- 61 -
joining Frey in purchasing the property. Prudential previously
had considered selling the apartment complex, and Frey's $20
million offer for the property significantly exceeded the
property's appraised market value.
The Prudential executive consulted with Ballard about Frey's
offer. Ballard thought that Prudential's refusal of such offer
might constitute a breach of fiduciary duty as investment manager
of the pension fund. Ballard advised the executive that
Prudential should accept the offer.
On January 16, 1980, the Village of Kings Creek partnership
was formed for the purpose of purchasing the property from
Prudential and converting it into condominiums. In 1980, the
Village of Kings Creek apartment complex was sold by Prudential
to the partnership. Zeus (a subsidiary of IRA) and Zion (a
subsidiary of Holding Co.) became limited partners in this
limited partnership. Kanter also brought in another investor,
First Illinois Enterprises (an Illinois general partnership),
that invested $1.5 million in the project. The financing for the
Village of Kings Creek project came from the following sources:
The First National Bank of Chicago was the first mortgage lender;
Connecticut Mutual Life Insurance Co. and First Illinois
Enterprises were the two primary equity participants.
Under the partnership agreement, Zeus was required to make
an initial contribution of $100,000 for its 6.14-percent interest
Page: Previous 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 NextLast modified: May 25, 2011