-----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, AZHaUhvpg0VURNg1CnZ2kDN+VrPRDMjP9CiArD0bPXgKpYb2qo+0UWvNaS1vm6kK tOB6Xgjq69C5WSzBY7pq4A== 0000898430-96-003663.txt : 19960813 0000898430-96-003663.hdr.sgml : 19960813 ACCESSION NUMBER: 0000898430-96-003663 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19960812 SROS: NASD GROUP MEMBERS: MICHAEL TENNENBAUM GROUP MEMBERS: TENNENBAUM & CO LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MISSION WEST PROPERTIES/NEW/ CENTRAL INDEX KEY: 0000704874 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 952635431 STATE OF INCORPORATION: CA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33637 FILM NUMBER: 96608486 BUSINESS ADDRESS: STREET 1: 6815 FLANDERS DR STE 250 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194503135 MAIL ADDRESS: STREET 1: 6815 FLANDERS DR STREET 2: SUITE 250 CITY: SAN DIEGO STATE: CA ZIP: 92121-3914 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TENNENBAUM & CO LLC CENTRAL INDEX KEY: 0001018962 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954587347 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1999 AVENUE OF THE STARS STREET 2: 32ND FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90067-6100 BUSINESS PHONE: 3102017882 MAIL ADDRESS: STREET 1: 1999 AVENUE OF THE STARS CITY: LOS ANGELES STATE: CA ZIP: 90067-6100 SC 13D/A 1 SCHEDULE 13D/A (AMENDMENT NO. #3) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 3)* MISSION WEST PROPERTIES ------------------------------------------------------- (Name of Issuer) Common Stock, no par value ------------------------------------------------------- (Title of Class of Securities) 60520010 ------------------------------------------------------- (CUSIP Number) Michael E. Tennenbaum 1999 Avenue of the Stars 32nd Floor Los Angeles, CA 90067 (310) 201-7882 ------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 9, 1996 ---------------------------------------------------------- (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 subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the box [_]. Check the following box if a fee is being paid with the statement [_]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) 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). Page 1 SCHEDULE 13D - ----------------------- CUSIP NO. 60520010 - ----------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Michael E. Tennenbaum SS No. ###-##-#### - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4 PF - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 5 TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 UNITED STATES - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 157,300 SHARES OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 157,300 SHARES - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 157,300 shares - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES 12 CERTAIN SHARES* [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 11.5% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 IN - ------------------------------------------------------------------------------ Page 2 SCHEDULE 13D - ----------------------- CUSIP NO. 60520010 - ----------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TENNENBAUM & CO., LLC 95-4587347 - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4 WC - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 5 TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 DELAWARE - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 157,300 SHARES SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 157,300 SHARES PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 157,300 SHARES - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES 12 CERTAIN SHARES* [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 11.5% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ Page 3 PRELIMINARY NOTE - ---------------- The persons filing this Amendment No. 3 are (i) Michael E. Tennenbaum and (ii) Tennenbaum & Co., LLC, a Delaware limited liability company. This Amendment No. 3 amends a Statement on Schedule 13D filed by Mr. Tennenbaum and Tennenbaum & Co., LLC on July 11, 1996 (the "Original Statement"). The filing of this Amendment No. 3 should not be deemed an admission that Mr. Tennenbaum and Tennenbaum & Co., LLC comprise a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. This Amendment No. 3 relates to the common stock, no par value (the "Common Stock"), of Mission West Properties (the "Company"), which, to the best knowledge of the persons filing this Amendment No. 3, is a company organized under the laws of the State of California, with its principal executive offices located at 6815 Flanders Drive, Suite 250, San Diego, California 92121-3914. Other than as set forth below, to the best knowledge of Mr. Tennenbaum and Tennenbaum & Co., LLC, there has been no material change in the information set forth in response to Items 1, 2 and 6 of the Original Statement, as amended. Accordingly, those Items are omitted from this Amendment No. 3. