-----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, HwuE4j2jZ3vQGD4stJVw8a/nIIhPpcG4A2y4DFh9bu92/xk/8mWpuKN1kNU5DDpQ Vlde6/5aVP4VimjBa4rbHA== 0000950134-02-013955.txt : 20021113 0000950134-02-013955.hdr.sgml : 20021113 20021112200228 ACCESSION NUMBER: 0000950134-02-013955 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20021113 GROUP MEMBERS: AMERICAN REALTY INVESTORS INC GROUP MEMBERS: AMERICAN REALTY TRUST INC GROUP MEMBERS: ART HOLDINGS INC GROUP MEMBERS: BASIC CAPITAL MANAGEMENT INC GROUP MEMBERS: EQK HOLDINGS INC GROUP MEMBERS: SYNTEK ASSET MANAGEMENT LP GROUP MEMBERS: THE GENE E PHILIPS CHILDREN'S TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRANSCONTINENTAL REALTY INVESTORS INC CENTRAL INDEX KEY: 0000733590 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 946565852 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-40410 FILM NUMBER: 02818332 BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRWY STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2146924700 MAIL ADDRESS: STREET 1: 10670 N CENTRAL EXPRWY STREET 2: SUITE 300 CITY: DALLAS STATE: TX ZIP: 75231 FORMER COMPANY: FORMER CONFORMED NAME: JOHNSTOWN CONSOLIDATED REALTY TRUST DATE OF NAME CHANGE: 19861005 FORMER COMPANY: FORMER CONFORMED NAME: JOHNSTOWN CONSOLIDATED REALTY TRUST /CA/ DATE OF NAME CHANGE: 19890815 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN REALTY TRUST INC CENTRAL INDEX KEY: 0000827165 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS [6510] IRS NUMBER: 540697989 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2146924700 MAIL ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: SUITE 600 CITY: DALLAS STATE: TX ZIP: 75231 SC 13D/A 1 d01203asc13dza.txt AMENDMENT NO.37 TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 37)* TRANSCONTINENTAL REALTY INVESTORS, INC. - -------------------------------------------------------------------------------- (NAME OF ISSUER) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) 893617-20-9 - -------------------------------------------------------------------------------- (CUSIP NUMBER) Robert A. Waldman 1800 Valley View Lane, Suite 300 Dallas, Texas 75234 (469) 522-4200 - -------------------------------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) November 7, 2002 - -------------------------------------------------------------------------------- (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 Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-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 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. 893617-20-9 13D/37A Page 2 of 16 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) American Realty Trust, Inc., FEI No. 54-0697989 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) [ ] (B) [ ] - -------------------------------------------------------------------------------- 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) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Georgia - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- OWNED BY ------------------------------------------------------------ EACH 8 SHARED VOTING POWER REPORTING PERSON -0- WITH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER -0- ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,994,301 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 49.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- CUSIP NO. 893617-20-9 13D/37A Page 3 of 16 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) ART Holdings, Inc., FEI No. 75-2663476 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) [ ] (B) [ ] - -------------------------------------------------------------------------------- 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) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Nevada - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- OWNED BY ------------------------------------------------------------ EACH 8 SHARED VOTING POWER REPORTING PERSON -0- WITH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER -0- ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) -0- - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- CUSIP NO. 893617-20-9 13D/37A Page 4 of 16 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Basic Capital Management, Inc., FEI No. 75-2261065 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) [ ] (B) [ ] - -------------------------------------------------------------------------------- 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) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Nevada - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 1,166,948 OWNED BY ------------------------------------------------------------ EACH 8 SHARED VOTING POWER REPORTING PERSON -0- WITH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 1,166,948 ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,166,948 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- CUSIP NO. 893617-20-9 13D/37A Page 5 of 16 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) The Gene E. Phillips Children's Trust, I.D. No. 13-6599759 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) [ ] (B) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Texas - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 1,827 OWNED BY ------------------------------------------------------------ EACH 8 SHARED VOTING POWER REPORTING PERSON -0- WITH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 1,827 ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,827 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.02% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) 00 - -------------------------------------------------------------------------------- CUSIP NO. 893617-20-9 13D/37A Page 6 of 16 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Syntek Asset Management, L.P., FEI No. 75-2311348 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) [ ] (B) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 26,475 OWNED BY ------------------------------------------------------------ EACH 8 SHARED VOTING POWER REPORTING PERSON -0- WITH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 26,475 ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 26,475 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- CUSIP NO. 893617-20-9 13D/37A Page 7 of 16 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) American Realty Investors, Inc., FEI No. 75-2847135 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) [ ] (B) [ ] - -------------------------------------------------------------------------------- 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) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Nevada - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY -0- OWNED BY ------------------------------------------------------------ EACH 8 SHARED VOTING POWER REPORTING PERSON -0- WITH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER -0- ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,994,301 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 49.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- CUSIP NO. 893617-20-9 13D/37A Page 8 of 16 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) EQK Holdings, Inc., FEI No. 75-2931679 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) [ ] (B) [ ] - -------------------------------------------------------------------------------- 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) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Nevada - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 3,994,301 OWNED BY ------------------------------------------------------------ EACH 8 SHARED VOTING POWER REPORTING PERSON WITH ------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 3,994,301 ------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,994,301 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 49.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- CUSIP NO. 893617-20-9 13D/37A Page 9 of 16 ITEM 1. SECURITY AND ISSUER. This Amendment No. 37 to Statement on Schedule 13D relates to the shares of Common Stock, par value $0.01 per share (the "Shares") of TRANSCONTINENTAL REALTY INVESTORS, INC., a Nevada corporation ("TCI" or the "Issuer") and further amends the original Statement on Schedule 13D as amended by Amendment Nos. 1 through 36 thereof (the "Amended Statement") filed by and on behalf of the "Reporting Persons" described below. The principal executive offices of TCI are located at 1800 Valley View Lane, Suite 300, Dallas, Texas 75234. The CUSIP number of the shares is 893617-20-9. This Amendment No. 37 is being filed to reflect various changes in the information contained in the Amended Statement, including a press release announcing a proposed tender offer of the Issuer's Shares. Transcontinental Realty Acquisition Corporation ("TCI Acquisition Sub"), a wholly-owned subsidiary of American Realty Investors, Inc. ("ARL"), is planning to offer to purchase any or all outstanding shares of common stock of the Issuer. ITEM 2. IDENTITY AND BACKGROUND. Item 2 of the Amended Statement is hereby further amended as follows: Collene C. Currie is no longer a director of ARL. On September 24, 2002 the SEC filed a civil complaint, Civil Action No. 1:02CV01872 (D.D.C.), in a lawsuit styled Securities and Exchange Commission v. Basic Capital Management, Inc. and Gene E. Phillips, and the SEC issued an Order Instituting Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act"), Making Findings and Imposing a Cease-and-Desist Order, In The Matter of Basic Capital Management, Inc., Nevada Sea Investments, Inc., International Health Products, Inc., One Realco Corporation, TacCO Financial, Inc. and Gene E. Phillips (Administrative Proceedings File No. 3-10898, Administrative Procedure Release No. 46538). In anticipation of the Order, Mr. Gene E. Phillips, BCM and four corporations affiliated with Mr. Phillips or the trust for his children that indirectly owns BCM (Nevada Sea Investments, Inc., International Health Products, Inc., One Realco Corporation and TacCO Financial, Inc.) (together, the "Respondents") submitted an Offer of Settlement and consented, without admitting or denying any of the allegations, to the entry of a judgment ordering Mr. Phillips and BCM to pay a civil penalty of $850,000. The Order finds, among other things, that the Respondents violated Section 10(b) and 13(d) of the Exchange Act, as amended, and Rules 10b-5, 13d-1 and 13d-2 promulgated thereunder, by failing to timely file reports required under Section 13(d) with respect to the securities of Greenbriar Corporation. Although none of the Respondents purchased more than five percent of Greenbriar's outstanding shares, their holdings together with the holdings of ART amounted to approximately 16.1% by June 1997. Between May 1996 and June 1997, the Respondents and ART accounted for approximately 54% of the total trading volume in Greenbriar stock. On particular days during the period, the Respondents bought all the Greenbriar stock traded. The Order requires the Respondents CUSIP NO. 893617-20-9 13D/37A Page 10 of 16 to cease and desist from committing or causing any violation of Sections 10(b) and 13(d) of the Exchange Act and Rules 10b-5, 13d-1 and 13d-2 promulgated thereunder. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 of the Amended Statement is hereby further amended as follows: ARL currently does not have sufficient cash to pay for the purchase of TCI's Shares and related expenses of a tender offer. If the tender offer takes place, ARL expects to pay for Shares tendered from cash on hand at the time tendered Shares are accepted and from borrowings. ARL expects to obtain this financing through refinancing existing indebtedness on its various real estate holdings, which it typically does in the ordinary course of its business, and by borrowing money from financial institutions with repayment secured by pledges of some of its real estate holdings. Although it does not have any firm commitments for either refinancings or new borrowings, it has had numerous discussions with existing lenders regarding refinancings of properties in Palm Desert, California, Tallahassee, Florida, Farmers Branch, Texas, Lincoln, Nebraska, Denver, Colorado, Fresno, California, Nashville, Tennessee and Sofia, Bulgaria, among others. ITEM 4. PURPOSE OF TRANSACTION. Item 4 of the Amended Statement is hereby further amended as follows: At the close of the market on November 7, 2002, ARL announced that it intends to commence, through subsidiaries, a tender offer for shares of common stock of its affiliates TCI and IOT. ARL expects to commence the tender offer on or before November 15, 2002. ARL is proposing to make the tender offer through its wholly-owned subsidiary, TCI Acquisition Sub, in order to comply with its obligations under a court-approved settlement agreement of certain litigation against TCI, Income Opportunity Realty Investors ("IOT") and certain of their affiliates known as Jack Olive, et. al. v. National Income Realty Trust, et. al., Case No. C89 4331 MHP pending in the United States District Court for the Northern District of California. The parties to the litigation have entered into a settlement agreement, after arms length negotiation, providing that ARL would propose a merger with TCI pursuant to which stockholders of TCI (other than Mr. Phillips, BCM, ARL and ART) would receive $17.50 in cash for each of their shares of the common stock of TCI or, at their option, a share of the preferred stock of ARL in lieu of cash. In order to propose the merger transaction to the stockholders of TCI, ARL was required to prepare a registration statement and proxy statement and submit it for review to the Securities and Exchange Commission. The settlement agreement required that the review process be completed by March 31, 2002, unless extended by Settlement Counsel, George Donaldson. That process has not yet been completed. In the event that ARL is in default of its obligations under the settlement agreement to propose and consummate the merger, it may cure its default by making a tender offer for the share of TCI's and IOT's common stock. In discussions with Settlement Counsel on Friday, November 1, 2002, representatives of ARL agreed to announce a tender offer for the shares of TCI's and CUSIP NO. 893617-20-9 13D/37A Page 11 of 16 IOT's common stock on November 7, 2002 and commence the offers not later than November 15, 2002. ARL did in fact announce a proposed tender offer on November 7, 2002 and plans to commence the tender offer on November 15, 2002. If ARL successfully completes the tender offer, ARL will not be liable for liquidated damages under the settlement agreement. ARL will defer further action on the proposed mergers during the pendency of the offer. If the offer is consummated for less than all of the Shares of TCI held by persons other than affiliates of ARL, ARL currently expects to pursue the merger after the consummation of the offer. Depending on the number of TCI Shares tendered in the offer, TCI's Shares could become eligible for delisting from the New York Stock Exchange and for termination of registration pursuant to Section 12(g)(4) of the Exchange Act. Except with respect to the proposed tender and the proposed merger offer described above, and any ancillary effect same would have on the following items, the Reporting Persons do not have any plans or proposals that relate to or would result in: (a) The acquisition by any person of additional securities of the Issuer or the disposition of securities of the Issuer; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of TCI or any of its subsidiaries (except that as part of the tender offer certain real property assets owned by the Issuer may be sold); (d) Any change in the present board of directors or management of TCI, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of TCI; (f) Any other material change in