BellaVista Capital, Inc.
15700 Winchester Blvd.
Los Gatos, CA 95030
June 5, 2009
BY EDGAR AND FACSIMILE
David L. Orlic, Esq.
Attorney-Advisor
Office of Mergers and Acquisitions
Division of Corporation Finance
Securities and Exchange Commission
Washington, D.C. 20549
Facsimile: 202-772-9203
Re: BellaVista Capital, Inc.
Soliciting Materials pursuant to Rule 14a-12
File No. 000-30507
Dear Mr. Orlic:
I am writing in response to your letter dated June 1, 2009 regarding
the above-referenced registrant (the "Company"). Responses to the comments
included in your letter are numbered to correspond to the numbered comments in
your letter.
1. The Company acknowledges its obligation to clearly characterize each
statement or assertion of opinion or belief, and to have a reasonable
basis in fact for each such opinion or belief. Set forth below are the
statements cited in your letter and the support for such statements.
MacKenzie Patterson Fuller ("MPF") intends to take "complete control" of the
Company's operation, management and board of directors oversight
We believe this intention is self evident from MPF's own soliciting
materials and preliminary proxy materials, and from its actions as reflected in
these materials, as well as the takeover proposals described in the Company's
letters filed with its Current Reports on Form 8-K dated April 7 and April 23,
2009. Initially, in a letter sent by MPF to the Board of BellaVista on March 20,
2009, MPF demanded that the entire Board resign and appoint MPF representatives
to fill all resulting vacancies with the stated intention to appoint MPF as the
exclusive asset manager and administrative service provider. They demanded an
answer in 10 days. After Company management engaged in correspondence and
discussions with MPF, with the result that the Company declined MPF's proposal
David L. Orlic, Esq.
June 5, 2009
Page 2
for the reasons stated in the second Current Report, MPF promptly commenced the
current proxy solicitation seeking board control, together with control of asset
management and administration. Further, MPF has stated its intention to
terminate any compensation to current management, and to retain for itself all
compensation for management and control of the Company. In the context of the
Company's limited business and size, this constitutes an intention to take
"complete control."
The soliciting material disseminated by MacKenzie is "a highly misleading
document with numerous misrepresentations and false allegations"
The Company included a 19 point discussion of the false and misleading
statements made by MPF in their additional soliciting materials. We believe
these 19 points support the statements made by the Company. For example, the MPF
materials reiterate their claims that administration of the company for a fee
equal to "2% of the assets" would generate material cost savings over the
Company's current expense levels. The Company spent a great deal of time and
effort to compile and disclose to MPF, subject to a confidentiality agreement,
the information demonstrating that their expense claims were not accurate. MPF
has chosen to continue to make claims regarding expenses and cost savings that
they either know have no basis or know to be false.
In this regard, we would also point out that MPF's most recent letter to
shareholders continues their false and misleading campaign. In this most recent
letter is the apparent claim that MPF can generate 20% per annum returns, double
the returns that the Company's current portfolio of trust deed investments
generate, with no mention of the relative liquidity and level of risk. We know
of no basis in fact for their claims of MPF's historic returns, as MPF and its
dozens of private investment fund partnerships are not publicly reporting
entities and no public or independently verified information, beyond their
unsupported statements, is available concerning MPF investment fund returns.
MacKenzie "specializes in taking advantage of holders of illiquid securities"
We believe that MPFs publicly available history, as evidenced by the tender
offers to purchase illiquid real estate securities it has regularly filed with
the SEC over the past twenty years (as well as hundreds of unfiled "mini
tenders") makes MPF's "specialty" a matter of the public record. MPF's business
model is designed to find untraded securities, typically acquired by investors
in initial offerings with intended long term holding periods, and offer cash to
purchase these securities for pennies on the dollar of the estimated underlying
asset value. Investors who are unable or unwilling to continue to hold these
securities, or who may be unaware of the value they thereby give up, tender
their interests to MPF. MPF raises capital from its own investors in order
acquire and hold these investments in their investment pools at substantial
discounts to the underlying asset values of the target issuers. MPF's own web
site (http://www.mpfi.com/mpf/cpy_profile.html) states:
David L. Orlic, Esq.
June 5, 2009
Page 3
"Through its investment advisory affiliate, MPF Advisers, LP, the
skilled team of MPF real estate professionals takes an innovative
approach to capitalizing on market inefficiencies. Concentrating on its
niche marketplace, MPF searches for thinly traded public and private
limited partnership securities and shares of real estate investment
trusts that may be undervalued for a variety of reasons - such as
temporary illiquidity, control issues, excess leveraging, or capital
needs of the partnership - and must trade at a discount. After
acquiring the securities, the firm works to reduce or eliminate the
liquidity problem and recover the asset value."
The "market inefficiencies" and "thinly traded securities" noted on their web
site under "Value Added Strategy" refer to their investment in securities,
like those of the Company, for which there is no trading market and no easily
ascertainable market value. As a consequence, these professional investors
take advantage of the opportunity to capitalize on individual holders' need
for liquidity, and lack of information about value, by offering them steeply
discounted prices.
For the foregoing reasons, we believe the cited statements are either self
evident, or are supported by information set forth in the Company's materials
as well as those of MPF.
*****
In connection with the foregoing, the Company hereby acknowledges that:
- - The Company is responsible for the adequacy and accuracy of the disclosures
in its filings;
- - Staff comments or changes to disclosure in response to staff comments do
not foreclose the Commission from taking any action with respect to the
filing; and
- - The Company 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.
If you have any further questions or comments, please contact me at (408)
396-3971, or contact our counsel, Paul Derenthal, at (510) 350-3070.
Very truly yours,
/s/ WILLIAM OFFENBERG
William Offenberg
Chief Executive Officer
cc: Paul J. Derenthal, Esq.