SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 41)
TRANSCONTINENTAL REALTY INVESTORS, INC.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
893617-20-9
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(CUSIP Number)
Robert A. Waldman
1800 Valley View Lane, Suite 300
Dallas, Texas 75234
(469) 522-4200
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
December 10, 2003
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(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 Rules 13d-1(b)(3) or (4), check the following box [ ].
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 persons'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
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
American Realty Trust, Inc., FEI No. 54-0697989
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2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a)
(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions) WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
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6) Citizenship or Place of Organization Georgia
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7) Sole Voting Power 85,400
Number of
Shares Bene- --------------------------------------------------------------
ficially 8) Shared Voting Power -0-
Owned by
Each Report- --------------------------------------------------------------
ing Person 9) Sole Dispositive Power 85,400
With
--------------------------------------------------------------
10) Shared Dispositive Power -0-
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11) Aggregate Amount Beneficially Owned by Each Reporting Person
5,070,317
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 62.81%
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14) Type of Reporting Person (See Instructions) CO
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CUSIP No. 893617-20-9
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
Transcontinental Realty Acquisition Corporation, FEI No. 13-4243611
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2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a)
(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions) WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
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6) Citizenship or Place of Organization Nevada
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7) Sole Voting Power 1,213,226
Number of --------------------------------------------------------------
Shares Bene- 8) Shared Voting Power -0-
ficially
Owned by --------------------------------------------------------------
Each Report- 9) Sole Dispositive Power 1,213,226
ing Person
With --------------------------------------------------------------
10) Shared Dispositive Power -0-
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11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,213,226
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 15.03%
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14) Type of Reporting Person (See Instructions) CO
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CUSIP No. 893617-20-9
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
Basic Capital Management, Inc., FEI No. 75-2261065
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2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a)
(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions) WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
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6) Citizenship or Place of Organization Nevada
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7) Sole Voting Power 202,806
Number of --------------------------------------------------------------
Shares Bene- 8) Shared Voting Power -0-
ficially
Owned by --------------------------------------------------------------
Each Report- 9) Sole Dispositive Power 202,806
ing Person
With --------------------------------------------------------------
10) Shared Dispositive Power -0-
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11) Aggregate Amount Beneficially Owned by Each Reporting Person
202,806
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 2.5%
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14) Type of Reporting Person (See Instructions) CO
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CUSIP No. 893517-20-9
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
The Gene E. Phillips Children's Trust, I.D. No. 13-6599759
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2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a)
(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions) N/A
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5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
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6) Citizenship or Place of Organization Texas
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7) Sole Voting Power 1,827
Number of --------------------------------------------------------------
Shares Bene- 8) Shared Voting Power -0-
ficially
Owned by --------------------------------------------------------------
Each Report- 9) Sole Dispositive Power 1,827
ing Person
With --------------------------------------------------------------
10) Shared Dispositive Power -0-
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11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,827
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 0.0002%
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14) Type of Reporting Person (See Instructions) OO
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CUSIP No. 893617-20-9
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
American Realty Investors, Inc., FEI No. 75-2847135
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2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a)
(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions) WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
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6) Citizenship or Place of Organization Nevada
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7) Sole Voting Power -0-
Number of --------------------------------------------------------------
Shares Bene- 8) Shared Voting Power -0-
ficially
Owned by --------------------------------------------------------------
Each Report- 9) Sole Dispositive Power -0-
ing Person
With --------------------------------------------------------------
10) Shared Dispositive Power -0-
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11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,283,543
