Icahn Enterprises L.P. – ‘PRER14C’ on 7/8/96

As of:  Monday, 7/8/96   ·   Accession #:  950123-96-3479   ·   File #:  1-09516

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Revised Preliminary Proxy Information Statement   —   Schedule 14C
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14C     Revised Preliminary Materials                         29    107K 

Document Table of Contents

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SCHEDULE 14C
(Rule 14c-101)

 INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION

 Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934

Check the appropriate box:                                                      

                                                                [Download Table]
                                                                                  
[X] Preliminary Information Statement  [ ] Confidential, for Use of the Commission
[ ] Definitive Information Statement   Only (as permitted by Rule 14c-5(d)(2))    

 American Real Estate Partners, L.P.
(Name of Registrant as Specified In its Charter)

Payment of Filing Fee (Check the appropriate box):                              
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii) or 14c-5(g)                      
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.       

 (1)      Title of each class of securities to which transaction
applies:                                    

       (2)      Aggregate number of securities to which transaction applies:

  (3)      Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11.

(4)      Proposed maximum aggregate value of transaction:     

(5)      Total fee paid:                                      

[X] Fee paid previously with preliminary materials.                             

[ ] Check box if any of the fee is offset as provided by Exchange Act Rule      
0-11(a)(2) and identify the filing for which the offsetting fee was paid        
previously. Identify the previous filing by registration statement number, or   
the Form or Schedule and the date of its filing.                                

(1)      Amount Previously Paid:                              

(2)      Form, Schedule or Registration Statement No.         

(3)      Filing Party:                                        

(4)      Date Filed:                                          

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 TABLE OF CONTENTS

                                                        [Enlarge/Download Table]
                                                                                                                    
SUMMARY INFORMATION.............................................................................................   5

BACKGROUND REGARDING PARTNERSHIP................................................................................   9

REASONS FOR AMENDMENT...........................................................................................   9

DESCRIPTION OF INVESTMENTS......................................................................................  11

RISKS RELATED TO NON-REAL ESTATE INVESTMENTS....................................................................  13

MANAGEMENT OF THE PARTNERSHIP...................................................................................  14

PROPOSED AMENDMENT TO PARTNERSHIP AGREEMENT.....................................................................  15

EFFECT OF AMENDMENT ON UNITHOLDERS AND PARTNERSHIP..............................................................  16

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                                                                 
      MANAGEMENT................................................................................................  18

CONFLICTS OF INTEREST...........................................................................................  19

EXPENSE OF PROPOSED AMENDMENT...................................................................................  20

NO DISSENTERS' RIGHTS OF APPRAISAL..............................................................................  20

AUDIT COMMITTEE APPROVAL........................................................................................  20

ADDITIONAL INFORMATION..........................................................................................  22

APPENDIX A          --     PROPOSED AMENDMENT................................................................... A-1
APPENDIX B          --     FORM OF CONSENT...................................................................... B-1

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 AMERICAN REAL ESTATE PARTNERS, L.P.
100 SOUTH BEDFORD ROAD
 MT. KISCO, NY 10549

 INFORMATION STATEMENT
 July 23, 1996

         We are writing to advise you of a proposed amendment to the Amended and
Restated Limited Partnership Agreement (as amended, the "Partnership Agreement")
of American Real Estate Partners, L.P., a Delaware limited partnership (the     
"Partnership"). The amendment discussed below (the "Amendment"), which is       
proposed by the General Partner (as hereinafter defined) pursuant to the terms  
of the Partnership Agreement, would permit the Partnership to make non-real     
estate related investments and engage in activities related thereto under       
circumstances described herein while remaining in the real estate business.     

        This Information Statement has been mailed to all holders of record as
of the close of business on July 23, 1996 (each, a "Unitholder" and             
collectively, the "Record Holders") of depositary units representing limited    
partner interests in the Partnership (the "Depositary Units").                  
No meeting of Record Holders will be held.                                      

  WE ARE NOT ASKING YOU FOR A PROXY OR WRITTEN CONSENT AND YOU ARE
REQUESTED NOT TO SEND A PROXY OR WRITTEN CONSENT.                               

        The general partner of the Partnership is American Property Investors,
Inc. ("API" or the "General Partner"), a Delaware corporation wholly owned by   
Carl C. Icahn ("Icahn"). The principal executive offices of both the General    
Partner and the Partnership are located at 100 South Bedford Road, Mt. Kisco,   
New York 10549. The Partnership's business is conducted through a subsidiary    
limited partnership, American Real Estate Holdings Limited Partnership (the     
"Subsidiary"), in which the Partnership owns a 99% limited partner interest. The
General Partner also acts as the general partner for the Subsidiary. The General
Partner has a 1% general partner interest in each of the Partnership and the    
Subsidiary. References to the Partnership herein include the Subsidiary, unless 
the context otherwise requires.                                                 

As of July 23, 1996, there were 25,666,640 Depositary Units         
outstanding. At that time, Icahn, through High Coast Limited Partnership, a     
Delaware limited partnership which he controls ("High Coast"), beneficially     
owned approximately 50.6% of the Partnership's outstanding Depositary Units. For
a list of individuals or "groups" (as that term is used in Section 13(d)(3) of  
the Securities Exchange Act of 1934, as amended) owning 5% or more of the       
Partnership's outstanding Depositary Units, see "SECURITY OWNERSHIP OF CERTAIN  
BENEFICIAL OWNERS AND MANAGEMENT."                                              

  Under the terms of the Partnership Agreement, the Partnership is
presently permitted to "directly or indirectly invest in, acquire, own, hold,   
manage, operate, sell, exchange and otherwise dispose of interests in real      
estate" and engage in activities related thereto. While the Partnership and the 
General Partner believe opportunistic real estate investments continue to remain
available, such investments have become more competitive to source and the      
increased competition may have an adverse impact on the spreads and its ability 
to find assets providing                                                        

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returns sought by the Partnership. In addition, pending investment in real      
estate assets, the Partnership's investment funds have been invested primarily  
in short-term government obligations. As a result of the foregoing and for the  
additional reasons described herein, the General Partner believes that it is in 
the best interests of the Partnership and its Unitholders to approve the        
Amendment which will permit the Partnership to invest a portion of the          
Partnership's funds in non-real estate assets.                                  

   Pursuant to Article XIV of the Partnership Agreement, the written
consent to an amendment by Record Holders owning at least a majority of the     
outstanding Depositary Units is sufficient for the adoption of an amendment to  
the Partnership Agreement, with certain limited exceptions (none of which is    
applicable to the subject amendment). Consequently, the written consent of High 
Coast, as beneficial holder of more than 50% of the outstanding Depositary      
Units, is sufficient to assure the approval of the Amendment by the requisite   
percentage of Record Holders. High Coast has confirmed to the Partnership that  
the Amendment will be approved by its written consent on or about August 12,    
1996 (twenty (20) days from the date hereof).                                   

    Under applicable state law, no dissenter's rights (i.e., rights of
non-consenting security holders to exchange interests in the Partnership for    
payment of their fair value) are available to any Unitholder of the Partnership,
regardless of whether such Unitholder has consented to the adoption of the      
Amendment.                                                                      

     This Information Statement should be read carefully as it describes
certain consequences of and possible risks related to investments made in       
accordance with the Amendment, including the following:                         

         - The Partnership is seeking to amend the Partnership
Agreement to permit it to make investments under circumstances described herein 
in companies that are not necessarily engaged as one of their primary activities
in the ownership, development or management of real estate. Other than real     
estate related assets, the Partnership currently is only permitted to invest in 
items such as deposit accounts and money market funds. While the Partnership    
will continue to own, develop, manage and invest in real estate related assets, 
the General Partner believes that it is in the best interests of the Partnership
and the Unitholders for the Partnership to be permitted to invest a portion of  
the Partnership's funds in assets outside the real estate market that may       
provide returns on its funds in excess of those available to the Partnership in 
the current real estate market or those currently received on investments in    
government securities. See "REASON FOR AMENDMENT."                              

