0001104659-06-046896.txt : 20060713 0001104659-06-046896.hdr.sgml : 20060713 20060713171046 ACCESSION NUMBER: 0001104659-06-046896 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060713 DATE AS OF CHANGE: 20060713 GROUP MEMBERS: DORSET MANAGEMENT CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BUTLER INTERNATIONAL INC /MD/ CENTRAL INDEX KEY: 0000786765 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 061154321 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-38458 FILM NUMBER: 06961161 BUSINESS ADDRESS: STREET 1: 110 SUMMIT AVE CITY: MONTVALE STATE: NJ ZIP: 07645 BUSINESS PHONE: 2015738000 MAIL ADDRESS: STREET 1: 110 SUMMIT AVENUE STREET 2: 110 SUMMIT AVENUE CITY: MONTVALE STATE: NJ ZIP: 07645 FORMER COMPANY: FORMER CONFORMED NAME: NORTH AMERICAN VENTURES INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KNOTT DAVID M CENTRAL INDEX KEY: 0000808722 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 485 UNDERHILL BLVD STREET 2: STE 205 CITY: SYOSSET STATE: NY ZIP: 11791-3419 SC 13D/A 1 a06-16066_1sc13da.htm AMENDMENT

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

Under the Securities Exchange Act of 1934
(Amendment No. 8)*

Butler International, Inc.

(Name of Issuer)

Common Stock $0.001 Par Value

(Title of Class of Securities)

123649105

(CUSIP Number)

David M. Knott

485 Underhill Boulevard, Suite 205

Syosset, New York 11791

(516) 364-0303

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

July 12, 2006

(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 §§240.13d-1(e), 240.13d-1(f) or 240.13d-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 §240.13d-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).

CUSIP No. 123649105

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) David M. Knott

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			ý

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States of America

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 965,400

			8.	Shared Voting Power 78,900

			9.	Sole Dispositive Power 1,051,800

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,051,800

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 9.0%

	14.	Type of Reporting Person (See Instructions) IN

CUSIP No. 123649105

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Dorset Management Corporation IRS # 11-2873658

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			ý

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization New York

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 965,400

			8.	Shared Voting Power 78,900

			9.	Sole Dispositive Power 1,051,800

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,051,800

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 9.0%

	14.	Type of Reporting Person (See Instructions) CO

Item 1.	Security and Issuer
This statement on Schedule 13D relates to the Common Stock of the Company, and is being filed pursuant to Rules 13d-1 and 13d-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The address of the principal executive offices of the Company is 110 Summit Ave., Montvale, New Jersey 07645.

Item 2.	Identity and Background
This statement is being filed by David M. Knott, an individual whose business address is 485 Underhill Boulevard, Suite 205, Syosset, New York 11791. Mr. Knott is a citizen of the United States of America. Mr. Knott is the managing member of Knott Partners Management, LLC, a New York limited liability company (“Knott Management”), that is the sole General Partner of Shoshone Partners, L.P., a Delaware limited partnership (“Shoshone”) and managing general partner of Knott Partners, L.P., a New Jersey limited partnership (“Knott Partners” and together with Shoshone, the “Partnerships”). The Partnerships invest in securities that are sold in public markets. The principal activity of each Partnership is the acquisition of long and short positions in equity securities of publicly traded U.S. and foreign securities. Each Partnership has the authority to employ various trading and hedging techniques and strategies in connection therewith. Mr. Knott is also the sole shareholder, Director and President of Dorset Management Corporation, a New York corporation (“Dorset”) which provides investment management services to a limited number of foreign and domestic individuals and entities (the “Managed Accounts”). The business address of Dorset is 485 Underhill Boulevard, Syosset, New York 11791. Collectively, Dorset and Mr. Knott are referred to as the Reporting Parties. During the last five years, Mr. Knott has not been convicted in any criminal proceeding, nor has he been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is subject to any 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
The source of funds used in making each of the purchases of the Common Stock purchased indirectly by Mr. Knott through the Partnerships and the Managed Accounts was the portfolio assets of the Partnerships and each of the Managed Accounts on whose behalf Mr. Knott has purchased the Common Stock. Neither of the Partnerships nor any of the Managed Accounts own more than five percent of the Common Stock individually. The aggregate amount of consideration used by the Reporting Parties in making such purchases was $2,892,200.

Mr. Knott effects purchases of securities primarily through margin accounts maintained by Goldman, Sachs & Co., which may extend margin credit as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules, and the firm’s credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.

Item 4.	Purpose of Transaction
The Reporting Parties originally acquired the Common Stock for investment in the ordinary course of business. This filing is being made because of the Reporting Parties’ concern about the Company’s financial condition, its outstanding debt load, and its contemplated financing transaction with Levine Leichtman Capital Partners (“Levine Leichtman”). On July 12, 2006, David M. Knott and Anthony R. Campbell, a Member of Knott Partners Management, LLC, sent a letter to Ed Kopko, the Chairman, President and Chief Executive Officer of the Company. The letter stated that the Reporting Parties believe that the terms of the proposed transaction with Levine Leichman are onerous and not in the best interest of the Company’s shareholders. The letter sets forth an alternative proposed financing transaction that the Reporting Parties believe is a more effective solution to the Company’s economic issues. The letter sent by the Reporting Parties is attached hereto as Exhibit A and is incorporated herein by reference. The Reporting Parties may continue discussions regarding these matters with management of the Company, its board of directors, stockholders or other relevant parties to express the Reporting Parties’ view regarding the Company. Except as set forth herein, the Reporting Parties do not have any present plan or proposal that would relate to or result in any of the actions or transactions enumerated in clauses (a) through (j) of Item 4 of Schedule 13D. The Reporting Parties will amend this Schedule 13D as events unfold.

