IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
- --------------------------------------------
LER 8, a Maryland General Partnership,
on its behalf and on behalf of
SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP
c/o Robert G. Brewer
3 Bethesda Metro Center, Suite 380
Bethesda, Maryland 20814
Plaintiffs,
v. No. DKC 95-555
THREE WINTHROP PROPERTIES, INC.,
One International Place
Boston, MA 02110
Serve: Arthur J. Halleran, Jr.
NOMURA ASSET CAPITAL CORPORATION, and
2 World Financial Center
New York, New York 10005
Serve: Ethan Penner, President
AQUARIUS ACQUISITION, L.P.
c/o Nomura Asset Capital Corporation
2 World Financial Center
New York, New York 10005
Serve: Ethan Penner, President
Defendants.
- -------------------------------------------
COMPLAINT
Plaintiffs, by their undersigned attorneys, for their
Complaint state as follows.
INTRODUCTION
1. This case concerns a contest for control of Springhill
Lake Investors Limited Partnership ("Springhill LP") and/or
certain real property in Greenbelt, Maryland, which Springhill LP
owns (the "Project"). Greenbelt Residential Limited Partnership
("Greenbelt") has offered to purchase the interest of the
limited partners and has asked the limited partners of Springhill
LP to consent to dissolution of the partnership, so that the
property can be sold to the highest bidder. Greenbelt hopes to
be the highest bidder. Three Winthrop Properties, Inc. ("Three
Winthrop"), the managing general partner of Springhill LP, has,
through an affiliate, launched a tender offer for Springhill LP.
It is believed that Three Winthrop has failed to comply with the
federal securities laws governing such tender offers, and has
breached its fiduciary obligations to the limited partners of
Springhill LP in a variety of ways. LER 8 brings this action in
its own right and on behalf of Springhill LP, and asks this Court
to enjoin Three Winthrop (and its affiliates) from continuing
with its tender offer and to affirmatively order Three Winthrop
to set up a fair and independent procedure, free of conflict of
interest, to affirmatively look for, and consider all possible
offers.
A. THE PARTIES
2. Springhill LP is a limited partnership organized and
existing under the laws of the State of Maryland, with a usual
place of business at One International Place, Boston,
Massachusetts.
3. LER 8 is a limited partner of Springhill LP. LER 8
currently resides in Maryland and is a citizen of Maryland. LER
8 purchased a .1464% limited partnership interest in Springhill
LP in 1985 and has owned that interest continuously since then.
2
LER 8 brings this action in its own right and derivatively on
behalf of Springhill LP.
4. Defendant Three Winthrop is a corporation organized
under the laws of the State of Massachusetts with its principal
place of business at One International Place, Boston,
Massachusetts.
5. Defendant Aquarius Acquisition, L.P. ("Aquarius") is
a newly formed Delaware limited partnership, whose general
partner, Partnership Acquisition Trust I, is a Delaware business
trust owned and controlled by defendant Nomura Asset Capital
Corporation ("NACC"). It is believed that NACC, a Delaware
corporation, also owns and/or controls Three Winthrop.
B. JURISDICTION AND VENUE
6. This Court has subject matter jurisdiction over
plaintiffs' federal securities law claims pursuant to 26 U.S.C. Section
1331 and over plaintiffs' state law breach of fiduciary duty
claim pursuant to 28 U.S.C. Section 1367.
7. Venue is proper in this Court pursuant to 28 U.S.C. Section
1391(b)(2).
C. BACKGROUND INFORMATION
8. The Project, the Springhill Lake Apartments in
Greenbelt, Maryland, consists of a 96 building, 2,899 unit garden
apartment complex, approximately 154 acres of land, an
eight-store shopping center, a day care center, two swimming
pools, six tennis courts and a clubhouse.
