SC 13D/A 1 d19717dsc13da.htm SCHEDULE 13D AMENDMENT NO. 2 Schedule 13D Amendment No. 2

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

 

 

AFFIRMATIVE INSURANCE HOLDINGS, INC.

(Name of Issuer)

Common Stock, $0.01 par value per share

(Title of Class of Securities)

008272106

(CUSIP Number)

Red Mountain Capital Partners LLC

Attn: Willem Mesdag

10100 Santa Monica Boulevard, Suite 925

Los Angeles, California 90067

Telephone (310) 432-0200

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

October 28, 2015

(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.  ¨

 

 

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).

 

 

 


CUSIP No. 008272106   SCHEDULE 13D   PAGE 2 OF 11 PAGES

 

  1   

NAME OF REPORTING PERSONS

 

Red Mountain Capital Partners LLC

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

AF (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

 

201,668 shares (See Item 5)

     8   

SHARED VOTING POWER

 

None (See Item 5)

     9   

SOLE DISPOSITIVE POWER

 

201,668 shares (See Item 5)

   10   

SHARED DISPOSITIVE POWER

 

None (See Item 5)

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

201,668 shares (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)

 

1.2% (See Item 5)

14.  

TYPE OF REPORTING PERSON*

 

IA, OO – Limited Liability Company

 

* See Instructions


CUSIP No. 008272106   SCHEDULE 13D   PAGE 3 OF 11 PAGES

 

  1   

NAME OF REPORTING PERSONS

 

Red Mountain Partners, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

WC (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

 

201,668 shares (See Item 5)

     8   

SHARED VOTING POWER

 

None (See Item 5)

     9   

SOLE DISPOSITIVE POWER

 

201,668 shares (See Item 5)

   10   

SHARED DISPOSITIVE POWER

 

None (See Item 5)

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

201,668 shares (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)

 

1.2% (See Item 5)

14.  

TYPE OF REPORTING PERSON*

 

PN – Limited Partnership

 

* See Instructions


CUSIP No. 008272106   SCHEDULE 13D   PAGE 4 OF 11 PAGES

 

  1   

NAME OF REPORTING PERSONS

 

RMCP GP LLC

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

AF (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

 

201,668 shares (See Item 5)

     8   

SHARED VOTING POWER

 

None (See Item 5)

     9   

SOLE DISPOSITIVE POWER

 

201,668 shares (See Item 5)

   10   

SHARED DISPOSITIVE POWER

 

None (See Item 5)

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

201,668 shares (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)

 

1.2% (See Item 5)

14.  

TYPE OF REPORTING PERSON*

 

OO – Limited Liability Company

 

* See Instructions


CUSIP No. 008272106   SCHEDULE 13D   PAGE 5 OF 11 PAGES

 

  1   

NAME OF REPORTING PERSONS

 

Red Mountain Capital Management, Inc.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

AF (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

 

201,668 shares (See Item 5)

     8   

SHARED VOTING POWER

 

None (See Item 5)

     9   

SOLE DISPOSITIVE POWER

 

201,668 shares (See Item 5)

   10   

SHARED DISPOSITIVE POWER

 

None (See Item 5)

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

201,668 shares (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)

 

1.2% (See Item 5)

14.  

TYPE OF REPORTING PERSON*

 

CO – Corporation

 

* See Instructions


CUSIP No. 008272106   SCHEDULE 13D   PAGE 6 OF 11 PAGES

 

  1   

NAME OF REPORTING PERSONS

 

Willem Mesdag

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

AF (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

 

U.S. Citizen

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON

WITH

 

     7    

SOLE VOTING POWER

 

201,668 shares (See Item 5)

     8   

SHARED VOTING POWER

 

None (See Item 5)

     9   

SOLE DISPOSITIVE POWER

 

201,668 shares (See Item 5)

   10   

SHARED DISPOSITIVE POWER

 

None (See Item 5)

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

201,668 shares (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)

 

1.2% (See Item 5)

14.  