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 77.84%
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14) Type of Reporting Person (See Instructions) CO
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CUSIP No. 893617-20-9
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above
Persons (entities only)
EQK Holdings, Inc., FEI No. 75-2931679
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2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a)
(b)
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3) SEC Use Only
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4) Source of Funds (See Instructions) WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e)
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6) Citizenship or Place of Organization Nevada
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7) Sole Voting Power 4,984,917
Number of --------------------------------------------------------------
Shares Bene- 8) Shared Voting Power -0-
ficially
Owned by --------------------------------------------------------------
Each Report- 9) Sole Dispositive Power 4,984,917
ing Person
With --------------------------------------------------------------
10) Shared Dispositive Power -0-
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11) Aggregate Amount Beneficially Owned by Each Reporting Person
4,984,917
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12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 61.75%
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14) Type of Reporting Person (See Instructions) CO
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ITEM 1. SECURITY AND ISSUER
This Amendment No. 41 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 40 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. 41 to Schedule 13D is being filed to reflect an
increase in the ownership of Shares by one of the Reporting Persons by more than
1% and to report various changes in the information contained in the Amended
Statement.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 of the Amended Statement is hereby further amended as follows:
This Amendment is being filed on behalf of American Realty Trust, Inc.,
a Georgia corporation ("ART"), Basic Capital Management, Inc., a Nevada
corporation ("BCM"), The Gene E. Phillips Children's Trust (the "GEP Trust"),
American Realty Investors, Inc. a Nevada corporation ("ARL"), EQK Holdings,
Inc., a Nevada corporation ("EQK"), and Transcontinental Realty Acquisition
Corporation, a Nevada corporation and a wholly-owned subsidiary of ARL ("TCI
AcqSub"), each of which have their principal executive offices located at 1800
Valley View Lane, Suite 300, Dallas, Texas 75234. All of ART, BCM, the GEP
Trust, ARL, EQK and TCI AcqSub are collectively referred to as the "Reporting
Persons." The Reporting Persons may be deemed to constitute a "person" within
the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended,
because BCM is beneficially owned by a trust for the benefit of Gene E.
Phillips' children; until June 30, 2003, BCM served as Advisor to ARL, and Mr.
Phillips' son, Ryan T. Phillips, serves as a director of BCM and is a
beneficiary of the GEP Trust. EQK is a wholly-owned subsidiary of ART, and ART
and TCI AcqSub are each wholly-owned subsidiaries of ARL.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
ART and ARL, respectively, acquired certain additional Shares as
described in Item 5(c) below at varying prices. The purchase price for such
Shares in the open market was paid for from the working capital of each of the
Reporting Persons, and no part of the purchase price was represented by funds or
other consideration borrowed or otherwise obtained for the purpose of acquiring,
holding, trading or voting the securities. Each of the Reporting Persons have in
the past utilized (and may in the future utilize) margin accounts with various
brokerage firms, which accounts may, from time to time, have debit balances and
include certain of the Shares owned by each. Since other securities are held in
such
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accounts, it is impracticable at any time to determine the amounts, if any,
borrowed with respect to any specific securities, and interest costs vary with
applicable costs and account balances.
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 October 31, 2003, the total number of issued and outstanding Shares was
8,072,594 Shares. As of December 19, 2003, the following Shares were owned
directly and beneficially by the Reporting Persons set forth below:
No. of Shares
Name Owned Directly Approximate % Class
----------------- -------------- -------------------
ART* 5,070,317 62.81%
BCM 202,806 2.5%
GEP Trust 1,827 0.0002%
ARL*+ 6,283,543 77.84%
EQK 4,984,917 61.75%
TCI AcqSub 1,213,226 15.03%
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Totals 6,488,176 80.37%
========== =========
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* 85,400 Shares are owned direct by ART; 4,984,917 are the 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. ARL does not
hold direct ownership of any Shares.
+ Same Shares owned by TCI AcqSub which is a wholly-owned subsidiary of
ARL.
Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934 (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; and each of
the directors of ARL and TCI AcqSub may be deemed to beneficially own the number
of Shares owned by TCI AcqSub described above; each of the directors of BCM may
be deemed to beneficially own the Shares held directly by BCM. 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 No. of Shares % of
General Partner Entity Beneficially Owned Class
------------------- ------------------------ ------------------ --------
Ted P. Stokley ARL 6,283,543*+ 77.84%
Earl D. Cecil ARL 6,283,543*+ 77.84%
Martin L. White ARL 6,283,543*+ 77.84%
Henry A. Butler ARL 6,283,543*+ 77.84%
Ryan T. Phillips(1) BCM and GEP Trust 204,633++ 2.53%
Mickey Ned Phillips BCM 202,806 2.51%
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Name of Director or No. of Shares % of
General Partner Entity Beneficially Owned Class
------------------- ------------------------ ------------------ --------
Donald W. Phillips GEP Trust 1,827 0.0002%
Robert A. Waldman ART, EQK and TCI AcqSub 6,283,543*+ 77.84%
Ronald E. Kimbrough ART, EQK and TCI AcqSub 6,283,543*+ 77.84%
----------- ------
Total Units beneficially owned by Reporting 6,488,176 80.37%
Persons and individuals listed above: =========== ======
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(1) Also beneficiary of the GEP Trust.
