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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
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MCNEIL PACIFIC INVESTORS FUND 1972
(NAME OF SUBJECT COMPANY)
MCNEIL PARTNERS, L.P.
(NAME OF PERSON FILING STATEMENT)
Units of Limited Partnership Interests
(TITLE OF CLASS OF SECURITIES)
582566 10 5
(CUSIP NUMBER OF CLASS OF SECURITIES)
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Donald K. Reed
MCNEIL PARTNERS, L.P.
13760 Noel Road, Suite 700, LB70
Dallas, Texas 75240
(214) 448-5800
(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
Copies to:
Patrick J. Foye, Esq. Scott Wallace, Esq.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM HAYNES AND BOONE, L.L.P.
919 Third Avenue 901 Main Street, Suite 3100
New York, New York 10022 Dallas, Texas 75202
(212) 735-2274 (214) 651-5587
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ITEM 1. SECURITY AND SUBJECT COMPANY
The subject company is McNeil Pacific Investors Fund 1972, a
California limited partnership (the "Partnership"). The address of the
principal executive offices of the Partnership and McNeil Partners, L.P., a
Delaware limited partnership and the general partner of the Partnership
("McNeil Partners"), is 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240.
The title of the class of equity securities to which this statement relates is
the outstanding limited partnership units (the "Units") of the Partnership.
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to the unsolicited tender offer being made
by High River Limited Partnership, a Delaware limited partnership ("High
River"), Riverdale LLC, a New York limited liability company ("Riverdale"),
Unicorn Associates Corporation, a New York corporation ("Unicorn"), and Carl C.
Icahn ("Mr. Icahn" and together with High River, Riverdale and Unicorn, the
"Bidders") disclosed in their Tender Offer Statement on Schedule 14D-1, dated
September 20, 1996, as amended (the "Schedule 14D-1"), to purchase from holders
of Units ("Unitholders") any and all of the outstanding Units of the
Partnership, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated September 20, 1996, as amended (the "Offer to
Purchase"), and the related Assignment of Partnership Interest (collectively
with the Offer to Purchase, the "HR Offer"). The Partnership did not solicit
the HR Offer. The Schedule 14D-1 states that the business address of Mr. Icahn
is 114 West 47th Street, New York, NY 10036 and the address of the principal
offices of High River, Riverdale and Unicorn is 100 South Bedford Road, Mount
Kisco, New York 10549.
ITEM 3. IDENTITY AND BACKGROUND
(a) The name and business address of McNeil Partners, which is
the person filing this statement on behalf of the Partnership, are set forth in
Item 1 above.
(b)(1) The sole general partner responsible for the management
of the Partnership's business is McNeil Partners. McNeil Investors, Inc., a
Delaware corporation ("McNeil Investors"), is the sole general partner of
McNeil Partners. Robert A. McNeil ("Mr. McNeil") is the sole stockholder of
McNeil Investors. Except as described below, there are no material contracts,
agreements, arrangements and understandings or any actual or potential
conflicts of interest between McNeil Partners or its affiliates and the
Partnership, its executive officers, directors or affiliates. Neither the
Partnership nor McNeil Partners has any directors or executive officers.
McNeil Partners is entitled to receive a partnership management
fee equal to 9.5% of distributions of cash from operations and disposition
proceeds when distributions are made to Unitholders.
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The Partnership pays property management fees equal to 6% of
gross rental receipts of residential properties and 5% for commercial
properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of
McNeil Partners, for providing property management services. Additionally, the
Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
McNeil Partners, as general partner of the Partnership, is
entitled to indemnification under certain circumstances from the Partnership
pursuant to provisions of the partnership agreement. As a result of such
provisions, a Unitholder may be entitled to a more limited right of action than
he or she would otherwise have if such provisions were not included in the
partnership agreement.
Certain of the directors and executive officers of McNeil
Investors and McREMI have employment agreements with such entities that contain
provisions granting such directors and executive officers the right to
terminate their employment agreements and receive three years annual
compensation upon a change of control of such entities. Any compensation
payable to such directors or executive officers upon a change of control is not
payable from funds of the Partnership and such agreements are not obligations
of the Partnership.