                 - Mr. Carl Icahn serves as Chairman of the Board of Directors
of the General Partner, and through High Coast beneficially owns approximately  
50.6% of the outstanding Depositary Units. The Partnership anticipates that Mr. 
Icahn, as Chairman, and personnel of the General Partner and the Partnership    
will be responsible for selecting non-real estate related investments by the    
Partnership as they have with respect to real estate related investments. Under 
the terms of the Partnership Agreement, the General Partner has full, exclusive 
and complete discretion to manage and control the business and affairs of the   
Partnership, including investment decisions, and consistent with the terms of   
the Partnership Agreement, Unitholders                                          

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will not be given an opportunity to approve or disapprove of decisions,         
including potential investments, made by and potential investment strategies    
used by the General Partner. Icahn has confirmed to the Partnership that neither
he, in his capacity as Chairman, nor any of his or the General Partner's        
affiliates will receive any fees from the Partnership in consideration for      
services rendered in assisting with investments. However, High Coast, in its    
capacity as majority Unitholder, will share in any benefits realized or losses  
incurred by the Partnership from investments made pursuant to the Amendment on a
pro rata basis with all Unitholders and the General Partner will share in such  
benefits and losses to the extent of its general partner interest. In addition, 
High Coast's approval of the Amendment to the Partnership Agreement and the     
General Partner's selection of non-real estate investments may be subject to    
conflicts of interest, including those relating to whether the General Partner  
or its affiliates have independent investments in such assets which may benefit 
from investments by the Partnership. See "CONFLICTS OF INTEREST."               

                - The proportion of the Partnership's assets invested in any
one type of security or any single issuer will not be limited. While the        
investment objectives of the Partnership with respect to such investments will  
be to purchase what it believes are undervalued securities, the General Partner,
pursuant to the Partnership Agreement, will have full authority relating to the 
bases and methods for selection of securities, and the Partnership will not be  
subject to any policy limitations on the amounts and nature of any non-real     
estate related securities purchased, sold or held, provided that the Partnership
will conduct its activities in such a manner so as not to be deemed an          
investment company under the Investment Company Act of 1940, as amended (the    
"1940 Act"), and will structure its investments so as to continue to be taxed as
a partnership rather than as a corporation under the publicly-traded partnership
rules of the Internal Revenue Code. See "RISKS RELATED TO NON-REAL ESTATE       
INVESTMENTS."                                                                   

               - The Partnership will conduct its investment activities in
such a manner so as not to be deemed an investment company under the 1940 Act.  
Generally, this means that the Partnership does not intend to enter the business
of investing in securities and that no more than 40% of the Partnership's total 
assets will be invested in securities. While the Partnership intends to operate 
so as to not be treated as an investment company under the 1940 Act, if it did  
not meet the exclusions under the 1940 Act, the Partnership would be required to
register as an investment company under the 1940 Act and would be subject to the
reporting requirements and regulatory constraints of the 1940 Act. See "EFFECT  
OF AMENDMENT ON UNITHOLDERS AND PARTNERSHIP."                                   

               - Under applicable tax laws, the Partnership will structure
its investments so as to continue to be taxed as a partnership rather than as a 
corporation under the publicly-traded partnership rules of Section 7704 of the  
Internal Revenue Code. While the General Partner intends to structure           
investments in non-real estate assets to satisfy these rules, it is possible    
that using the Partnership's cash for investments not related to real estate    
could result in income which would endanger the Partnership's classification as 
a partnership for tax purposes. See "EFFECT OF AMENDMENT ON UNITHOLDERS AND     
PARTNERSHIP."                                                                   

               - Investment in securities issued by companies that are not
engaged as one of their primary activities in the ownership, development or     
management of real estate will entail                                           

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somewhat different risks from those associated with investments in real estate  
assets. For example, equity securities fluctuate in value, often based on       
factors unrelated to the value of the issuer of the securities, and such        
fluctuations can be pronounced. In addition, even though interest-bearing debt  
securities are investments which may promise a stable stream of income, the     
prices of such securities generally are inversely affected by changes in        
interest rates and, therefore, are subject to the risk of market price          
fluctuations. Also, some securities which may provide the potential for higher  
yields may also entail a commensurate greater risk of loss. See "RISKS RELATED  
TO NON-REAL ESTATE INVESTMENTS."                                                

      THE ACTIONS CONTEMPLATED IN THIS INFORMATION STATEMENT HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE  
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY     
STATE SECURITIES COMMISSION PASSED UPON THE MERITS OF THE ACTIONS CONTEMPLATED  
HEREIN OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS         
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.                       

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 SUMMARY INFORMATION

       The following summary information is qualified in its entirety by the
more detailed information appearing elsewhere in this Information Statement and 
the Appendices hereto. Unitholders are urged to read the entire Information     
Statement carefully, as it contains important information regarding certain     
consequences of the Amendment.                                                  

                                                        [Enlarge/Download Table]
                                                                                                          
Item under Consideration................................ Approval of an amendment to the Partnership      
                                                         Agreement which would permit the                 
                                                         Partnership to invest in securities issued by    
                                                         companies that are not necessarily engaged as    
                                                         one of their primary activities in the           
                                                         ownership, development or management of          
                                                         real estate while remaining in the real estate   
                                                         business and continuing to pursue suitable       
                                                         investments for the Partnership in the real      
                                                         estate markets.  See "PROPOSED AMENDMENT TO      
                                                         PARTNERSHIP AGREEMENT."                          

Reasons for the Amendment............................... The Partnership intends to continue to invest    
                                                         its assets available for investment in           
                                                         undervalued assets in the real estate market,    
                                                         including residential development projects,      
                                                         land parcels for future residential and          
                                                         commercial development, non-performing           
                                                         loans, commercial properties and securities of   
                                                         entities which own, develop or manage            
                                                         significant real estate assets, including limited
                                                         partnership units and securities issued by real  
                                                         estate investment trusts.  While the Partnership 
                                                         believes opportunistic real estate investments   
                                                         continue to remain available, such investments   
                                                         have become more competitive to source and       
                                                         the increased competition may have an adverse    
                                                         impact on the spreads and the ability to find    
                                                         quality assets that provide returns sought by    
                                                         the Partnership.  In addition, pending           
                                                         investment in real estate assets, the            
                                                         Partnership's investment funds have been         
                                                         invested primarily in short-term government      
                                                         obligations.  Currently, the Partnership         
                                                         Agreement only permits the Partnership to        
                                                         invest in assets related to real estate unless   
                                                         such investments are of a short-term nature      
                                                         pending investment in real estate assets, such   

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                                                        [Enlarge/Download Table]
                                                                                                            
                                                         as deposit accounts and money market funds. The    
                                                         General Partner believes that it is in the best    
                                                         interests of the Partnership and the Unitholders   
                                                         for the Partnership to be permitted to invest a    
                                                         portion of the Partnership's funds in assets       
                                                         outside the real estate market that may provide    
                                                         returns on its funds in excess of those available  
                                                         to the Partnership in the current real estate      
                                                         market or those currently received on investments  
                                                         in government securities. See "BACKGROUND,"        
                                                         "DESCRIPTION OF INVESTMENTS" and "REASONS FOR      
                                                         AMENDMENT."                                        

Effect of Amendment on Unitholders and the                                                                  
   Partnership.......................................... The General Partner expects that investments       
                                                         pursuant to the proposed Amendment may result in   
                                                         increased Unitholder value and further             
                                                         diversification of its portfolio, although there   
                                                         can be no assurance thereof. Nevertheless, there   
                                                         are certain risks which may also attend an         
                                                         expansion of the Partnership's business purposes.  
                                                         For a discussion of such risks, see "RISKS RELATED 
                                                         TO NON-REAL ESTATE INVESTMENTS" and "EFFECT OF     
                                                         AMENDMENT ON UNITHOLDERS AND PARTNERSHIP."         

