SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) Securities
Exchange Act of 1934
(Amendment No. 8)
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[ ] Preliminary Proxy Statement
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(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
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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):
[X] No fee required
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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Everest Properties II, LLC
Millenium Management, LLC
199 S. Los Robles Ave., Suite 200
Pasadena, CA 91101
January 31, 2005
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.
We are pleased to report that we have entered into a Settlement Agreement
with Mr. Hoyt and his company that, if approved by the State Court, will resolve
the litigation and allow Millenium to take over as the new general partner of
the Partnerships. The principal terms of the Settlement Agreement are:
o All unit holders shall be admitted as substitute limited partners with
respect to the units they currently hold, and upon the Effective Date
of the Settlement Agreement, the current general partners will be
removed and Millenium will become the successor general partner of the
Partnerships, in accordance with the limited partnership agreements of
the Partnerships and the majority vote received by Millenium.
o Mr. Hoyt has signed a Promissory Note to repay all advances taken from
SIR 2, which amount is initially set at $2.5 Million but shall be
adjusted by auditors to ensure that Mr. Hoyt must repay all unrepaid
loans or advances made to him and any other amounts taken in
contravention of the Partnership Agreement. The Promissory Note
provides for repayment to be made over ten (10 ) years, with interest
being charged at a variable rate of the Prime Rate plus one percent
(1%).
o SIR 1 will repay to Mr. Hoyt all amounts loaned by him to SIR 1, which
amount is initially set at $100,000 but shall be audited and adjusted
accordingly. SIR 2 has a security interest in such payments to Mr.
Hoyt, and such payments will be made directly to SIR 2 towards the
amount owed to SIR 2.
o All payments to be made by Millenium to Mr. Hoyt for his general
partner interest (as required by the limited partnership agreements)
and for the units of limited partnership interest he owns, a total of
$41,800, shall be made directly to SIR 2 towards the amount owed by
Mr. Hoyt to SIR 2.
We believe this is a very favorable result for the Partnerships. It will
allow Millenium to take over the management of the Partnerships, work to improve
the performance of the remaining properties, and provide you with the
information about the Partnerships to which you are entitled. We have already
begun to coordinate efforts with the court-appointed receiver of the
Partnerships' assets in anticipation of being able to take formal control of the
Partnerships upon the State Court's approval of the Settlement Agreement.
Summary of Litigation. Set forth below are brief summaries of the action
filed by Millenium and its affiliates; and the action filed by Mr. Hoyt and his
companies.
1. Everest Management, LLC, et al. v. James R. Hoyt, et al., (District
Court, Johnson County, Kansas, Case No. 03CV07056) (the "State Court")
This case, filed on October 1, 2003, arose originally from Millenium's
affiliates ("Everest") seeking access to, and inspection of the books and
records of SIR 1 and SIR 2. On February 12, 2004, the State Court granted
Everest's request and directed Mr. Hoyt and the Partnerships to make available
for inspection and copying all books and records of the Partnerships. A review
of the books and records revealed that an advance on management fees in an
amount greater than $2,500,000.00 was taken from SIR 2 at some time during 2001.
On June 2, 2004, Everest filed a motion for a temporary restraining order
seeking to prevent the general partners from taking unauthorized cash advances
and from selling, transferring, converting or otherwise encumbering any real
property of either Partnership. On July 1, 2004, the motion for a temporary
restraining order was granted.
On June 28, 2004, Everest amended their complaint requesting the State
Court to appoint a receiver to protect and operate the assets of SIR I and SIR
II. On September 9, 2004, and after hearing evidence on the matter, the State
Court appointed Carl R. Clark, Esq. as receiver for both Partnerships. The State
Court's decision to appoint a receiver has been appealed.
Also on September 9, 2004, the State Court raised the issue of an apparent
conflict of interest between Mr. Hoyt and the Partnerships based on the
$2,500,000.00 advance on management fees. The State Court ordered counsel for
Mr. Hoyt and the Partnerships to file a written statement addressing the
apparent conflict of interest. Counsel provided the State Court with a
confidential written response and subsequently withdrew as counsel for Mr. Hoyt,
while remaining as counsel for the Partnerships.