If the HR Offer is successful, High River may be in a position to
cause the amendment of the Partnership's partnership agreement and the removal
of McNeil Partners as the general partner of the Partnership. If McNeil
Partners is removed by High River as the general partner of the Partnership,
the respective asset or partnership management fee and property management fee
payable to McNeil Partners and McREMI will no longer be received by McNeil
Partners or McREMI, as the case may be, and therefore, McNeil Partners has a
conflict of interest in making a recommendation to Unitholders whether to
reject or accept the HR Offer.
(b)(2) To the best knowledge of the Partnership, there are no
material contracts, agreements, arrangements and understandings or any actual
or potential conflicts of interest between the Partnership or its affiliates
and the Bidders, their executive officers, directors or affiliates.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) Following the Partnership's receipt of the HR Offer, McNeil
Partners met with the financial and legal advisors of the Partnership to review
and consider the HR Offer and to explore various possible alternative courses
of action which might be available in response to the HR Offer. Based on the
Partnership's analysis and its consultation with such advisors, the
Partnership, in light of all relevant circumstances, determined not to make a
recommendation as to whether its Unitholders should reject or accept the HR
Offer.
(b) The Partnership reached the conclusions set forth in Item
4(a) after considering a variety of factors, including, but not limited to, the
following:
(i) In April 1996, the Partnership announced that it had
determined to evaluate market and other economic conditions to establish
the optimum time to commence an orderly liquidation of the Partnership's
assets in accordance with the terms of the partnership agreement. THE
PARTNERSHIP HAS BEGUN MARKETING FOR SALE ITS SOLE ASSET. Although there
can be no assurance as to the timing of the liquidation due to real
estate market conditions, the general difficulty of disposing of real
estate, and other general economic factors, it is anticipated that such
liquidation would result in the dissolution of the Partnership followed
by a liquidating distribution to Unitholders following the completion of
the Assumed Liquidation.
(ii) The report of Crosson Dannis, Inc., the Partnership's
financial advisor ("Crosson Dannis"), dated October 3, 1996, which
estimates the range of present value (the "Present Estimated
Liquidation Value") of the Units based on the assumption that the
Partnership commences a theoretical orderly liquidation in January 1997
and completes the liquidation by December 31, 1997 (the "Assumed
Liquidation"). THE PRESENT ESTIMATED LIQUIDATION VALUE PER UNIT FOR THE
PARTNERSHIP AS OF OCTOBER 3, 1996 IS BETWEEN $233 AND $236. The Present
Estimated Liquidation Value represents Crosson Dannis' estimate of the
present value of the gross cash distributions that a Unitholder would
receive between now and the completion of the Assumed Liquidation.
Crosson Dannis' estimate of the amount of gross cash distributions per
Unit through the completion of the Assumed Liquidation for the
Partnership is approximately $265.00. It should be noted that the
Present Estimated Liquidation Value does not represent an estimate by
Crosson Dannis of the fair market value of a Unit. A copy of the
Crosson Dannis report dated October 3, 1996 is filed as exhibit (c)(2).
(iii) Last August, the Bidders offered $400 per unit for McNeil
Real Estate Fund V, Ltd., which was significantly below the
partnership's estimate of the pro forma liquidation value of $667.30 per
unit as of June 30, 1995. In response, McNeil Real Estate Fund V, Ltd.
recommended that unitholders reject the offer because it did not reflect
the inherent value of the units and was not in the best interests of
either McNeil Real Estate Fund V, Ltd. or its unitholders. Holders of
approximately 97.5% of McNeil Real Estate Fund V, Ltd.'s units agreed
that Mr. Icahn's offer was inadequate, rejected his offer and did not
tender their units. Since then, McNeil Real Estate Fund V, Ltd.
distributed $83.40 cash to unitholders (including Mr. Icahn) and, on
September 10, 1996, holders of more than 75% of McNeil Real Estate Fund
V, Ltd.'s units which voted approved the liquidation and dissolution of
McNeil Real Estate Fund V, Ltd., pursuant to which it is anticipated
that all unitholders will receive a cash distribution of approximately
$643.07 per unit, subject to reserves and adjustment, which closely
approximates McNeil
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Real Estate Fund V, Ltd.'s estimate of pro forma liquidation value.