TCI's business or corporate structure; (g) Changes in TCI's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of TCI by any person (except that the Reporting Persons' collective ownership of 64.3% of the outstanding Shares would itself be an impediment to any potential change of control not approved by the Reporting Persons); (h) Causing a class of securities of TCI to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association (except that, depending on the number of Shares tendered, TCI's Shares may no longer be eligible for listing on a national securities exchange); (i) A class of equity securities of TCI becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act, as amended (except that if the tender offer reduced the number of common stockholders of TCI to a number below 300, such Shares would then become eligible for termination of registration); or CUSIP NO. 893617-20-9 13D/37A Page 12 of 16 (j) Any actions similar to any of those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 of the Amended Statement is hereby further amended as follows: (a) According to the latest information available from the Issuer, as of November 1, 2002, the total number of issued and outstanding Shares was 8,072,594 Shares. As of November 1, 2002, the following Shares were owned directly and beneficially by the Reporting Persons as set forth below:
NAME NUMBER OF SHARES APPROXIMATE PERCENT OF CLASS - --------------------- ---------------------------------- ---------------------------------- ART* 3,994,301 49.5% BCM 1,166,948 14.5% AHI -0- -0- GEP TRUST 1,827 0.02% SAM LP 26,475 0.3% ARL* 3,994,301 49.5% EQK** 3,994,301 49.5% ----------------- ----------------- TOTALS: 5,189,551 64.3%
- ---------- * Same Shares owned by EQK; EQK is a wholly-owned subsidiary of ART, which in turn is a wholly-owned subsidiary of ARL; ARL is the indirect parent of EQK. ** Effective August 10, 2001, ART transferred to its subsidiary EQK 2,135,400 Shares, all of which had previously been purchased in open market transactions over a period of years. Pursuant to Rule 13d-3 under the Exchange Act, each of the directors of ARL, ART and EQK may be deemed to beneficially own the number of Shares owned by EQK described above; each of the directors of BCM may be deemed to beneficially own the Shares held directly by BCM; and each of the directors of Syntek Asset Management, Inc. ("SAMI"), a general partner of SAM LP, and Gene E. Phillips, the other general partner of SAM LP, may be deemed to beneficially own the Shares held by SAM LP. Those individuals and the number of Shares deemed beneficially owned pursuant to Rule 13d-3, and the approximate percent of the class, as well as the relationship, are set forth in the following table:
NAME OF DIRECTOR OR GENERAL PARTNER ENTITY NO. OF SHARES BENEFICIALLY OWNED PERCENT OF CLASS - ------------------------------- --------------------- --------------------------------- -------------------------------- Earl D. Cecil ARL 3,994,301* 49.5%
CUSIP NO. 893617-20-9 13D/37A Page 13 of 16
NAME OF DIRECTOR OR GENERAL ENTITY NO. OF SHARES BENEFICIALLY OWNED PERCENT OF CLASS PARTNER - ------------------------------- --------------------- --------------------------------- -------------------------------- Richard W. Humphrey ARL 3,994,301* 49.5% Joseph Mizrachi ARL 3,994,301* 49.5% Ryan T. Phillips BCM+ 1,168,804 14.5% Mickey Ned Phillips BCM 1,166,977 14.5 Donald W. Phillips GEP Trust 1,827 0.02% Gene E. Phillips SAM LP 26,475 0.3% SAMI SAM LP 26,475 0.3% Robert A. Waldman ART and EQK 3,994,301* 49.5% Ronald E. Kimbrough ART and EQK 3,994,301* 49.5% ----------------- ----------------- Total Units Beneficially owned by Reporting Persons 5,191,407 64.32% and Individuals listed above
- ---------- + Also beneficiary of the GEP Trust. (b) No modification. (c) No modification. (d) No modification. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 of the Amended Statement is hereby further amended to add the following exhibit: Pursuant to the settlement agreement, which is discussed in Item 4, ARL, BCM, Mr. Phillips and stockholders affiliated with those parties who in the aggregate own a total of 64.3% of the TCI common stock have orally agreed with TCI Acquisition Sub not to tender shares of TCI common stock owned by them in the tender offer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 of the Amended Statement is hereby further amended to add the following exhibit: CUSIP NO. 893617-20-9 13D/37A Page 14 of 16
EXHIBIT DESIGNATION DESCRIPTION OF EXHIBIT - ------------------------------------------------------------ --------------------------------------------------------- 99.1 Pre-commencement Press Release