Everest again amended their complaint on October 15, 2004, seeking an order
declaring that all assignees of record of both Partnerships be admitted as
substitute limited partners. The aforementioned relief was necessary due to the
general partner's failure to admit any assignees of record as substitute limited
partners, effectively eliminating the limited partners' voting rights under the
respective partnership agreements. In addition, Everest amended their complaint
to bring claims, on behalf of all unit holders of SIR 2, against Mr. Hoyt and
Secured Investment Resources II, Inc. (the corporate general partner of SIR 2)
for breach of contract, unjust enrichment and conversion related to the
$2,500,000.00 advance on management fees. These claims are currently pending.
On December 21, 2004, the State Court made a finding that counsel for the
Partnerships should be removed from the pending litigation due to a conflict of
interest based on their prior concurrent representation of Mr. Hoyt and the
Partnerships.
2. James R. Hoyt, et al. v. Everest Properties II, LLC, et al. (United
States District Court, District of Kansas, Case No. 04-2369-CM-DJW)
On August 6, 2004, James R. Hoyt, Secured Investment Resources, Inc.,
Secured Investment Resources II, Inc., SIR 1, and SIR 2 file an action against
Everest Properties II, LLC and Millenium alleging: (1) that proxy statements and
solicitation sent by Everest and Millenium to unit holders of SIR 1 and SIR 2
contained materially false and misleading information; and (2) requesting a
declaration that the voting procedures set forth in the proxy solicitation
violate the respective partnership agreements and that any resulting votes are
void and of no effect.
On October 7, 2004, Everest and Millenium filed a motion to dismiss all of
the claims against Everest and Millenium. All claims in this action, including
the motion to dismiss, are still pending.
Recent Events in Partnership Operations. In the last several months, there
have been several developments about which you should be aware. Although it is
the general partners' obligation to keep you informed of these events, we will
provide you with a brief description of a few significant developments.
SIR 1. One of SIR 1's two remaining properties, the Hidden Valley Shopping
Center, was threatened with foreclosure in December 2004. With the Receiver's
consent, Mr. Hoyt loaned money to SIR 1 in order to reinstate the mortgage loan
and prevent the foreclosure. The lender has subsequently claimed that the amount
paid to reinstate the loan was not adequate, but as of the date of this letter,
the lender and the Receiver continue to discuss the matter and foreclosure
proceedings have not been resumed.
SIR 2. With the approval of the Receiver and the State Court, the Forest
Park Shopping Center was sold by SIR 2. The receiver has control of the proceeds
of that sale. SIR 2 has been in default on its mortgage on the Sunwood Village
Apartments (Las Vegas), and the lender is currently attempting to foreclose on
the property. The Receiver is attempting to prevent the foreclosure by
negotiating with the lender and considering a bankruptcy filing by the entity
that holds the property. SIR 2 had entered into a contract to sell Sunwood for a
price that we believe is substantially below its full value. We do not know the
current status of that contract or whether it is enforceable.
We anticipate that the State Court will determine whether to approve the
Settlement Agreement within approximately fifteen days. 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) February 21, 2005,
or such later date to which Millenium determines to extend the solicitation,
(ii) the date Millenium determines that the Required Consents are received (as
described in the Consent Solicitation Statement), and (iii) the date the State
Court has entered an order granting final approval to the Settlement Agreement
or an order dismissing the State Lawsuit, whichever action of the State Court
occurs first.
You may still vote by returning the Consent form. If you have any
questions, please do not hesitate to contact us at (626) 585-5920.
Millenium Management, LLC
/S/ W. Robert Kohorst
----------------------
W. Robert Kohorst
President
P.S. Please note our new address: 199 S. Los Robles Ave., Suite 200, Pasadena,
CA 91101