TAKEN TOGETHER WITH THE CASH DISTRIBUTIONS TO UNITHOLDERS, SUCH AMOUNT
IS APPROXIMATELY $326.47 PER UNIT (82%) HIGHER THAN THE BIDDERS' 1995
OFFER PRICE FOR MCNEIL REAL ESTATE FUND V, LTD. Although there can be
no assurance that a similar result will occur with the Partnership or
that any particular distribution per Unit will be obtained, THE
LIQUIDATION AND DISSOLUTION OF MCNEIL REAL ESTATE FUND V, LTD. AND THE
REPORT OF CROSSON DANNIS SHOULD BE CONSIDERED BY UNITHOLDERS IN
DETERMINING WHETHER TO REJECT OR ACCEPT THE HR OFFER.
(iv) The price offered by the Bidders is between approximately
95.1% and 96.4% of the high and low end of the range in the Present
Estimated Liquidation Value.
(v) The Bidders are making the HR Offer with a view to making a
profit. Accordingly, there is a conflict of interest between their
desire to purchase the Units at a low price and Unitholders' desire to
sell their Units at a high price. In fact, High River concedes that its
own estimates of net asset value per Unit are above the prices it is
offering for Units in the HR Offer.
(vi) The Partnership has, from time to time, received inquiries
from other parties that may be considering making tender offers for the
Units. In anticipation of the HR Offer, the Partnership has determined
to make confidential information available to responsible parties who
express a bona fide interest in considering making a tender offer for
Units in the Partnership pursuant to the requirements of federal
securities laws. While it is possible that additional offers for Units
in the Partnership on more favorable terms than the HR Offer may be
forthcoming, there can be no assurance as to whether any such offers
will be made, the terms thereof, or, if made, whether any such offer
will be subsequently amended or withdrawn.
(vii) The HR Offer does not fully disclose Mr. Icahn's
intentions to seek control of the Partnership. Last year Mr. Icahn
commenced a similar tender offer for Units after McNeil Partners
rejected his proposal to acquire the general partner interest of McNeil
Partners and thereby control the Partnership. In addition, Mr. Icahn
negotiated with McNeil Partners during the period of last year's tender
offer in an effort to acquire control of the Partnership.
(viii) As stated in the Offer to Purchase, if the HR Offer is
successful, High River may be in a position to influence control of the
Partnership and to influence voting decisions and may seek to remove the
Partnership's general partner and/or McREMI. In considering the
possibility of High River influencing voting decisions with respect to
the Partnership and whether High River or one of its affiliates would be
suitable in such a role, the Partnership further considered the
following:
(A) McNeil Partners and McREMI presently manage the
businesses of the Partnership. McREMI is a fully integrated real
estate service organization performing property management, asset
management, investor services, partnership administration and a
wide range of other real estate-related services for 19 limited
partnerships with more than 79,000 limited partners. McNeil
Investors, with its affiliates and subsidiaries, is one of the
largest managers of multifamily
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residential properties in the United States and a large manager
of commercial properties.
(B) The Offer to Purchase does not adequately disclose
information regarding Mr. Icahn's plans in the event he acquires
control of the businesses of the Partnership. In fact, the Offer
to Purchase states that High River has never acted as the general
partner or property manager of a limited partnership, such as the
Partnership, which is engaged in the business of owning real
estate and, to date, High River has not sought to negotiate any
arrangements with other parties to act in such capacities. As a
result, McNeil Partners believes that High River's lack of
experience in managing real estate limited partnerships similar
to the Partnership would adversely effect the Partnership were
Mr. Icahn to acquire control thereof.
(ix) Carl C. Icahn controls High River. The Partnership
considered the background of Mr. Icahn, his past investment practices,
his reputation in the investment and business communities, and various
lawsuits and proceedings, both private and by government agencies,
involving Mr. Icahn and affiliated companies. The Partnership is aware
that the strategy Mr. Icahn has employed in the HR Offer, as well as,
last year's offer, is similar to strategies he has repeated in numerous
previous unsolicited offers for corporate and partnership securities.
