SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
BALCOR PENSION INVESTORS-II
(Name of Subject Company)
BALCOR PENSION INVESTORS-II
(Name of Person(s) Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Thomas E. Meador
Chairman
The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
(847) 267-1600
(Name, Address and Telephone Number of Persons Authorized to
Receive Notice and Communications on Behalf of the Person(s)
Filing Statement)
Copy To:
Herbert S. Wander
Lawrence D. Levin
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, Illinois 60661-3693
(312)902-5200
Item 1. Security and Subject Company
The name of the subject partnership is Balcor Pension Investors-II, an
Illinois limited partnership (the "Partnership"). The address of the
Partnership's principal executive offices is 2355 Waukegan Road, Suite A200,
Bannockburn, Illinois 60015. The Partnership's general partner is Balcor
Mortgage Advisors, an Illinois partnership (the "General Partner"). The title
of the class of equity securities to which this statement relates is the
Partnership's limited partnership interests (the "Units"), which are held by
the Partnership's limited partners (the "Limited Partners").
Item 2. Tender Offer of the Bidder
This statement relates to the unsolicited tender offer by Walton Street
Capital Acquisition Co. II, L.L.C., a Delaware limited liability company
("Walton Street"), to purchase up to 28,053 (but not more than 28,053)
(approximately 33%) of the Units at a purchase price of $249 per Unit, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 20, 1996 (the "Offer
to Purchase"), and the related letter of transmittal (which together constitute
the "Offer"). The Offer is disclosed in a Tender Offer Statement on Schedule
14D-1 dated May 20, 1996, as filed with the Securities and Exchange Commission
(the "Commission"). The Offer to Purchase states that the address of the
principal executive office of Walton Street is 900 North Michigan Avenue, Suite
1900, Chicago, Illinois 60611.
Walton Street has entered into an agreement (the "Assignment Agreement")
with Beattie Place LLC ("Beattie Place") pursuant to which, among other things,
Walton Street has assigned to Beattie Place the right to purchase approximately
16.2% of the Units tendered pursuant to the Offer. Beattie Place was organized
by Metropolitan Acquisition VII, L.L.C. ("Metropolitan") for the purpose of
acquiring Units pursuant to the Offer. Metropolitan owns 99.9% of the equity
interest in Beattie Place, and MAP VII Acquisition Corporation ("MAP"), which
is the managing member of Beattie Place, owns the remaining 0.1% interest in
Beattie Place. MAP also owns a 9.9% equity interest in, and is the managing
member of, Metropolitan. Each of Beattie Place, Metropolitan and MAP is an
affiliate of Insignia Financial Group, Inc. ("Insignia"). As described below,
other affiliates of Insignia have entered into certain agreements with the
Partnership regarding certain of the Partnership's property.
Item 3. Identity and Background
(a) The name and business address of the Partnership, which is the person
filing this statement, are set forth in Item 1 above.
(b)(i) The Partnership and its affiliates have the following material
contracts, agreements, arrangements and understandings and actual or potential
conflicts of interest with the Partnership, the General Partners and their
affiliates:
The General Partner is entitled to a certain percentage of the annual cash
flows of the Partnership resulting from the operations of the Partnership's
investments. For the quarter ended March 31, 1996, the General Partner
received $56,673 pursuant to this provision, of which $14,168.25 (25%) was
deposited into the Early Investor Incentive Fund.
(b)(ii) The Partnership and its affiliates have the following material
contracts, agreements, arrangements or understandings and actual or potential
conflicts of interest with Walton Street, or its affiliates:
Various present and former affiliates of Walton Street have talked with,
or made proposals to, affiliates of the General Partner in the ordinary course
about purchasing individual properties that were being marketed for sale by
such affiliates of the General Partner. In late 1993, affiliates of Walton
Street met with affiliates of the General Partner regarding the potential
acquisition of the General Partner. These meetings were exploratory in nature,
were unsolicited by affiliates of the General Partner and no information was
exchanged as a result of these meetings.