3
9. The Project is owned by ten limited partnerships
organized under the laws of the State of Maryland: First
Springhill Lake Limited Partnership, Second Springhill Lake
Limited Partnership, Third Springhill Lake Limited Partnership,
Fourth Springhill Lake Limited Partnership, Fifth Springhill Lake
Limited Partnership, Sixth Springhill Lake Limited Partnership,
Seventh Springhill Lake Limited Partnership, Eighth Springhill
Lake Limited Partnership, Ninth Springhill Lake Limited
Partnership, and Springhill Commercial Limited Partnership
(collectively the "Operating Partnerships").
10. Springhill LP is the general partner of each of the
Operating Partnerships. Springhill LP owns a 90% interest in
each of the Operating Partnerships. Subject to certain special
allocations contained in the partnership agreements of the
Operating Partnerships, the remaining interest in each of the
Operating Partnerships has, since 1985, been owned by Theodore
Lerner, as limited partner. He has an interest in Greenbelt.
11. Three Winthrop is the managing general partner of
Springhill LP and is charged with the responsibility for carrying
out the business of Springhill LP.
12. Except for certain minor ownership interests held by
Three Winthrop and by an affiliated company, Linnaeus-Lexington
Associates Limited Partnership ("Linnaeus"), Springhill LP is
owned by individuals or entities who own as limited partners 649
units of interest in Springhill LP (the "Investor Limited Part-
4
ners"). The Investor Limited Partners purchased their interests
in Springhill LP through a confidential offering memorandum dated
January 16, 1985. Those interests constitute securities for
purposes of the Securities Exchange Act of 1934 (the "Exchange
Act"), and are registered under Section 12(g) of the Exchange Act.
13. Three Winthrop, acting as managing general partner of
Springhill LP, has certain fiduciary obligations to the Investor
Limited Partners and to Springhill LP.
D. GREENBELT'S OFFER TO PURCHASE THE PROPERTY
14. Greenbelt has offered to purchase the Springhill LP
interest in the Project and has solicited consents from the
Investor Limited Partners of Springhill LP to a resolution
dissolving Springhill LP, thereby requiring a sale of its only
asset, the Project, to the highest bidder. Greenbelt
simultaneously advised the Investor Limited Partners that if the
Project is put up for sale, Greenbelt will purchase it.
Greenbelt's offer may be in the interest of the Investor Limited
Partners and Springhill LP.
E. AQUARIUS' TENDER OFFER
15. On February 1, 1995 Aquarius, which, like Three
Winthrop, is controlled by NACC, commenced a tender offer for the
units of limited partnership interests in Springhill LP. On that
date, Aquarius provided the Investor Limited Partners an Offering
Circular which set out the terms of the tender offer.
5
16. The tender offer is being made by an affiliate of
Springhill LP and, if successful, will cause the limited
partnership interests to be held by fewer than 300 people.
Accordingly, Rule 13e-3 (promulgated under Section 13(e) of the
Exchange Act) imposes certain disclosure obligations on Three
Winthrop, Aquarius, and NACC.
17. Under Rule 13e-3 (and Schedule 13E-3 thereto), Three
Winthrop must state whether it believes the transaction is "fair
or unfair" to unaffiliated security holders and must discuss the
factors supporting that stated belief. Three Winthrop has
advised the Investor Limited Partners that it has a conflict and
has refused to make these required disclosures, in breach of both
the Exchange Act and its fiduciary duty to the Investor Limited
Partners.
F. THREE WINTHROP'S BREACHES OF ITS FIDUCIARY DUTY
18. Though purporting to remain neutral, Three Winthrop
has apparently supported the Aquarius tender offer. On
information and belief, Three Winthrop has provided NACC and
Aquarius with extensive information about Springhill LP which
Aquarius and NACC have used in putting together the tender offer.
19. Three Winthrop has also breached its fiduciary duty by
refusing to hire an independent entity and to establish an
independent procedure to evaluate all offers and to advise the
Investor Limited Partners as to the appropriate course of action.
6
Upon information and belief, Three Winthrop has not sought other
offers to determine the fair market value of the Project.
