UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D/A

 

Under the Securities Exchange Act of 1934
(Amendment No. 7)*

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(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 that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* 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).

 

 

 

(1) Includes beneficial ownership of common stock of the issuer through vested restricted stock units for 22,367 shares of the issuer’s common stock.

 

(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s annual report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s annual report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s annual report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s annual report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(3) Beneficial ownership of common stock of the issuer is through a warrant to purchase 7,535,580 shares of the issuer’s common stock.  Exercise of the warrant is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s annual report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(4) Beneficial ownership of common stock of the issuer is through a warrant to purchase 4,964,420 shares of the issuer’s common stock.  Exercise of the warrant is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s annual report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

7

 

This Amendment No. 7 to Schedule 13D amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on November 25, 2009 (as amended to date, this “Schedule 13D”) by (i) Ronald W. Burkle, an individual, (ii) Yucaipa American Management, LLC, a Delaware limited liability company (“Yucaipa American”), (iii) Yucaipa American Funds, LLC, a Delaware limited liability company (“Yucaipa American Funds”), (iv) Yucaipa American Alliance Fund II, LLC, a Delaware limited liability company (“YAAF II LLC”), (v) Yucaipa American Alliance Fund II, L.P., a Delaware limited partnership (“YAAF II”), and (vi) Yucaipa American Alliance (Parallel) Fund II, L.P., a Delaware limited partnership (“YAAF II Parallel” and, together with YAAF II, the “Investors”; and the Investors, together with Mr. Burkle, Yucaipa American, Yucaipa American Funds, and YAAF II LLC, are referred to herein as the “Reporting Persons”), with respect to the common stock, par value $0.01 per share (the “Common Stock”), of Morgans Hotel Group Co., a Delaware corporation (the “Company”).  The filing of any amendment to this Schedule 13D (including the filing of this amendment) shall not be construed to be an admission by the Reporting Persons that a material change has occurred in the facts set forth in this Schedule 13D or that such amendment is required under Rule 13d-2 of the Securities Exchange Act of 1934, as amended.

 

Item 4.           Purpose of the Transaction.

 

Item 4 of this Schedule 13D is hereby supplemented to add the following:

 

As disclosed on the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 8, 2013, in early April director Jason Taubman Kalisman filed a purported derivative action on behalf of the Company action in Delaware Chancery Court against the seven other current members of the Company’s board of directors and various third-parties associated with the Investors, which action OTK Associates, LLC (“OTK”) subsequently joined.

 

On May 14, 2013 the Delaware Chancery Court entered an order which, among other things, prohibited the Company from taking any steps to consummate the transactions described on the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2013 (the “Transactions”), until the earlier of a trial on the merits of the pending action or a decision by the Company’s board of directors with respect to the Transactions made at a properly noticed meeting after due deliberation and after receiving a favorable recommendation from the special transaction committee of the board.

 

On May 16, 2013 Robert P. Bermingham, General Counsel of The Yucaipa Companies, sent a letter by e-mail to Michael Gross, Chief Executive Officer of the Company, indicating the Investors’ willingness for their representative, Mr. Burkle, to participate in the Company’s board meeting on May 17, and the Investors’ willingness to enter into the Transaction on the condition that the Company offer OTK the option to join with the Investors to provide a portion of the full backstop for the Company’s proposed rights offering. In addition, the Investors asked the Company to reflect in its materials for the annual meeting the proposal made to the Company to acquire all of its outstanding common stock for $7.50 per share in cash.

 

Item 7.           Material to be Filed as Exhibits.

 

Exhibit No.		Description of Exhibit
1.		Letter sent on May 16, 2013 via e-mail from Robert P. Bermingham, General Counsel of The Yucaipa Companies, to Michael Gross, Chief Executive Officer of the Company.