As of November 4, 1994, an affiliate of Insignia, which is the ultimate
parent entity of Beattie Place, entered into property management agreements
with respect to properties owned by the Partnership (collectively, the
"Property Management Agreements"). Specimens of the Property Management
Agreements are filed herewith as Exhibit 2. The Property Management
Agreements, which are terminable at the option of either party upon sixty days'
prior written notice, provide for annual fees of 5% of gross operating receipts
to be paid to Insignia on a monthly basis for residential properties and
between 3% and 6% of gross operating receipts for commercial properties
depending upon whether Insignia performs leasing services. The Property
Management Agreements may be terminated by the purchasers of the Partnership's
properties as the properties are sold.
As a result of this contractual arrangement, Beattie Place may have a
conflict of interest with the General Partner and the non-tendering Limited
Partners. Because of its affiliation with Insignia, Beattie Place may have an
interest in the Partnership continuing to pay the monthly property management
fees described above to Insignia. Sales of the Partnership's properties would
result in Insignia's loss of these fees if the purchaser of the properties were
to elect to terminate the Property Management Agreements for the properties.
As discussed below, any sale of all or substantially all of the Partnership's
properties in a single transaction or series of related transactions requires
the approval of the holders of a majority of the outstanding Units. Therefore,
Beattie Place may have a conflict of interest with any non-tendering Limited
Partner who may find such a sale desirable or with the General Partner if the
General Partner were to recommend such sale to the Limited Partners.
During the first half of 1995, affiliates of Walton Street approached
affiliates of the General Partner with regard to a variety of business
proposals, including a proposal to purchase all or a portion of the general
partners of the partnerships (including the Partnership) sponsored by
affiliates of the General Partner, or performing some or all of their various
general partner functions. These contacts were very preliminary and
exploratory in nature and the discussions concluded without reaching any
agreement. In addition, Insignia has previously had preliminary discussions
with the General Partner concerning the acquisition by Insignia of the general
partner interest in the Partnership held by the General Partner, but those
discussions are not currently active.
In April 1996, Insignia and the Partnership entered into Disposition
Support Agreements (each a "Support Agreement") with respect to two of the
Partnership's residential properties, pursuant to which among other things, the
Partnership has engaged Insignia to assist in the marketing of those
residential properties in connection with their proposed sale. The Support
Agreements are filed herewith as Exhibit 3. However, each Support Agreement
specifically states that Insignia is not authorized to negotiate on behalf of
the Partnership, or bind the Partnership to, any contract or other agreement of
any kind. Each Support Agreement provides that Insignia will be paid a fee for
its services which is based on the sale price of the subject property, but
Insignia is only entitled to such compensation if the property is sold.
Neither Walton Street nor any affiliate of Walton Street is a party or would
receive any income from the Support Agreement.
On several occasions during the first four months of 1996, representatives
of Walton Street met with representatives of the General Partner. During these
meetings: (i) Walton Street informed the General Partner that Walton Street
was considering making an offer to Limited Partners in the Partnership and for
limited partnership interests in certain partnerships affiliated with the
Partnership, (ii) requested information on properties held by the Partnership,
and (iii) requested a list disclosing the Limited Partners of the Partnership.
After the first meeting, Walton Street sent a letter to the General Partner
requesting a list of Limited Partners. The General Partner provided this list
to Walton Street on or about March 15, 1996 and, additionally, provided
information with respect to the Partnership's properties.
After the meetings, representatives of Walton Street and representatives
of the General Partner orally discussed several issues relating to the proposed
price at which Walton Street would seek to acquire Units. As part of these
discussions, representatives of Walton Street received certain preliminary
information orally concerning valuations being performed by Alex. Brown & Sons
Incorporated ("Alex. Brown") at the request of the General Partner which
indicated a preliminary value, subject to change, of $356-362 per Unit. The
representatives of Walton Street and the representatives of the General Partner
exchanged views on the value of the Partnership's assets. The General
Partner's view of the current value of the Partnership's assets, in the
aggregate, is not materially different from that of Walton Street. Of course,
the process of valuing an asset is subject to, and affected by, a number of
factors including but not limited to interest rates, the capital marketplace,
investor demand and property performance. Each of these valuation factors are
variable and, as such, the value of an asset is subject to change either
positively or negatively. Moreover, these factors affect not only the value of
the assets, but the appropriateness of the discount from Partnership value to
the offering price for the Units. Therefore, in evaluating the offering price,
each Limited Partner must determine whether the discount from current value of
the offering price is appropriate first with respect to the risk associated
with whether and when the assets can ultimately be sold at their current value
and second with respect to their own individual investment objectives and need
for liquidity.
