The 50-page complaint, brought by CNL investors San Francisco-based Sutter Acquisition Fund Inc. and Robert Lewis, alleges the merger would be a $140-million windfall for CNL Financial Group chairman James M. Seneff Jr., CNL president and treasurer Robert A. Bourne and CNL Realty Corp., the general partners of the merger participants. The $140 million "rightfully belongs to the limited partners," the suit argues.
The defendants are CNL Restaurant Properties Inc. (CNLRP), CNL Restaurant Investments Inc., Restaurant Capital Corp., US Restaurant Properties Inc. (USRP) and CNL Income Fund Ltd. 1 to 18, known as the CNL Income Funds.
"The proposed merger is a vehicle to bail out CNLRP from financial difficulties," states the suit, filed in Dallas District Court. "Since general partners Seneff and Bourne are also heavy investors in CNLRP and own virtually no interest in the CNL Income Funds, the general partners are in an irreconcilable conflict of interest that disables them from fulfilling their responsibilities as the general partners of the 18 CNL Income Funds."
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