Consent Required........................................ Pursuant to the terms of the Partnership Agreement,
                                                         the written consent to the proposed Amendment by   
                                                         Record Holders owning at least a majority of the   
                                                         outstanding Depositary Units is sufficient for the 
                                                         adoption of the Amendment. High Coast, which       
                                                         beneficially owns more than 50% of the outstanding 
                                                         Depositary Units, has confirmed to the Partnership 
                                                         that the Amendment proposed by the General Partner 
                                                         will be approved by its written consent, and       
                                                         thereby adopted by the Partnership, twenty (20)    
                                                         days from the date of this Information Statement.  
                                                         See "PROPOSED AMENDMENT TO PARTNERSHIP AGREEMENT"  
                                                         and "SECURITY                                      

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                                                        [Enlarge/Download Table]
                                                                                                            
                                                         OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND         
                                                         MANAGEMENT."                                       

Conflicts of Interest................................... Icahn's approval of the Amendment to the           
                                                         Partnership Agreement through High Coast and the   
                                                         General Partner's selection of non-real estate     
                                                         investments may be influenced by factors other than
                                                         the best interests of the Partnership and          
                                                         maximization of Unitholder value. Such factors may 
                                                         include, whether the General Partner and its       
                                                         affiliates, including Icahn, have independent      
                                                         investments in such assets which may benefit from  
                                                         investments by the Partnership. In addition, the   
                                                         Partnership may enter into other transactions with 
                                                         the General Partner and its affiliates, including, 
                                                         without limitation, buying and selling assets from 
                                                         or to the General Partner or its affiliates and    
                                                         participating in joint venture investments in      
                                                         assets with the General Partner or its affiliates, 
                                                         whether real estate or non-real estate related,    
                                                         provided the terms of such transactions are fair   
                                                         and reasonable to the Partnership. Furthermore, it 
                                                         should be noted that the Partnership Agreement     
                                                         provides that the General Partner and its          
                                                         affiliates are permitted to have other business    
                                                         interests and may engage in other business ventures
                                                         of any nature whatsoever, and may compete directly 
                                                         or indirectly with the business of the Partnership.
                                                         Icahn and his affiliates currently invest in and   
                                                         perform investment management services with respect
                                                         to assets that are similar to those the Partnership
                                                         may invest in and intend to continue to do so;     
                                                         pursuant to the Partnership Agreement, however, the
                                                         Partnership shall not have any right to participate
                                                         therein or receive or share in any income or       
                                                         profits derived therefrom. In addition, Icahn,     
                                                         through High Coast, will share in any benefits     
                                                         realized or losses incurred by the Partnership from
                                                         investments made pursuant to the Amendment on a pro
                                                         rata basis with all Unitholders and the General    

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                                                        [Enlarge/Download Table]
                                                                                                          
                                                         Partner will share in such benefits and losses to
                                                         the extent of its general partner interest in the
                                                         Partnership.                                     

Audit Committee Approval................................ The adoption by the Partnership of the Amendment 
                                                         was unanimously approved by the members of the   
                                                         Audit Committee (the "Audit Committee") of the   
                                                         Board of Directors (the "Board") of the General  
                                                         Partner and the members of the Board. See "AUDIT 
                                                         COMMITTEE APPROVAL."                             

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BACKGROUND REGARDING PARTNERSHIP                                                

         The Partnership has been in the business of acquiring and managing real
estate and activities related thereto. Such acquisitions may be accomplished by 
purchasing assets outright or by acquiring securities of entities which hold    
significant real estate related assets. Historically, the properties owned by   
the Partnership have been primarily office, retail, industrial, residential and 
hotel properties. Most of the real estate assets currently owned by the         
Partnership were acquired from thirteen limited partnerships pursuant to an     
exchange offer consummated on July 1, 1987 and such assets generally are        
net-leased to single, corporate tenants. As of July 8, 1996, the Partnership    
owned 234 separate real estate assets primarily consisting of fee and           
leasehold interests in 35 states.                                               

     The Partnership's primary investment strategy in recent periods has
been to seek to acquire residential development projects, land parcels for      
future residential and commercial development, commercial properties,           
non-performing loans and securities of entities which own, manage or develop    
significant real estate assets, including limited partnership units and         
securities issued by real estate investment trusts.                             

         As discussed below, the Partnership is seeking to amend the Partnership
Agreement to permit investments which, while the Partnership continues to seek  
undervalued investment opportunities in the real estate market, will permit it  
to take advantage of investment opportunities it believes exist outside of the  
real estate market in order to maximize Unitholder value and further diversify  
its portfolio. Investments in non-real estate assets will consist of equity and 
debt securities of domestic and foreign issuers that are not necessarily engaged
as one of their primary activities in the ownership, development or management  
of real estate, and may include, for example, lower rated securities which may  
provide the potential for higher yields and therefore may entail higher risk.   
See "DESCRIPTION OF INVESTMENTS."                                               

REASONS FOR AMENDMENT                                                           

        Currently, the Partnership Agreement permits the Partnership to invest
only in assets related to real estate, except for short-term cash-type          
investments such as deposit accounts and money market funds. In recent months,  
however, the opportunities for profitable investments of the types sought by the
Partnership in real estate have diminished. While the Partnership believes      
opportunistic real estate acquisitions continue to remain available, such       
acquisition opportunities have become more competitive to source and the        
increased competition may have an adverse impact on the spreads and the ability 
to find quality assets that provide returns sought by the Partnership.          

    The General Partner continues to believe that the Partnership will
benefit from diversification of its real estate portfolio and is actively       
pursuing opportunistic real estate investments. To that end, the Partnership    
intends to continue to invest its assets available for investment in undervalued
assets in the real estate market, including land parcels for future residential 
and commercial development, non-performing loans, real estate securities and    
real estate operating and development companies, which acquisitions may include 
those from affiliates of the General Partner, provided the terms thereof are    
fair and reasonable to the                                                      

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Partnership and approved by the Audit Committee. However, there is significant  
competition for acquiring such assets including a number of investment funds    
that have raised additional capital for investment in opportunistic real estate 
transactions which may have a negative impact on the Partnership's investment   
returns. In addition, pending investment in real estate assets, the             
Partnership's investment funds, including those generated by property sales,    
refinancings and the exercise of tenant purchase options, have been invested    
primarily in short-term government obligations. The General Partner believes    
that it is in the best interests of the Partnership and Unitholders for the     
Partnership to be permitted to invest a portion of the Partnership's funds in   
assets outside of the real estate market that may provide returns on its funds  
in excess of those available to the Partnership in the current real estate      
market or those currently received on investments in government securities. The 
Amendment proposed by the General Partner will allow the Partnership to take    
advantage of such opportunities while remaining in the real estate business and 
continuing to pursue suitable investments for the Partnership in the real estate
markets by permitting it to invest under circumstances described herein in debt 
and equity securities of issuers that are not necessarily engaged as one of     
their primary activities in the ownership, development or management of real    
estate.                                                                         

        The General Partner has considered and is continuing to consider other
investment opportunities in the real estate markets, in addition to its         
historical real estate investments and its proposed non-real estate related     
investments under the Amendment. The Audit Committee requested and received     
information from Coopers & Lybrand, L.L.P. regarding real estate related        
investment opportunities available in certain real estate markets outside the   
United States. Additionally, management of the Partnership has been analyzing   
possible acquisitions of real estate operating companies and real estate related
investment opportunities that may exist relating to real estate limited         
partnership units, securities of real estate investment trusts and              
collateralized mortgage backed securities. While management is continuing to    
investigate and pursue such opportunities and other real estate related         
investments, the Board determined that after considering and comparing the      
potential risks related to such investments, including, for example, with       
respect to foreign real estate investments, political risks, currency risks,    
regulatory risks and potential tax considerations, and the risks related to     
investments in equity and debt securities of issuers that are not engaged       
primarily in real estate activities, including fluctuation in market value, that
it is in the best interests of the Partnership and its Unitholders to permit the
Partnership to be able to invest a portion of its funds in non-real estate      
related investments at this time beyond investments in government securities.   