The ownership of a substantial number of Units by any person or entity
presents a potential conflict of interest between such person or entity on the
one hand and the General Partner and any nontendering Limited Partners on the
other hand. If the transactions contemplated in the Offer were to be
consummated, Walton Street could own a substantial number of Units.
Furthermore, following the completion of the Offer, Walton Street may acquire
additional Units through private purchases, one or more future tender offers or
any other means deemed advisable by Walton Street. The ownership of a large
block of Units by Walton Street would enable Walton Street to significantly
influence decisions of the Partnership with respect to certain Partnership
matters.
Holders of a majority of the outstanding Units are entitled to vote to
take any of the following actions: (i) remove the General Partner; (ii) elect
or approve a successor to any removed or withdrawn General Partner; (iii)
dissolve the Partnership; and/or (iv) amend the Partnership's Partnership
Agreement (the "Partnership Agreement"). In order to amend certain provisions
of the Partnership Agreement, approval by the General Partner as well as an
affirmative vote by the holders of a majority of the outstanding Units is
required. Similarly, subject to certain limited exceptions, the consent of the
General Partner and an affirmative vote by the holders of a majority of the
outstanding Units is required to sell all or substantially all of the assets of
the Partnership in a single transaction or a series of related transactions.
Limited Partners holding more than 10% of the Units are entitled to call a
meeting at which the matters described in this Item 3(b)(ii) may be submitted
to a vote of the Limited Partners. Therefore, such ownership by Walton Street
may increase the likelihood that any one or more of the actions described in
this Item 3(b)(ii) may or may not be taken by the Partnership. Such actions
may conflict with the General Partner' intentions and/or any non-tendering
Limited Partner's desires with respect to such Partnership matters.
If the General Partner is removed as General Partner by the Limited
Partners at some future date, such removal may adversely impact the employment
needs of The Balcor Company, a partner of the General Partner.
Except as set forth in Items 3(b)(1) above and this Item 3(b)(2), there
are no material contracts, agreements, arrangements or understandings, or any
actual or potential conflicts of interest between the Partnership or any of its
affiliates and (i) the General Partner, its executive officers, directors or
affiliates or (ii) Walton Street, or its executive officers, directors or
affiliates.
Item 4. The Solicitation or Recommendation
(a) The General Partner is expressing no opinion and remaining neutral
with respect to the Offer.
(b) The General Partner is not making a recommendation and is remaining
neutral with respect to the Offer because (i) on the one hand, the General
Partner recognizes that Walton Street is making the Offer with a view to making
a profit at the expense of the Limited Partners and the offering price is below
the current liquidation value per Unit provided by Alex. Brown while, (ii) on
the other hand, the Offer provides Limited Partners who desire immediate cash
with the opportunity to immediately liquidate their investment in the
Partnership. Although the General Partner is not making a recommendation with
respect to the Offer, the General Partner believes that the Limited Partners
should consider the following factors in making their own decision of whether
to accept or reject the Offer:
(i) The Partnership engaged Alex. Brown to prepare a current
liquidation value of the Partnership. The Alex. Brown definition of current
liquidation value assumes an orderly liquidation of the remaining assets of the
Partnership over a 12 month period. The Alex. Brown value as of March 31, 1996
is $356-362 per Unit for those investors who purchased their Units after
December 31, 1981 (depending upon assumptions made about prepayment penalties)
and $401-408 per Unit for those investors who purchased their Units on or prior
to December 31, 1981 ("Early Investors"). This value includes the first
quarter distribution which was paid in April, 1996 in the amount of $6.00 per
Unit. Therefore, the net Alex. Brown value is $350-356 per Unit and $395-402
per Unit for Early Investors (the Alex. Brown opinion of value is attached to
this letter). The Walton Street offer is 71% - 70% of the net Alex. Brown
value, respectively, and 63%-62%, respectively, for Early Investors.
Additionally, as you know, the Partnership receives valuations
quarterly from Valuation Counselors Group and Darby & Associates ("Darby").