FIRST CAUSE OF ACTION
VIOLATION OF RULE 13e-3
20. Plaintiffs repeat and reallege the allegations of
paragraphs 1 to 19.
21. Because Three Winthrop has not made the disclosures
required by Rule 13e-3, the Investor Limited Partners are unable
to properly evaluate the fairness of the Aquarius/Three Winthrop
tender offer.
SECOND CAUSE OF ACTION
BREACH OF FIDUCIARY DUTY
22. Plaintiffs repeat and reallege the allegations of
paragraphs 1 to 21.
23. Three Winthrop has breached its fiduciary duty to LER
8 and to Springhill LP by failing to disclose information as
required by the securities laws, and because of its conflict of
interest, by failing to establish a procedure for the fair and
independent evaluation of the different proposals.
24. These breaches have injured plaintiffs by preventing
plaintiffs from obtaining from its managing general partner a
proper evaluation of the competing offers for Springhill LP.
WHEREFORE, plaintiffs respectfully request that this
Court:
(1) enjoin NACC, Aquarius and Three Winthrop from
continuing to pursue their tender offer, and requiring them to
7
employ an independent entity to be paid by Three Winthrop to
establish a fair and independent procedure to evaluate all
proposals; and
(2) award plaintiffs such other relief as the Court deems
just and proper.
Respectfully submitted,
LERCH, EARLY & BREWER
By /s/ R. Dennis Osterman
-------------------------
R. Dennis Osterman
3 Bethesda Metro Center
Suite 380
Bethesda, Maryland 20814
(301) 986-1300
Attorneys for Plaintiff
8
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
- -----------------------------------------------------------------------------
LER 8, a Maryland General Partnership,
on its behalf and on behalf of
SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP
Plaintiffs,
Case No. DKC 95-555
v.
THREE WINTHROP PROPERTIES, INC.,
NOMURA ASSET CAPITAL CORPORATION, and
AQUARIUS ACQUISITION, L.P.
Defendants.
- ------------------------------------------------------------------------------
PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION
Plaintiffs hereby move this Court for a preliminary
injunction in the form indicated in the attached proposed order.
In support of this motion, plaintiffs rely upon the
complaint filed in this action, the memorandum of law which
accompanies this motion, and the affidavit of Robert G. Brewer,
Jr.
Respectfully submitted,
LERCH, EARLY & BREWER
By /s/ R. Dennis Osterman
----------------------
R. Dennis Osterman
3 Bethesda Metro Center
Suite 380
Bethesda, Maryland 20814
(301) 986-1300
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
- -----------------------------------------------------------------------------
LER 8, a Maryland General Partnership,
on its behalf and on behalf of
SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP
Plaintiffs,
Case No. DKC 95-555
v.
THREE WINTHROP PROPERTIES, INC.,
NOMURA ASSET CAPITAL CORPORATION, and
AQUARIUS ACQUISITION, L.P.
Defendants.
- ------------------------------------------------------------------------------
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS'
MOTION FOR A PRELIMINARY INJUNCTION
INTRODUCTION
There is an ongoing contest for control of Springhill Lake
Investors Limited Partnerhip ("Springhill LP") between Greenbelt
Residential Limited Partnership ("Greenbelt") and defendant
Aquarius Acquisition Ltd. ("Aquarius"). That contest is now at a
critical stage. Greenbelt has an open offer to purchase the
interest of Springhill LP in the Springhill project and a tender
offer presented to the limited partners by Aquarius will expire on
March 2, 1995.
The limited partners of Springhill LP need to know whether
the Aquarius offer is fair and preferable to the Greenbelt offer,
to other offers that could be obtained by Winthrop in the
marketplace, or to declining to sell at this time.
Normally, the limited partners would get advice in this
regard from the managing general partner, who has access to all
financial information and a fiduciary responsibility to the
limited partners. However, the managing general partner is Three
Winthrop Properties Inc. ("Three Winthrop"), an affiliate of
Aquarius. Three Winthrop has a conflict and has given the limited
partners no guidance.