     While the General Partner believes that investments pursuant to the
Amendment may result in increased Unitholder value and further diversification  
of the Partnership's assets, there can be no assurances thereof and there are   
significant risks which may also attend the Amendment. Under the terms of the   
Partnership Agreement, the General Partner has full, exclusive and complete     
discretion to manage and control the business and affairs of the Partnership, to
make all decisions affecting the business and affairs of the Partnership and to 
take all such actions as it deems necessary or appropriate to accomplish the    
purposes of the Partnership. Therefore, Unitholders will not be given an        
opportunity to approve or disapprove of decisions, including potential          
investments, made by the Partnership and the Partnership will be able to invest 
in non-real estate related assets without further consent of Unitholders. The   
Partnership anticipates that Mr. Icahn in his capacity as Chairman and personnel
of the General Partner and the Partnership will be responsible for determining  
the investments made by the                                                     

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Partnership following the adoption of the Amendment as they have with respect to
real estate related investments. See "RISKS RELATED TO NON-REAL ESTATE          
INVESTMENTS" and "CONFLICTS OF INTEREST."                                       

  It should be noted that Mr. Icahn is the Chairman of the General
Partner and through High Coast beneficially owns approximately 50.6% of the     
Partnership's outstanding Depositary Units. Icahn, in his capacity as majority  
Unitholder and as a result of his ownership of the General Partner, will receive
a pro rata interest in any benefits realized or losses incurred by the          
Partnership as a result of the Amendment both as a limited partner and as the   
general partner. However, regardless of his substantial ownership interests in  
the Partnership, Icahn's approval of the Amendment through High Coast and the   
General Partner's selection of non-real estate investments may be influenced by 
factors other than the best interests of the Partnership and maximization of    
Unitholder value. See "CONFLICTS OF INTEREST."                                  

   In determining to authorize the Amendment, the Board considered a
number of factors. Those factors included the long-term strategic plans of the  
Partnership relating to the enhancement of Unitholder value, the current real   
estate market and the investment opportunities available in real estate, the    
changes in investment opportunities that have arisen over recent months, the    
possibilities for comparable or higher returns on Partnership funds through     
non-real estate investments in relation to returns from government securities,  
the potential conflicts of interest and the possibility of self-dealing as a    
result of Icahn in his capacity as Chairman and certain employees and affiliates
of the General Partner performing services for the Partnership or investing in  
joint investment opportunities in respect of such assets, and the potential     
risks involved. In analyzing the current real estate market, the Audit Committee
requested and received information from Coopers & Lybrand, L.L.P. and the       
Partnership's management relating to, among other matters, difficulties facing  
the Partnership in acquiring real estate assets on terms acceptable to          
management in the current real estate market and relating to the increase in the
availability of capital and competition in the real estate markets which the    
Partnership believes has made it more difficult to earn higher yields sought by 
the Partnership. See  "AUDIT COMMITTEE APPROVAL."                               

DESCRIPTION OF INVESTMENTS                                                      

       Following adoption of the Amendment by the Partnership by the written
consent of High Coast on or about August 12, 1996, the Partnership intends,     
while remaining in the real estate business and continuing to pursue suitable   
investments for the Partnership in the real estate markets, to invest a portion 
of its funds available for investment in securities of issuers that are not     
necessarily engaged as one of their primary activities in the ownership,        
development or management of real estate. Such investments will include equity  
and debt securities of domestic and foreign issuers. The investment objective of
the Partnership with respect to such investments will be to purchase undervalued
securities, so as to maximize total returns consisting of current income and/or 
capital appreciation. Undervalued securities are those which the Partnership    
believes may have greater inherent value than indicated by their then current   
trading price. This may result from the fact that the securities, for example,  
may be thinly traded or otherwise undervalued due to market inefficiencies, may 
relate to opportunities wherein economic or market trends have not been         
identified and reflected in market value, or may                                

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include those in complex or not readily followed securities. Less favorable     
financial reports, lowered credit ratings, revised industry forecasts or sudden 
legal complications may result in market inefficiencies and undervalued         
situations.                                                                     

       The equity securities in which the Partnership may invest may include
common stocks, preferred stocks and securities convertible into common stocks,  
as well as warrants to purchase such securities. The debt securities in which   
the Partnership may invest may include bonds, debentures, notes,                
mortgage-related securities and municipal obligations. Certain of such          
securities may include lower rated securities which may provide the potential   
for higher yields and therefore may entail higher risk. In addition, the        
Partnership may engage in various investment techniques, such as options and    
futures transactions, foreign currency transactions and leveraging for either   
hedging or other purposes. As in any investment approach, the General Partner   
intends to perform due diligence as it believes appropriate in the circumstances
prior to making an investment pursuant to the Amendment, including possibly a   
review of public data, industry sources, research, and performance of           
risk/return analyses, which may include credit analyses, review of growth and   
market potentials and review of strategic positions of the underlying           
investment.                                                                     

       Under the terms of the Partnership Agreement, the General Partner has
full, exclusive and complete discretion to manage and control the business and  
affairs of the Partnership to make all decisions affecting the business and     
affairs of the Partnership, and to take all actions as it deems necessary or    
appropriate to accomplish the purposes of the Partnership. Thus, Unitholders    
will not be given an opportunity to approve or disapprove of decisions,         
including potential investments, made by the General Partner.                   

      As the Partnership will concentrate on undervalued securities, which
may include, for example, high yield securities and neglected securities, the   
Partnership's investments may be subject to significant amounts of business,    
financial, market and other risks. There can be no assurance that the           
Partnership will correctly evaluate such investments and their attendant risks  
or that such investments will be profitable to the Partnership. In addition, the
securities in which the Partnership may invest may fluctuate in value, and such 
fluctuations can be pronounced. See also "RISKS RELATED TO NON-REAL ESTATE      
INVESTMENTS."                                                                   

         The Partnership will conduct its investment activities in such a manner
so as not to be deemed an investment company under the 1940 Act. Generally, this
means that the Partnership does not intend to enter the business of investing in
securities and that no more than 40% of the Partnership's total assets will be  
invested in securities. The proportion of the Partnership's assets invested in  
each type of security or any single issuer or industry will not be limited.     
Investments may be made directly by the Partnership or indirectly through       
entities in which it has an interest. Mr. Icahn, as Chairman of the General     
Partner, and personnel of the General Partner and the Partnership, will be      
responsible for making investment decisions on behalf of the Partnership as they
have with respect to real estate related investments. While neither Icahn nor   
any other affiliates of the General Partner will receive any fees from the      
Partnership in consideration for services rendered in connection with non-real  
estate related investments, certain conflicts of interest may arise. See        
"CONFLICTS OF INTEREST."                                                        

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RISKS RELATED TO NON-REAL ESTATE INVESTMENTS                                    

    General. Under the terms of the Partnership Agreement, the General
Partner has full, exclusive and complete discretion to manage and control the   
business and affairs of the Partnership, to make all decisions affecting the    
business and affairs of the Partnership and to take all such actions as it deems
necessary or appropriate to accomplish the purposes of the Partnership.         
Therefore, Unitholders will not be given an opportunity to approve or disapprove
of decisions, including potential investments, made by the Partnership and the  
Partnership will be able to invest in non-real estate related assets without    
further consent of Unitholders.                                                 

         In addition, the proportion of the Partnership's assets invested in any
one type of security or any single issuer will not be limited. While the        
investment objectives of the Partnership with respect to such investments will  
be to purchase what it believes are undervalued securities, the General Partner 
will have full authority relating to the bases and methods for selection of     
securities and the Partnership will not be subject to any policy limitations on 
the amounts and nature of any non-real estate related securities purchased, sold
or held, provided that the Partnership will conduct its activities in such a    
manner so as not to be deemed an investment company under the 1940 Act and will 
structure its investments so as to continue to be taxed as a partnership rather 
than as a corporation under the publicly-traded partnership rules of the        
Internal Revenue Code. See "EFFECT OF AMENDMENT ON UNITHOLDERS AND PARTNERSHIP."

