SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the
|_| Definitive Proxy Statement Commission Only (as permitted by Rule
|_| Definitive Additional Materials 14a-6(e)(2))
|X| Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
PROMETHEUS INCOME PARTNERS, a California limited partnership
(Name of Registrant as Specified in Its Charter)
PROMETHEUS DEVELOPMENT CO., INC., a California corporation
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
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(4) Date Filed:
PROMETHEUS INCOME PARTNERS
350 Bridge Parkway
Redwood City, CA 94065-1517
(650) 596-5393
October 17, 2001
To the Limited Partners:
The General Partner is pleased to announce that it has now reached settlement
with all parties in the Alderwood and Timberleaf hardboard siding and
construction defects litigation. In total, from all Alderwood and Timberleaf
settlements, defendants have agreed to pay Prometheus Income Partners (the
Partnership) an aggregate of $14.6 million. Of this amount, the Partnership will
receive a net amount of approximately $10.8 million.
As you know, throughout the summer the Partnership continued to pursue the
previously announced acquisition of the outstanding limited partner units by PIP
Partners-General, LLC, (PIP Partners) an affiliate of the general partner. The
agreement as to the proposed merger expired on August 31, 2001. Since that time,
the Partnership and PIP Partners have been evaluating options with respect to
providing limited partners with the liquidity many of you have sought in a
transaction that is both fair to the limited partners and commercially
acceptable to PIP Partners. In light of new appraisals obtained and the
settlements of the litigation, PIP Partners has indicated its intention to make
a new proposal for an all cash merger. To better evaluate this proposal, the
Partnership is now consulting with an investment banker to determine the
fairness of any firm offer PIP Partners makes. As of this writing, barring any
material changes in circumstances, it is anticipated that PIP Partners will
propose a merger transaction in which the consideration to be offered in respect
of each limited partner unit will be in excess of the minimum cash consideration
previously proposed. This is, of course, only a statement of present intention
and is subject to change due to any number of developments. There can be no
assurance that such a transaction will be proposed or that any such transaction,
if proposed, will be consummated.
If able to reach agreement on a revised merger proposal, the Partnership will
file revised preliminary proxy materials with the Securities and Exchange
Commission. You will be able to obtain the revised preliminary version of the
proxy statement, and any other relevant documents, for free at the Securities
and Exchange Commission's website at www.sec.gov.
Once a definitive proxy statement relating to a proposed transaction has been
filed with the Securities and Exchange Commission, it will be distributed to
limited partners. In such event, read the definitive proxy statement when you
receive it because it will contain important information that expands upon and
clarifies the information contained in this letter, including a detailed list of
participants in the proxy solicitation, as well as their direct and indirect
interests in the Partnership. Upon request, once they become available, the
general partner will provide you for free with a definitive proxy statement,
partnership Annual Report on Form 10-K for the year ended December 31, 2000, and
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001, June
30, 2001 and September 30, 2001.
On behalf of the General Partner, I thank you and appreciate your patience and
consideration of these matters.
Prometheus Development Co., Inc., a California
corporation
/s/ John Murphy
-----------------------------------
By: John J. Murphy
Title: Vice President