0001295984-05-000010.txt : 20120705
0001295984-05-000010.hdr.sgml : 20120704
20050131100213
ACCESSION NUMBER: 0001295984-05-000010
CONFORMED SUBMISSION TYPE: SC 13D/A
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20050131
DATE AS OF CHANGE: 20050131
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: CORNELL COMPANIES INC
CENTRAL INDEX KEY: 0001016152
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-FACILITIES SUPPORT MANAGEMENT SERVICES [8744]
IRS NUMBER: 760433642
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-48735
FILM NUMBER: 05560109
BUSINESS ADDRESS:
STREET 1: 1700 WEST LOOP SOUTH
STREET 2: STE 1500
CITY: HOUSTON
STATE: TX
ZIP: 77027
BUSINESS PHONE: 7136230790
MAIL ADDRESS:
STREET 1: 1700 WEST LOOP SOUTH
STREET 2: STE 1500
CITY: HOUSTON
STATE: TX
ZIP: 77027
FORMER COMPANY:
FORMER CONFORMED NAME: CORNELL CORRECTIONS INC
DATE OF NAME CHANGE: 19960604
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: Pirate Capital LLC
CENTRAL INDEX KEY: 0001295984
IRS NUMBER: 030445177
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D/A
BUSINESS ADDRESS:
STREET 1: 200 CONNECTICUT AVENUE
STREET 2: 4TH FLOOR
CITY: NORWALK
STATE: CT
ZIP: 06854
BUSINESS PHONE: 203 854 1100
MAIL ADDRESS:
STREET 1: 200 CONNECTICUT AVENUE
STREET 2: 4TH FLOOR
CITY: NORWALK
STATE: CT
ZIP: 06854
SC 13D/A
1
sc13da8_012805.txt
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
CORNELL COMPANIES, INC.
(Name of Issuer)
Common Stock, $0.001 par value
(Title of Class of Securities)
219141108
(CUSIP Number)
Thomas R. Hudson Jr, Pirate Capital LLC
200 Connecticut Avenue, 4th Floor
Norwalk, CT 06854 (203) 854-1100
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
January 31, 2005
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the object of this Schedule 13D, and
is filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ]
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page. The information
required on the remainder of this cover page shall not be deemed to be
"filed" for the purpose of Section 18 of the Securities Exchange Act
of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
CUSIP: 219141108
1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pirate Capital LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) * See Item 2 (b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS
Not Applicable (See Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES
BENEFICIALLY OWNED BY
EACH REPORTING
PERSON WITH
7 SOLE VOTING POWER
852,900 (See Item 5)
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
1,999,100 (See Item 5)
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
1,999,100 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11)
14.8% (See Item 4)
14 TYPE OF REPORTING PERSON*
00 (See Item 2)
CUSIP: 219141108
1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Thomas R. Hudson Jr
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) * See Item 2 (b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS
Not Applicable (See Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
NUMBER OF SHARES
BENEFICIALLY OWNED BY
EACH REPORTING
PERSON WITH
7 SOLE VOTING POWER
1,146,200 (See Item 5)
8 SHARED VOTING POWER
852,900 (See Item 5)
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
1,999,100 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
1,999,100 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY
14.8% (See Item 4)
14 TYPE OF REPORTING PERSON*
IN
CUSIP: 219141108
1 NAME OF REPORTING PERSON S.S. OR I.R.S.
IDENTIFICATION NO. OF ABOVE PERSON
Gabrielle Katz Hudson
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A
GROUP* (a) (b)
__X__ * See Item 2
3 SEC USE ONLY
4 SOURCE OF FUNDS Not Applicable (See Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES
BENEFICIALLY OWNED BY
EACH REPORTING
PERSON WITH
7 SOLE VOTING POWER
0 (See Item 5)
8 SHARED VOTING POWER
852,900 (See Item 5)
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
1,999,100 (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
1,999,100 (See Item 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11)
14.8% (See Item 4)
14 TYPE OF REPORTING PERSON*
IN
Item 1. Security and Issuer
The class of equity securities to which this Schedule 13D relates is shares
of common stock, par value $.001, of Cornell Companies, Inc. whose principal
executive offices are located at 1700 West Loop South, Suite 1500, Houston
Texas 77027.
Item 2. Identity and Background
(a), (b), (c) and (f) This Amendment No. 8 amends the Schedule 13D filed by
Pirate Capital LLC, Thomas R. Hudson Jr and Gabrielle Katz Hudson on
July 6, 2004. Pirate Capital LLC is a limited liability company, organized
under the laws of Delaware, whose principal executive office is 200
Connecticut Avenue, 4th Floor, Norwalk, Connecticut 06854. The principal
business of Pirate Capital LLC is providing investment management services
to investment partnerships and other entities. Thomas R. Hudson Jr and
Gabrielle Katz Hudson are the controlling Members of Pirate Capital LLC.