 

8

 

SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated:  May 16, 2013

 

	RONALD W. BURKLE
	By:	/s/ Ronald W. Burkle
	YUCAIPA AMERICAN MANAGEMENT, LLC
	By:	/s/ Ronald W. Burkle
		Name: Ronald W. Burkle
		Its: Managing Member
	YUCAIPA AMERICAN FUNDS, LLC
	By: Yucaipa American Management, LLC
	Its: Managing Member
		By:	/s/ Ronald W. Burkle
			Name: Ronald W. Burkle
			Its: Managing Member
	YUCAIPA AMERICAN ALLIANCE FUND II, LLC
	By: Yucaipa American Funds, LLC
	Its: Managing Member
		By: Yucaipa American Management, LLC
		Its: Managing Member
			By:	/s/ Ronald W. Burkle
				Name: Ronald W. Burkle
				Its: Managing Member

 

9

 

	YUCAIPA AMERICAN ALLIANCE FUND II, L.P.
	By: Yucaipa American Alliance Fund II, LLC
	Its: General Partner
		By: Yucaipa American Funds, LLC
		Its: Managing Member
			By: Yucaipa American Management, LLC
			Its: Managing Member
				By:	/s/ Ronald W. Burkle
					Name: Ronald W. Burkle
					Its: Managing Member
	YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.
	By: Yucaipa American Alliance Fund II, LLC
	Its: General Partner
		By: Yucaipa American Funds, LLC
		Its: Managing Member
			By: Yucaipa American Management, LLC
			Its: Managing Member
				By:	/s/ Ronald W. Burkle
					Name: Ronald W. Burkle
					Its: Managing Member

 

10

Exhibit 1

 

Dear Michael:

 

I don’t have to detail for you the Vice Chancellor’s decision on Tuesday, May 14th.  You have already re-noticed the shareholders meeting (had a meeting, adjourned it and set the new meeting for June 14th) and have called a board meeting for Friday, May 17th to re-review and seek approval of our transaction.  As you know the Vice Chancellor has held that we have no transaction to date because of improper notice and other reasons set forth in his opinion.

 

We have discussed the Vice Chancellor’s opinion and Kalisman’s position internally over the past 48 hours with the advice of counsel.

 

Here’s what we are willing to do:

 

1.      I will participate in the board meeting on May 17th per your schedule.

 

2.      Yucaipa is willing to do the deal as originally proposed (but not yet approved) with one additional but important condition.

 

3.      The condition to getting this transaction signed and closed is that Yucaipa wants the company to offer to the OTK/Kalisman group the option to join with Yucaipa to provide a portion of a full backstop for the Rights Offering, but limit the OTK/Kalisman group to 32% of the company’s common stock — this would include the OTK/Kalisman group current ownership interest.  Therefore, by way of example, if Yucaipa and the OTK/Kalisman group were required to make purchases as part of the backstop of the Rights Offering, Yucaipa would be limited to the percentage set forth in its standstill agreement and OTK/Kalisman would be subject to a standstill limiting their total holdings to 32% of outstanding company shares (but not prohibiting their pending proxy solicitation).  This offer to OTK/Kalisman would have to be made in writing and be accepted or rejected within 10 days of the date it is received by the OTK/Kalisman group.  Yucaipa would be willing, if OTK joins in providing the backstop obligation, to let them take the first 32% of the outstanding shares (or that amount of stock that would give them 32% of the outstanding shares in total including existing ownership).   This would give them a priority, i.e. they would go first which would give them the best chance of buying more stock.  In addition if the company wishes, it can downsize the Rights Offering to $75 million - this is totally your option.

 

4.     As a further condition related to OTK/Kalisman’s optional participation in the backstop, they would be required to purchase in the Rights Offering, their pro rata share of common stock.  However, in no event would the total holdings of OTK/Kalisman exceed 32% as mentioned previously.

 

5.  We feel it’s important for your proxy material to reference the offer from [redacted] - this really needs to be in.

 

If you have questions or want to discuss this correspondence, please let me know.

 

I assume you will share this with all relevant parties including the company’s directors.

 

Robert P. Bermingham
General Counsel
The Yucaipa Companies