EVEREST
199 S. LOS ROBLES AVE., #200
PASADENA, CA 91101
November 14, 2005
Via Facsimile: (202) 772-9203
and submitted via EDGAR
Daniel F. Duchovny
Office of Mergers and Acquisitions
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-3628
Re: Secured Investment Resources Fund, L.P. II (the "Partnership")
Schedule TO-T and 14D-9 filed by Millenium Management, LLC on October
13, 2005; File No. 005-80677
Dear Mr. Duchovny:
This letter responds to the Staff's comments conveyed in your letters of
October 21, 2005 and October 28, 2005. Numbered paragraphs below correspond to
the numbered paragraphs in your letter.
October 28 Letter
1. We believe that Unit Holders have all the available material information
that is relevant to the tender offer. Most importantly, Unit Holders have all
the material information that the offeror has, so that they can make their
decision to tender or hold with the same material information that the offeror
has in deciding to purchase such Units.
Although it has not been audited, we are not aware of any material
inaccuracies in the financial information provided, and it is the best
information available with which to make investment decisions. Unlike public
operating companies, the Partnership's value at any given time is derived
entirely from the market value of its real estate holdings. We believe that most
Unit Holders compare the offer price to what they believe they would receive if
the Partnership were to be liquidated, as well as consider whether they wish to
hold an otherwise illiquid investment. The offeror has provided comprehensive
disclosure in the "Determination of Offer Price" section of the Offer to
Purchase, which will allow a Unit Holder to evaluate the offeror's estimates of
value and compare them to the Unit Holder's views. Accordingly, we believe that
Unit Holders have sufficient information to make an informed decision on whether
to tender or hold their Units.
The former general partner mismanaged this Partnership's assets
egregiously; and he failed to file reports with the SEC for many years, provide
any financial statements to Unit Holders, and misappropriated over $2.5 million
of Partnership funds for his personal use. One of the consequences of the
failure of the former general partner to make SEC filings was that the Unit
Holders did not have access to the limited avenues of liquidity that exist for
other registered, unlisted partnerships, such as matching services and
third-party tender offers, because of the absence of financial information
available to prospective buyers.
In response to a letter dated September 22, 2005 from Michael Ferraro,
Office of Enforcement Liaison in the Division of Corporation Finance, our
counsel, Gibson, Dunn & Crutcher, contacted Mr. Ferraro to discuss the unusual
history and circumstances of the Partnership and our intention to have the
Partnership resume the filing of its Exchange Act reports as soon as
practicable. As discussed with Mr. Ferraro, we will contact the Office of Chief
Accountant in the Division of Corporation Finance to discuss how best to resume
the filing of audited financial statements in light of the substantial
difficulties that the Partnership faces in complying with the requirements of
Regulation S-X, particularly in light of the mismanagement by the former general
partner and the length of time since the Partnership's last audit: the 1998
financial statements. In the meanwhile, there are a substantial number of
investors who wish to obtain liquidity for their investments in the current tax
year to utilize losses and eliminate the need for Schedule K-1s for later tax
years.
We do not have any current plan to take the Partnership private. Otherwise,
the offeror's plans regarding the Partnership are described in "Future Plans of
the Purchaser."
October 21 Letter
1. In response to the comment, the sentence identified in the comment is
being amended.
2. We respectfully disagree that the section identified in the comment
states that we will make a price reduction if a distribution is made; however,
to avoid any possible confusion, the statement identified in the comment is
being deleted.
3. We respectfully submit that the summary complies with Item 1001 of
Regulation M-A. Please note Instruction 1 to such Item.
4. In response to the comment, the statement identified in the comment is
being amended.
5. In response to the comment, the statements identified in the comment are
being amended.
6. In response to the comment, the statement identified in the comment is
being amended.
7. Because the Purchaser is the general partner of the Partnership, it is
aware of any other transfers in the last twelve months and knew at the time of
the prior filing that there was no actual risk of exceeding 50% in the last
12-month period, even if this Offer were fully subscribed. Nothing has changed
in that regard, and the response to the Offer to date makes it apparent that
there continues to be no risk of exceeding 50% in the last 12-month period.
Therefore, we respectfully suggest that there would be no benefit to adding
disclosure to address that hypothetical situation, since we know it will no
occur.
8. In response to the comment, the section identified in the comment is
being amended.
9. In response to the comment, the section identified in the comment is
being amended. However, we note that the guidance provided by Section III.B.I of
Release No. 34-43069 does not suggest that a bidder should meet each and every
requirement of Items 14 and 15 or cover the same historical period. For
apartment properties, average rent per square foot is not data that is developed
in the ordinary course of business. Also, we do not believe historical property
performance data would be material to Unit Holders, and such information is not
available without undue expense, if at all, because the properties were managed
by the former general partner's affiliate until March 2005.
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.
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: James Moloney, Esq. (e-mail)