Each of them is a citizen of the United States. Thomas R. Hudson Jr is
the Managing Member of Pirate Capital LLC, which is his principal occupation.
Gabrielle Katz Hudson is the Chief Operating Officer of Pirate Capital LLC,
which is her principal occupation. Each of the aforesaid reporting persons
is deemed to be the beneficial owner of an aggregate of 1,999,100 shares of
the Common Stock of the Issuer (the Shares), which Shares are owned of
record, in part, by each of Jolly Roger Fund LP, Jolly Roger Offshore Fund
Ltd and Mint Master Fund Ltd (the "Holders"). The persons filing this report
disclaim that they and/or the Holders are members of a group as defined in
Regulation 13D-G.
(d) and (e) Within the last five years, none of Pirate Capital LLC, Thomas
R. Hudson Jr, or Gabrielle Katz Hudson has been i) convicted in a criminal
proceeding, or ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration
Funds for the purchase of the Shares were derived from available capital
of the Holders. A total of $26,561,856.08 was paid to acquire the Shares as
detailed in Item 5.
Item 4. Purpose of Transaction
Pirate Capital LLC ("Pirate") has decided to seek the election of seven
nominees to the board of directors of Cornell Companies, Inc. (the
"Company") at the Company's 2005 Annual Meeting of Stockholders. Pirate
does not expect the Board of Directors of the Company to support Pirate's
nominees and is prepared to solicit proxies from the Company's stockholders
to elect Pirate's nominees. The seven nominees that Pirate currently
intends to nominate for election are as follows:
* Leon Clements, president and chief executive officer of League
Medical Concepts and the former chief administrative officer of
the University of Texas Medical Branch, a provider of health care
services for the prison system in Texas;
* Alfred Jay Moran, Jr., the chairman and chief executive officer
of The Moran Group LLC, a turnaround and restructuring firm;
* Richard Crane, a consultant in more than 30 corrections
privatization projects, and the former general counsel for
Corrections Corporation of America;
* Todd Goodwin, a former partner of investment banking firm Gibbons,
Goodwin, van Amerongen, and a former managing director of Merrill
Lynch;
* Sally Walker, the president of Encourage Youth Corporation, a
consulting firm specializing in programming for high risk youths and
juvenile offenders;
* Thomas R. Hudson, Jr, the portfolio manager and managing member of
Pirate, a former senior distressed trader and portfolio manager at
Goldman, Sachs & Co., and the former chairman of the Loan Syndication
and Trading Association's Distressed Committee; and
* Zachary George, senior investment analyst of Pirate covering the
private corrections industry.
Each of the nominees has entered into a letter of agreement with Pirate, the
form of which is attached hereto as Exhibit 2. Pirate intends to submit a
notice to the Company in accordance with the Company's bylaws setting forth
its slate of nominees. In connection with its expected solicitation of
proxies for the election of directors, Pirate has retained D.F. King & Co.,
a New York based proxy solicitor. The Company has not yet announced the
date of the 2005 Annual Meeting of Stockholders.
It is Pirate's understanding that the Board of Directors of the Company
currently consists of seven members, including James E. Hyman, who has
recently been appointed as the Company's new Chief Executive Officer.
Pirate currently intends to submit seven nominees, which, if elected,
would constitute all of the members of the Board of Directors. The total
number of nominees proposed by Pirate may, in part, depend on the actual
number of the members of the Board of Directors as determined by the
Company.
The limited amount of information made publicly available by the Company
concerning Mr. Hyman provides an insufficient basis for Pirate to have
established an opinion regarding Mr. Hyman's appointment as CEO. While
Pirate may ultimately be receptive to Mr. Hyman's role as CEO and a director
of the Company, his recent appointment does not alter Pirate's determination
that the Board of Directors of the Company needs to be replaced.
Pirate reserves the right to change its plans and take any and all actions
that Pirate may deem appropriate to maximize the value of its investment in
the Company, including, among other things, (a) purchasing or otherwise
acquiring additional securities of the Company, (b) selling or otherwise
disposing of any securities of the Company beneficially owned by Pirate in
the open market or in privately negotiated transactions, (c) communicating
with other stockholders or (d) formulating other plans or proposals regarding
the Company or its securities, in each case to the extent deemed advisable by
Pirate in light of Pirate's general investment policies, market conditions,
subsequent developments affecting the Company and the general business and
future prospects of the Company.