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION ------------------------------------------------- The shares of Common Stock of the Company purchased by Tennenbaum & Co., LLC since the date of the reporting persons' most recent filing on Schedule 13D were purchased with funds, aggregating $39,125.00, which were provided from working capital of Tennenbaum & Co., LLC. ITEM 4. PURPOSE OF TRANSACTION ---------------------- On July 1, 1996, the Company announced an agreement for the sale of substantially all of its assets to DMB/SVP California Investments, LLC ("DMB/SVP"). Tennenbaum & Co., LLC has taken a position opposed to the sale of the Company's assets to DMB/SVP and has communicated such opposition to the Company and to Triton Group Ltd. ("Triton"). The reporting persons believe, based on the Company's most recent available filing with the Securities and Exchange Commission, that Triton holds 49.3% of the outstanding shares of Common Stock of the Company. Tennenbaum & Co., LLC has communicated and may in the future communicate with the Company and Triton in an effort to resolve the differences between them and has made a conditional proposal to purchase Triton's shares of Common Stock of the Company at a price of $8 per share. In furtherance of the foregoing, Tennenbaum & Co., LLC had executed a confidentiality agreement to permit Tennenbaum & Co., LLC access to nonpublic information of the Company. However, the Company refused to agree to the terms of the confidentiality agreement as proposed, which prompted Tennenbaum & Co., LLC to withdraw its offer to enter into such agreement. By letter dated August 9, 1996, Tennenbaum & Co., LLC demanded that the Company exercise its rights pursuant to the agreement with DMB/SVP not to proceed with the proposed sale of the Company's assets to DMB/SVP. A copy of such letter is attached hereto as Exhibit B. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER ------------------------------------ (a) As of the date hereof, Tennenbaum & Co., LLC may be deemed to be the beneficial owner of an aggregate of 157,300 shares of Common Stock of the Company, which constitutes approximately 11.5% of the outstanding shares of Page 4 Common Stock of the Company, based upon the Company's most recent available filing with the Securities and Exchange Commission. By reason of his position as managing member of Tennenbaum & Co., LLC, Mr. Tennenbaum, as of the date hereof, may be deemed to be the beneficial owner of an aggregate of 157,300 shares of Common Stock of the Company, which constitutes approximately 11.5% of the outstanding shares of Common Stock of the Company, based upon the Company's most recent available filing with the Securities and Exchange Commission. (b) Tennenbaum & Co., LLC has the sole power of voting and disposition with respect to 157,300 shares of Common Stock of the Company. By reason of his position as managing member of Tennenbaum & Co., LLC, Mr. Tennenbaum may be deemed to share powers of voting and disposition with respect to 157,300 shares of Common Stock of the Company. (c) Set forth on Exhibit A, attached hereto, is information concerning all transactions in the Company's Common Stock by Tennenbaum & Co., LLC that were effected since the filing persons' most recent filing on Schedule 13D and ended on the date hereof. No transactions in the Company's Common Stock were effected by Mr. Tennenbaum individually since the filing persons' most recent filing on Schedule 13D. (d) Not applicable. (e) Not applicable. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS -------------------------------- Exhibit A Transactions in Common Stock of the Company. Exhibit B Letter from Tennenbaum & Co., LLC to Mission West Properties dated August 9, 1996. Page 5 SIGNATURE Each of Michael E. Tennenbaum and Tennenbaum & Co., LLC, after reasonable inquiry and to the best of each's knowledge and belief, hereby certifies that the information set forth in this statement is true, complete and correct. August 9, 1996 - -------------- Date /s/ MICHAEL E. TENNENBAUM ----------------------------------- Michael E. Tennenbaum TENNENBAUM & CO., LLC By: /s/ MICHAEL E. TENNENBAUM -------------------------------- Michael E. Tennenbaum Managing Member Page 6 EX-99.A 2 TRANSACTIONS BY TENNENBAUM & CO. EXHIBIT A Transactions by Tennenbaum & Co., LLC in Common Stock of Mission West Properties since July 26, 1996
NUMBER OF --------- SHARES ------ DATE PURCHASED PRICE PER SHARE COST ---- --------- --------------- ---------- July 30, 1996 1,000 $7-7/8 $ 7,925.00 1,000 7-3/4 7,800.00 July 31, 1996 3,000 7-7/8 23,400.00 TOTAL 5,000 $39,125.00