TYPE OF REPORTING PERSON*

 

IN – Individual

 

* See Instructions


CUSIP No. 008272106   SCHEDULE 13D   PAGE 7 OF 11 PAGES

 

  1   

NAME OF REPORTING PERSONS

 

Red Mountain Capital Partners II, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

N/A

  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

 

None (See Item 5)

     8   

SHARED VOTING POWER

 

None (See Item 5)

     9   

SOLE DISPOSITIVE POWER

 

None (See Item 5)

   10   

SHARED DISPOSITIVE POWER

 

None (See Item 5)

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

None (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)

 

None (See Item 5)

14.  

TYPE OF REPORTING PERSON*

 

PN – Limited Partnership

 

* See Instructions


CUSIP No. 008272106   SCHEDULE 13D   PAGE 8 OF 11 PAGES

 

  1   

NAME OF REPORTING PERSONS

 

Red Mountain Capital Partners III, L.P.

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(a)  ¨        (b)  x

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

N/A

  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

 

None (See Item 5)

     8   

SHARED VOTING POWER

 

None (See Item 5)

     9   

SOLE DISPOSITIVE POWER

 

None (See Item 5)

   10   

SHARED DISPOSITIVE POWER

 

None (See Item 5)

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

None (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)

 

None (See Item 5)

14.  

TYPE OF REPORTING PERSON*

 

PN – Limited Partnership

 

* See Instructions


CUSIP No. 008272106    SCHEDULE 13D    PAGE 9 OF 11 PAGES

 

This Amendment No. 2 amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on July 10, 2008, as amended by Amendment No. 1 thereto, filed with the SEC on September 29, 2011 (collectively, this “Schedule 13D”), by (i) Red Mountain Capital Partners LLC, a Delaware limited liability company (“RMCP LLC”), (ii) Red Mountain Capital Partners II, L.P., a Delaware limited partnership (“RMCP II”), (iii) Red Mountain Capital Partners III, L.P., a Delaware limited partnership (“RMCP III”), (iv) RMCP GP LLC, a Delaware limited liability company (“RMCP GP”), (v) Red Mountain Capital Management, Inc., a Delaware corporation (“RMCM”), and (vi) Willem Mesdag, a natural person and U.S. citizen, with respect to the common stock, $0.01 par value per share (“Common Stock”), of Affirmative Insurance Holdings, Inc., a Delaware corporation (the “Issuer”).

 

ITEM 2. IDENTITY AND BACKGROUND.

Item 2 of this Schedule 13D is hereby amended and restated as follows:

 

(a), (c), (f) This Schedule 13D is being jointly filed by (i) RMCP LLC, (ii) Red Mountain Partners, L.P., a Delaware limited partnership (“RMP”), (iii) RMCP GP, (iv) RMCM and (v) Mr. Mesdag. RMCP LLC, RMP and RMCP GP are sometimes collectively referred to herein as “Red Mountain.” Red Mountain, RMCM and Mr. Mesdag are sometimes collectively referred to herein as the “Reporting Persons.”

RMP was formed, and its principal business is, to invest in small cap public companies. RMCP GP is the general partner of RMP and thus may be deemed to control RMP. RMCP LLC is the managing member of RMCP GP and thus may be deemed to control RMCP GP and each entity directly or indirectly controlled by RMCP GP. RMCM is the managing member of RMCP LLC and thus may be deemed to control RMCP LLC and each entity directly or indirectly controlled by RMCP LLC. Mr. Mesdag is the president, sole executive officer, sole director and sole shareholder of RMCM and thus may be deemed to control RMCM and each entity directly or indirectly controlled by RMCM (including Red Mountain). The principal business of RMCP LLC is providing investment advisory services to hedge funds and other pooled investment vehicles. The principal business of each of RMCP GP and RMCM is investing in securities. The principal occupation of Mr. Mesdag is serving as an executive officer and Managing Partner of RMCP LLC. He is a U.S. citizen.

Each of J. Christopher Teets and Matthew Hepler (and each of their principal occupations) is serving as an executive officer and Partner of RMCP LLC. None of Mr. Teets or Mr. Hepler controls any Reporting Person. Information regarding Messrs. Teets and Hepler is being included in this Schedule 13D solely for purposes of complying with General Instruction C to Schedule 13D. Each of Messrs. Teets and Hepler is a U.S. citizen.

 

(b) The principal executive offices of Red Mountain and RMCM are located at, and the principal business address of each of Messrs. Mesdag, Teets and Hepler is 10100 Santa Monica Boulevard, Suite 925, Los Angeles, California 90067.

