SC 13D/A 1 counsel13d-93003.txt SEPTEMBER 30, 2003 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 1)* Counsel Corporation (Name of Issuer) Common Stock (Title of Class of Securities) 22226R102 (CUSIP Number) Michael Katz, Esq., 2 American Lane Greenwich, Connecticut 06836-2571, Tel: (203) 862-8000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 29, 2003 (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(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(b) 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). 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Paloma International L.P. 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 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 0 8. SHARED VOTING POWER 7,126,320 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 7,126,320 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,126,320 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.6% 14. TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS BEFORE FILLING OUT! 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Amaranth L.L.C. 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 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 0 8. SHARED VOTING POWER 9,599,280 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 9,599,280 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,599,280 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.7% 14. TYPE OF REPORTING PERSON* OO *SEE INSTRUCTIONS BEFORE FILLING OUT! 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) S. Donald Sussman 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* OO 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8. SHARED VOTING POWER 7,126,320 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 7,126,320 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,126,320 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.6% 14. TYPE OF REPORTING PERSON* IN *SEE INSTRUCTIONS BEFORE FILLING OUT! 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Nicholas M. Maounis 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* OO 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8. SHARED VOTING POWER 9,599,280 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 9,599,280 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,599,280 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.7% 14. TYPE OF REPORTING PERSON* IN *SEE INSTRUCTIONS BEFORE FILLING OUT! This Amendment No. 1 ("Amendment No. 1") is filed as of September 29, 2003 on behalf of the Reporting Persons (as defined below) with respect to the Common Stock (as defined below) of the Issuer (as defined below). By this Amendment No. 1, the Reporting Persons hereby amend and supplement Schedule 13D filed on September 19, 2003 (the "Original Schedule 13D"). Except as set forth herein, the Schedule 13D is unmodified. ITEM 1. Security and Issuer. This statement relates to the common shares, without par value ("Common Stock") of Counsel Corporation (the "Issuer"). The Issuer's principal executive office is located at Exchange Towers, Suite 1300, 130 King Street West, Toronto, Ontario M5X 1E3. ITEM 2. Identity and Background. (a)-(c) and (f) The names of the persons filing this statement on Schedule 13D (the "Reporting Persons") are: - Paloma International L.P., a Delaware limited partnership ("Paloma International"). Paloma International holds the shares of Common Stock beneficially owned by it through its subsidiary, Sunrise Partners Limited Partnership, a Delaware limited partnership ("Sunrise"). Paloma GP LLC, a Delaware limited liability company ("Paloma GP") is the general partner of Paloma International. - Amaranth L.L.C., a Delaware limited liability company ("Amaranth"). Amaranth Advisors L.L.C., a Delaware limited liability company, is the managing member of Amaranth. Amaranth Advisors (Canada) ULC, a Nova Scotia unlimited liability company ("Amaranth Advisors (Canada)"), provides investment management services to Amaranth with respect to the shares of Common Stock owned by Amaranth. Amaranth holds the shares of Common Stock beneficially owned by it. - S. Donald Sussman, an individual and a citizen of the United States ("Sussman"). Mr. Sussman may be deemed to beneficially own the shares of Common Stock held by Paloma International as a result of being a managing member of Paloma GP. - Nicholas M. Maounis, an individual and a citizen of the United States ("Maounis"). Maounis may be deemed to beneficially own the shares of Common Stock held by Amaranth as a result of being the managing