SCHEDULE 14A
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SCHEDULE 14A INFORMATION
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SECURED INVESTMENT RESOURCES FUND, L.P.
(Name of Registrant as Specified in Its Charter)
Everest Properties II, LLC
Millenium Management, LLC
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
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VOTE VOTE VOTE VOTE VOTE VOTE
Everest Properties II, LLC
Millenium Management, LLC
155 N. Lake Avenue, Suite 1000
Pasadena, CA 91101
July 28, 2004
To the Limited Partners of
Secured Investment Resources Fund, L.P. ("SIR1") and
Secured Investment Resources Fund, L.P. II ("SIR2") (the "Partnerships")
Re: Electing a New General Partner - Recent Developments
Dear Limited Partner:
We wish to update you on our efforts to remove James R. Hoyt and his
company as the general partners of your Partnerships, and elect Millenium
Management, LLC, a California limited liability company ("Millenium"), as the
new general partner.
On July 20, 2004, the District Court of Johnson County, Kansas (the
"Court"), ruled that if Mr. Hoyt is left to manage the Partnerships and their
assets, there is clear and imminent danger to the property or proceeds thereof,
and that a receiver should be appointed. On June 17, 2004, the Court had agreed
to prohibit Mr. Hoyt from taking any further unauthorized cash advances from the
Partnerships; or selling any of the Partnerships' assets except the Sunwood
Village Apartments in Las Vegas, Nevada ("Sunwood"), which is already under
contract. In addition, the Court agreed to require that any proceeds from the
sale of Sunwood be paid into the Court rather than be left under Mr. Hoyt's
control.
The Court found that there is a likelihood of immediate and irreparable
harm to the Partnerships and their unit holders if Mr. Hoyt was left in control
of them. We recently learned, and informed the Court, that Mr. Hoyt allowed SIR2
to default on its mortgage payments for Sunwood, and that the property was
almost lost to a foreclosure once, and is still under threat of foreclosure if
the current purchase contract is not consummated. This new information may
explain the reason that Mr. Hoyt agreed to sell Sunwood without a responsible
marketing effort, for a price that we believe is significantly less than its
full potential. We believe the mortgage default, and the resulting pressure to
sell, could have easily been avoided if Mr. Hoyt had not taken $2.5 Million from
SIR2's cash reserves for himself. This is yet another example of Mr. Hoyt's
incompetent and self-serving management of the Partnerships.
Mr. Hoyt recently sent you letters admitting that he took approximately
$2.5 Million from SIR2, but failing to acknowledge that he has: violated the
limited partnership agreement by taking the $2.5 Million, violated federal and
state laws by failing to disclose that he had taken the $2.5 Million, and failed
to pay SIR2 any interest whatsoever since taking the $2.5 Million in 2001. He
offers no explanation of what he did with the $2.5 Million, no explanation of
his ability to repay the $2.5 Million, and no explanation of his actions.
As general partner of the Partnerships, Millenium will pursue him for the
claims we believe exist: for the money he has taken, for his waste of
Partnership assets and for many breaches of fiduciary duty and the limited
partnership agreements of the Partnerships. We asked the Court to appoint a
receiver to take control of the Partnerships, because we strongly believe that
leaving Mr. Hoyt in control of these Partnerships would be the worst possible
choice for the investors in the Partnerships - we all need to be protected from
the potential that Mr. Hoyt will continue to mismanage the Partnerships,
misprice the Partnerships' assets, and misappropriate the Partnerships' funds.
Mr. Hoyt has recently informed us of his position that all transfers that
have ever occurred in the Partnerships have resulted in the transferee becoming
only an assignee, as opposed to a substitute limited partner with voting rights.
Mr. Hoyt's position would result in more than half of the outstanding units in
each Partnership being held by assignees with no voting rights, which would make
it impossible for the Partnership to take any actions that require limited
partner approval. We do not believe Mr. Hoyt's position will withstand a legal
challenge, and we will probably need to bring this issue before the Court before
we can close our Consent Solicitation. We are evaluating our options and, in the
meanwhile, we are extending the Expiration Date for the solicitation to 11:59
p.m. Pacific Time on the earlier to occur of the following dates (the
"Expiration Date"): (i) August 31, 2004 or such later date to which Millenium
determines to extend the solicitation, and (ii) the date Millenium determines
that the Required Consents are received (as described in the Consent
Solicitation Statement).
If you have not yet voted, please return the Consent form. If you have any
questions, please do not hesitate to contact us toll free at (800) 611-4613, or
at (626) 585-5920.
Millenium Management, LLC
/S/ W. Robert Kohorst
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W. Robert Kohorst
President