(x) The HR Offer is conditioned upon the McNeil Partners
consenting in writing to the admission of High River as a substitute
limited partner of the Partnership; however, the HR Offer fails to
disclose that McNeil Partners may, in its sole discretion under certain
circumstances set forth in the Partnership's partnership agreement,
refuse such admission. McNeil Partners has not determined whether or
not to admit High River as a substitute limited partner. Any such
determination will be made depending on a number of factors including
the effect of such admission on the tax status of the Partnership.
Present Estimated Liquidation Value Analysis
High River is offering to purchase the Units, which are
relatively illiquid investments, and is not offering to purchase the
Partnership's underlying assets or assume any of its liabilities. Although the
Partnership does not believe that the amount per Unit which might be
distributed to Unitholders following a future sale of all the Partnership's
properties necessarily reflects the present fair value of a Unit, the
realizable value of the Partnership's assets clearly is a relevant factor in
determining the price a prudent purchaser would offer for Units.
Crosson Dannis prepared an estimate of the Present Estimated
Liquidation Value based on the assumptions that the Partnership commences a
theoretical orderly liquidation in January 1997 and completes such liquidation
by December 31, 1997. The Present Estimated Liquidation Value as of October 3,
1996 is between $233 and $236 per Unit. The Present Estimated Liquidation
Value represents Crosson Dannis' estimate of the gross cash distributions that
a Unitholder would receive between January 1997 and the completion of the
Assumed Liquidation, discounted to reflect the present value of such
distributions. Crosson Dannis' estimate of gross cash distributions per Unit
following the liquidation of the Partnership is
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$265.00. It should be noted that the Present Estimated Liquidation Value does
not represent an estimate by Crosson Dannis of the fair market value of a Unit.
The Present Estimated Liquidation Value is based in part upon
certain estimated cash receipts and disbursements of the Partnership through
the Assumed Liquidation. As a business planning tool, the Partnership prepares
near and long-term projections of cash flow on an annual basis for the next
succeeding year and the remaining life of the Partnership (the "Draft
Projections"). The Draft Projections were reviewed by various operating
personnel for, among other things, appropriateness of assumptions, timing of
expected cash receipts and disbursements, cash reserves, timing of scheduled
loan repayments, and levels of cash flow generally. The Draft Projections are
considered by the management of the Partnership as the most current long-term
business plan of the Partnership. The Draft Projections are prepared to
estimate the level of cash flow each asset of the Partnership will produce and
the related expenditures and timing of the expenditures to achieve the
potential cash flow. The Draft Projections are utilized as a management tool
to determine the appropriate methods of operating the Partnership's business,
which include, but are not limited to, the amount of invested capital in
assets, appropriate development plans for assets, level of indebtedness for the
Partnership, cash reserves and appropriate distribution levels. The Draft
Projections may be updated during any particular year for identified, material
change(s) to estimated cash receipts and/or disbursements. The summary of the
Draft Projections, which have been prepared on the basis of the most current
knowledge of the Partnership's personnel, are attached hereto as Annex A.
The Draft Projections are based on the above and other
assumptions and on other general factors relating to the Partnership's business
or to more general economic conditions. THERE IS NO ASSURANCE THAT THE DRAFT
PROJECTIONS WILL BE ACHIEVED DUE TO, AMONG OTHER THINGS, ADVERSE GENERAL
NATIONAL OR LOCAL ECONOMIC CONDITIONS; CHANGES IN INTEREST RATES OR
RESTRICTIONS IN FINANCING; UNANTICIPATED EXPENDITURES; CHANGES IN ENVIRONMENTAL
LAWS; REGULATIONS OR CONDITIONS AND UNANTICIPATED EXPENDITURES FOR
ENVIRONMENTAL MATTERS; CHANGES IN BUILDING CODES; INCREASED COMPETITION;
ADVERSE CHANGES IN LAWS, GOVERNMENTAL RULES OR FISCAL POLICIES; AND OTHER
FACTORS AFFECTING THE SALE OF REAL ESTATE.