         Equity Securities. Equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and such        
fluctuations can be pronounced.                                                 

      Fixed-Income Securities. Even though interest-bearing securities are
investments which may promise a stable stream of income, the prices of such     
securities generally are inversely affected by changes in interest rates and,   
therefore, are subject to the risk of market price fluctuations. The values of  
fixed-income securities also may be affected by changes in the credit rating or 
financial condition of the issuer.                                              

     Lower Rated Securities. The Partnership may invest a portion of its
funds in higher yielding (and, therefore, higher risk) securities (commonly     
known as junk bonds). Such investments generally may be subject to certain risks
with respect to the issuing entity and to greater market fluctuations than      
certain lower yielding, higher rated convertible debt securities. The secondary 
market for these securities may be less liquid than that of higher rated        
securities; adverse conditions could make it difficult at times for the         
Partnership to sell certain securities or could result in lower prices.         

     Foreign Securities. Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some foreign
issuers are less liquid and more volatile than securities of comparable U.S.    
issuers. Similarly, volume and liquidity in most foreign securities markets are 
less than in the United States and, at times, volatility of price can be greater
than in the United States.                                                      

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  Since foreign securities often are purchased with and payable in
currencies of foreign countries, the value of these assets measured in U.S.     
dollars may be affected favorably or unfavorably by changes in currency rates   
and exchange control regulations.                                               

     Use of Leverage. Use of borrowed funds to leverage acquisitions can
exaggerate the effect of any increase or decrease in market value. Such         
borrowings would be subject to interest costs which may not be recovered by     
appreciation in value of the securities purchased.                              

Use of Derivatives. The Partnership may use derivatives       
("Derivatives"), which are financial instruments which derive their performance,
at least in part, from the performance of an underlying asset, index or interest
rate, such as options and mortgage-related securities. While Derivatives can be 
used effectively in furtherance of the Partnership's investment objectives such 
as by providing a hedging technique, under certain market conditions they can   
increase the volatility or decrease the liquidity of the Partnership's assets.  

MANAGEMENT OF THE PARTNERSHIP                                                   

       Under the terms of the Partnership Agreement, the General Partner has
full, exclusive and complete discretion to manage and control the business and  
affairs of the Partnership, to make all decisions affecting the business and    
affairs of the Partnership and to take all such actions as it deems necessary or
appropriate to accomplish the purposes of the Partnership. Thus, Unitholders    
will not be given an opportunity to approve or disapprove of decisions,         
including potential investments, made by the General Partner.                   

     The Partnership is in a unique position to utilize the expertise of
Icahn, the Chairman of its General Partner, and through High Coast, its         
principal Unitholder, and certain of its other affiliates. The Partnership      
anticipates that under Icahn's guidance it will pursue appropriate opportunities
in undervalued situations, for the purpose of maximizing returns, including for 
example, opportunities arising from market inefficiencies and opportunities from
identifying economic and market trends before the investment community          
generally. In addition, the General Partner will seek opportunities in which it 
may utilize the experience of Icahn and other affiliates of the General Partner 
in negotiations and restructurings in order to enhance performance, and may act 
as an activist shareholder, where considered appropriate to maximize Unitholder 
value. See "CONFLICTS OF INTEREST." It should be noted, however, that there can 
be no assurances of success in such transactions.                               

    Mr. Icahn has confirmed to the Partnership that neither he nor any
affiliates of the General Partner will receive any fees from the Partnership in 
consideration for services rendered in connection with non-real estate related  
investments by the Partnership. No arrangement or agreement exists pursuant to  
which Mr. Icahn will provide guidance in selecting undervalued securities.      
However, Mr. Icahn is Chairman of the General Partner and, through High Coast,  
beneficially owns 50.6% of the Partnership's outstanding Depositary Units and   
will share in any benefits realized and losses incurred by the Partnership as a 
result of the Amendment on a pro rata basis with all of the Unitholders. In     
addition, Icahn, through his ownership of the General Partner, will also receive
his general partner share of such benefits and losses. As such, Mr. Icahn and   
employees of the General Partner and the Partnership will, pursuant to the      
Partnership                                                                     

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Agreement, devote to the business of the Partnership such time as they deem     
reasonably required for its operations, including its investment decisions. See 
"CONFLICTS OF INTEREST."                                                        

PROPOSED AMENDMENT TO PARTNERSHIP AGREEMENT                                     

       Attached as Appendix A to this Information Statement is a copy of the
text of the proposed Amendment. The Amendment provides generally that the       
business purposes of the Partnership shall be:                                  

                (a) to directly or indirectly invest in, acquire, own, hold,
            manage, operate, sell, exchange and otherwise dispose of
             interests in real estate (including without limitation, a
              limited partner interest in the Operating Partnership) and
              securities of any type and description now or hereafter in
                  existence, whether or not related to interests in real estate,
                  and (b) to enter into any lawful transaction and engage in any
         lawful activities related or incidental thereto or in
             furtherance of the foregoing purposes (including, without
              limitation, any transaction or activity outside the normal
           scope of the Partnership's business), provided that the
           Partnership will conduct its activities so as not to be
                 considered an investment company under the Investment Company
                  Act of 1940, as amended. [emphasis reflects proposed additions
 to Section 3.01 of the Partnership Agreement]

A corresponding similar amendment will be made to the Amended and Restated      
Agreement of Limited Partnership of American Real Estate Holdings Limited       
Partnership, the Partnership's operating subsidiary.                            

    Article XIV of the Partnership Agreement provides that, subject to
certain specified exceptions (none of which is applicable) and provided that    
certain conditions are satisfied,(1) an amendment to the Partnership Agreement  
requires the approval of a Majority Interest, defined in Article I as "Record   
Holders who are Record Holders with respect to more than fifty percent (50%) of 
the total number of all outstanding Units."(2) Article XIV of the Partnership   
Agreement                                                                       

--------                                                                        

(1)      These conditions generally require that certain opinions be supplied to
    the effect that the exercise of voting rights in this case and the
         action proposed to be taken (i) would not cause the limited partners to
      be deemed to be taking part in the management of the Partnership and
         thereby threaten their limited liability, (ii) would not jeopardize the
       status of the Partnership as a partnership for tax purposes and (iii)
is otherwise permissible under the governing statutes of the  
         Partnership. Under the circumstances contemplated herein, such opinions
will be rendered.                                             

(2)      Amendment No. 1 to the Agreement states that all references in the     
       Partnership Agreement to a Majority Interest are meant not to include
holders of the 5% cumulative                                  

                                                                  (continued...)