Despite a request from limited partners, Three Winthrop has
not agreed to a procedure to provide the limited partners an
independent analysis of the different offers, free of any conflict
of interest. To all appearances Three Winthrop has taken
advantage of its position as managing general partner of
Springhill LP and has provided assistance to Aquarius. By so
doing, the limited partners have no assurance they will receive
fair and unbiased information, which is a violation of its
fiduciary duties to the limited partners of Springhill LP.
To protect the interests of the limited partners of Springhill LP,
this Court should enjoin the Aquarius tender offer and order Three
Winthrop to set up a fair and independent procedure for allowing
the limited partners to evaluate the competing offers.
FACTS
The property at issue is the Springhill Lake Apartments in
Greenbelt, Maryland, comprising a 96-building, 2,899-unit garden
apartment complex on approximately 154 acres of land. It contains
an eight-store shopping center, a day care center, two swimming
pools, six tennis courts and a clubhouse (the "Project"). The
Project is owned by ten limited partnerships organized under the
laws of the State of Maryland (the "Operating Partnerships").
- 2 -
Springhill LP is the general partner of each of the ten Operating
Partnerships and owns a 90% interest in each of the ten Operating
Partnerships. Theodore Lerner owns the remaining 10% limited
partnership interest in each of the ten Operating Partnerships.
Three Winthrop is the managing general partner of Springhill
LP and is charged with the responsibility for carrying out the
business of Springhill LP. Except for the minor ownership
interests held by Three Winthrop and by an affiliated company,
Springhill LP is owned by individuals or entities who own as
limited partners approximately 649 units of interest in Springhill
LP (the "Investor Limited Partners"). LER 8 is an investor limited
partner.
The Greenbelt Offer
Greenbelt has distributed proxies to the Investor Limited
Partners of Springhill LP seeking approval of a resolution
dissolving Springhill LP, thereby requiring a sale of its only
asset, the Project, to the highest bidder. Greenbelt
simultaneously advised the Investor Limited Partners that if the
Project is put up for sale, Greenbelt would attempt to purchase
the Project. Greenbelt's and Three Winthrop's offers may or may
not be in the interest of the Investor Limited Partners and
Springhill LP. Three Winthrop has not established a procedure to
provide a fair assessment of either offer.
On February 1, 1995, Aquarius, which, like Three Winthrop, is
controlled by defendant Nomura Asset Capital Corporation ("NACC"),
commenced a tender offer for the units of limited partnership
- 3 -
interest in Springhill LP. It is believed that Three Winthrop opposes the
Greenbelt offer and has actively supported the Aquarius tender offer by
providing NACC and Aquarius with extensive information about Springhill LP
which Aquarius and NACC have used in putting together the tender offer.
Three Winthrop's conduct is irreparably injuring the Investor Limited
Partners. Rather than providing the Investor Limited Partners with the
impartial advice and information they are entitled to expect from their
fiduciary, Three Winthrop is apparently throwing its weight behind the
Aquarius offer. Three Winthrop's conduct raises the prospect that a majority
of the Investor Limited Partners will be forced to accept an offer without
having the opportunity to consider other offers and without receiving
independent advice.
ARGUMENT
THE COURT SHOULD GRANT PLAINTIFF'S MOTION
FOR A PRELIMINARY INJUNCTION
In determining whether to grant a preliminary injunction, the Court must
weigh four factors:
(1) the likelihood of irreparable harm to the plaintiff if the preliminary
injunction is denied;
(2) the likelihood of harm to the defendant if the requested relief is
granted;
(3) the likelihood that the plaintiff will succeed on the merits; and
(4) the public interest.
- 4 -
Direx Israel Ltd v. Breakthrough Medical Corp., 952 F.2d 802, 812 (4th
Cir. 1994). As we show below, here all four factors favor granting a
preliminary injunction.
First, plaintiffs will clearly be irreparable harmed if the Aquarius/Three
Winthrop tender offer is allowed to proceed without the Investor Limited
Partners ever receiving a neutral assessment of all offers.