ACCORDINGLY, THE ACTUAL OPERATIONS AND CASH FLOWS OF THE
PARTNERSHIPS ARE LIKELY TO VARY FROM THOSE INCLUDED IN THE DRAFT PROJECTIONS
AND SUCH VARIATIONS MAY BE MATERIAL. CONSEQUENTLY, SUCH PROJECTIONS OF
RESULTS OF OPERATIONS AND CASH FLOWS OF THE PARTNERSHIP AND THE PRESENT
ESTIMATED LIQUIDATION VALUES ARE NOT GUARANTEES OF ACTUAL RESULTS OF OPERATIONS
OR CASH FLOWS OF THE PARTNERSHIP AND SHOULD NOT BE CONSIDERED AS THE ACTUAL
RESULTS OF THE PARTNERSHIP OR THE AMOUNT THAT WILL NECESSARILY BE REALIZED BY
AN UNITHOLDER WHO RETAINS AN INTEREST IN THE PARTNERSHIP THROUGH ITS ACTUAL
LIQUIDATION.
NO ASSURANCE CAN OR IS MADE THAT THE PROJECTED RESULTS OF THE
PARTNERSHIP'S OPERATIONS AND CASH FLOWS, OR THE AMOUNT SET FORTH IN THE PRESENT
ESTIMATED LIQUIDATION VALUE, WILL BE REALIZED IN WHOLE OR PART. NO ASSURANCE
CAN OR IS MADE AS TO THE ACTUAL RESULTS THAT
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WILL BE ACHIEVED BY A UNITHOLDER WHO RETAINS AN INTEREST IN THE PARTNERSHIP.
The Crosson Dannis report is based upon a number of factors,
including the following items and assumptions:
(i) The Partnership holds good and, as the case may be under
applicable state laws, marketable or indefeasible title to its assets.
(ii) The Partnership, McNeil Partners and all other pertinent
persons have fully complied with all applicable federal, state and local
laws and regulations that would otherwise adversely affect the value of
the assets of the Partnership.
(iii) All required licenses, certificates of occupancy, consents
or legislative or administrative authority from any federal, state or
local governmental authority or agency have been or will be obtained or
renewed for any use of the assets of the Partnership on which the report
is based, whether in whole or part.
(iv) As to the real property assets of the Partnership, all
existing leases, subleases and other use agreements are in full force
and effect and each party to all such agreements are in full compliance
with their obligations thereunder and no default or event of default
exists with respect to any such agreements.
(v) The assets of the Partnership are all freely transferable.
(vi) No asset of the Partnership is subject to any option, right
of first offer, right of first refusal or other encumbrance that could
result in any obligation of the Partnership to sell or otherwise dispose
of such asset for an amount less than the then fair market value of such
asset.
(vii) The Present Estimated Liquidation Value specifically
disregards the impact of litigation expenses resulting from tender offer
defense costs and/or class action litigation.
ITEM 5. PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED
McNeil Partners, on behalf of the Partnership, has engaged
Crosson Dannis as its financial advisor to prepare the Present Estimated
Liquidation Value. Pursuant to the engagement agreement between the McNeil
Partners, on behalf of the Partnership, and Crosson Dannis, McNeil Partners
agreed, on behalf of the Partnership, to pay Crosson Dannis an aggregate fee of
$10,400 for the preparation and presentation of its report. In addition,
McNeil Partners, on behalf of the Partnership, agreed to reimburse Crosson
Dannis for the direct expenses it incurs for deliveries, travel and third party
research and data in preparing the Present Value, and indemnify it against
certain expenses and liabilities if incurred in connection with its engagement.
The fee paid to Crosson Dannis was not contingent upon the conclusions reached
in, or the substance of, the report.