The Darby valuation represents the value of a Unit based upon the present value
of the Partnership's projected future cash flows and the sale of the
Partnership's assets within the next 12 months. As such, it is not intended to
represent the value for which a Unit could be liquidated today and therefore is
different from the Alex. Brown value. The Darby valuation as of March 31, 1996
is $386 per Unit and $442 per Unit for Early Investors. The net Darby value
(after deducting the first quarter distribution of $6.00 per Unit) is $380 per
Unit and $436 per Unit for Early Investors. The Walton Street offer is 66% and
57% of the net Darby value, respectively.
(ii) The Partnership continues to repurchase Units (as described in
the Partnership's original prospectus) from Limited Partners through the Early
Investment Incentive Fund (the "Fund"). Currently, the Fund owns approximately
7,310 Units (8.6% of the total outstanding Units). The Fund purchases Units on
a first-come first-served basis. The purchase price for Units by the Fund is
equal to 95% of the Partnership's most recent valuation less any distributions
made subsequent to the valuation date. The Fund most recently purchased 272
Units for $363.60 per Unit and 95 Units for $319.90 per Unit during the fourth
quarter of 1995. Approximately 990 Units are currently on a waiting list to be
purchased by the Fund. The General Partner believes that, based upon its
projections of cash being deposited into the Fund for the purchase of Units,
the Fund will be able to purchase all 990 Units on the waiting list plus
approximately 50 additional Units during the first six months of 1996. Dollars
available to the Fund to repurchase Units are limited and, therefore, there may
not be sufficient dollars available to repurchase all Units on a current basis
if more Units are offered to the Fund than cash is available to repurchase
Units. If you are interested in selling Units to the Fund, you may call (800)
422-5267 for further information.
(iii) As of March 31, 1996, the Partnership had cash reserves of
approximately $27.12 per Unit, which represents 11% of Walton Street's offering
price. This cash reserve has been adjusted to deduct the quarterly
distribution of $6.00 which was declared as of March 31, 1996 and paid in
mid-April, 1996. Based upon current operations, the Partnership currently
expects to make a distribution of $6.00 per Unit in mid-July, 1996. If you
elect to tender your Units to Walton Street, this distribution will either be
paid directly to Walton Street or deducted from their offering price for your
Units.
(iv) The most recent issue of Partnership Spectrum (April/May 1996)
indicates that the Units traded in a range from $258 to $285 during the sixty
day period ended March 31, 1996, reflecting 10 trades. These prices do not
reflect commissions that may be payable by the sellers to third parties, so
that the actual proceeds received by a seller may be reduced. Due, in part, to
the inefficiencies of these secondary markets, there can be no assurance that
future secondary trades will result in similar trading prices.
(v) The Partnership has six remaining assets of which one is a
mortgage loan and five are operating properties. As previously communicated to
investors, the Partnership is now in its liquidation stage and the strategy is
to sell or otherwise dispose of its remaining assets by the end of 1997. In
that regard, the Partnership has entered into a contract to sell Cumberland
Pines apartments and a letter of intent to sell Sherwood Acres (Phases I and
II) apartments. The negotiated price for Cumberland Pines is substantially the
same as the Alex. Brown valuation for this property. However, the negotiated
price for Sherwood Acres is approximately 28% higher than the Alex. Brown
valuation for this property. If both sales are consummated the net proceeds
from these two assets alone would result in a distribution of proceeds to
holders of Units of approximately $188 per Unit or approximately 76% of the
Walton Street offer. No assurance can be given that the transaction with
respect Cumberland Pines will be closed, or that a contract will be entered
into with respect to Sherwood Acres (Phases I and II) Apartments, or what the
final distribution will be if either or both of the transactions are
consummated. The other assets in the Partnership are being marketed for sale
and proceeds will be distributed to investors upon their sale or disposition.
(vi) Limited Partners that generally are exempt from Federal income
taxation will generally not be taxed on a sale of Units pursuant to the Offer.
Acceptance of Walton Street's Offer will constitute a taxable event to taxable
Limited Partners. However, both non-taxable and taxable Limited Partners
should consult with their personal tax and legal advisors prior to accepting
the Offer and tendering their Units.
