July 15, 2005
Jeffrey B. Werbitt
Office of Mergers and Acquisitions
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: BellaVista Capital, Inc., Schedule TO-T filed June 22, 2005 by MacKenzie
Patterson Fuller, Inc. and its affiliates, the Purchasers
SEC File No. 5-80316
Dear Mr. Werbitt:
Thank you for your letter dated July 5, 2005 regarding our recent Schedule TO-T.
I will respond to the questions you asked in your letter in the order in which
you posed them.
1. I am assuming for the purposes of responding to this comment that
you meant that the Purchasers (not "BellaVista") will file an
amendment and to the extent necessary, extend the Expiration Date if
there is a reduction in price. We confirm our understanding that a
reduction would require dissemination of revised materials to
shareholders.
2. Financial statements of the purchasers would not add material
disclosure to the available information. As disclosed, the offer
will be funded through the existing capital of the Purchasers. As
stated in the offer materials, the purchasers have aggregate capital
which is more than adequate to fund the offer. The specific facts
and circumstances of this offer should be understood. Absent a
tender offer filed under Section 14(d)(1) of the Securities Exchange
Act, the Purchasers would have little or no access to the security
holders and the holders would have little or no access to potential
purchasers. Because of the lack of liquidity of the securities, the
uncertainty as to the underlying value of the securities and the
issuer's assets, and the extraordinary per share costs of using a
tender offer as the means for purchasing the securities, the offer
prices are substantially discounted from the estimates of
liquidation value of the issuers. It is therefore anticipated that
only those securities holders who have an immediate need for
liquidity will seek to sell their securities. Based on the extensive
past experience of both the Purchasers and others who have tendered
for illiquid securities in similar circumstances, the Purchasers do
not reasonably expect to receive more than 10% to 25% of the total
number of securities sought and will likely receive substantially
less than that. Of course, the Purchasers could have tendered for
100% and would not have expected any different response, but such a
tender would have been unrealistic. Accordingly, while the
Purchasers are prepared and able to fund the entire Offer, as a
practical matter, the actual funds necessary to complete the Offer
are reasonably expected to be substantially less than the cash
July 15, 2005
Page 2 of 3
reserves held by the Purchasers. This Offer is for immediate cash
payment and no securities of the bidder are to be used. No
evaluation of securities or credit risk is therefore relevant to
this offer. The bidder neither seeks control, nor would it, if
successful in purchasing all securities sought, gain control of any
issuer, so no evaluation of the bidders' financial condition is
relevant in that respect. No market exists for the securities and no
competing bidder is seeking to purchase the securities, so no real
alternative opportunities are available to be evaluated over the
period of the offer. We not only disclose that we will finance the
Offer with cash on hand, we also disclose the amount of cash on hand
that we have to finance the Offer as well as the fact that we have
sufficient cash on hand to finance all other outstanding offers.
Lastly, we are only tendering for 9.34% of the shares, so even if
fully subscribed, we would not even approach having any modicum of
control over the corporation, so the Purchasers' financial
statements would seem to be even more immaterial than in an offer
where a larger position might be obtained.
3. The Schedule TO discloses that "The Purchasers currently have
sufficient funded capital to fund all of their commitments under
this offer and all other tender offers they are presently making."
(See "DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?" on page
5). We do not believe that the actual dollar amount for which the
Purchasers may be liable under the other offers is material to a
unit holder in this Offer, so long as there is no possibility that
the Purchasers in this Offer would be unable to purchase tendered
units. Furthermore, anyone interested in finding out about the other
Offers can find that information on your EDGAR database or in your
offices, as disclosed in the Schedule TO.
4. See our response to comments 2 and 3.
5. We do not believe Unit holders would ever have to pay such fees.
This could only be an issue when a security can be held in "street
name" by a brokerage firm. We believe that all of the Shares of this
company are held in the name of the record holder (they are not
DTC-eligible and do not have a CUSIP number).
6. On page 2 our disclosure appears to comport with your comment; we
confirm our understanding that any condition must be satisfied or
waived by the Expiration Date and that payment must be made promptly
upon confirmation of ownership or presentation of certificates after
the expiration of the Offer.
7. The penultimate sentence of the first paragraph of Section 5 states
that "The Purchasers may also be required by applicable law to
disseminate to Shareholders certain information concerning the
extensions of the Offer and any material changes in the terms of the
Offer." We confirm that we understand the requirements of Rule 14d-4
and 6.
8. We disclose this potential conflict without being able to state what
the conflict might be because we don't really know what conflict
could arise. Hence, we also say because the Depository's role is
administrative only, any conflict would be immaterial. The reason
for this disclosure is just to raise the issue that the Depository
is not an independent party.
July 15, 2005
Page 3 of 3
9. Please see Schedule I, where the requested information is provided.
Shareholders are referred to this Schedule in Section 11.
10. You have requested that we acknowledge, and we hereby acknowledge
(and we have the authority to do so on behalf of all filing
persons), that we are responsible for the adequacy and accuracy of
the disclosure in the filings and that staff comments or changes to
disclosure in response to staff comments in the filings reviewed by
the staff do not foreclose the Commission from taking any action
with respect to the filing and that we may not assert staff comments
as a defense in any proceeding initiated by the Commission or any
person under the federal securities laws of the United States.
Please let me know if you have any questions or further comments.
Very Truly Yours,
Chip Patterson
Senior Vice President and General Counsel
(925) 631-9100 ext.206
(925) 871-4046 (Fax)
chip@mpfi.com