Page 7 EX-99.B 3 BOARD OF DIRECTORS LETTER Exhibit B Tennenbaum & Co., LLC 1999 Avenue of the Stars Los Angeles, California 90067 ______ (310) 201-7882 Facsimile (310) 201-2752 August 9, 1996 Board of Directors Mission West Properties 6815 Flanders Drive Suite 250 San Diego, California 92121-3914 Re: Proposed Sale of Assets to DMB/SVP California Investments Gentlemen: This letter is our formal demand that the Company exercise its rights not to proceed with the proposed sale of the Company's real estate assets to DMB/SVP California Investments. The obligations of the Company are subject to the receipt of stockholder approval for this transaction on or before August 14, 1996 or such later date as may be approved by the parties. Stockholder approval will not and cannot be obtained by August 14, as notice of the meeting has not even been mailed. Under the present circumstances agreement to an extension of this deadline would be manifestly improper. Further, the Agreement with DMB/SVP contains no obligation on the part of the Company to proceed with a meeting at any time. To do so would be a dereliction of the duties of directors unless the board were satisfied that this transaction is the best available alternative for the stockholders -- a determination which could not be made under present --- circumstances. Decisions of the Delaware Supreme Court clearly establish that a board of directors approving a sale of substantially all of the assets of a corporation, in addition to the normal prerequisites of the business judgement rule: due care, lack of conflicting interests, good faith and loyalty, must be prepared to bear the burden of demonstrating . that the directors have obtained and considered all material information reasonably available to them and Board of Directors Mission West Properties August 9, 1996 Page 2 . that they have acted reasonably in determining that the transaction affords the highest value to stockholders reasonably attainable. We are aware that the Company is a California, not a Delaware, corporation. Not only is it likely that the California courts will follow the Delaware rule, however, but we cannot imagine that the directors of the Company would assert that they are bound to follow any but the highest standards of corporate ------- conduct. Whatever may have been the directors' belief when the DMB/SVP Agreement was entered into, it is clear that a decision to proceed at this time could not possibly satisfy the applicable legal standards. Tennenbaum & Co., has instructed its counsel to take all appropriate actions to enforce its rights, and those of the other public stockholders, against any director who does not fulfill his legal responsibilities. As a holder of over 10% of the Company's stock, Tennenbaum & Co. has no interest in this matter other than maximization of the value of the shareholders' interests. It is clear to us that this cannot be accomplished by the proposed transaction and that the procedures followed by the Company could not stand the test of legal scrutiny. The following are only some of the glaring defects in the proposal, as reflected in the Company's preliminary proxy statement: Director Conflicts. It is obvious that a majority of the board of ------------------ directors has seriously conflicting interests and fiduciary obligations in this matter. Three of the directors (Messrs. Early, Foletta and Tartre) are also officers and/or directors of the Company's 49% stockholder, Triton Group, and owe a fiduciary duty to that corporation. Triton Group has only recently emerged from bankruptcy and is committed to the liquidation of its assets. Its interests are plainly not the same as the public stockholders of the Company; and the Triton directors have acknowledged as much in stating that they are leaving the decision as to whether to proceed with the DMB/SVP Agreement in the hands of the other directors of the Company. A fourth director (Mr. Kasun) is married to an employee of an affiliate of the purchaser, and the preliminary proxy statement acknowledges the resulting conflict of interest on Mr. Kasun's part. That leaves only two directors who appear to be independent in the matter; and one of them is opposed to the transaction! --------------------------------------------- Absence of Qualified Expert Advice. Notwithstanding the pervasive ---------------------------------- conflicts of interest on the part of the Company's directors, the Company did not obtain the assistance of a qualified real estate expert in connection with this transaction, and the opinion obtained from Slusser Associates (whose qualifications are not disclosed in the preliminary proxy statement, but which we believe is not a real estate firm) is fatally flawed. The Slusser opinion states that that firm performed no appraisal of the Company's assets. While this may be acceptable in a typical investment banking opinion on a transaction in which real estate comprises only a fraction of the Board of Directors Mission West Properties August 9, 1996 Page 3 assets involved, it is completely unacceptable in the case of a company whose only assets are real estate. Further, the