Item 5. Interest in Securities of the Issuer
(a) and (b) By virtue of its position as general partner of Jolly Roger Fund LP
and an agreement between it and the sole owner of Mint Master Fund, Ltd.,
Pirate Capital LLC has sole power to vote or direct the voting, and to dispose
or direct the disposition of, all of the Shares owned by Jolly Roger Fund LP
and Mint Master Fund Ltd. By virtue of an agreement between it and Jolly Roger
Offshore Fund, Ltd. Pirate Capital LLC has sole disposition power with respect
to all of the Shares owned by Jolly Roger Offshore Fund Ltd. By virtue of his
position as sole Managing Director of Jolly Roger Offshore Fund Ltd, Thomas R.
Hudson Jr has sole voting power with respect to the Shares owned by Jolly
Roger Offshore Fund Ltd. By virtue of their shared control of Pirate Capital
LLC, each of Thomas R. Hudson Jr and Gabrielle Katz Hudson is deemed to have
shared voting power and shared disposition power with respect to all Shares as
to which Pirate Capital, LLC has voting power or disposition power.
Based on the foregoing, Pirate Capital LLC has sole voting power with respect
to 852,900 of the Shares and sole disposition power with respect to 1,999,100 of
the Shares; Thomas R. Hudson Jr has sole voting power with respect to
1,146,200 of the Shares and shared voting power with respect to 852,900 of the
Shares and shared disposition power with respect to 1,999,100 of the Shares;
and Gabrielle Katz Hudson has shared voting power with respect to 852,900 of
the Shares and shared disposition power with respect to 1,999,100 of the
Shares. None of the Reporting Persons have any voting or disposition power
over any Shares held by nominees (other than Mr. Hudson) listed herein and
there are no agreements or understandings between any of the Reporting Persons
and any of the nominees (other than Mr. Hudson) listed herein with respect to
the holding, voting or disposing of any of Cornell's securities. Accordingly,
the number of Shares beneficially owned by the Reporting Persons reported
herein does not include 7,000 Shares held by Todd Goodwin and 100 Shares
held by Richard Crane.
(b) All of the Shares were purchased by the Holders in open market transactions.
The following sets forth all purchases made by each of the Holders in the last
sixty days:
JOLLY ROGER OFFSHORE FUND LTD
Trade Date Number of Shares Price
12/2/04 400 14.70
12/3/04 5,000 15.01
12/3/04 18,800 14.99
12/6/04 600 15.03
12/6/04 1,400 15.00
12/6/04 4,400 15.05
12/7/04 3,000 15.01
12/7/04 1,800 15.00
12/7/04 9,400 15.00
12/8/04 3,000 15.00
12/9/04 1,100 15.01
12/9/04 300 15.01
12/9/04 1,500 15.00
12/9/04 7,600 15.05
12/10/04 200 15.00
12/13/04 13,500 15.05
12/17/04 8,800 15.09
12/17/04 4,500 15.25
12/17/04 500 15.16
12/20/04 26,600 15.09
12/21/04 20,000 15.05
1/26/05 500 15.11
1/28/05 1,000 14.95
1/28/05 1,000 14.96
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
None
Item 7. Material to Be Filed as Exhibits
Exhibit 1. Agreement of Joint Filing
Exhibit 2. Nominee Agreement
Signature
After reasonable inquiry and to the best of their knowledge and belief,
the undersigned certify that the information set forth in this statement
is true, complete and correct.
Dated: January 31, 2005
Pirate Capital LLC
By: Thomas R. Hudson Jr
Portfolio Manager
Thomas R. Hudson Jr
Gabrielle Katz Hudson
EXHIBIT 1
AGREEMENT OF JOINT FILING
The undersigned hereby agree that the attached Schedule 13D,
together with any and all amendments thereto, is filed on behalf
of each of us, pursuant to Rule 13d-1 of the General Rules and
Regulations of the Securities and Exchange Commission. This Agreement
may be executed in several counterparts, each of which may be deemed
to be an original, but all of which together will constitute one and
the same Agreement.
Dated: January 31, 2005
Thomas R. Hudson Jr
Gabrielle Katz Hudson
PIRATE CAPITAL, LLC
EXHIBIT 2
NOMINEE AGREEMENT
Dear Nominee:
We are pleased that you have agreed to become a member of a slate
of nominees (the "Slate") of Pirate Capital, LLC (the "Fund") to stand for
election as a director of Cornell Companies, Inc. ("Cornell") at the 2005
Annual Meeting of Stockholders of Cornell (the "2005 Annual Meeting"),
expected to be held in June 2005, or a special meeting of stockholders of
Cornell called for a similar purpose. This letter will confirm our
understanding regarding your nomination.