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McNeil Partners, on behalf of the Partnership, has retained The
Herman Group, Inc. to assist with communications with Unitholders with respect
to, and to provide other services to the Partnership in connection with, the HR
Offer. McNeil Partners, on behalf of the Partnership, will pay The Herman
Group, Inc. reasonable and customary fees for its services, reimburse it for
reasonable expenses, and provide customary indemnities. Neither McNeil
Partners, the Partnership nor any person acting on their behalf has employed,
retained, or compensated or intends to employ, retain, or compensate any other
person or class of persons to make solicitations or recommendations to
Unitholders on its behalf concerning the HR Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES
(a) Neither the Partnership, McNeil Partners nor McNeil
Investors has effected any transactions in the Units during the past 60 days.
Except as described below, the Partnership is not aware of any other
transactions in the Units during the past 60 days by any of McNeil Investors's
executive officers, directors, affiliates, or subsidiaries.
(b) Neither the Partnership nor, to the knowledge of the
Partnership, any of McNeil Partners' executive officers, directors, affiliates,
or subsidiaries intends to tender Units owned by them in the HR Offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) Except as described in Item 4, there are no negotiations
being undertaken or underway which would result in any of the transactions
listed in Item 7(a) with respect to the Partnership.
(b) Except as described in Item 4, there is no transaction,
board resolution, agreement in principle or signed contract in response to the
tender offer which relates to or would result in one or more of the matters
referred to in Item 7(a) with respect to the Partnership.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
Tender Offer Litigation
On August 12, 1996, High River sent a letter to the Partnership and
nine affilated limited partnerships (together, the "McNeil Partnerships")
demanding a list of the names, current residence or business addresses and
certain other information concerning the Unitholders of the McNeil
Partnerships. On August 19, 1996, the McNeil Partnerships commenced an action
against High River, Mr. Icahn and certain of their affiliates (collectively,
the "Bidder Defendants") in United States District Court for the Central
District of California (the "California Federal Action") seeking, among other
things, to declare that the McNeil Partnerships are not required to provide
High River with a current list of the Unitholders on the grounds that the
Bidder Defendants commenced a tender offer in violation of the federal
securities laws by filing certain Schedule 13D Amendments on August 5, 1996.
On August 19, 1996, the McNeil Partnerships, through their counsel, responded
to High River's August 12 letter by denying High River's demand for a current
list of the Unitholders for the reasons set forth above.
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On August 23, 1996, the Bidder Defendants filed, among other documents,
(a) an answer to the McNeil Partnerships' complaint in the California Federal
Action denying the allegations contained therein and asserting four affirmative
defenses; (b) a counterclaim seeking, among other things, injunctive relief
requiring the McNeil Partnerships to either make available to High River a copy
of the list of Unitholders or grant High River permission to inspect and copy
such list; and (c) an application for a temporary restraining order ("TRO") and
a preliminary injunction seeking access to the list of Unitholders. On
September 6, 1996, the Bidder Defendants' TRO application was denied. On
September 12, 1996, the McNeil Partnerships filed an answer to the Bidder
Defendants' counterclaim asserting six affirmative defenses and alleging that
the Bidder Defendants were denied access to the list of Unitholders because
their requests for the list were in connection with an illegal tender offer.
Discovery is currently underway in the California Federal Action and the matter
is expected to go to trial in mid-October 1996.
On September 30, 1996, the McNeil Partnerships, including McNeil Real
Estate Fund XXVI, L.P. and McNeil Real Estate Fund XXVII, L.P., logged an
amended complaint for declaratory and injunctive relief against the Bidder
Defendants seeking, among other things, to enjoin the HR Offers on the grounds
that such offers violate the McNeil Partnerships' partnership agreements and
federal securities laws and to declare that the McNeil Partnerships are not
required to provide High River with a current list of Unitholders to facilitate
its illegal tender offers.
Restriction on Transfers; Tax Termination
The Partnership intends that no transfer or assignment of Units
shall be effective which, when considered with all other transfers or
assignments during the twelve-month period ending with such transfer or
assignment, would, in the opinion of counsel to the Partnership, cause a
termination of the Partnership for federal income tax purposes (which
termination may occur when 50% or more of the total interest in the Partnership
capital and profits is transferred by sale or exchange in a twelve-month
period). Depending upon the number of Units tendered pursuant to the HR Offer,
sales of Units on the secondary market for the twelve-month period following
completion of the HR Offer may be limited. The Partnership will not process
any requests for transfers of Units during such twelve-month period which the
Partnership believes would cause a tax termination. Because of the tax-related
transfer restrictions, in no event will an aggregate of 50% or more of the
Units be accepted for transfer by the Partnership pursuant to the HR Offer
(reduced to the extent of any prior transfers of Units within the preceding
twelve months).