The Investor Limited Partners have only a few days to evaluate the
competing offers. Unless Three Winthrop promptly sets up a procedure for
providing the Investor Limited Partners with an independent evaluation (as
its fiduciary obligations require), the opportunity for the Investor Limited
Partners to properly evaluate the competing offers will be lost forever. This
lost opportunity plainly constitutes irreparable harm. See In re W.T. Grant
Co., 6 B.R. 762, 766 (Bkr. S.D.N.Y. 1980) (enjoining misleading proxy
solicitation because loss of "unique opportunity as investors to make an
informed judgment with respect to the offer" constitutes irreparable harm).
Second, while plaintiffs face irreparable injury, granting the injunction
will not harm defendants. Defendants will still be able to pursue their
tender offer in a timely fashion.
Third, plaintiffs are likely to succeed on the merits. Three Winthrop has
conceded, as it must, that it has a fiduciary duty to the Investor Limited
Partners. Under Maryland law, a managing general partner must act with
"utmost good faith" towards passive limited partners and owes a duty to make
full disclosure of
- 5 -
information important to limited partners. Dixon v. Trinity Joint Venture, 49
Md. App. 1361, 431 A.2d 1361, 1366 (1981). Three Winthrop has violated that
fiduciary duty by providing crucial funding and information to support the
Aquarius tender, by refusing to comment on the competing tenders, and by
failing to set up a procedure for providing the Individual Limited Partners
with a neutral assessment of the offers. Maryland partnership law as to the
fiduciary duties of managing general partners is analogous to the duties of
officers and directors of a corporation. Dixon, supra. In Walter J. Schloss
Assoc. v. Chesapeake and Ohio R'way Co., 73 Md. App. 727, 536 A.2d 147, 154
(1988) (quoting Weinberger v. UOP, Inc., 457 A.2d 721 (Del. 1983), the court
recognized in a corporate context the appropriateness of a corporation
obtaining independent advice on valuation in a merger where a conflict could
be present).
Finally, the public interest favors the injunction, requiring offerors to
honor their fiduciary duties is in the public interest.
CONCLUSION
Unless the Court acts now, it will be too late for the Investor Limited
Partners of Springhill LP. Plaintiffs respectfully request that this Court
preliminarily enjoin the tender
- 6 -
offer until a fair and independent procedure is established for evaluating
the proposals.
LERCH, EARLY & BREWER
By /s/ R. Dennis Osterman
------------------------
R. Dennis Osterman
3 Bethesda Metro Center
Suite 380
Bethesda, Maryland 20814
(301) 986-1300
- 7 -
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
- -----------------------------------------------------------------------------
LER 8, a Maryland General Partnership,
on its behalf and on behalf of
SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP
Plaintiffs,
No. DKC 95-555
v.
THREE WINTHROP PROPERTIES, INC.,
NOMURA ASSET CAPITAL CORPORATION, and
AQUARIUS ACQUISITION, L.P.
Defendants.
- ------------------------------------------------------------------------------
ORDER
Upon consideration of the motion of plaintiffs for a
preliminary injunction, it is hereby
ORDERED, that said motion is hereby granted; and it is
further
ORDERED, that defendants Three Winthrop Properties, Inc.,
Aquarius Acquisition, L.P., and Nomura Asset Capital Corporation
are hereby preliminarily enjoined from continuing to pursue their
tender offer for Springhill Lake Investors Limited Partnership;
and it is further
ORDERED, that defendants Three Winthrop Properties, Inc.
shall promptly employ an independent entity to evaluate any and
all proposals for the sale of Springhill Lake Investors Limited
Partnership, including whether or not to list it for sale on the
open market, and it is further
ORDERED, that plaintiffs post a nominal bond of $2,500.00.
_______________________
Judge
Dated: ___________, 1995
- 2 -
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
- -----------------------------------------------------------------------------
LER 8, a Maryland General Partnership,
on its behalf and on behalf of
SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP
Plaintiffs,
No. DKC 95-555
v.
