A class action lawsuit, entitled Lewis v. CNL Restaurant Properties, was commenced in the District Court of Dallas County, Texas, against CNL Restaurant Properties, Inc. ("CNLRP"), CNL Restaurant Investments, Inc. ("CNL Investments"), Restaurant Capital Corp., U.S. Restaurant Properties, Inc. ("USRP") and CNL Income Fund, Ltd. I - XVIII, (collectively, the "CNL Income Funds"), and James M. Seneff, Jr., Robert A. Bourne and CNL Realty Corporation (collectively, the "General Partners"), on behalf of a class of all the Limited Partners of the CNL Income Funds ("Limited Partners" or "Class"). USRP and CNLRP are publicly owned real estate investment trusts and the 18 CNL Income Funds are publicly owned limited partnerships all of which are involved in the ownership and operation of restaurant properties located around the country. The plaintiffs in this action are represented by Wolf Haldenstein Adler Freeman & Herz LLP, Goodkind Labaton Rudoff & Sucharow LLP and Chimicles & Tikellis LLP.

The Complaint, brought by Sutter Acquisition Fund, Inc., which may be the largest single holder of units of the 18 CNL Income Funds, and Robert Lewis, an individual, charges the General Partners with breaches of both the fiduciary duties they owe to the Limited Partners and the Partnership Agreements. In addition, the Complaint alleges that Defendants CNLRP and USRP have aided and abetted the General Partners in breaching the fiduciary duties owed to the proposed Class. The action also seeks an accounting from the CNL Income Funds.

The Complaint alleges, among other things, that:

(1) The CNL Income Funds are contributing 42% of the equity to the Surviving Corporation, but the CNL Income Funds' Limited Partners will receive only 33% of the Merger Consideration. The 9% spread (valued at more than $140 Million) between the CNL Income Funds are contributing and what consideration they will be receiving is to be allocated wrongfully to the other merger partners, CNLRP and USRP; and

(2) The proposed Merger is a vehicle to bail out CNLRP from financial difficulties. 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.

The objective of this action is to make certain that the Limited Partners of the CNL Income Funds receive their fair share of consideration from the proposed Merger or any other transaction that may materialize. This suit also seeks the removal and replacement of the General Partner Defendants from their positions with the CNL Income Funds.

A copy of the complaint can be viewed by clicking on the link to the right. If you wish to discuss this Action or have any questions concerning this notice or your rights or interests, please fill out an information form by clicking on "participate in this class action" below, or contact Lawrence Kolker at 212-545-4600.