(b) Each of the directors of EQK share voting and dispositive power
over the 4,984,917 Shares held by EQK. Each of the directors of TCI AcqSub share
voting and dispositive power over the 1,213,226 Shares held by TCI AcqSub. Each
of the directors of ART have shared voting and dispositive power over the 85,400
Shares held directly by ART. The directors of BCM have shared voting and
dispositive power over the 202,806 Shares held by BCM. The Trustee of the GEP
Trust has the sole voting and dispositive power over the 1,827 Shares held by
the GEP Trust.
(c) During the 60 calendar days ended December 22, 2003, except for the
transactions described below, the Reporting Persons and their executive
officers, directors, partners and trustees, as the case may be, did not engage
in any transaction in the Shares or any other equity interest derivative
thereof. The following table sets forth the transactions in the Shares that have
been effectuated during the sixty days ended December 19, 2003, all of which
were purchases in open market transactions at the prices per Share and dates
specified:
NO. OF PURCHASE PRICE
REPORTING PERSON DATE OF SALE SHARES PURCHASED PER SHARE
---------------- ------------ ---------------- --------------
ART 12/10/03 81,400 $16.00
ART* 12/16/03 500 15.61
ART* 12/16/03 700 15.50
ART 12/17/03 400 15.50
ART 12/19/03 200 15.80
ART 12/19/03 1,000 15.90
ART 12/22/03 200 16.04
ART 12/22/03 800 16.05
ART 12/22/03 200 16.03
(d) No person other than the Reporting Persons or its respective Board
of Directors, General Partners or Trustee is known to have the right to receive
or the power to direct receipt of dividends from, or the
----------
*These two transactions were originally incorrectly reported as direct purchases
by ARL instead of ART.
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proceeds of sale of, the Shares held by each of the Reporting Persons, subject
to the matters set forth in Item 6 below.
(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 read as
follows:
EQK pledged 2,751,798 Shares to Sunset Management, LLC ("Sunset")
pursuant to a loan agreement with such lender. The 650,000 Shares and 270,507
Shares acquired by EQK from BCM are also pledged to Sunset. Sunset made a loan
of $30,000,000 on September 17, 2001 to EQK, BCM, ART and ART Williamsburg,
Inc., a Nevada corporation ("AWI") initially secured by 3,522,305 Shares of TCI
Common Stock which was increased by 150,000 Shares to a total of 3,672,305
Shares on February 25, 2002. Such Shares are the subject of four pledge
agreements and amendments pursuant to which Commonwealth Land Title Insurance
Company ("Commonwealth") is the Pledge Holder of the securities. The loan was
scheduled to mature on September 17, 2002, but Sunset orally agreed in September
2002 to extend the maturity date of the loan and accept substitute collateral
for the Shares after a pay-down of $15,000,000, which was made by the borrowers.
Sunset did not honor the agreement which resulted in litigation filed in Texas
state court on October 3, 2002. On July 7, 2003, Sunset delivered to TCI a
Schedule 13D for an event on June 10, 2003, alleging that Sunset (i) holds the
voting rights to 3,672,305 Shares (10 Shares owned and incorrectly 3,673,115
other shares [which should be no more than 3,672,305 Shares]) of TCI Common
Stock (approximately 45%), (ii) intends to pursue legal remedies to remove and
replace the TCI directors, and (iii) intends to foreclose upon the pledged
Shares of TCI Common Stock. On September 10, 2003, the Texas State Court case
was removed to bankruptcy court as an adversary proceeding in the case styled In
Re: ART Williamsburg, Inc. in the United States Bankruptcy Court for the Eastern
District of Texas.