member of Amaranth Advisors L.L.C. The business address of Paloma International and Paloma GP is 2 American Lane, Greenwich, Connecticut 06836-2571. The business address of Mr. Sussman is 6100 Red Hook Quarter, 18B, Suites C, 1-6, St. Thomas, USVI 00802. The business address of Amaranth, Amaranth Advisors L.L.C. and Mr. Maounis is One American Lane, Greenwich, Connecticut 06831. The business address of Amaranth Advisors (Canada) is Canada Trust Tower, BCE Place, Suite 3160, PO Box 216, 161 Bay Street, Toronto, Ontario M5J 2S1. The principal business of Paloma International is that of a private investment fund engaged in the purchase and sale of securities for its own account. The principal business of Paloma GP is serving as the general partner of Paloma International. Mr. Sussman's principal occupation is serving as a managing member of Paloma GP and other private investment advisers. The principal business of Amaranth is that of a private investment fund engaged in the purchase and sale of securities for its own account. The principal business of Amaranth Advisors L.L.C. is serving as the managing member of Amaranth. The principal business of Amaranth Advisors (Canada) is providing investment management services. The principal business of Mr. Maounis is serving as the managing member of Amaranth Advisors L.L.C. (d) During the last five years, none of the Reporting Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, none of the Reporting Persons 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 judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. Source and Amount of Funds or Other Consideration. The source and amount of funds used by Paloma International in making its purchases of the shares of Common Stock beneficially owned by the Reporting Persons are set forth below: SOURCE OF FUNDS AMOUNT OF FUNDS Working Capital $7,499,220.40 The source and amount of funds used by Amaranth in making its purchases of the shares of Common Stock beneficially owned by the Reporting Persons are set forth below: SOURCE OF FUNDS AMOUNT OF FUNDS Working Capital $8,521,820.05 ITEM 4. Purpose of Transaction. The Issuer has issued 6% Convertible Unsecured Subordinated Debentures Due October 31, 2003 (the "Debentures") which are convertible into shares of Common Stock. The Reporting Persons beneficially own their shares of Common Stock through their ownership of Debentures. Paloma International (through its subsidiary, Sunrise) and Amaranth acquired the Debentures beneficially owned by them in the ordinary course of purchasing and selling securities for their own respective accounts. Depending upon market conditions and other factors that they may deem material, the Reporting Persons may purchase additional Debentures, shares of Common Stock or other related securities or may dispose of all or a portion of the Debentures, shares of Common Stock or other related securities that they now beneficially own or may hereafter acquire. The Reporting Persons previously reported in the Original Schedule 13D that they had been informed that the Issuer intends to satisfy its obligation to pay the aggregate principal amount payable to the holders of the Debentures on October 31, 2003 by electing to use a right under the trust indenture governing the Debentures to pay the Debentures in Common Stock (the "Issuer Payment Election"). The Issuer had indicated that it would satisfy its obligation to pay the principal amount of the Debentures at maturity by delivering 690 shares of Common Stock for each US$1,000 principal amount of Debentures. The information disclosed above (and in the Original Schedule 13D) with respect to the Issuer Payment Election was provided to the Reporting Persons through a press release by the Issuer on September 9, 2003, the date used by the Reporting Persons as the Event Date of the Original Schedule 13D filing. However, the Reporting Persons' use of the September 9, 2003 Event Date in the Original Schedule 13D was without prejudice, since the Reporting Persons did not (and still do not yet) have all of the facts with respect to the Issuer's compliance with the conditions to make the above mentioned payment election. On September 29, 2003, Amaranth commenced litigation in Ontario, Canada (the "Litigation") against the Issuer seeking an order invalidating the share payment notice purportedly delivered to the Debenture holders by the Issuer on September 9, 2003, in connection with the Issuer Payment Election, as well as its legal costs incurred in connection with the Litigation. ITEM 