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further provides that the General Partner may obtain approval for an amendment  
to the Partnership Agreement by written consent of Record Holders in lieu of a  
meeting. Accordingly, High Coast can execute a written consent approving the    
proposed Amendment. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND    
MANAGEMENT" for information relating to High Coast's security ownership. High   
Coast has confirmed to the Partnership that on or about August 12, 1996, twenty 
(20) days following the date of this Information Statement, High Coast will     
execute a written consent and the proposed Amendment will be duly adopted by the
Partnership.                                                                    

EFFECT OF AMENDMENT ON UNITHOLDERS AND PARTNERSHIP                              

       At present, the General Partner does not have under consideration any
specific investments in securities of issuers that are not necessarily engaged  
as one of their primary activities in the ownership, development or management  
of real estate. However, it is contemplated that after the approval of the      
Amendment, the General Partner will, while continuing to pursue investments in  
real estate assets, pursue such investments described herein. As discussed      
above, these investments may result in increased Unitholder value and increased 
net income for the Partnership, although there can be no assurance thereof.     
Nevertheless, there are certain consequences which may also attend the          
Amendment.                                                                      

        The Partnership will conduct its activities in such a manner so as not
to be deemed an investment company under the 1940 Act. Generally, this means    
that the Partnership does not intend to enter the business of investing in      
securities and that no more than 40% of the Partnership's total assets will be  
invested in securities. If it does not meet the exclusions from the 1940 Act,   
the Partnership would be required to register as an investment company under the
1940 Act, and it would be subject to the reporting requirements and regulatory  
constraints of the 1940 Act. As a consequence, the General Partner intends to   
continue to limit the Partnership from engaging in transactions that would cause
it to meet the definitions in Section 3(a) of the 1940 Act so that the          
Partnership will not be deemed to be an "investment company."                   

Under applicable tax laws, the Partnership will structure its 
investments so as to continue to be taxed as a partnership rather than a        
corporation under the publicly-traded partnership rules of Section 7704 of the  
Internal Revenue Code. While the General Partner intends to structure           
investments in non-real estate related assets to satisfy these rules, it is     
possible that investments not related to real estate could result in income     
which would endanger the Partnership's classification as a partnership for tax  
purposes. If the Partnership were treated as an association taxable as a        
corporation in any taxable year: (i) the Partnership's taxable income, gains,   
losses, deductions and credits would be subject to corporate income tax and     
would not be passed                                                             

---------                                                                       

(2)(...continued)                                                               
     pay-in-kind redeemable preferred units representing limited partner
    interests in the Partnership (the "Preferred Units") issued in the
       rights offering conducted by the Partnership (the "Rights Offering").
 Thus, the term "Record Holders," for purposes of approval of an
        amendment to the purpose clause, does not include holders of Preferred
Units.                                                        

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through to its partners; (ii) any distributions made to Unitholders would be    
treated as taxable dividend income to the extent of the Partnership's earnings  
and profits and the balance a non-taxable return of capital to the extent of the
partner's basis in his or her Depositary Units; and (iii) the reclassification  
as an association taxable as a corporation would be deemed an incorporation of  
the entity upon which some gain could be recognized.                            

       In order for a publicly-traded partnership such as the Partnership to
avoid these consequences, for tax years beginning after 1997 at least 90% of the
Partnership's gross income each year must be "qualifying income," i.e., inter   
alia, interest, dividends, real property rents, gain from the sale or other     
disposition of real property, income from oil, gas and mineral explorations,    
development, mining, refining and transportation and gain from the sale or      
disposition of assets held for the production of qualifying income. The 90%     
qualifying income test would apply immediately if the Partnership entered into a
substantial new line of business before 1998 as described below.                

      Dividend and interest income from non-real estate corporations would
constitute "qualifying income"; however, interest received from a non-real      
estate corporation the stock of which is controlled by Icahn and/or the         
Partnership may not be treated as qualifying income. If instead of securities   
the Partnership were to invest in the assets of a business, directly or through 
a partnership or limited liability company, its share of gross income of the    
business will be taken into account in testing for qualifying income.           
Investments through or in a corporation can permit business interests to be     
purchased. Thus, the Partnership will seek to ensure that under its investment  
policy, the level of "qualifying income" received by the Partnership remains at 
or above this 90% level in order for the Partnership to continue to be taxed as 
a partnership after 1997.                                                       

      Expansion of the Partnership's business purposes might also endanger
the protection of a transition rule provided in the Revenue Act of 1987, which  
states that a partnership which was publicly traded on December 17, 1987, as the
Partnership was, will continue to be classified as a partnership through        
December 31, 1997, so long as it does not acquire or commence a "substantial new
line of business." The approval of the Amendment would not, in and of itself,   
constitute the commencement of a "substantial new line of business." A new line 
of business would be considered "substantial" in the first taxable year in which
either (i) the Partnership derives more than 15% of its gross income from, or   
uses more than 15% of its gross assets in, a new line of business operated by   
the Partnership or (ii) the Partnership conducts an activity through a          
corporation controlled by the Partnership or Icahn which would be substantial if
conducted by the Partnership, unless the Partnership does not hold significant  
debt of the corporation or receive other amounts from the corporation which were
deductible by it. Except as described in clause (ii) above, ownership of        
corporate stock is not a new line of business for these purposes. Nevertheless, 
even if the protection of this transition rule were lost, the Partnership could 
avoid taxation as a corporation by meeting the 90% qualifying income test noted 
above.                                                                          

        Assuming the Partnership continues to be taxed as a partnership, asset
dispositions or other gains made on investments of the Partnership, whether real
estate related or not, may result in additional income which will be allocated  
to Unitholders and included in their income whether or not they receive cash    
distributions. In December 1995, the Partnership announced                      

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that it plans to continue to apply available Partnership operating cash flow to 
repayment of maturing indebtedness, tenant requirements and other capital       
expenditures and creation of cash reserves for contingencies facing the         
Partnership, including environmental matters and scheduled lease expirations. As
a result, the Partnership does not expect to make any distributions in 1996 and,
therefore, Unitholders may be required to recognize taxable income and gain even
though they will not receive a cash distribution. The Partnership plans to      
reconsider the issue after the close of its 1996 fiscal year.                   

     In addition, while the terms of the Prudential Loan do not directly
prohibit the Partnership from amending the Partnership Agreement as proposed    
herein, investments in certain types of assets that may be considered non-income
producing are restricted thereunder. Therefore, the Partnership will continue to
structure investments, in the absence of a waiver or amendment to the Prudential
Loan, such that the Partnership will continue to be in compliance with the      
restrictive covenants contained in the Prudential Loan. It should be noted that 
the Prudential Loan, as executed, generally does not take into account the      
possibility that the Partnership might invest in non-real estate related assets 
other than short-term cash-type investments, and does not specifically deal with
the investments described herein. Following the scheduled payment in May 1996,  
approximately $22,616,000 remains outstanding under the Prudential Loan. While  
the Partnership may prepay in full the Prudential Loan, to date, the Partnership
has been unable to negotiate favorable terms for such prepayment.               

       In addition to the possible consequences discussed above, Unitholders
should consider the risks related to non-real estate investments set forth under
"RISKS RELATED TO NON- REAL ESTATE INVESTMENTS" above.                          

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                  

       As of July 23, 1996, High Coast owned 12,991,312 Depositary Units, or
approximately 50.6% of the outstanding Depositary Units and 1,828,772 Preferred 
Units or approximately 88.2% of the outstanding Preferred Units. Icahn may also 
be deemed to be the beneficial owner of the 147,390 Depositary Units owned of   
record by API Nominee Corp. ("Nominee") (the Units owned by Nominee are         
Depositary Units of holders who have not yet exchanged their limited partner    
interests) which, in accordance with state law, are in the process of being     
turned over to the relevant state authorities as unclaimed property; however,   
Icahn disclaims such beneficial ownership.                                      

As of July 23, 1996, there were 25,666,640 Depositary Units   
outstanding. Each Unitholder is entitled to one vote per Depositary Unit held.  
As of July 23, 1996, to the best knowledge of the Partnership, Wellington       
Management Company, a Massachusetts corporation, which filed a Schedule 13-G on 
January 26, 1996, owns 1,526,546 Depositary Units, or approximately 5.95% of the
outstanding Depositary Units.                                                   

      The following table provides information, as of July 23, 1996, as to
the beneficial ownership of the Depositary Units and Preferred Units of the     
Partnership for each director of the General Partner, and all directors and     
executive officers of the General Partner as a group.                           