THREE WINTHROP PROPERTIES, INC.,
NOMURA ASSET CAPITAL CORPORATION, and
AQUARIUS ACQUISITION, L.P.
Defendants.
- ------------------------------------------------------------------------------
AFFIDAVIT OF ROBERT G. BREWER, JR.
Robert G. Brewer, Jr., being duly sworn, deposes and says:
1. I am a general partner of a Maryland general partnership,
LER 8, which is a limited partner in Springhill Lake Investors
Limited Partnership ("Springhill LP"), which is one of the
plaintiffs in this action. I make this affidavit in support of
plaintiff's motion for a preliminary injunction. I am fully
familiar with the facts set forth herein.
2. I currently reside in Chevy Chase, Maryland, and am a
citizen of Maryland. LER 8 purchased a .1464% limited partnership
interest in Springhill LP in 1985 and has owned that interest
continuously since then.
3. Springhill LP is a limited partnership organized and
existing under the laws of the State of Maryland, with a usual
place of business at One International Place, Boston,
Massachusetts.
4. Defendant Three Winthrop is a corporation organized
under the laws of the State of Massachusetts with its principal
place of business at One International Place, Boston,
Massachusetts.
5. Upon information and belief, defendant Aquarius
Acquisition, L.P. ("Aquarius") is a newly formed Delaware limited
partnership, whose general partner, Partnership Acquisition Trust
I, is a Delaware business trust owned and controlled by defendant
Nomura Asset Capital Corporation ("NACC"), which also controls
Three Winthrop.
Background Information
6. The sole asset of Springhill LP is a 90% general
partnership interest in ten limited partnerships which in turn own
the Springhill Lake Apartments in Greenbelt, Maryland (the
"Project"). The Project consists of a 96-building, 2,899-unit
garden apartment complex, approximately 154 acres of land, an
8-store shopping center, a day care center, two swimming pools, six
tennis courts and a clubhouse.
7. Three Winthrop is the managing general partner of
Springhill LP and is charged with the responsibility for carrying
out the business of Springhill LP. As managing general partner,
Three Winthrop has received (directly or through affiliates) fee
income for oversight management of the Project and for other
services.
8. Except for certain minor ownership interests held by
Three Winthrop and by an affiliated company, Springhill LP is
- 2 -
owned by individuals or entities who own as limited partners 649 units of
interest in Springhill LP (the "Investor Limited Partners"). LER 8 is one of
the 649 Investor Limited Partners. (Attached as Exhibit A is a diagram of the
ownership of the Project).
THE GREENBELT OFFER
9. The Investor Limited Partners have received from Greenbelt Residential
Limited Partnership proxy solicitations seeking approval of a resolution
dissolving Springhill LP, thereby requiring a sale of its only asset, the
Project, to the highest bidder. Greenbelt simultaneously advised the Investor
Limited Partners that if the Project is put up for sale, Greenbelt will seek
to purchase the Project. Greenbelt has also offered to purchase Springhill
LP's interest in the Project.
10. Greenbelt's offer may be in the interest of the Investor Limited
Partners and Springhill LP. The Investor Limited Partners are entitled to a
neutral assessment of that offer from their fiduciary, Three Winthrop.
THE AQUARIUS TENDER OFFER
11. Three Winthrop has, through affiliates, put together a tender offer
without providing the Investor Limited Partners with a fair assessment of all
offers. Three Winthrop has not remained neutral nor has it established a
procedure to provide a fair assessment of Greenbelt's offer.
12. On February 1, 1995, Aquarius, which, like Three Winthrop, is
controlled by defendant Nomura Asset Capital
- 3 -
Corporation ("NACC"), commenced a tender offer for the units of limited
partnership interests in Springhill LP. On that date, Aquarius provided the
investor limited partners an offering circular which set out the terms of the
tender offer. Three Winthrop has acknowledged its conflict and has refused to
comment on the offers. (A copy of the February 2, 1995 letter is attached as
Exhibit B).
