MILLBURN RIDGEFIELD CORPORATION
411 WEST PUTNAM AVENUE
GREENWICH, CT 06830
203-625-7554
May 1, 2006
BY EDGAR AND OVERNIGHT MAIL
Mr. Steven Jacobs
Branch Chief
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Nestor Partners ("Registrant" or "Nestor" or the "company");
Form 10-K for the year ended December 31, 2005; File no.
000-50725
Dear Sir:
We are writing in response to your comment letter dated April 21, 2006
(the "Letter"), relating to the above-referenced filing. Subsequent to
Registrant's receipt of the Letter and as instructed in the Letter, Gregg
Buckbinder, acting as Chief Financial Officer of Millburn Ridgefield
Corporation, the general partner of Nestor, spoke by telephone to you and Kelly
McCusker, Staff Accountant (the "Telephone Conversations"). As discussed in the
Telephone Conversations, Registrant is responding to the Letter in the form of
this correspondence, but is not amending the relevant disclosure in the
above-referenced filing. As further agreed during the Telephone Conversations,
Registrant's future filings will contain the language requested in the Letter.
For your convenience, the comment included in the Letter is set forth verbatim
below in italics, together with Registrant's response thereto.
FORM 10K FOR THE YEAR ENDED DECEMBER 31, 2005
NOTE 3 - PROFIT SHARE ALLOCATION
1. WE NOTE THAT FROM YOUR DISCLOSURE IN NOTE 1 THAT "LIMITED PARTNERS, SPECIAL
LIMITED PARTNERS, NEW PROFIT MEMO ACCOUNT, AND THE GENERAL PARTNER SHARE IN THE
PROFITS AND LOSSES OF THE PARTNERSHIP...ON THE BASIS OF THEIR PROPORTIONATE
INTERESTS OF PARTNERSHIP CAPITAL." PLEASE ADVISE US AND REVISE YOUR DISCLOSURE
TO EXPLAIN WHY INCOME WAS ALLOCATED TO THE SPECIAL LIMITED PARTNERS AND GENERAL
PARTNER FOR PERIODS IN WHICH LOSSES WERE ALLOCATED TO THE LIMITED PARTNERS. IN
ADDITION, PLEASE CLARIFY THE AMOUNT AT WHICH EACH PARTNERSHIP UNIT CAN BE
REDEEMED.
The relevant disclosure will be modified in future filings as follows (additions
are indicated by bold and double underline and deletions are indicated by strike
through):
MILLBURN RIDGEFIELD CORPORATION
Mr. Steven Jacobs
Securities and Exchange Commission
May 1, 2006
Page 2
1. ORGANIZATION OF THE PARTNERSHIP
Nestor Partners (the "Partnership") is a limited partnership, which was
organized in 1976 under the New Jersey Uniform Limited Partnership Act.
The Limited Partnership Agreement (the "Agreement") was amended and
restated as of April 5, 2004. The Partnership engages in the speculative
trading of futures and forward currency contracts. The instruments that
are traded by the Partnership are volatile and involve a high degree of
market risk.
The General Partner of the Partnership is Millburn Ridgefield Corporation
(the "General Partner"). Principals, employees, former employees, and
other affiliates of the General Partner have invested in the Partnership
as special limited partners.
The Agreement provides that subject to certain limitations, the General
Partner shall conduct and manage the business of the Partnership. The
General Partner has the right to make all investment decisions regarding
the Partnership, authorize the payments of distributions to partners,
enter into customer agreements with brokers, and take such other actions,
as it deems necessary or desirable, to manage the business of the
Partnership.
The limited partners, special limited partners, New Profit Memo Account,
and the General Partner share in the profits and losses of the
Partnership, which are determined before brokerage fees (Note 2) and
profit share allocations on the basis of their proportionate interests of
Partnership capital (Note 3). THE GENERAL PARTNER AND SPECIAL LIMITED
PARTNERS ARE CHARGED LOWER BROKERAGE FEES THAN LIMITED PARTNERS, WHICH IN
2004 AND 2003 RESULTED IN THE GENERAL PARTNER AND SPECIAL LIMITED PARTNERS
EXPERIENCING NET GAINS AND THE LIMITED PARTNERS, IN AGGREGATE, NET LOSSES.
No limited partner or special limited partner shall be liable for
Partnership obligations in excess of their capital contribution plus
profits allocated to their capital accounts, if any.