Item 5. Persons Retained, Employed or to Be Compensated
The Partnership has retained Darby each year since the inception of the
Partnership to provide an annual valuation of the Units. The Partnership paid
Darby aggregate fees and reimbursement of expenses of $25,104 for the year
ended December 31, 1995. In addition, the Partnership retained Alex. Brown for
the purpose of providing a current liquidation value of the Partnership. The
Partnership paid Alex. Brown a fee of $102,482 for such valuation. None of the
Partnership, the General Partner or any person acting on behalf of any of them
has retained any other persons to make solicitations or recommendations to
holders of Units in connection with the Offer.
Item 6. Recent Transactions and Intent with Respect to Securities
(a) To the best of the General Partner's knowledge, no transactions in
the Units have been effected during the past 60 days by the Partnership, the
General Partner or any partner, executive officer, director, affiliate or
subsidiary of either such entity.
(b) To the best of the General Partner's knowledge, none of the
Partnership, the General Partner, the Early Investor Incentive Fund or any
partner, executive officer, director, affiliate or subsidiary of each such
entity presently intends to tender any Units that are held of record or
beneficially owned by such persons pursuant to the Offer.
Item 7. Certain Negotiations and Transactions by the Subject Company
(a) No negotiations are being undertaken or are underway by the
Partnership in response to the Offer which relate to or would result in: (1) an
extraordinary transaction such as a merger or reorganization involving the
Partnership or any affiliate controlled by the Partnership; (2) a purchase,
sale or transfer of a material amount of assets by the Partnership or any
affiliate controlled by the Partnership; or (3) any material change in the
present capitalization or distribution policy of the Partnership.
(b) There are no transactions, General Partner resolutions, agreements in
principle or signed contracts in response to the Offer that relate to or would
result in one or more of the events referred to in Item 7(a), although the
General Partner has descried certain discussions between the General Partner
and third parties under Item 3(b)(ii).
Item 8. Additional Information to be Furnished
(a) Tax Discussion
Tax-exempt Limited Partners. Limited Partners that are generally exempt
from Federal income taxation (such as pension and retirement plans and
religious, charitable, scientific, literacy and educational organizations (the
"Tax-exempt Limited Partners")) will generally not be taxable on a sale of
Units pursuant to the Offer. However, in order to avoid tax on the sale,
certain entities exempt under Section 501(c)(7), (c)(9), (c)(17) and (c)(20) of
the Code must set aside or reserve the income from the sale for purposes
related to their tax-exempt status, as described in Section 512(a)(3) of the
Code. In addition, to the extent the Units of a Tax-exempt Limited Partner are
considered debt-financed property as a result of borrowing by such Partner, all
or part of the gain from the sale of the Units may be taxable as unrelated
business taxable income (although certain "qualified organizations" may be
excepted from taxation under Section 514(c)(9) of the Code). Also, a
Tax-exempt Limited Partner would be taxable on a sale of Units in the unlikely
event the Units are considered includible in inventory of the Partner or held
primarily for sale to customers in the ordinary course of business.
Taxable Limited Partners. Limited Partners that are not exempt from
Federal income tax ("Taxable Limited Partners") will recognize gain on a sale
of a Unit pursuant to the Offer to the extent that the amount realized exceeds
the Limited Partner's adjusted tax basis in such Unit. Notably, any gain
realized by a Taxable Limited Partner may possibly be offset by losses from
other "passive activities" under the passive loss rules of Section 469 of the
Internal Revenue Code of 1986, as amended (the "Code"). In the event a Taxable
Limited Partner realizes a loss on disposition, such loss may be deductible
only to the extent permitted under the passive loss rules and other applicable
limitations. If a Taxable Limited Partner sells all Units (and such Units have
not been aggregated for purposes of the passive loss rules with activities not
currently being sold), loss recognized on the sale should be deductible by such
Taxable Limited Partner against non-passive income, subject to any other
applicable limitations (including capital loss limitations). Taxable Limited
Partners should also consider the possibility of changes in the tax rate on
long-term capital gains, as well as other tax law changes, in evaluating the
Offer.
In addition, other considerations could affect a Limited Partner's tax
liability, including, but not limited to, alternative minimum taxes and state
income taxes.
(b) Class Action Lawsuits
(i) In February 1990, a proposed class-action complaint was filed,
Paul Williams and Beverly Kennedy, et al. vs. Balcor Pension Investors, et
al., Case No.: 90-C-0726 (U.S. District Court, Northern District of Illinois).