13. The tender offer expires on March 2, 1995.
14. Following the distribution of the Offering Circular, Greenbelt raised
the value of its offer to purchase the Project if the partnership is
dissolved.
15. Three Winthrop apparently opposes the Greenbelt offer and is
apparently supporting the Aquarius tender offer. Three Winthrop has also
apparently provided NACC and Aquarius with extensive information about
Springhill LP which Aquarius and NACC have used in putting together the
Aquarius tender offer.
IRREPARABLE HARM
16. Three Winthrop's conduct is irreparably injuring the Investor Limited
Partners. In the next few days, the Investor Limited Partners will have to
decide whether to accept one of the two offers or continue to hold their
interests. Because the Investor Limited Partners have only limited access to
the relevant financial information, we need neutral advice in assessing the
proposed transactions. Rather than providing the Investor Limited Partners
with the impartial advice and information we are entitled to expect from our
fiduciary, Three Winthrop is apparently
- 4 -
throwing its weight behind the Aquarius offer. Three Winthrop's conduct
raises the very real prospect that a majority of the Investor Limited
Partners will have to act without having independent advice as to other
offers, and without receiving sufficient financial information. Three
Winthrop has not responded to a written request for an independent mechanism
to advise the Investor Limited Partners.
17. So as to avoid irreparable injury, on behalf of all the Investor
Limited Partners, I respectfully request that this court enjoin the Aquarius
tender offer until Three Winthrop establishes a neutral mechanism for fairly
evaluating the competing offers and whether or not to obtain other offers.
I affirm under the penalties of perjury that the above is true. Subscribed
to this 27th day of February, 1995.
/s/ Robert G. Brewer, Jr.
-------------------------
Robert G. Brewer, Jr.
General Partner, LER 8, a Maryland
General Partnership, and limited
partner in Springhill Lake Investors
Limited Partnership
Sworn to before me this
27th day of February, 1995
/s/ Christine E. Hampton
- ---------------------------
Notary Public
- 5 -
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Springhill Lake Development
154 Acres
96 buildings
- -----------------------------------------------------------------------------
10 L.P.s
(Operating P.)
(Theodore Lerner is a 10% Limited
Partner in each Operating Partnership.)
- -----------------------------------------------------------------------------
Springhill Lake Investors L.P.
is a 90% general partner in
each of the 10 L.P.s
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
General Partners 649 Individual Investors
(95%) --Limited Partners
Three Winthrop Properties, Inc.
(.1%)
Managing General Partner
Linnaeus--Lexington Associates
Limited Partnership (4.9%)
General Partner
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
[The above information is displayed in a graph of the Ownership Structure.]
(LETTERHEAD OF WINTHROP)
To: Investor Limited Partners
From: Beverly L. Bergman
Date: February 1, 1995
Re: Springhill Lake Investors Limited Partnership (the "Partnership")
On January 24, 1995, we wrote to you regarding the materials sent to you
by Theodore Lerner seeking your consent to a dissolution of the Partnership
(the "Lerner Solicitation"). On February 1, 1995, Aquarius Acquisition, L.P.
("Aquarius") commenced a tender offer (the "Aquarius Offer") to acquire
limited partnership units of the Partnership. As set forth in the enclosed
Schedule 14D-9 filed with the Securities and Exchange Commission by the
Partnership in response to the Aquarius Offer, Three Winthrop Properties,
Inc. ("Three Winthrop"), the managing general partner of the Partnership, is
an affiliate of Aquarius and, because of the conflict of interest inherent in
such affiliation, the Partnership is making no recommendation and is
remaining neutral as to whether Limited Partners should tender their limited
partnership interests pursuant to the Aquarius Offer. Similarly, Three
Winthrop is not taking a position with respect to the Lerner Solicitation.
Should you have any questions, please feel free to contact me at
800-333-4556.
cc: Account Executive
[Exhibit B]