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
99.(a)(1) Form of Letter from the Partnership to Unitholders dated October
4, 1996.
99.(b) Not applicable.
99.(c)(1) Form of Press Release issued by McNeil Partners on October 4,
1996.
99.(c)(2) Letter dated October 3, 1996 from Crosson Dannis, Inc. to McNeil
Partners, L.P.
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99.(c)(3) Letter dated August 12, 1996 from the Bidders to the Partnerships
(incorporated by reference to Exhibit 6 of Bidders' Schedule
14D-1 dated September 19, 1996).
99.(c)(4) Letter dated August 19, 1996 from counsel to the Partnerships to
counsel to the Bidders (incorporated by reference to Exhibit 7 of
Bidders' Schedule 14D-1 dated September 19, 1996).
99.(c)(5) Complaint filed by McNeil Pacific Investors Fund 1972, McNeil
Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd.,
McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV,
Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund
XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real
Estate Fund XXV, L.P., as plaintiffs, against the Bidders and
certain affiliates, as defendants (without exhibits)
(incorporated by reference to Exhibit 8 of Bidders' Schedule
14D-1 dated September 19, 1996).
99.(c)(6) Defendants' Answer to Complaint for Declaratory and Injunctive
Relief filed by High River and certain of its affiliates, as
defendants, against McNeil Pacific Investors Fund 1972, McNeil
Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd.,
McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV,
Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund
XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real
Estate Fund XXV, L.P., as plaintiffs (incorporated by reference
to Exhibit 19 of Bidders' Schedule 14D-1 dated September 19,
1996).
99.(c)(7) Counterclaim of High River for Injunctive and other Relief re:
Denial of Access to a Partner to Limited Partnership Records
filed by High River and certain of its affiliates, as defendants,
against McNeil Pacific Investors Fund 1972, McNeil Real Estate
Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real
Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil
Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P.,
McNeil Real Estate Fund XXIV, L.P. and McNeil Real Estate Fund
XXV, L.P., as plaintiffs (without exhibits) (incorporated by
reference to Exhibit 20 of Bidders' Schedule 14D-1 dated
September 19, 1996).
99.(c)(8) Plaintiffs/Counterclaim-Defendants' Answer to Counterclaim of
High River for Injunctive and other Relief filed by McNeil
Pacific Investors Fund 1972, McNeil Real Estate Fund IX, Ltd.,
McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund
XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate
Fund XXIV, L.P. and McNeil Real Estate Fund XXV, L.P., as
plaintiffs, against High River and certain of its affiliates
(incorporated by reference to Exhibit 21 of Bidders' Schedule
14D-1 dated September 19, 1996).
99.(c)(9) Proposed Supplemental and Amended Complaint for Declaratory and
Injunctive Relief filed by McNeil Pacific Investors Fund 1972,
McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X,
Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund
XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real
Estate Fund XXV, L.P., McNeil Real Estate Fund XXVI, L.P. and
McNeil Real Estate Fund XXVII, L.P., as plaintiffs, against High
River and certain of its affiliates (without exhibits) (filed
herewith).
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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.
Dated: October 4, 1996
MCNEIL PARTNERS, L.P.
General Partner of each of the Partnerships
By: McNeil Investors, Inc.
General Partner
By: /s/ Donald K. Reed
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Donald K. Reed
President
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ANNEX A
MCNEIL PACIFIC INVESTORS FUND 1972
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CASH FLOW PROJECTIONS 000'S 1997 1998 1999 2000 2001
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Partnership cash flow before debt service (386) 0 - - -
Net sales proceeds 3,990 - - - -
Debt service on mortgage obligations (161) - - - -
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Partnership cash flow 3,444 0 - - -
Estimated distributions to LP's (3,966) - - -
Beginning working capital cash reserves 522 (0) - - -
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Ending working capital cash reserves (0) - - - -
ASSUMPTIONS:
Partnership cash flow before debt service - Represents net cash flow from
properties after capital improvements but before debt service. Also
includes all G & A costs of the partnership and payments to the GP. Based
on 1996 property budgets and estimated 1996 partnership costs.