The Partnership, the General Partner, seven affiliated limited partnerships
(together with the Partnership, the "Related Partnerships") and other
affiliates are the defendants. The complaint alleges violations of Federal
securities laws as to the adequacy and accuracy of disclosure of information in
the offering of limited partnership interests in the Related Partnerships and
alleges breach of fiduciary duty, fraud, negligence and violations under the
Racketeer Influenced and Corrupt Organizations Act. The complaint seeks
compensatory and punitive damages. The defendants subsequently filed a
counterclaim asserting claims of fraud and breach of warranty against certain
plaintiffs, as well as a request for declaratory relief regarding the
defendants' rights to be indemnified for their expenses incurred in defending
the litigation. The defendants seek to recover for damage to their reputations
and business as well as costs and attorneys' fees in defending the claims.
In May 1993, the Court issued an order denying the plaintiffs' motion
for class certification based principally on the inadequacy of the individual
plaintiffs representing the proposed class. However, the Court gave plaintiffs
leave to propose new individual class representatives. Upon the defendants'
motion, the Court ordered plaintiffs' counsel to pay $75,000 to the defendants
and $25,000 to the Court for costs incurred with the class certification
motion, which amounts continue to be outstanding.
In July 1994, the Court granted plaintiffs' motion certifying a class
relating to the Federal securities fraud claims. The class certified by the
Court includes only the original investors in the Related Partnerships. The
defendants filed a motion for reconsideration in opposition to the class
certification, which was denied in December 1994. The Court approved the
Notice of Class Action in August 1995 which was sent to potential members of
the class in September 1995.
Defendants have been engaged in settlement discussions with counsel
for the plaintiff class and a tentative settlement has been agreed to in
principle, subject to court approval. The General Partner believes that the
terms of this settlement, even if finally accepted by the parties and approved
by the Court, should not be a material factor in an investor's decision whether
or not to accept this tender offer. There is of course no assurance that this,
or any other settlement will in fact be agreed to by the parties and approved
by the Court, nor can the General Partner predict what the final terms of any
settlement might be. Unless and until a settlement is reached, the defendants
intend to continue vigorously contesting this action. Management of each of
the defendants believes they have meritorious defenses to contest the claims.
It is not determinable at this time whether or not an unfavorable decision in
this action would have a material adverse impact on the Partnership.
(ii) On May 22, 1996, a purported class action lawsuit was filed as
Tom Chipain, et al. v. Walton Street Capital Acquisition II, LLC, et al.
(Circuit Court of Cook County, Illinois, Chancery Division). The General
Partner and the general partners of nine affiliated limited partnerships,
together with Walton Street, Metropolitan, Beattie Place and certain of their
affiliated entities and individuals are the defendants. The named plaintiffs
are partners in four of the partnerships which are the subject of the Walton
Street tender offer. The Complaint alleges that the defendants individually
and, with respect to certain of the defendants, in concert have breached their
fiduciary duty owed to limited partners in connection with the conduct of the
tender offer and further alleges that certain aspects of the tender offer are
coercive and unfair. With respect to the General Partner, the Complaint
alleges that it breached fiduciary duties to limited partners by failing to
prevent the tender offer or taking other steps to obtain a better price for
limited partners. The Complaint seeks certain injunctive relief and
compensatory damages.
The General Partner believes that the allegations in this action are
unfounded and without any basis in law or fact and the General Partner intends
to take such steps as it deems appropriate in response to this action. It is
not determinable at this time whether or not an unfavorable decision would have
a material adverse impact on the Partnership.
Item 9. Material to be Filed as Exhibits
1. (a)(1) Letter to Investors, dated May 28, 1996
2. (c)(1) Specimen Property Management Agreements
3. (c)(2) Specimen Disposition Support Agreement
4. (c)(3) Alex. Brown Valuation Report
5. (c)(4) The Darby Valuation Report [to be filed by amendment]
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: May 28, 1996 BALCOR PENSION INVESTORS-II
By: Balcor Mortgage Advisors, its general
partner
By: RGF-Balcor Associates, a general
partner
By: The Balcor Company, a general
partner
By:/s/ Thomas E. Meador
------------------------------
Thomas E. Meador, Chairman and
President