CUSIP NO. 893617-20-9 13D/37A Page 15 of 16 SIGNATURES AND POWER OF ATTORNEY After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certify that the information set forth in this statement is true, complete and correct. DATED: November 12, 2002 SYNTEK ASSET MANAGEMENT, LP, a Delaware limited partnership By: Syntek Asset Management, General Partner By: /s/ RONALD E. KIMBROUGH ---------------------------------------- Ronald E. Kimbrough Executive Vice President AMERICAN REALTY INVESTORS, INC. By: /s/ RONALD E. KIMBROUGH ---------------------------------------- Ronald E. Kimbrough Executive Vice President ART HOLDINGS, INC. By: /s/ RONALD E. KIMBROUGH ---------------------------------------- Ronald E. Kimbrough Executive Vice President THE GENE E. PHILLIPS CHILDREN'S TRUST By: /s/ DONALD W. PHILLIPS ---------------------------------------- Donald W. Phillips, Trustee AMERICAN REALTY TRUST, INC. By: /s/ RONALD E. KIMBROUGH ---------------------------------------- Ronald E. Kimbrough Executive Vice President BASIC CAPITAL MANAGEMENT, INC. By: /s/ RONALD E. KIMBROUGH ---------------------------------------- Ronald E. Kimbrough Executive Vice President CUSIP NO. 893617-20-9 13D/37A Page 16 of 16 EQK HOLDINGS, INC. By: /s/ RONALD E. KIMBROUGH ---------------------------------------- Ronald E. Kimbrough Executive Vice President EX-99.1 3 d01203aexv99w1.txt PRESS RELEASE EXHIBIT 99.1 AMERICAN REALTY ANNOUNCES TENDER OFFER FOR COMMON SHARES OF TRANSCONTINENTAL REALTY AND INCOME OPPORTUNITY REALTY Thursday November 7, 5:01 pm ET DALLAS, Nov. 7, 2002 (PRIMEZONE) -- American Realty Investors (NYSE:ARL - News) announced Wednesday that it intends to commence, through subsidiaries, a tender offer for shares of common stock of its affiliates Transcontinental Realty Investors, Inc. (NYSE:TCI - News) and Income Opportunity Realty Investors, Inc. (AMEX:IOT - News). The price per share to be paid will be $17.50 for Transcontinental Realty Investors shares and $19.00 for Income Opportunity Realty Investors shares. American Realty Investors expects to commence the tender offer on or before November 15, 2002. The tender offer will be for the shares of common stock of Transcontinental Realty Investors and of Income Opportunity Realty Investors not held by American Realty Investors or its affiliates. Consummation of the tender offers will be subject to, among other conditions, obtaining necessary financing. American Realty Investors and its affiliates own approximately 64.3% of the issued and outstanding common stock of Transcontinental Realty Investors and approximately 59.9% of the issued and outstanding common stock of Income Opportunity Realty Investors. American Realty Investors, Inc. previously proposed to enter into merger agreements with each of Transcontinental Realty Investors and Income Opportunity Realty Investors. American Realty Investors will defer further action on these proposed mergers until the consummation or abandonment of its tender offers for the shares of Transcontinental Realty Investors and Income Opportunity Realty Investors. If the tender offers for the shares of Transcontinental Realty Investors and Income Opportunity Investors are consummated for less than the outstanding shares of those companies held by persons not affiliated with American Realty Investors, Inc., American Realty Investors, Inc. expects to continue to pursue mergers with those entities. American Realty Investors is a real estate investment company that holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, hotels, shopping centers and developed and undeveloped land. Transcontinental Realty Investors is a real estate investment company that invests in real estate similar to ARL's holdings. Income Opportunity Realty Investors is a real estate investment trust that invests in real estate. For more information on the companies, visit their Websites at http://www.bcm-inc.com. This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by the use of forward-looking terminology, such as "intend," "may," "will," "expect," "anticipate," "estimate," or "continue" or the use of the negative thereof or other variations thereon or comparable terminology. In particular, any statement expressed or implied, concerning future events is a forward-looking statement. There can be no assurance that any expectation expressed or implied herein will prove to be correct, or that any contemplated event or result will occur as anticipated. Among other factors, the inability to obtain requisite financing may cause actual results to differ from those anticipated. THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL SHARES OF TRANSCONTINENTAL REALTY INVESTORS, INC. OR SHARES OF INCOME OPPORTUNITY REALTY INVESTORS, INC. AT THE TIME THE OFFER IS COMMENCED, EACH ACQUIRING ENTITY WILL FILE A TENDER OFFER STATEMENT AND EACH TARGET ENTITY WILL FILE A SOLICITATION/RECOMMENDATION STATEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO THE OFFER. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS, AS WELL AS THE SOLICITATION/RECOMMENDATION STATEMENT, WILL BE MADE AVAILABLE TO ALL STOCKHOLDERS OF EACH TARGET ENTITY, AT NO EXPENSE TO THEM. THE TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND ALL OTHER OFFER DOCUMENTS FILED WITH THE COMMISSION) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL ALSO BE AVAILABLE AT NO CHARGE AT THE COMMISSION'S WEBSITE AT WWW.SEC.GOV. ONCE THE TENDER OFFER IS COMMENCED, THE TENDER OFFER STATEMENT AND RELATED MATERIALS MAY BE OBTAINED FOR FREE BY DIRECTING SUCH REQUESTS TO AMERICAN REALTY'S INFORMATION AGENT, GEORGESON SHAREHOLDER COMMUNICATIONS, INC. FOR TRANSCONTINENTAL INFORMATION, CALL TOLL-FREE (866) 423-4880. FOR INCOME OPPORTUNITY INFORMATION, CALL TOLL-FREE (866) 423-4879. Contact: American Realty Investors, Inc. Phyllis Wolper, Director, Investor Relations (800) 400-6407 (469) 522-4245 investor.relations@bcminc.com Page 2 -----END PRIVACY-ENHANCED MESSAGE-----