Subject to certain conditions, a partner HAS THE RIGHT TO REDEEM ALL OR A
PORTION OF ITS PARTNERSHIP CAPITAL AS OF ANY MONTH-END UPON FIFTEEN DAYS'
PRIOR WRITTEN NOTICE TO THE GENERAL PARTNER. IN ITS SOLE DISCRETION, THE
GENERAL PARTNER MAY PERMIT REDEMPTIONS ON SHORTER NOTICE OR AS OF A DATE
OTHER THAN MONTH-END. PARTNERS WHO PURCHASED THEIR INTERESTS THROUGH
CERTAIN SELLING AGENTS AND REDEEM THEIR PARTNERSHIP CAPITAL PRIOR TO THE
ONE-YEAR ANNIVERSARY OF THEIR SUBSCRIPTION WILL PAY THE APPLICABLE EARLY
REDEMPTION FEE. REDEMPTIONS WILL BE MADE AS OF THE LAST DAY OF THE MONTH
FOR AN AMOUNT EQUAL TO THE NET ASSET VALUE OF THE PORTION OF A PARTNER'S
CAPITAL BEING REDEEMED; A REDEEMING PARTNER SHALL RECEIVE SUCH REDEEMED
CAPITAL LESS THE REDEMPTION FEE, IF ANY.
MILLBURN RIDGEFIELD CORPORATION
Mr. Steven Jacobs
Securities and Exchange Commission
May 1, 2006
Page 3
The General Partner, subject to Commodity Futures Trading Commission
requirements, may (at its discretion) sell additional Limited Partnership
Interests to persons desiring to become limited partners.
The Partnership will terminate on October 31, 2017, or in the event of
certain other circumstances, as defined in the Agreement.
At December 31, 2003, the number of partners in the Partnership exceeded
500. As a result, pursuant to the requirements of Section 12(g) of the
Securities Exchange Act of 1934 (the "Act"), the Partnership filed a
registration statement on Form 10 with the Securities and Exchange
Commission on April 29, 2004, and became subject to the periodic reporting
requirements of the Act.
3. PROFIT SHARE ALLOCATION
The Agreement provides that the General Partner's profit share equal to
20% of Trading Profits (as defined in the Agreement) at the end of each
year is charged to the limited partners' capital accounts. However, for
limited partners' withdrawals during the year, the profit share
calculation shall be computed as though the withdrawal date was at year
end. BECAUSE LIMITED PARTNERS MAY PURCHASE THEIR PARTNERSHIP INTERESTS AT
DIFFERENT TIMES, THEY MAY RECOGNIZE DIFFERENT AMOUNTS OF TRADING PROFITS.
EACH LIMITED PARTNER PAYS A PROFIT SHARE ONLY ON TRADING PROFITS
APPLICABLE TO ITS PARTNERSHIP INTEREST. LIMITED PARTNERS WHO MAKE MULTIPLE
INVESTMENTS IN THE PARTNERSHIP RECEIVE SEPARATE PARTNERSHIP INTERESTS FOR
PURPOSES OF TRACKING THE PROFIT SHARE. ACCORDINGLY, IN ANY GIVEN YEAR,
SOME LIMITED PARTNERS MAY EXPERIENCE NET GAINS AND BE CHARGED THE 20%
PROFIT SHARE ALLOCATION FOR ALL OR A PORTION OF THEIR INTERESTS WHERE
LIMITED PARTNERS IN THE AGGREGATE EXPERIENCED NET LOSSES.
Any profit share charged is added to the General Partner's capital account
to the extent net taxable capital gains are allocated to the General
Partner, and the remainder, if any, of such profit share is added to the
New Profit Memo Account. The General Partner may not make any withdrawal
from the balance in the New Profit Memo Account. If, at the end of a
subsequent year, net taxable gains are allocated to the General Partner in
excess of such year's profit share, a corresponding amount is transferred
from the New Profit memo account to the General Partner's capital account.
* * * *
As requested in the Letter, the company hereby acknowledges that:
o the company is responsible for the adequacy and accuracy of the disclosure
in the filings;
MILLBURN RIDGEFIELD CORPORATION
Mr. Steven Jacobs
Securities and Exchange Commission
May 1, 2006
Page 4
o staff comments or changes to disclosure in response to staff comments do
not foreclose the Commission from taking any action with respect to the
filings; and
o the company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
flaws of the United States.
* * * *
If you have further comments or questions or we may be of further
assistance, please contact me at (212) 332-7300.
Sincerely,
/s/ Gregg Buckbinder
--------------------
Gregg Buckbinder
Chief Financial Officer,
Millburn Ridgefield Corporation, General Partner
cc: James Biery
Steven M. Felsenthal