March 21, 2005
BY FEDERAL EXPRESS AND FACSIMILE (202) 942-9585
Securities and Exchange Commission
500 North Capital Street
Washington, D.C. 20549
Attention: Daniel F. Duchovny
Re: The Newkirk Master Limited Partnership-
Supplemental Response Letter dated March 16, 2005 re: Amended
Schedule TO-I filed March 8, 2005
File No. 005-79560
Gentlemen:
We are responding on behalf of The Newkirk Master Limited Partnership (the
"Partnership"), to your letter of comment dated March 18, 2005 and our telephone
conversation on the same date, with respect to the above-referenced filing.
As indicated in our previous response letters, while we have properly
disclosed the ownership percentage of affiliates of the general partner and the
conflicts associated therewith with respect to the offer, we do not believe that
any such affiliates are offerors in accordance with Instruction K(1) of Schedule
TO or bidders under rule 14d-1. The tender offer is being made solely by the
Partnership, with Partnership funds and is not being made by or on behalf of any
other person. The offer is an issuer tender offer for up to approximately 1.6%
of the outstanding units. We have disclosed in the Offer to Purchase that
affiliates of the general partner do not intend to tender their units in the
offer. Accordingly, any benefits received by such affiliates as a result of the
offer will be received by all other non-tendering unitholders in proportion to
the their units in the Partnership. We note, in particular, the following
disclosure set forth in the Offer to Purchase under "Section 7- Effects of the
Offer":
"Currently, affiliates of the general partner hold a 80.4% limited partner
interest in your partnership. No units will be purchased from affiliates
of the general partner in this offer. If all the units sought in this
offer are tendered, the ownership interest of such affiliates would
increase to approximately 81.7%. Presently, as a result of the ownership
of 80.4% of the units, affiliates of the general partner have the ability
to control substantially all votes of the limited partners. The offer will
have no effect on this control."
Securities and Exchange Commission
March 21, 2005
Page 2
In response to your request for information regarding the Partnership's
agreement of limited partnership (the "Partnership Agreement"), the Partnership
Agreement, which was filed as exhibit 4.1 to the Partnership's Registration
Statement on Form 10 on April 30, 2003, grants the general partner broad control
over the Partnership's affairs and grants limited partners limited approval
rights. In particular, Section 7.1 of the Partnership Agreement provides as
follows:
"A. Powers of General Partner. Except as otherwise expressly provided in
this Agreement, all management powers over the business and affairs of the
Partnership are and shall be exclusively vested in the General Partner,
and no Limited Partner shall have any right to participate in or exercise
control or management power over the business and affairs of the
Partnership."
Section 7.1 of the Partnership Agreement goes on to provide that the
general partner "shall have full power and authority to do all things deemed
necessary or desirable by it on such terms and conditions as the General Partner
in its sole discretion deems appropriate" to conduct the business of the
Partnership, including, without limitation, a long list of actions set forth in
the Partnership Agreement as being in the general partner's exclusive control.
Section 7.1B goes on to provide:
"B. No Approval of Limited Partners. Each of the Limited partners agrees
that the General Partner is authorized to execute, deliver and perform the
above-mentioned agreements and transactions on behalf of the Partnership
without any further act, approval or vote of the Partners, notwithstanding
any other provision of this Agreement, the [Delaware Revised Uniform
Limited Partnership] Act or any applicable law, rule or regulation, to the
full extent permitted under... applicable law."
The only voting rights granted to limited partners are with respect to the
following actions which may be taken by the general partner only with the
consent of limited partners owning a majority of the units: amendments to the
Partnership Agreement (and only if first proposed by the general partner),
dissolution of the Partnership (only if first proposed by the general partner),
selection of a liquidating trustee, the sale of all or substantially all of the
Partnership's assets, election of a successor general partner upon withdrawal of
the general partner, removal of the general partner, election to continue the
Partnership in situations where the Partnership would otherwise dissolve and
approval of a merger in which the Partnership is not the surviving entity (See
Section 14.3 of the Partnership Agreement).
Finally, as we have noted in our previous response letters, we do not
believe that the current applicable regulations and Staff interpretations
support the notion that, in the context of an issuer tender offer governed by
Rule 13e-4, a significant equity holder that is affiliated with management
should be deemed a "bidder" under Rule 14d-1 or an "offeror" under Instruction
K(1) of Schedule TO. In our review of tender offer filings that have been made
under Rule 13e-4 over the past few years, we have found no examples of a
majority equity holder being deemed a bidder or offeror where the offer was
Securities and Exchange Commission
March 21, 2005
Page 3
being made solely by and on behalf of the issuer. Rather, in all the examples we
found, the sole filing person was the issuer making the offer. In particular, we
note the following examples of Schedule TO-I filings where affiliates held a
majority of the equity. In all the examples, the only filing person was the
issuer:
o Mercantile Long-Short Manager Fund LLC (Schedule TO-I filed 3/1/05)-
The parent of the fund's manager owned 53.05% of the interests.
o Coast Dental Services, Inc. (Schedule TO-I filed 3/4/03)- Affiliates
of management owned 52% of the outstanding shares.
o Pubco Corporation (Schedule TO-I filed 5/23/02)- Affiliate owned
85.5%, which, if all shares sought in offer would be tendered, would
increase to 86.5%.
o Fashionmall.com, Inc. (Schedule TO-I filed 7/2/01)- CEO owned in
excess of 51.5% of the shares.
Please call me at (212) 940-6348 should you have any further questions.
Sincerely yours,
/s/ Elliot Press
Elliot Press