opinion is expressly premised on the - ---- understanding that "substantially all of the proceeds ... will be distributed to the Shareholders of Mission West", an understanding that is directly contradictory to the disclosure in the preliminary proxy statement that the Company only intends to "consider" making a distribution to stockholders. Finally, the preliminary proxy statement discloses that the fee to Slusser is partly contingent upon the closing of the DMB/SVP transaction; clearly Slusser --------------- has a financial interest in completion of the transaction. - ---------------------------------------------------------- Failure to Consider all Qualifed Proposals. Information which has come to ------------------------------------------ our attention leads us to believe that the Company refused to discuss a potential transaction with at least two well-qualified potential buyers who had an interest in doing so. Please see the enclosed letter from FGH Investments as one example. The Sale Price is Unfair. The form of the transaction, i.e., a bulk sale, ------------------------ unfairly discounts the value that could be realized if the properties are sold one-by-one. In addition, the timing of the transaction for non-Triton shareholders is poor. Leasing activity and rental rates are improving in the Company's markets and several institutional real estate buyers are bidding up valuations. The Company is clearly selling in front of recovering markets, before it has had a chance to fully lease its buildings and capture additional value. Absence of Independent Counsel. It seems evident from the preliminary ------------------------------ proxy statement that the independent directors of the Company did not have the benefit of independent counsel. As we have advised the directors, based upon our extensive real estate experience and specific knowledge of the Company's properties, we strongly believe that substantially higher values for shareholders can be achieved if the Company disposes of its assets in individual transactions through an orderly process over time, while aggressively managing them to be certain that their value is maximized. The proposed wholesale liquidation will result in a significant discount to intrinsic value. We wish to be constructive in proposing a method to resolve our differences without the necessity of legal action; and to that end, we would propose the following to you: Tennenbaurm & Co. is willing to participate with the Company in submitting to a mutually acceptable, independent, qualified, firm with genuine real estate expertise all relevant information concerning the proposed transaction and the value of the Company's properties. If such firm determines that the proposed transaction is consistent with the objective of maximizing stockholder value, we will accept that conclusion. If, however, the firm determines that stockholder value would better be maximized by not proceeding with this transaction, we would expect the Company to promptly exercise its legal rights not to proceed with the DMB/SVP transaction. Board of Directors Mission West Properties August 9, 1996 Page 4 We look forward to your response at the earliest practicable time. Sincerely yours, TENNENBAUM & CO., LLC By: /s/ MICHAEL E. TENNENBAUM ----------------------------------------- Michael E. Tennenbaum Managing Member MET/gsf Encl. [LETTERHEAD OF FGH INVESTMENTS] August 6, 1996 Mr. Michael Tennenbaum Tennenbaum & Co., LLC 1999 Avenue of the Stars Los Angeles, Ca. 90067 Dear Mr. Tennenbaum, As we discussed, set forth below is a brief summary of our involvement with Mission West Properties Inc. In December 1995, I was introduced to Gregory Kasun by telephone from the offices of Rogers & Wells. In that conversation I expressed an interest in the acquisition of the assets of or a merger with Mission West Properties. Mr. Kasun forwarded public materials to me but did not return numerous follow up calls. Later in December I spoke to Peter Slusser of Slusser Associates with the same result and concluded that the company must not be interested in a sale. On June 25, 1996, I made an offer to purchase the shares of Mission West Properties held by Triton Group Ltd., which offer was declined. I was shocked to later learn that the company's assets were being sold at what appears to be a favorable price to a purchaser who hired Kasun's wife as its Chief Financial Officer. Based on the above and subsequent conversations with Byron Webb and Peter Slusser I can only draw the conclusion that little if any effort was made to maximize the value to the shareholders. I own 10,100 shares of Mission West stock and continue to be interested in the purchase of the assets or potentially the company. I have received the confidentiality agreement and am evaluating my alternatives. Sincerely, /s/ W. Monsees Stubbs, Jr. W. Monsees Stubbs, Jr. WMS/kss -----END PRIVACY-ENHANCED MESSAGE-----