May 11, 2007
Christina Chaulk
Office of Mergers and Acquisitions
Securities and Exchange Commission
Washington, D.C. 20549-0303
Re: Amrecorp Realty Fund II, Schedule TO-T filed April 23, 2007 by
MacKenzie Patterson Fuller, LP and its affiliates, the Purchasers
SEC File No. 005-54793
Dear Ms. Chaulk:
Thank you for your letter dated May 1, 2007 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. We disclose the fact that we made an earlier offer, and the date and
amount of that offer in two different locations in the Offer to
Purchase. It is in the Summary Term Sheet under "WHAT IS THE MARKET
VALUE OF MY UNITS?" and under "Establishment of the Offer Price."
Further, almost without fail, every unit holder would have received a
copy of that offer as well (and perhaps the 14D-9 filed with respect
to that offer), and would be fully aware of the previous offer. We do
not feel it is appropriate for the Staff to make comments about
whether or not disclosure items should be bullet points or otherwise.
Furthermore, we fail to see the materiality of the disclosure in any
case; the unit holders receiving this offer cannot avail themselves of
the previous offer and the purchasers do not have a plan or intention
of making "serial offers." In fact, 83% of the participants in this
offer were not a part of the last offer (i.e., only Steve Gold
participated in the last offer and this offer). The Purchasers and
their affiliates have conducted the following previous tender offers:
Everest Management, LLC made 3 offers: $65 per Unit on 4/17/01; $80
per Unit on 9/25/02; and $30 per Unit on 10/03/05; Affiliates of
MacKenzie Patterson Fuller, LP have made 4 offers (dates are
approximate): 7-1-1998, $40 Per Unit; 2-29-00, $30 Per Unit; 7-7-2003,
$80 Per Unit; 11-22-2006, $60 Per unit (net of distributions, as noted
below). Equity Resources is withdrawing from the Offer, so information
about their tender offers in the past was not requested.
2. We acknowledge that we have an obligation to disclose and disseminate
material information of which we are aware that is not publicly
available. Furthermore, should we make a material change in the terms
of our Offer, we will file an amendment and disseminate the changes.
3. We mailed the Offer to Purchase, Letter of Transmittal, and Letter to
Unit Holders to each limited partner of record, filed the same on
EDGAR, and posted the same on our website. Thus, we have complied with
Rule 14d-4's requirement that we "must publish, send or give the
disclosure required by Sec. 240.14d-6 to security holders...." The
instruction to paragraph (a) states that "tender offers may be
published or sent or given to security holders by other methods..."
Clearly, mailing a copy of the entire offer to each security holder
May 11, 2007
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satisfies the requirement that we "send" the offer to security
holders. Frankly, we are surprised by this comment. If the Staff has a
concern that is not addressed by our response, please let us know.
4. We will file an amendment clarifying that the Schedule TO was signed
by all bidders.
5. As disclosed in the Offer, the last tender offer was at $60 per Unit
net of distributions. Originally, it was $85 per Unit, but that was
prior to a $25 per Unit distribution made in late November 2006, so
the offer price was reduced to $60 per Unit, as disclosed in the
Partnership's Schedule 14D-9 filed with respect to that offer. The
offer by CMG Partners at $65 per Unit is the "latest offer" to which
we refer. As a point of clarification, our last offer ended December
29, 2006, not in January. As for the CMG Partners offer, we understand
that it began sometime on or before January 2007 and continued through
February 28, 2007, unless it was extended (our information is from the
General Partner's preliminary proxy filing). As to your comment about
this statement being misleading, we assume that our clarification
regarding the distribution resolves that concern. As to your comment
regarding the General Partner's recent offer, we disclose the details
of that offer no fewer than 4 times in the Offer, including below the
bullet point you reference. Further, in each instance we refer the
General Partner's offer in comparison to our Offer, but again, he has
abandoned that offer, as we disclose, so our comparison is based upon
a sale at that price, even though no such contract is in place.
6. We will note in future offers that notice of the extension will be
filed on EDGAR. The Summary Term Sheet already discloses that we will
issue a public announcement.
7. It is neither our intent nor is it likely that our offer will result
in deregistration eligibility. This offer is not one in a planned
series of transactions that is likely to have that result either. We
state already in the offer that "The Offer is not made with any
current view toward or plan or purpose of acquiring Units in a series
of successive and periodic offers." We also discuss the possibility of
deregistration, which in this case is highly unlikely with 1,470
limited partners. Lastly, we are not an affiliate of the Partnership,
so a 13e-3 filing would not be required even if our offer would
certainly result in deregistration.
8. The offer to purchase was made in an email to the general partner's
staff in early April. There were no conditions or terms negotiated
other than sale price; had we agreed on a sale price, those terms
would have been discussed at that point. The General Partner did not
provide a reason for its rejection of the offer; it just stated that
it would actively market the property and would entertain a bid from
us along with any other potential purchaser. We no longer have any
plans to purchase the property. If our offer had been accepted, we
estimate that limited partners would have received approximately $98
per Unit.
9. We have no plans or intentions with respect to purchasing or marketing
the property, as we disclose in the offer. At this point, if the
property is actively marketed, we are content to receive the benefits
of such a sale as limited partners.
10. We acknowledge your expectation.
11. The offer is to purchase "ALL Units of limited partnership interest
(the "Units") in AMRECORP REALTY FUND II (the "Partnership") not
already held by purchasers and their affiliates." The Purchasers and
their affiliates currently own 2,215.75 Units, so the 12,328.25 Units
May 11, 2007
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subject to the offer are all outstanding units that could be tendered.
We believe this is clearly disclosed in several places.
12. As indicated above, we have no plans to purchase the property. Our
negotiations with the general partner terminated, and the general
partner indicated that it would begin actively marketing the property.
13. We do not believe the condition in 13(e) is impacted by the
transaction proposed by the General Partner. The General Partner
proposed to purchase the property owned by the Partnership, not
additional units in the Partnership.
Closing paragraphs: While acknowledging the Staff's positions, and without
implying any specific issue with such position, we respectfully decline to make
the statements requested. There is no requirement that we do so. To the extent
the requested statements are accurate statements of applicable law, there is no
reason to obtain from bidders a recitation of such law. To the extent the
statements go beyond applicable law or reflect interpretations of law that may
be open to dispute, it would not be fair or appropriate to require bidders to
make statements that might prejudice their right to take a contrary position at
some later time, if the occasion arose.
Please let me know if you have any questions or further comments.
Very Truly Yours,
Chip Patterson
Senior Vice President and General Counsel
(925) 631-9100 ext. 206
(925) 871-4046 (Fax)
chip@mpfi.com