-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KIBozDSfWREIUVJbjtlL5A/gv1gmC2CJe1g2moOsa89OuBFD2Wlmzq96lge+nK23 Sk4WTgAfSecDJaaK5WVtzA== 0001068800-07-001474.txt : 20071029 0001068800-07-001474.hdr.sgml : 20071029 20071029140348 ACCESSION NUMBER: 0001068800-07-001474 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20071029 DATE AS OF CHANGE: 20071029 GROUP MEMBERS: CHADWICK CAPITAL MANAGEMENT LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PENN TREATY AMERICAN CORP CENTRAL INDEX KEY: 0000814181 STANDARD INDUSTRIAL CLASSIFICATION: ACCIDENT & HEALTH INSURANCE [6321] IRS NUMBER: 231664166 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-38689 FILM NUMBER: 071195974 BUSINESS ADDRESS: STREET 1: 3440 LEHIGH ST CITY: ALLENTOWN STATE: PA ZIP: 18103 BUSINESS PHONE: 6109652222 MAIL ADDRESS: STREET 1: 3440 LEHIGH ST CITY: ALLENTOWN STATE: PA ZIP: 18103 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Monarch Activist Partners LP CENTRAL INDEX KEY: 0001356548 IRS NUMBER: 203788656 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 4510 EXECUTIVE DRIVE, SUITE 200 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 858-480-2840 MAIL ADDRESS: STREET 1: 4510 EXECUTIVE DRIVE, SUITE 200 CITY: SAN DIEGO STATE: CA ZIP: 92121 SC 13D 1 monarch_13d.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Penn Treaty American Corporation - ------------------------------------------------------------------------------ (Name of Issuer) Common Stock, Par Value $0.10 Per Share - ------------------------------------------------------------------------------ (Title of Class of Securities) 707874400 - ------------------------------------------------------------------------------ (CUSIP Number) James M. Chadwick Chadwick Capital Management, LLC 4510 Executive Drive Suite 200 San Diego, California 92121 - ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 29, 2007 - ------------------------------------------------------------------------------ (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), (f) or (g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are being 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. 707874400 =============================================================================== NAME OF REPORTING PERSON 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Monarch Activist Partners LP =============================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[X] 2 (b)[ ] =============================================================================== SEC USE ONLY 3 =============================================================================== SOURCE OF FUNDS (See Instructions) 4 N/A =============================================================================== CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] 5 PURSUANT TO ITEMS 2(d) or 2(e) =============================================================================== CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware =============================================================================== SOLE VOTING POWER 7 N/A* NUMBER OF =========================================================== SHARES SHARED VOTING POWER BENEFICIALLY 8 N/A* OWNED BY EACH =========================================================== REPORTING SOLE DISPOSITIVE POWER PERSON 9 N/A* WITH =========================================================== SHARED DISPOSITIVE POWER 10 N/A* =============================================================================== AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 N/A* =============================================================================== CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] 12 SHARES =============================================================================== PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 <5% =============================================================================== TYPE OF REPORTING PERSON 14 OO =============================================================================== *Reporting Person beneficially owns less than 5% of the outstanding common stock of Issuer. - 2 - CUSIP No. 221492101 =============================================================================== NAME OF REPORTING PERSON 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Chadwick Capital Management LLC =============================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[X] 2 (b)[ ] =============================================================================== SEC USE ONLY 3 =============================================================================== SOURCE OF FUNDS (See Instructions) 4 N/A =============================================================================== CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ] 5 PURSUANT TO ITEMS 2(d) or 2(e) =============================================================================== CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware =============================================================================== SOLE VOTING POWER 7 N/A* NUMBER OF =========================================================== SHARES SHARED VOTING POWER BENEFICIALLY 8 N/A* OWNED BY EACH =========================================================== REPORTING SOLE DISPOSITIVE POWER PERSON 9 N/A* WITH =========================================================== SHARED DISPOSITIVE POWER 10 N/A* =============================================================================== AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 