March 3, 2005
Celeste M. Murphy
Office of Mergers and Acquisitions
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0303
Re: Inland Capital Fund, L.P., Schedule TO-T filed February 23, 2005 by
MacKenzie Patterson Fuller, Inc. and its affiliates, the Purchasers
SEC File No. 005-80567
Dear Ms. Murphy:
Thank you for your letter dated March 2, 2005 regarding our recent Schedule
TO-T. I will respond to the questions you asked in your letter in the order in
which you posed them.
1. Financial statements of the purchasers would not add material disclosure
to the available information. As disclosed, the offer will be funded
through the existing capital of the purchasers. As stated in the
offer materials, the purchasers have aggregate capital which is more
than adequate to fund the offer. The specific facts and circumstances of
this offer should be understood. Absent a tender offer filed under
Section 14(d)(1) of the Securities Exchange Act, the purchasers would
have little or no access to the security holders and the holders
would have little or no access to potential purchasers. Because of the
lack of liquidity of the securities, the uncertainty as to the
underlying value of the securities and the issuer's assets, and the
extraordinary per unit costs of using a tender offer as the means for
purchasing the securities, the offer prices are substantially
discounted from the estimates of liquidation value of the issuers. It is
therefore anticipated that only those securities holders who have an
immediate need for liquidity will seek to sell their securities. Based
on the extensive past experience of both the purchasers and others
who have tendered for illiquid securities in similar circumstances, the
purchasers do not reasonably expect to receive more than 10% to 25%
of the total number of securities sought and will likely receive
substantially less than that. Of course, the purchasers could have
tendered for 100% and would not have expected any different response,
but such a tender would have been unrealistic. Accordingly, while the
purchasers are prepared and able to fund the entire offer, as a
practical matter, the actual funds necessary to complete the offer
are reasonably expected to be substantially less than the cash reserves
held by the purchasers. This offer is for immediate cash payment and
no securities of the bidder are to be used. No evaluation of
securities or credit risk is therefore relevant to this offer. The
bidder neither seeks control, nor would it, if successful in
purchasing all securities sought, gain control of any issuer, so no
evaluation of the bidders' financial condition is relevant in that
respect. No market exists for the securities and no competing bidder is
seeking to purchase the securities, so no real alternative
opportunities are available to be evaluated over the period of the
offer. Given the circumstances and terms of this offer, to require
inclusion of financial statements for this offer would involve
unnecessary and unreasonable time, effort, and expense, without
March 3, 2005
Page 2 of 2
providing any more material information to prospective sellers than the
information presented in the Offer. Any additional document preparation,
financial statement preparation, and subsequent mailing costs would add
substantial additional cost to the offer without any material impact on
disclosure. Based on the foregoing, we believe the financial statements
presented together with disclosure of the other sources of funds provide
all financial information material to a security holder's evaluation of
the offer.
2. Item 1016 of Regulation M-A requires the filing of certain exhibits,
but we do not believe that the informal arrangement between the
purchasers for the allocation of units tendered pursuant to the Offer
falls within any of the provisions of Item 1016. Furthermore, the
arrangement is not definitive in that it needs to be flexible based
upon the results of the tender offer. Disclosure of such details would
not be material to a prospective seller because the terms of the Offer
are not affected by the allocation between the purchasers.
3. I am a bit surprised by this comment. My review of various Schedule
TOs, including, for example, the Oracle tender offer for Peoplesoft,
indicates that many bidders do not make this notation. We believe that
the preface to the Item, which says "If the Schedule TO is combined
with Schedule 13E-3...," implies that unless the Item is noted, it is
inapplicable, although I understand that you are relying on the
instruction indicating that if an item is inapplicable, we should so
state. Additionally, the fact that this is a Schedule TO-T necessarily
implies that Item 13 would be inapplicable (it could not be a
going-private transaction by a private party). Nonetheless, we will in
the future note that Item 13 is inapplicable, and amend the current
Schedule TO-T.
4. You have requested that we acknowledge, and we hereby do acknowledge,
that we are responsible for the adequacy and accuracy of the disclosure
in the filings and that staff comments or changes to disclosure in
response to staff comments in the filings reviewed by the staff do not
foreclose the Commission from taking any action with respect to the
filing and that we may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
Please let me know if you have any questions or further comments.
Very Truly Yours,
/s/ CHIP PATTERSON
Chip Patterson
Vice President and General Counsel
(925) 631-9100 ext.
206 (925) 871-4046 (Fax)
chip@mpfi.com