 

(d)-(e) During the last five years, none of the Reporting Persons, Mr. Teets or Mr. Hepler has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person 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.

Item 3 of this Schedule 13D is hereby amended to include the following information:

Previously, 771,697 shares of Common Stock were reported as being held by RMCP II, and 83,121 shares of Common Stock were reported as being held by RMCP III. At the time, RMP owned 100% of the economic interests of RMCP II and RMCP III, and RMCP GP served as the general partner of each of RMP, RMCP II and

 


CUSIP No. 008272106    SCHEDULE 13D    PAGE 10 OF 11 PAGES

 

RMCP III. Subsequently, as part of an internal restructuring, RMCP II and RMCP III distributed all Common Stock held by them to RMP in a transaction that resulted in a change in the form of beneficial ownership of such Common Stock but not a change in pecuniary interest in such Common Stock. As a result of such internal restructuring, RMP held such shares of Common Stock, and each of RMCP II and RMCP III ceased to beneficially own any Common Stock and was dissolved and terminated.

 

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.

Items 5(a)-(c) of this Schedule 13D are hereby amended and restated as follows:

 

(a)-(b) RMP beneficially owns, in the aggregate, 201,668 shares of Common Stock, which represent approximately 1.2% of the outstanding Common Stock.(1) RMP has the sole power to vote or direct the vote, and the sole power to dispose or direct the disposition, of all such 201,668 shares of Common Stock.

Because each of RMCP GP, RMCP LLC, RMCM and Mr. Mesdag may be deemed to control RMP, each of RMCP GP, RMCP LLC, RMCM and Mr. Mesdag may be deemed to beneficially own, and to have the power to vote or direct the vote, or dispose or direct the disposition of, all of the Common Stock beneficially owned by RMP.

The filing of this Schedule 13D shall not be construed as an admission that any Reporting Person is the beneficial owner of any of the shares of Common Stock that such Reporting Person may be deemed to beneficially own. Without limiting the foregoing sentence, each of RMCM and Mr. Mesdag disclaims beneficial ownership of all shares of Common Stock reported in this Schedule 13D. In addition, the filing of this Schedule 13D shall not be construed as an admission that any partner, member, director, officer or affiliate of any Reporting Person is the beneficial owner of any of the shares of Common Stock that such partner, member, director, officer or affiliate may be deemed to beneficially own. Without limiting the foregoing sentence, each of Messrs. Teets and Hepler disclaims beneficial ownership of all shares of Common Stock reported in this Schedule 13D.

 

(c) The following table lists all transactions in Common Stock effected during the past sixty days by RMP. All such transactions were effected on the open market.

 

Shares of Common Stock Sold

 

Weighted Average Price per Share ($)

 

Date of Sale

45,000

  $0.0055   10/27/15

300,000

  $0.0051   10/28/15

100,000

  $0.0052   10/29/15

168,000

  $0.0040   11/02/15

Item 5(e) of this Schedule 13D is hereby amended and restated as follows:

 

(e) The Reporting Persons ceased to be beneficial owners of more than 5% of the outstanding Common Stock on October 28, 2015.

 

 

(1)  All calculations of percentage ownership in this Schedule 13D are based on the 16,155,357 shares of Common Stock outstanding as of May 13, 2015, as reported in the Quarterly Report on Form 10-Q filed by the Issuer with the SEC on May 15, 2015.

 


CUSIP No. 008272106    SCHEDULE 13D    PAGE 11 OF 11 PAGES

 

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: November 2, 2015

 

RED MOUNTAIN CAPITAL PARTNERS LLC

/s/ Willem Mesdag

By:   Willem Mesdag
Title:   Authorized Signatory
RED MOUNTAIN PARTNERS, L.P.
By:      RMCP GP LLC, its general partner

/s/ Willem Mesdag

By:   Willem Mesdag
Title:   Authorized Signatory
RMCP GP LLC

/s/ Willem Mesdag

By:   Willem Mesdag
Title:   Authorized Signatory
RED MOUNTAIN CAPITAL MANAGEMENT, INC.

/s/ Willem Mesdag

By:   Willem Mesdag
Title:   Authorized Signatory
WILLEM MESDAG

/s/ Willem Mesdag