Net sales proceeds - Estimated proceeds from sales of properties.
Calculated by taking property NOI and capping at 10% for apartments, 11%
for retail and self storage, and 12% for office buildings. This capped
value is then reduced by a 3% transaction cost and the outstanding balance
of the related mortgage indebtedness.
Debt service on mortgage obligations - Annual debt service on outstanding
mortgage notes secured by real property.
Estimated distributions to LP's - Represents distribution of total
partnership cash flow subject to maintenance of a working capital cash
reserve, which is distributed in year of termination.
Cash flow projections assume an orderly liquidation of all partnership
properties commencing with sales in 1997 and final termination in 1997 with
the final property sale.
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EXHIBIT INDEX
Exhibit Description Page
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99.(a)(1) Form of Letter from the Partnerships to Unitholders dated
October 4, 1996.
99.(c)(1) Form of Press Release issued by McNeil Partners on October 4,
1996.
99.(c)(2) Letter dated October 3, 1996 from Crosson Dannis, Inc. to McNeil
Partners, L.P.
99.(c)(3) Letter dated August 12, 1996 from the Bidders to the
Partnerships (incorporated by reference to Exhibit 6 of Bidders'
Schedule 14D-1 dated September 19, 1996).
99.(c)(4) Letter dated August 19, 1996 from counsel to the Partnerships to
counsel to the Bidders (incorporated by reference to Exhibit 7
of Bidders' Schedule 14D-1 dated September 19, 1996).
99.(c)(5) Complaint filed by McNeil Pacific Investors Fund 1972, McNeil
Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd.,
McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV,
Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund
XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real
Estate Fund XXV, L.P., as plaintiffs, against the Bidders and
certain affiliates, as defendants (without exhibits)
(incorporated by reference to Exhibit 8 of Bidders' Schedule
14D-1 dated September 19, 1996).
99.(c)(6) Defendants' Answer to Complaint for Declaratory and Injunctive
Relief filed by High River and certain of its affiliates, as
defendants, against McNeil Pacific Investors Fund 1972, McNeil
Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd.,
McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV,
Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund
XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real
Estate Fund XXV, L.P., as plaintiffs (incorporated by reference
to Exhibit 19 of Bidders' Schedule 14D-1 dated September 19,
1996).
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99.(c)(7) Counterclaim of High River for Injunctive and other Relief re:
Denial of Access to a Partner to Limited Partnership Records
filed by High River and certain of its affiliates, as
defendants, against McNeil Pacific Investors Fund 1972, McNeil
Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd.,
McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV,
Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund
XX, L.P., McNeil Real Estate Fund XXIV, L.P. and McNeil Real
Estate Fund XXV, L.P., as plaintiffs (without exhibits)
(incorporated by reference to Exhibit 20 of Bidders' Schedule
14D-1 dated September 19, 1996).
99.(c)(8) Plaintiffs/Counterclaim-Defendants' Answer to Counterclaim of
High River for Injunctive and other Relief filed by McNeil
Pacific Investors Fund 1972, McNeil Real Estate Fund IX, Ltd.,
McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund
XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate
Fund XXIV, L.P. and McNeil Real Estate Fund XXV, L.P., as
plaintiffs, against High River and certain of its affiliates
(incorporated by reference to Exhibit 21 of Bidders' Schedule
14D-1 dated September 19, 1996).
99.(c)(9) Proposed Supplemental and Amended Complaint for Declaratory and
Injunctive Relief filed by McNeil Pacific Investors Fund 1972,
McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X,
Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund
XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real
Estate Fund XXV, L.P., McNeil Real Estate Fund XXVI, L.P. and
McNeil Real Estate Fund XXVII, L.P., as plaintiffs, against High
River and certain of its affiliates (without exhibits) (filed
herewith).
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