EVEREST
199 S. LOS ROBLES AVE., #200
PASADENA, CA 91101
TEL: 626-585-5920
FAX: 626-585-5929
December 16, 2005
Via Facsimile: (202) 772-9203
and submitted via EDGAR
Abby Adams
Office of Mergers and Acquisitions
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-3628
Re: Wilder Richman Historic Properties II (the "Partnership")
Schedule TO-T filed by Everest Properties II, LLC
on November 14, 2005
Dear Ms. Adams:
This letter responds to the Staff's comments conveyed in your letter of
December 14, 2005. Numbered paragraphs below correspond to the numbered
paragraphs in your letter.
1. Please see our response paragraph 2. Please note that Dixon has filed a
previous tender offer on the Partnership and stated that neither Dixon nor the
Operating General Partner is an affiliate of the Partnership (Schedule TO filed
February 26, 2004). Please also note that the Partnership has not identified the
Operating General Partner or Dixon as an affiliate in its most recent (or any
prior) Form 10-K filing, or in its Schedule 14D-9 filing relating to this offer.
2. Please see our response paragraph 1. We believe, based on the
regulations and our previous experience with the Staff's interpretation thereof,
that the Staff would agree that none of the bidders, taken individually, would
be an affiliate. We have not found any authority or precedent for the
proposition that three non-affiliates can become affiliates by acting as a group
with respect to a tender offer, and under what standards such a group of
non-affiliates becomes an affiliate. If you are aware of any such authority or
precedent, please advise us.
Without such authority or precedent, we do not believe it is appropriate to
require the bidders to comply with a much more cumbersome, regulatory regime.
Such bidders have no voting agreement, do not have the actual ability to remove
the general partner or make any other partnership decisions unilaterally, and do
not have any indicia of control over the Partnership or its general partner.
Further, fulfilling such request is probably unattainable by the Purchasers for
the very same reason that they are not affiliates: they lack the requisite
control over the Partnership.
3. Please note the following text (emphasis added) in Sections 1 and 2
under Details of the Offer, in the Offer to Purchase (as amended):
"the Purchasers will accept and purchase, in accordance with the procedures
set forth in this Offer to Purchase, ALL validly tendered, and not
withdrawn, Units not already held by Purchasers and their affiliates
("Properly Tendered");"
"the Purchasers will purchase and will pay for ALL Properly Tendered Units,
promptly following the Expiration Date;" and
"[i]n all cases, payment for Units purchased pursuant to the Offer will be
made only after timely receipt by the Purchasers of: . . . (iii) written
confirmation from the Partnership of the transfer of the Units to the
Purchasers or the General Partner confirms ownership of and changes the
distribution address for the Units.
Accordingly, the Units may be "accepted for purchase" by the bidders
regardless of any transfer restrictions the Partnership may have. Payment for
the Units will be made when the transfer is confirmed, OR when the General
Partner confirms that the tendering Unit Holder does own the Units and changes
the address of record for future distribution to the appropriate bidder's
address. Such address changes are common practice in limited partnerships like
the Partnership. We understand the Staff has accepted such language in the past
with respect to this issue. Please see, e.g., Schedule TO filed June 23, 2005 re
1999 Broadway Associates Limited Partnership.
Based on our estimates, the 50% limit to avoid a Tax Termination will not
come up except in the unlikely event that more than 325 of the remaining 408.5
Units are tendered (to date, 24 Units have been tendered). In such case, the
effect of a "Tax Termination" would mainly affect the bidders themselves (and
their affiliates), as the holders of 90% of the Units. Also, for limited
partnerships holding real estate assets, the actual effect of a Tax Termination
is often immaterial. We do not know whether or not the General Partner would
waive the 50% limit but, for the foregoing reasons, a general partner might
waive the restriction. We are aware of general partners that have done so in the
past.
4. Please see response paragraph 3. We expect to comply with the prompt
payment rule because we believe the conditions for payment are designed so that
they will be satisfied promptly. Since we must wait for the General Partner to
act, we cannot specify the number of days between expiration and payment, but
there is no reason to anticipate that such period will be any longer than the
typical time for tender offers on partnerships like the Partnership.
5. We did not delete disclosure in response to comment 6 in your letter
dated November 23, 2005; we amended the related bullet point. We believe the
amended bullet point adequately explains the issue to Unit Holders, and in
addition it obliges us to alert Unit Holders "if the Purchasers extend the
Expiration Date to a date that would not allow the Purchasers to submit
transfers in December 2005, or if the Purchaser[sic] becomes aware of any other
reason that Unit Holders may not obtain a year-end transfer and a final K-1 for
2005." So if a Tax Termination is threatened because the number of Units
tendered approaches 325, the Purchasers have committed "to disseminate
additional tender offer materials to Unit Holders to advise them of such
development and the effect thereof."
6. In response to the comment, the reference to materiality to the
Purchaser is being deleted, and condition (c) is being amended. There are no
government approvals known to be required for the Offer.
7. The Purchasers believe that they have stated the material federal income
tax consequences of the transaction to Unit Holders.
We are filing an amendment concurrently with this letter. We do not believe
that the amendment materially changes the information already provided to the
Unit Holders. Please contact the undersigned if you have any questions regarding
our responses to the Staff's comments and to advise us if the Staff has any
further comments.
Very truly yours,
/S/ CHRISTOPHER K. DAVIS
----------------------
Christopher K. Davis
Vice President and General Counsel
CKD:ckd
Enclosures with fax copy
cc w/e: Mark Bava (Dixon)
Chip Patterson (MPF)