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                                                                [Download Table]

                           Beneficial                  Beneficial            
Name of                   Ownership of     Percent    Ownership of    Percent
Beneficial Owner        Depositary Units  of Class  Preferred Units  of Class
----------------        ----------------  --------  ---------------  --------
                                                                             
Carl C. Icahn(1)           12,991,312       50.6%      1,828,772       88.2% 

All directors and                                                            
executive officers                                                           
as a group (5 persons)     12,991,312       50.6%      1,828,772       88.2% 

---------                                                                       
(1)      Icahn, through High Coast may also be deemed to be the beneficial owner
      of the 147,390 Depositary Units owned of record by Nominee, which in
      accordance with state law are in the process of being turned over to
      the relevant state authorities as unclaimed property; however, Icahn
      disclaims such beneficial ownership. The foregoing is exclusive of a
       1.99% ownership interest in the Partnership which the General Partner
   holds by virtue of its 1% General Partner interest in each of the
       Partnership and the Subsidiary, but inclusive of the Depositary Units
High Coast acquired through the Rights Offering.              

        The affirmative vote of Unitholders holding more than 75% of the total
number of all Units then outstanding, including Depositary Units held by the    
General Partner and its affiliates, is required to remove the General Partner.  
Thus, since Icahn, through High Coast, holds approximately 50.6% of the         
Depositary Units outstanding, the General Partner will not be able to be removed
pursuant to the terms of the Partnership Agreement without Icahn's consent.     
Moreover, under the Partnership Agreement, the affirmative vote of the General  
Partner and Unitholders owning more than 50% of the total number of all         
outstanding Depositary Units then held by Unitholders, including High Coast, is 
required to approve, among other things, selling or otherwise disposing of all  
or substantially all of the Partnership's assets in a single sale or in a       
related series of multiple sales, dissolving the Partnership or electing to     
continue the Partnership in certain instances, electing a successor general     
partner, making certain amendments to the Partnership Agreement or causing the  
Partnership, in its capacity as sole limited partner of the Subsidiary, to      
consent to certain proposals submitted for the approval of the limited partners 
of the Subsidiary. Accordingly, as High Coast holds in excess of 50% of the     
Depositary Units outstanding, Icahn, through High Coast, has effective control  
over such approval rights.                                                      

       Mark H. Rachesky, M.D., ended employment with Icahn and affiliates in
June 1996, and resigned as an officer and director of the General Partner. Dr.  
Rachesky did not indicate to the Partnership any disagreement with the          
Partnership on any matter relating to its operations, policies or practices. As 
Dr. Rachesky's resignation was effective prior to the Board actions referred to 
below taken at its June 17th meeting, he did not participate therein.           

CONFLICTS OF INTEREST                                                           

     Icahn, in his capacity as majority Unitholder, will not receive any
additional benefit with respect to distributions and allocations of profits and 
losses not shared on a pro rata basis by all other Unitholders as a result of   
the Amendment. In addition, Icahn has confirmed to the Partnership that neither 
he nor any of his affiliates will receive any fees from the Partnership in      
consideration for services rendered in connection with non-real estate related  
investments by                                                                  

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the Partnership. However, High Coast's approval of the Amendment and the General
Partner's selection of non-real estate investments may be influenced by factors 
other than the best interests of the Partnership and maximization of Unitholder 
value. Such factors may include, but are not limited to, whether Icahn or his   
affiliates have independent investments in such assets which may benefit from   
investments by the Partnership. In addition, the Partnership may enter into     
other transactions with the General Partner and its affiliates, including,      
without limitation, buying and selling assets from or to the General Partner or 
its affiliates and participating in joint venture investments in assets with the
General Partner or its affiliates, whether real estate or non-real estate       
related, provided the terms of such transactions are fair and reasonable to the 
Partnership. Furthermore, it should be noted that the Partnership Agreement     
provides that the General Partner and its affiliates are permitted to have other
business interests and may engage in other business ventures of any nature      
whatsoever, and may compete directly or indirectly with the business of the     
Partnership. Icahn and his affiliates currently invest in and perform investment
management services with respect to assets that are similar to those the        
Partnership may invest in and intend to continue to do so; pursuant to the      
Partnership Agreement, however, the Partnership shall not have any right to     
participate therein or receive or share in any income or profits derived        
therefrom.                                                                      

The Audit Committee meets on an annual basis, or more often if
necessary, to review any conflicts of interest which may arise and will continue
to be charged with reviewing and approving any conflicts of interest that may   
arise in connection with transactions entered into with Icahn and his           
affiliates, including the Partnership's participation in joint investments with 
Icahn and his affiliates.                                                       

EXPENSE OF PROPOSED AMENDMENT                                                   

  The Partnership will bear the cost of preparing this Information
Statement and all other costs incurred in connection with the proposed          
Amendment.                                                                      

NO DISSENTERS' RIGHTS OF APPRAISAL                                              

Under Delaware law, no dissenter's rights (i.e., rights of    
non-consenting security holders to exchange interests in the Partnership for    
payment of their fair value) are available to any Unitholder of the Partnership,
regardless of whether such Unitholder has consented to the adoption of the      
Amendment. Further, the Partnership Agreement does not provide appraisal rights 
for an amendment to the purpose clause of the Partnership Agreement, and        
therefore the Unitholders dissenting from an amendment passed by at least a     
Majority Interest would not be entitled to same.                                

AUDIT COMMITTEE APPROVAL                                                        

The Audit Committee, consisting of directors Messrs. Alfred D.
Kingsley, William A. Leidesdorf and Jack G. Wasserman, acting independently of  
the Partnership's management, in March 1996 commissioned a report addressed to  
them from Coopers & Lybrand L.L.P.                                              

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regarding the views of the Partnership's management that the Partnership's      
traditional business, net lease transactions, had become increasingly           
competitive with declining returns and that, with respect to the real estate    
markets, the Partnership should continue to explore other investment            
opportunities including those being pursued by the Partnership as described     
elsewhere herein. The report of Coopers & Lybrand L.L.P. to the Audit Committee 
confirmed this view. The report also confirmed management's view that real      
estate investment conditions are now different than they were 12 or 24 months   
ago, and that the availability of capital and competition has increased         
significantly, making it more difficult to earn higher yields sought by the     
Partnership.                                                                    

       In this context, the Audit Committee members had informal preliminary
discussions among themselves regarding the possibility of the Partnership       
investing its funds in non-real estate assets in order to protect and further   
the best interests of the Partnership and its Unitholders and diversify its     
assets. Thereafter, at a meeting of the Audit Committee on May 21, 1996, the    
Audit Committee determined to discuss the matter with the other directors, and  
to hire independent counsel to advise the Audit Committee in this regard. The   
full Board met on May 30, 1996 and discussed the possibility of the Partnership 
investing its funds in non-real estate related assets. Thereafter, the Audit    
Committee requested and received additional information from Coopers & Lybrand  
L.L.P. and the Partnership's management relating to the difficulties facing the 
Partnership in acquiring real estate assets on terms acceptable to management in
the current real estate market and information from Mr. Icahn and affiliates    
regarding their investment performance and potential conflicts of interest.     

