MCNEIL REAL ESTATE FUND XIV, LTD.
Question: [Did you see the] liquidation values [of the
McNeil Partnerships] published ...?
ICAHN: "I DIDN'T LOOK AT THEM AT ALL .... I DIDN'T LOOK
AT IT BECAUSE I DIDN'T CARE. I FIGURED--"
Question: You just throw out $150 million and you don't care?
ICAHN: "75% OF LIQUIDATING VALUE IS GOOD ENOUGH FOR ME.
THAT'S WHAT I WANT TO PAY. GOOD RETURN ON MY
MONEY."
Excerpt from cross-examination of
Carl C. Icahn, October 2, 1996
Dear Unitholder:
By now you should be very familiar with the name Carl C. Icahn.
For more than a year, Mr. "GOOD RETURN ON MY MONEY" Icahn, and
his affiliate, High River Limited Partnership, have attempted,
through repeated "hostile" tender offers, litigation and bluster,
to acquire control of McNeil Real Estate Fund XIV, Ltd. (the
"Partnership"). In this regard, they have repeatedly tried to
buy your Units at prices below their values and made unfounded
allegations about the Partnership and its General Partner.
You should be aware that Mr. Icahn has a long record of this type
of "VULTURE" investing -- that is, acquiring large blocks of
Units at prices that are inadequate and not in the best interests
of either the respective Partnership or Unitholders. He's now
trying this same investment tactic with the Partnership. HE'S
TRYING TO TAKE ADVANTAGE OF YOU BY CONVINCING YOU THAT THE UNITS
ARE A BAD INVESTMENT, WHILE AT THE SAME TIME BUYING THEM FOR $95
PER UNIT, SIGNIFICANTLY LESS THAN THE RANGE OF PRESENT ESTIMATED
LIQUIDATION VALUE DETERMINED BY AN INDEPENDENT FINANCIAL ADVISOR
TO THE PARTNERSHIP. Mr. Icahn's own admission in his cross-
examination on October 2 that he is offering only 75% of HIS OWN
LOW-BALL ESTIMATE of the value of the Units, and thereby realiz-
ing a "good return" at YOUR expense, speaks for itself. IN FACT,
MR. ICAHN'S OFFER PRICE IS ONLY BETWEEN 55.6% AND 59.0% OF THE
PRESENT ESTIMATED LIQUIDATION VALUE OF THE UNITS DISCUSSED BELOW.
* STATEMENTS MADE BY MR. ICAHN AND HIGH RIVER IN THEIR RECENT
LETTER TO YOU ARE FALSE AND INTENTIONALLY MISLEADING. For
instance, the amount of fees they claim McNeil Partners
received includes money paid to affiliates of Southmark
Corporation, an entity which is not affiliated with McNeil
Partners and which filed for bankruptcy in 1989. McNeil
Partners replaced Southmark as the General Partner in the
early 1990's. At that time, Robert A. McNeil established a
revolving credit facility which permitted the Partnership
and other McNeil partnerships to borrow from the General
Partner up to $5,000,000 in order to stabilize the Partner-
ship and avoid a fire-sale of its assets in a depressed real
estate market. Under the stewardship of a well-capitalized
McNeil Partners since 1991, the Partnership's financial
condition has recovered significantly from its pre-1991
condition.
* Mr. Icahn is certainly not offering to buy your Units be-
cause he thinks they are a bad investment. Fellow holders
of 97.7% of the outstanding Units have chosen not to tender
their Units as of November 1 and have rejected Mr. Icahn's
offer. IF YOU ARE ONE OF THE FEW WHO HAVE TENDERED YOUR
UNITS AND HAVE SECOND THOUGHTS ABOUT YOUR DECISION, WE HAVE
INCLUDED FOR YOUR CONVENIENCE A FORM TO WITHDRAW YOUR TEN-
DER.
IN LIGHT OF ALL RELEVANT CIRCUMSTANCES, INCLUDING THE INDEPENDENT
OPINION OF CROSSON DANNIS, INC. THAT MR. ICAHN'S OFFER PRICE IS
INADEQUATE FROM A FINANCIAL POINT OF VIEW, THE PARTNERSHIP
DETERMINED THAT THE OFFER IS INADEQUATE, NOT IN THE BEST INTER-
ESTS OF EITHER THE PARTNERSHIP OR UNITHOLDERS AND WE STRONGLY
RECOMMEND THAT YOU REJECT IT.
