall not bind or be
recognized by the Partnership."
Based on advice we have received from the Partnership's legal
counsel, we believe that it is very likely that the acquisition of a
majority of the Units by the Purchaser, when aggregated with other
sales within the past twelve (12) months, would result in the
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Partnership being considered to have been terminated with the meaning
of Section 708 of the Internal Revenue Code of 1986, as amended. As a
result, pursuant to the Partnership Agreement, any such assignment will
be void and ineffectual and will not bind or be recognized by the
Partnership.
o Under Section 21(a)(2)(A) of the MultiFamily Deed of Trust, Assignment
of Rents and Security Agreement dated November 20, 2000, by the
Partnership for the benefit of Northland/Marquette Capital Group, Inc.
(the "Deed of Trust"), the Partnership's $9,900,000 loan could be
accelerated and become immediately due if there is a transfer of any
general partnership interest, which is an event of default. According
to the Offer to Purchase, if the Purchaser is successful in obtaining a
majority of the Units, the Purchaser will remove the General Partner.
Under the Partnership Agreement, in order to remove the General
Partner, the general partner interest must be purchased and transferred
to the new general partner. In this case, the transfer of the general
partnership interest could cause the Partnership's loan to be
accelerated and become immediately due and payable. If the loan is
accelerated, Section 5 of the Deed of Trust further provides that the
Partnership would have to pay a prepayment premium.
In addition, the lender could take the position that the mere
acquisition of a majority of the Units might be a change of control
that would arguably cause an event of default under the Deed of Trust
and could again cause an acceleration of the loan. The Partnership does
not want to take this risk.
If an event of default occurs, the default rate of interest would be
11.45% as compared to the current rate of 7.45%
o As the Partnership indicated in its tender offer, the Partnership
believed that the liquidation value of the Partnership was
approximately $530 per Unit prior to the closing of the Partnership's
tender offer, based on a third-party appraisal of the Partnership's
sole property and the Partnership's cash reserves. After taking into
account the Units redeemed by the Partnership's tender offer and the
$10 per Unit cash distribution, the Partnership now believes the
liquidation value is approximately $567 per Unit. The Partnership
highlighted this fact numerous times in its tender offer statement,
including its cover letter to the limited partners. The Purchaser
mentions that the Partnership's belief that the liquidation value is
well in excess of the offer price one time. The Partnership believes
that Limited Partners should take this into consideration. The
Partnership commenced its tender offer for those Limited Partners who
wanted immediate
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liquidity. If Limited Partners do not want immediate liquidity,
the Partnership believes Limited Partners should reject the Purchaser's
offer, based on the third party appraisal.
(c) Intent to Tender. Neither the Partnership nor the General Partner or, to
the knowledge of the Partnership, any affiliate of the Partnership or the
General Partner intends to tender to the Purchaser any Units that are held of
record or beneficially by such person.
Item 5. Persons/Assets, Retained, Employed, Compensated or Used.
Neither the Partnership nor the General Partner nor any person acting on
their behalf has employed, retained or compensated, or intends to employ, retain
or compensate, any person to make solicitations or recommendations to the
limited partners on their behalf concerning the Offer to Purchase.
Item 6. Interest in Securities of the Subject Company. (transactions in last 60
days)
The Partnership redeemed 1,356 Units on June 5, 2001, with respect to the
offer to purchase dated April 20 , 2001, as amended July 12, 2001 (the
"Partnership Offer") by the Partnership to purchase up to 2,025 Units at $300
per Unit. Further information of the Partnership Offer is incorporated herein by
reference. An affiliate of the Partnership, Bond Purchase, L.L.C., purchased
five (5) Units on June 14, 2001 for $200 per Unit in a private sale. David L.
Johnson, an officer and director of the General Partner owns 86% of the equity
interests of Bond Purchase, L.L.C. No other transactions in the Units by the
Partnership or any affiliates have occurred in the last sixty (60) days.
Item 7. Purpose of the Transaction and Plans or Proposals.
(a) The Partnership has not undertaken or engaged in any negotiations in
response to the Offer to Purchase which relates to: (i) a tender offer or other
acquisition of the Units by the Partnership, any of its subsidiaries or any
other person; (ii) any extraordinary transaction, such as a merger,
reorganization or liquidation, involving the Partnership; or (iii) a purchase,
sale or transfer of a material amount of assets by the Partnership; or (iv) any
material change in the present dividend rate or policy, or indebtedness or
capitalization of the Partnership, except that the Partnership intends to begin
quarterly cash distributions in the amount of $10 per Unit to the extent the
Partnership has excess cash, after reasonable reserves.
(b) There are no transactions, resolutions, agreements in principle or signed
contracts in response to the Offer to Purchase that relate to or
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would result in one or more of the events referred to in Item 7(a).
Item 8. Additional Information.
None.
Item 9. Exhibits.
(a)(1) Letter to the Limited Partners
SIGNATURE
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.
Date: July 13, 2001 MAXUS REAL PROPERTY
INVESTORS-FOUR, L.P.,
a Missouri limited partnership
By: Maxus Capital Corp.,
General Partner
By:/s/ David L. Johnson
Name: David L. Johnson
Title: Chairman and
Executive Vice President
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