    In preparing its report for the Audit Committee, Coopers & Lybrand
L.L.P. performed internal research which included interviews with real estate   
industry professionals such as opportunistic fund investment officers,          
multi-family development company executives, CMBS buyers, single-family         
residential developers, and large-tract multi-use development executives, and   
analyzed publicly-available market and financial information where available. In
addition, Coopers & Lybrand L.L.P. presented to the Audit Committee information 
it had compiled from publicly-available information regarding comparisons       
between United States real estate investment opportunities and investment       
opportunities in certain countries outside the United States, which included    
matters relating to country risks, economic opportunities, currency risks and   
political and regulatory risks. In reviewing various real estate investment     
opportunities that may be considered by the Partnership, Coopers & Lybrand      
L.L.P.'s analysis included, among other matters, evaluations of the typical size
of an investment, the holding period required, the amount of control an investor
could expect to have over the investment vehicle and/or the real estate asset,  
and other liquidity matters. The Audit Committee analyzed the information       
provided by Coopers & Lybrand L.L.P. and by the management of the Partnership,  
as well as that generally available in the market, in reaching its conclusions  
regarding the prospects for suitable real estate investments for the            
Partnership.                                                                    

    At the June 17, 1996 full Board meeting, the Audit Committee, upon
further discussions with the Partnership's management, the Partnership's        
counsel, the Audit Committee's counsel and Coopers & Lybrand L.L.P., unanimously
approved the Amendment and determined that the amendment of the Partnership     
Agreement to permit it, while remaining in the real estate business and         
continuing to pursue suitable investments for the Partnership in the real estate
markets, to include non-real estate related investments by permitting the       
Partnership to invest in securities issued by companies that are not necessarily
engaged as one of their primary activities in the                               

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ownership, development or management of real estate, was in the best interests  
of the Partnership and its Unitholders.                                         

        Thereafter, the full Board unanimously approved the Amendment as well.
While Mr. Icahn did not participate in the separate meetings and discussions of 
the Audit Committee, he did participate in the full Board meetings. The Board   
was fully informed of Mr. Icahn's interest in the Partnership and the Amendment,
and Mr. Icahn answered questions from the other Board members with respect to   
his interest and potential conflicts.                                           

         In determining to authorize the Amendment as described above, the Board
considered a number of factors. Those factors included the long-term strategic  
plans of the Partnership relating to the enhancement of Unitholder value, the   
current real estate market and the investment opportunities available in real   
estate, the changes in investment opportunities that have arisen over the recent
months, the possibilities for comparable or higher returns on the Partnership's 
funds through non-real estate investments, the potential conflicts of interest  
and possibility of self-dealing as a result of Icahn or his affiliates          
performing services for the Partnership or investing in joint investment        
opportunities in respect of such assets, and the potential risks involved.      

ADDITIONAL INFORMATION                                                          

       Any questions regarding this Information Statement may be directed to
John P. Saldarelli, Secretary of the General Partner, at the following telephone
numbers: (914) 242-7700 or (800) 255-AREP.                                      

/s/ JOHN P. SALDARELLI                                        

By order of the Board of Directors,                           
John P. Saldarelli, Secretary                                 

July 23, 1996                                                                   

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APPENDIX A

 AMENDMENT NO. 2

TO

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

OF

 AMERICAN REAL ESTATE PARTNERS, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

         AMENDMENT NO. 2 ("Amendment No. 2") to the Amended and Restated Limited
Partnership Agreement (the "Partnership Agreement") of American Real Estate     
Partners, L.P. (the "Partnership"), dated as of August __, 1996, by and among   
American Property Investors, Inc., a Delaware corporation, as general partner   
(the "General Partner"), and all other persons and entities who are or shall in 
the future become limited partners (the "Limited Partners") of the Partnership. 
Except as otherwise indicated, all capitalized terms used herein have the       
meaning ascribed to such terms in the Partnership Agreement.                    

 WITNESSETH:

     WHEREAS, the Partnership desires to expand its business purposes to
permit it to invest in securities not necessarily related to real estate; and   

         WHEREAS, the Partnership has obtained the written consent of High Coast
Limited Partnership, as beneficial holder of more than 50% of the outstanding   
depositary units representing limited partner interests in the Partnership (the 
"Depositary Units").                                                            

NOW, THEREFORE, the parties hereby agree as follows:          

    1. Section 3.01 of the Partnership Agreement is hereby amended and
restated in its entirety to read as follows:                                    

"3.01.  Purposes and Business.                                

               The purposes of the Partnership shall be (a) to directly or
  indirectly invest in, acquire, own, hold, manage, operate, sell,
       exchange and otherwise dispose of interests in real estate (including
 without limitation, a limited partner interest in the Operating
Partnership) and securities of any type and description now or
     hereafter in existence, whether or not related to interests in real
        estate, and (b) to enter into any lawful transaction and engage in any
lawful activities related or                                  

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incidental thereto or in furtherance of the foregoing purposes
         (including, without limitation, any transaction or activity outside the
normal scope of the Partnership's business), provided that the
       Partnership will conduct its activities so as not to be considered an
 investment company under the Investment Company Act of 1940, as
amended."                                                     

    2. Except as expressly amended hereby, all other provisions of the
Partnership Agreement shall continue in full force and effect.                  

      3. This Amendment No. 2 shall become effective as of the date hereof
upon its execution by all parties hereto.                                       

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       IN WITNESS WHEREOF, the undersigned have evidenced their adoption and
ratification of the foregoing Amendment No. 2 to the Partnership Agreement of   
the Partnership and have duly executed this Amendment No. 2, or have caused this
Amendment No. 2 to be duly executed on their behalf, as of the day and year     
first hereinabove set forth.                                                    

              General Partner:

                               AMERICAN PROPERTY INVESTORS, INC.

                                      By: ____________________________________
                               Name:  John P. Saldarelli
                             Title:   Vice President

               Limited Partners:

                                   By: American Property Investors, Inc.
                            (attorney-in-fact)

                                      By: ____________________________________
                               Name:  John P. Saldarelli
                             Title:   Vice President

[Amendment No. 2 to Partnership Agreement of AREP]

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APPENDIX B

 WRITTEN ACTION OF

THE MAJORITY UNITHOLDER OF

 AMERICAN REAL ESTATE PARTNERS, L.P.

               The undersigned, being the beneficial owner of 50.6% of the
outstanding Depositary Units of American Real Estate Partners, L.P., a Delaware 
limited partnership (the "Partnership"), does hereby adopt, confirm and ratify  
the following resolution by written consent pursuant to the provisions of       
Section 14.13 of the Amended and Restated Limited Partnership Agreement (the    
"Partnership Agreement") of the Partnership:                                    

                 RESOLVED, that the amendment to the Partnership Agreement set
   forth on Appendix A hereto and duly proposed by American Property
        Investors, Inc., as the general partner of the Partnership, be, and it
hereby is, adopted, affirmed and approved in all respects; and

                  RESOLVED further, that the adoption of an amendment equivalent
     in substance to the amendment attached hereto as Appendix A, making
conforming amendments to the "purposes" paragraph of the OLP  
      Partnership Agreement (as defined in the Partnership Agreement), be,
and it hereby is, approved.                                   

             This Written Action shall be effective when signed by the
undersigned and filed in the minute book, whereupon it shall constitute the act 
of the majority Unitholder of the Partnership.                                  

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                 IN WITNESS WHEREOF, the undersigned has executed this Written
Action as of this ___ day of August, 1996.                                      

                            HIGH COAST LIMITED PARTNERSHIP

                                     By:  American Property Investors, Inc.,
                           General Partner

                                      By: ____________________________________
                               Name:  John P. Saldarelli
                             Title:   Vice President

[Written Action of majority Unitholder of AREP
 authorizing purpose amendment to Partnership Agreement]

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PRER14C’ Filing		Date		First		Last			Other Filings
		12/31/97		19					10-K405
		8/12/96		4		18
		7/23/96		3		24			DEF 14C,  PRE 14C
Filed on:		7/8/96		11
		6/17/96		23
		5/30/96		23
		5/21/96		23
		1/26/96		20
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