We urge you to consider the following points in making your
determination whether to reject the offer:
THE PRESENT ESTIMATED LIQUIDATION VALUE FOR THE UNITS AS OF
OCTOBER 3, 1996 IS BETWEEN $161 AND $171 PER UNIT. Crosson
Dannis, Inc., an independent financial advisor to the Partner-
ship, prepared an estimate of the present value (the "Present
Estimated Liquidation Value") of a Unit based on the assumption
that the Partnership completes an orderly liquidation by December
2001 (the "Liquidation"), during which time the Partnership will
be distributing cash proceeds from the sale of the Partnership's
properties as they are sold. The Present Estimated Liquidation
Value represents Crosson Dannis' estimate of the present value of
the gross cash distributions, approximately $271 per Unit, that a
Unitholder would receive between now and the completion of the
Liquidation. 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. OF COURSE, IN HIS
LETTER TO UNITHOLDERS, MR. ICAHN FAILED TO ADDRESS THE PRESENT
ESTIMATED LIQUIDATION VALUE OF THE UNITS.
AS WE HAVE STATED BEFORE, THE PARTNERSHIP HAS DETERMINED TO BEGIN
AN ORDERLY LIQUIDATION OF ALL THE PARTNERSHIP'S ASSETS. Although
there can be no assurance as to the timing of any liquidation, it
is anticipated that such liquidation would result in distribu-
tions to all Unitholders of the cash proceeds from the sale of
the Partnership's properties as they are sold and the dissolution
of the Partnership followed by a liquidating distribution to all
Unitholders before December 2001. THE PARTNERSHIP'S LIQUIDATION
PLAN IS ONE OF THE MAJOR REASONS THAT THE UNITS ARE AN ATTRACTIVE
INVESTMENT FOR MR. ICAHN -- IT GIVES HIM THE ABILITY TO MAKE - IN
HIS OWN WORDS -- A "GOOD RETURN" ON HIS MONEY FROM PURCHASING
YOUR UNITS.
ON OCTOBER 17, 1996, MCNEIL REAL ESTATE FUND XXVII, L.P. AN-
NOUNCED THAT IT HAD RECEIVED AN UNSOLICITED OFFER FROM AN UNAF-
FILIATED THIRD PARTY TO ACQUIRE ALL OUTSTANDING UNITS OF FUND
XXVII AT $6.50 PER UNIT, WHICH IS 15% MORE THAN MR. ICAHN IS
OFFERING FOR SUCH UNITS. After meeting with the offeror in
Dallas and considering the $6.50 offer, the partnership rejected
it as being inadequate because the Present Estimated Liquidation
Value of Fund XXVII's Units is between $8.37 and $8.64 per Unit.
UNITHOLDERS OF MCNEIL REAL ESTATE FUND V, LTD. WHO DID NOT TENDER
THEIR UNITS TO MR. ICAHN ARE EXPECTED TO RECEIVE APPROXIMATELY
82% MORE THAN HIS 1995 OFFER PRICE FOR THEIR UNITS. Last August,
Mr. Icahn offered $400 per unit for McNeil Real Estate Fund V,
Ltd. Since then, Fund V distributed $83.40 cash to unitholders
and, on September 10, 1996, holders of Fund V's units approved
the liquidation and dissolution of Fund V, pursuant to which it
is anticipated that all unitholders will receive a cash distribu-
tion of approximately $643.07 per Unit, subject to reserves and
adjustment. 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 FUND V PROVIDES SOLID SUPPORT FOR OUR VIEW THAT
MR. ICAHN'S CURRENT OFFER PRICE FOR YOUR UNITS IS INADEQUATE AND
NOT IN THE BEST INTERESTS OF EITHER THE PARTNERSHIP OR
UNITHOLDERS AND WE STRONGLY RECOMMEND THAT YOU REJECT IT.
IN THE EVENT YOU HAVE ANY QUESTIONS, PLEASE CONTACT THE HERMAN
GROUP, INC. AT (800) 658-2007.
Very truly yours,
Donald K. Reed
McNeil Partners, L.P.
General Partner
P.S. If you are one of the few who tendered your Units
and have second thoughts about your decision, we
have included a withdrawal form for your conve-
nience.