N/A* =============================================================================== CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ] 12 SHARES =============================================================================== PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 <5% =============================================================================== TYPE OF REPORTING PERSON 14 OO =============================================================================== *Reporting Person beneficially owns less than 5% of the outstanding common stock of Issuer. - 3 - SCHEDULE 13D ITEM 1. SECURITY AND ISSUER: This Schedule 13D relates to the common shares of Penn Treaty American Corporation (the "Issuer"). The principal executive offices of 3440 Lehigh Street, Allentown, Pennsylvania 18103. ITEM 2. IDENTITY AND BACKGROUND: (a) This statement on Schedule 13D is filed by Chadwick Capital Management LLC ("CCM") and Monarch Activist Partners LP ("Monarch"). The managers of CCM are James M. Chadwick and Sohail Malad. CCM is the General Partner of Monarch and has sole voting and dispositive authority over Monarch's accounts. (b) The business address for CCM, Monarch and Mr. Chadwick is 4510 Executive Drive, Suite 200, San Diego, California 92121. (c) CCM's principal business is to provide asset management services to private investment funds. Mr. Chadwick manages CCM's business. (d)-(e) During the last five years, none of CCM, Mr. Chadwick, or Monarch has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been 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 judgement, 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. (f) CCM is a limited liability company organized under the laws of the State of Delaware. Mr. Chadwick is a citizen of the United States of America. Monarch is a limited partnership organized under the laws of the State of Delaware. ITEM 4. PURPOSE OF TRANSACTION On October 29, 2007 Monarch submitted a letter to the Board of Directors of the Issuer. Monarch's October 29, 2007 letter is appended hereto as Exhibit 1. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER: CCM is the General Partner of Monarch under Monarch's Limited Partnership Agreement. This agreement provides, among other things, the authority to buy, invest in, hold for investment, own, assign, and transfer, sell and otherwise deal in securities on behalf of Monarch. - 4 - ITEM 7. MATERIAL TO BE FILED AS EXHIBITS: Exhibit Number Description -------------- ----------- 1 Letter dated October 29, 2007, from James Chadwick, Managing Partner of Monarch Activist Partners LP to Eugene Woznicki, Chairman of the Penn American Treaty Corporation Board of Directors. - 5 - EX-1 2 ex1.txt EXHIBIT 1 Sent via Facsimile - ------------------ Mr. Eugene Woznicki Chairman of the Board of Directors Penn Treaty American Corp. 3440 Lehigh Street Allentown, PA 18103 October 29, 2007 Dear Mr. Woznicki: This letter is a follow-up to correspondence dated June 8, 2007, between Monarch Activist Partners (Monarch) and the management and Board of Penn Treaty American Corp. ("PTA") regarding PTA's inability to file on a timely basis its Form 10-K for the year ended December 31, 2006. We notified the Board at that time that we would make our displeasure public if the situation was not rectified within a reasonable period of time. Due to continued delays in filing the company's GAAP financials, as well as the recently announced restatement of prior earnings, we believe it is time for Penn Treaty's Board of Directors to immediately hire an investment banker to explore strategic alternatives, including the potential sale of the company. Monarch believes PTA shares are worth north of $10 per share (applying a conservative 1.0x book value multiple- which would be closer to $11+ based on an improving book value in 2007) and the only near term way for shareholders to receive fair value is through the sale of the company. In conversations with other PTA shareholders as well as professionals in the industry, we believe that since the company is current in its statutory filings (including the 2006 Statutory Audit signed off on by BDO Seidman), a sale of the company would not be dependent upon the GAAP financials. We believe PTA's Directors are in breach of their fiduciary responsibility by letting the financial reporting issues persist indefinitely without pursuing strategic alternatives. If PTA does not hire an investment banking firm to pursue alternatives and add shareholder representatives to the board immediately we intend to take action to unseat the board in the next shareholders' meeting. We do not make these threats lightly and regret the board has put its investors in this situation. Additionally, with the recent resignation of Chairman Gary Hindes, a vacancy exists on the company's board. This vacancy should be filled by a shareholder of the company and the board should be reconstituted with shareholder friendly Directors. Sincerely, James Chadwick Managing Partner, Monarch Activist Partners - 6 - 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 as of October 29, 2007 CHADWICK CAPITAL MANAGEMENT LLC By: ------------------------------------- James M. Chadwick, Manager MONARCH ACTIVIST PARTNERS LP By: Chadwick Capital Management LLC, its General Partner By: ------------------------------------- James M. Chadwick, Manager - 7 - -----END PRIVACY-ENHANCED MESSAGE-----