Item 5.	Interest in Securities of the Issuer
(a) Pursuant to Rule 13d-3, Mr. Knott may be deemed to own beneficially 1,051,800 shares of Common Stock, which represents 9.0% of all outstanding shares of Common Stock. (b) Mr. Knott individually has the sole power to vote 965,400 shares of Common Stock and dispose of 1,051,800 shares of Common Stock held in the Partnerships’ accounts and the Managed Accounts. As President of Dorset, Mr. Knott shares with certain of Dorset’s clients the power to vote that portion of 78,900 shares of Common Stock held in their respective accounts. None of the Partnerships or Managed Accounts (except through Mr. Knott) either holds or shares with any person the power to vote or to dispose of the Company’s Common Stock.

(c) The Reporting Parties have not effected any transactions in the Company’s Common Stock in the past sixty days. (d) The Partnerships and Managed Accounts have the right to receive dividends and proceeds from the sale of the shares of Common Stock that may be deemed to be beneficially owned by the Reporting Parties. No individual person or entity has such right with regard to greater than five percent of the Common Stock. (e) Not applicable. The filing of this Schedule 13D shall not be construed as an admission that the Reporting Parties are, for purposes of Section 13(d) or 13(g) of the Act, the beneficial owner of any securities covered by this Schedule 13D.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
The Reporting Parties have entered into agreements with the Partnerships and Managed Accounts pursuant to which the Reporting Parties have discretion over the disposition and/or the voting of the shares of Common Stock..

Item 7.	Material to Be Filed as Exhibits
Exhibit A - Letter from the Reporting Parties to Ed Kopko, Chairman, President and Chief Executive Officer of the Company

SIGNATURE

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: July 12, 2006	/s/ David M. Knott
	David M. Knott


Dated: July 12, 2006	Dorset Management Corporation


	By:	/s/ David M. Knott
	Name:	David M. Knott
	Title:	President

EX-99.A 2 a06-16066_1ex99da.htm EX-99

Exhibit 99.A

KNOTT PARTNERS L.P.

485 Underhill Boulevard

Suite 205

Syosset, New York 11791-3419

David M. Knott, General Partner		Telephone: (516) 364-0303
		Facsimile: (516) 364-0879

July 12, 2006

Mr. Ed Kopko

Members of the Board of Directors

Butler International, Inc.

110 Summit Avenue

Montvale, NJ 07645

Gentlemen:

As you know, we have been a significant shareholder of Butler International for some time. In the past several weeks, we have contacted you on a number of occasions to express our concern with the Company’s financial condition and, particularly, its outstanding debt load. In our prior correspondence, we offered our views regarding the Company’s outstanding debt to GECC and recommended that the Company consider a full range of alternatives to address its debt situation in order to insure its long-term economic stability. We further recommended that the Company work with our representatives on coming up with the best possible long-term solution for dealing with its precarious economic position.

Over the course of the past week, the Company appears to have dismissed our recommendation to work together to evaluate alternative solutions and instead has agreed to enter into a refinancing transaction with Levine Leichtman Capital Partners. We believe the terms of this proposed transaction with Levine Leichtman are, at best, onerous and clearly are not in the best interests of the Company’s shareholders. As described in the Company’s 8-K of July 7, 2006, we understand the proposed notes transaction would require the Company to pay interest rates of approximately 12% to 15% based on current LIBOR, would provide Levine Leichtman with a warrant to acquire more than 1,000,000 shares of the Company at a low price, and would call for an unspecified increase in the rate of interest on the notes if the Company has not repaid $7,000,000 of indebtedness by March 31, 2007. In addition, the Levine Leichtman refinancing appears to provide a breakup penalty that is out of sync with the economics of the transaction and the essential interests of the Company.

Quite simply, we do not believe this refinancing assures the long-term economic stability of the Company. Instead, if consummated, we believe this transaction will hang a sword of

Damocles over the Company and place the value of the shareholders’ equity in dire jeopardy. Accordingly, while we have offered to work with the Company, we can no longer remain idle in light of the recently announced contemplated financing.

In our continuing effort to work cooperatively with management to find the most effective solution to the Company’s economic issues, we wish to propose an alternative transaction to the Levine Leichtman refinancing. In broad strokes, our proposal contemplates that the Company would issue up to $30 million of secured convertible debt carrying a commercially reasonable coupon of approximately 6% to 9% over a five- to seven-year term. The Company could force conversion assuming its stock achieves certain price thresholds. The debt would also have call provisions. In connection with this transaction, the debt holders will be provided seats on the Company’s board of directors. A senior lender has agreed in principle to provide the financing for the revolver at commercially reasonable terms.

We believe our proposed transaction, with its substantially lower interest rate and significantly more favorable terms, is far more attractive than the Levine Leichtman transaction, and holds out the best prospect for sustaining the long-term economic viability of the Company and protecting the investment of its shareholders. Among other things, the fact that the Company can call the debt and potentially force conversion will provide it with an opportunity to clean up its balance sheet in a relatively brief period of time. We believe this proposed transaction will best serve the interests of the Company even if the Levine Leichtman breakup fee proves enforceable.

We have also noted with interest the recent press releases announcing the formation of the Special Shareholders Committee of Butler International. Accordingly, we would remind the Company and its Board of Directors of their fiduciary responsibility to all shareholders.

We have spent a good deal of time and resources formulating this proposed alternative transaction and wish to discuss it with you at your earliest convenience. Please contact us within the next three business days to discuss this matter further.

	Respectfully yours,

	/s/ David M. Knott		/s/ Tony Campbell

Under the Securities Exchange Act of 1934 (Amendment No. 8)*

Under the Securities Exchange Act of 1934
(Amendment No. 8)*