1. The Fund shall pay all costs of the proxy contest to be
conducted by the Fund in connection with the 2005 Annual Meeting (the "Proxy
Contest"); provided however that the Fund reserves the right to seek
reimbursement for such costs from Cornell.
2. You understand that it may be difficult, if not impossible,
to replace nominees who, such as yourself, have agreed to serve on the Slate
and later change their minds and determine not to seek election.
Accordingly, the Fund is relying upon your agreement to seek nomination.
In that regard, you are being supplied with a questionnaire (a
"Questionnaire") in which you will provide the Fund with information
necessary for the Fund to make appropriate disclosures both to Cornell and
for use in creating the proxy material to be sent to stockholders of Cornell
that will be filed with the Securities and Exchange Commission. You have
agreed that (i) you will immediately complete and sign the questionnaire and
return it to the undersigned and (ii) your responses to the questions
contained therein will be true and correct in all respects. The Fund has
also enclosed a form letter (the "Consent Letter") to Cornell informing
Cornell that you consent to being a nominee of the Fund for the election as
a director of Cornell and, if elected, consent to serve as a director of
Cornell.
3. The undersigned hereby agrees that, so long as you actually
serve on the Slate, the Fund will defend, indemnify and hold you harmless
from and against any and all losses, claims, damages, penalties, judgments,
awards, liabilities, costs, expenses and disbursements (including, without
limitation, reasonable attorneys' fees, costs, expenses and disbursements)
incurred by you in the event that you become a party, or are threatened to
be made a party, to any civil, criminal, administrative or arbitrative
action, suit or proceeding, and any appeal thereof relating solely to your
role as a nominee for director of Cornell on the Slate. Your right of
indemnification hereunder shall continue after the election has taken
place but only for events which occurred during the period from the date
hereof until the date of the 2005 Annual Meeting or special meeting of
stockholders regarding the election of the Slate in the event that you are
a candidate for election at such special meeting. Anything to the contrary
herein notwithstanding, the Fund is not indemnifying you for any action taken
by you or on your behalf which occurs prior to the date hereof or subsequent
to the 2005 Annual Meeting or such earlier time as you are no longer a nominee
of the Slate for election to Cornell's Board of Directors or for any actions
taken by you as a director of Cornell, if you are elected. Nothing herein
shall be construed to provide you an indemnity: (i) in the event you are
found to have engaged in a violation of any provision of state or federal law
in connection with the Proxy Contest unless you demonstrate that your action
was taken in good faith and in a manner you reasonably believed to be in or
not opposed to the best interests of electing the Slate; (ii) if you acted in
a manner which constitutes gross negligence or willful misconduct; or (iii)
if the claim results from any misstatement or omission of material fact in
your Questionnaire. In the event that you shall make any claim for
indemnification hereunder, you shall promptly notify the Fund in the event
of any third-party claims actually made against you or known by you to be
threatened. In addition, with respect to any such claim, the Fund shall be
entitled to control your defense with counsel chosen by the Fund. The Fund
shall not be responsible for any settlement of any claim against you covered
by this indemnity without its prior written consent. However, the Fund may
not enter into any settlement of any such claim without your consent unless
such settlement includes a release of you from any and all liability in
respect of such claim.
4. Each of us recognizes that should you be elected to the Board
of Directors of Cornell all of your activities and decisions as a director
will be governed by applicable law and subject to your fiduciary duty to the
stockholders of Cornell and, as a result, that there is, and can be, no
agreement between you and the Fund which governs the decisions which you
will make as a director of Cornell.
5. This letter sets forth the entire agreement between the Fund
and you as to the subject matter contained herein, and cannot be amended,
modified or terminated except by a writing executed by the Fund and you. This
letter shall be governed by the laws of the State of New York, without giving
effect to principles of conflicts of law.
Should the foregoing agree with your understanding, please so indicate
in the space provided below, and return to the Fund, together with the
completed Questionnaire and Consent Letter, whereupon this letter will become
a binding agreement between us.
Very truly yours,
PIRATE CAPITAL, LLC
By: ______________________________
Name: Thomas R. Hudson Jr
Title: Portfolio Manager
Agreed to and accepted as
of the date first written above:
________________________
Nominee
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a nominee for
election as a director of Cornell Companies, Inc. (the "Company"), in
the proxy statement and other materials concerning the undersigned's
nomination in connection with the solicitation of proxies from
stockholders of the Company to be voted at the 2005 annual meeting of
stockholders of the Company and any adjournment thereof, and further
consents to serve as a director of the Company, if elected.
________________________
Nominee