The remaining 1,312,612 Shares owned directly by EQK may be deemed to
be "collateral" for borrowings pursuant to margin or other account arrangements
with bankers and brokerage firms relating to accounts of EQK. Such arrangements
are standard arrangements involving margin securities of up to a specified
percentage of market value of the Shares and bear interest at varying rates and
contain only standard default and similar provisions, the operation of any of
which should not give any other person immediate voting power or investment
power over such securities. Such arrangements exist with the Shares and other
securities held in such accounts, and it is impracticable at any given time to
determine the amounts, if any, with respect to the Shares and interest costs
under such arrangements may vary with applicable costs and account balances.
The remaining 202,806 Shares owned by BCM may be deemed to be
"collateral" for borrowings pursuant to margin or other account arrangements
with bankers and brokerage firms relating to accounts of BCM.
-4-
Such arrangements are standard arrangements involving margin securities of up to
a specified percentage of the market value of the Shares and bear interest at
varying rates and contain only standard default and similar provisions, the
operation of any of which should not give any other person immediate voting
power or investment power over such securities. Such arrangements exist with the
Shares and other securities held in such accounts, and it is impracticable at
any given time to determine the amounts, if any, with respect to the Shares and
interest costs under such arrangements vary with applicable costs and account
balances.
All 85,400 Shares owned by ART may be deemed to be "collateral" for
borrowings pursuant to margin or other account arrangements with a brokerage
firm relating to an account of ART. Such arrangements are standard arrangements
involving margin securities of up to a specified percentage of the market value
of the Shares and bear interest at varying rates and contain only standard
default and similar provisions, the operation of any of which should not give
any other person immediate voting power or investment power over such
securities. Such arrangements exist with the Shares and other securities held in
such account, and it is impracticable at any given time to determine the amount,
if any, with respect to the Shares and interest cost under such arrangements
vary with applicable costs and account balances.
All 1,827 Shares owned by the GEP Trust may be deemed to be
"collateral" for borrowings pursuant to margin or other account arrangements
with a brokerage firm relating to an account of the GEP Trust. Such arrangements
are standard arrangements involving margin securities of up to a specified
percentage of the market value of the Shares and bear interest at varying rates
and contain only standard default and similar provisions, the operation of any
of which should not give any other person immediate voting power or investment
power over such securities. Such arrangements exist with the Shares and other
securities held in such account, and it is impracticable at any given time to
determine the amount, if any, with respect to the Shares and interest cost under
such arrangements vary with applicable costs and account balances.
Except as set forth in the preceding paragraphs, the Reporting Persons
do not have any contracts, arrangements, understandings or relationships (legal
or otherwise) with any person with respect to any securities of the Issuer
including finder's fees, joint ventures, loan or option arrangements, puts or
calls, guaranties of profits, division of profits or loss, or the giving or
withholding of proxies.
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SIGNATURES
After reasonable inquiry and to the best of their respective knowledge
and belief, the undersigned certify that the information set forth in this
Amendment No. 41 to Statement on Schedule 13D is true, complete and correct.
Dated: December 24, 2003.
AMERICAN REALTY TRUST, INC. AMERICAN REALTY INVESTORS, INC.
By: /s/ Ronald E. Kimbrough By: /s/ Ronald E. Kimbrough
----------------------------- -----------------------------
Ronald E. Kimbrough Ronald E. Kimbrough
Executive Vice President Executive Vice President
BASIC CAPITAL MANAGEMENT, INC. TRANSCONTINENTAL REALTY
ACQUISITION CORPORATION
By: /s/ Ronald E. Kimbrough
----------------------------- By: /s/ Ronald E. Kimbrough
Ronald E. Kimbrough -----------------------------
Executive Vice President Ronald E. Kimbrough
President
EQK HOLDINGS, INC. THE GENE E. PHILLIPS CHILDREN'S
TRUST
By: /s/ Ronald E. Kimbrough
----------------------------- By: /s/ Donald W. Phillips
Ronald E. Kimbrough -----------------------------
President and Treasurer Donald W. Phillips,
Trustee
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