5. Interest in Securities of the Issuer. (a) The Reporting Persons beneficially own: (i) Collectively, the Reporting Persons beneficially own $24,240,000 principal amount of the Debentures. The Issuer has elected to repay these Debentures at maturity by issuing to the Reporting Persons 16,725,600 shares of Common Stock, which represent 34.4% of all of the outstanding shares of Common Stock. (ii) Paloma International beneficially owns $10,328,000 principal amount of Debentures. The Issuer has elected to repay these Debentures by issuing to Paloma International 7,126,320 shares of Common Stock, which represent 14.6% of all of the outstanding shares of Common Stock. Mr. Sussman may be deemed to beneficially own the shares of Common Stock held by Paloma International as a result of being a managing member of Paloma GP. (iii) Amaranth beneficially owns $13,912,000 principal amount of Debentures, which the Issuer has elected to exchange at maturity for 9,599,280 shares of Common Stock. The 9,599,280 shares of Common Stock beneficially owned by Amaranth represent 19.7% of all of the outstanding shares of Common Stock. Maounis may be deemed to beneficially own the shares of Common Stock held by Amaranth as a result of being the managing member of Amaranth Advisors L.L.C. The percentage ownership was determined after giving effect to the Issuer's election to exchange the shares of Common Stock for all outstanding Debentures (reported to be $40,861,000 in principal amount) at the exchange ratio of 690 shares per $1,000 principal amount of Debentures. (b) Mr. Sussman has shared power with Paloma to vote or direct the vote of, and to dispose or direct the disposition of, the shares of Common Stock beneficially owned by Paloma. Mr. Maounis has shared power with Amaranth to vote or direct the vote of, and to dispose or direct the disposition of, the shares of Common Stock beneficially owned by Amaranth. (c) The following transactions were effected by Paloma International during the past sixty (60) days: Shares of Common Stock or Approx. Price per Principal Amount Share or Debenture Of Debentures (excl. of Trade Date Security Bought/(Sold) commissions) 09/04/03 Common (18,300) $1.96 CAN 09/05/03 Common (427,400) $1.32 CAN 09/09/03 Common (219,400) $1.15 CAN 09/10/03 Common 45,900 $1.41 CAN 09/10/03 Common 40,100 $1.40 CAN 09/10/03 Debentures $1,900,000 $75.33 US 09/10/03 Debentures $ 44,000 $75.25 US The following transactions were effected by Amaranth during the past sixty (60) days: Shares of Common Stock or Approx. Price per Principal Amount Share or Debenture Of Debentures (excl. of Trade Date Security Bought/(Sold) commissions) 09/04/03 Debentures $204,000 $66.00 US 09/04/03* Common (8,300) $1.39 US 09/04/03* Common (6,000) $1.44 US 09/04/03 Common (73,400) $1.96 CAN 09/05/03 Common (641,300) $1.32 CAN 09/08/03 Debentures $7,000 $60.00 US 09/08/03 Common (1,156,200) $1.17 CAN 09/09/03 Common (882,000) $1.15 CAN 09/09/03 Common 169,000 $1.33 CAN 09/10/03 Debentures $837,000 $75.12 US 09/10/03 Debentures $177,000 $75.25 US 09/10/03 Common 183,700 $1.41 CAN 09/10/03 Common 160,500 $1.40 CAN 09/11/03* Common 14,300 $1.11 US 09/11/03 Common 66,500 $1.49 CAN 09/11/03 Common (3,600) $1.53 CAN 09/11/03 Common 8,000 $1.46 CAN 09/12/03 Common (62,500) $1.52 CAN Except as stated below, the above transactions were effected by the Reporting Persons on the Toronto Stock Exchange. An asterisk by a transaction indicates a trade effected by the Reporting Persons on the Nasdaq Small Market System. (d) Not applicable. (e) Not applicable. ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Amaranth and Paloma International have an understanding that Sunrise will contribute to certain of the legal expenses incurred in connection with the Litigation described in Item 4, above. ITEM 7. Material to be Filed as Exhibits. Exhibit A - Joint Filing Agreement SIGNATURES After reasonable inquiry and to the best of its knowledge and belief, the undersigned each certifies that the information with respect to it set forth in this statement is true, complete and correct. Dated: September 30, 2003 PALOMA INTERNATIONAL L.P. By: Paloma GP LLC, as General Partner By: /s/ Michael J. Berner --------------------- Michael J. Berner Vice President /s/ S. Donald Sussman --------------------- S. Donald Sussman AMARANTH L.L.C. By: Amaranth Advisors L.L.C., as Managing Member By: /s/ Nicholas M. Maounis ----------------------- Nicholas M. Maounis President /s/ Nicholas M. Maounis ----------------------- Nicholas M. Maounis