SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Colonial Downs Holdings, Inc.
(Name of Issuer)
Class A Common Stock and Class B Common Stock
(Title of Class of Securities)
1956H100
(CUSIP Number)
Ian M. Stewart, 10515 Colonial Downs Parkway, New Kent, VA 23124 (804) 966-1006
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and communications)
September 9, 1998
(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 following
box [ ].
Check the following box if a fee is being paid with the statement [ ].
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).
(Release #12, 12/91)
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CUSIP No. 19564H100 13D Page 2 of 9 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CD Entertainment Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IS DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 1,779,931 Shares of Class A Common Stock
SHARES 2,250,000 Shares of Class B Common Stock
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,779,931 Shares of Class A Common Stock
PERSON 2,250,000 Shares of Class B Common Stock
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10 SHARED DISPOSITIVE POWER
WITH -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,779,931 Shares of Class A Common Stock
2,250,000 Shares of Class B Common Stock
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Class A Common Stock 33.3%
Class B Common Stock 75.0%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTION BEFORE FILING OUT!
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CUSIP No. 19564H100 13D Page 3 of 9 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jacobs Entertainment Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IS DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 1,779,931 Shares of Class A Common Stock
SHARES 2,250,000 Shares of Class B Common Stock
---------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
---------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,779,931 Shares of Class A Common Stock
PERSON 2,250,000 Shares of Class B Common Stock
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,779,931 Shares of Class A Common Stock
2,250,000 Shares of Class B Common Stock
- -------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Class A Common Stock 33.3%
Class B Common Stock 75.0%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTION BEFORE FILING OUT!
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CUSIP No. 19564H100 13D Page 4 of 9 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jeffrey P. Jacobs
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IS DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
NUMBER OF 1,799,931 Shares of Class A Common Stock
SHARES 2,250,000 Shares of Class B Common Stock
---------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
---------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,799,931 Shares of Class A Common Stock
PERSON 2,250,000 Shares of Class B Common Stock
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH -0-
- -------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,799,931 Shares of Class A Common Stock
2,250,000 Shares of Class B Common Stock
- -------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Class A Common Stock 33.6%
Class B Common Stock 75.0%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTION BEFORE FILING OUT!
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Schedule 13D
Item 1. Security and Issuer.
Title of Securities: Class A Common Stock ("A Stock") and Class B
Common Stock ("B Stock") of Colonial Downs Holdings, Inc., a
Virginia corporation ("Issuer").
Principal Executive Officers:
Jeffrey P. Jacobs, Chief Executive Officer and President
Ian M. Stewart, Chief Operating Officer and Chief Financial Officer
David C. Grunenwald, Secretary
10515 Colonial Downs Parkway
New Kent, VA 23124
Item 2. Identity and Background.
(a) CD Entertainment Ltd., an Ohio limited liability company
("CD Entertainment"); Jacobs Entertainment Ltd., an Ohio
limited liability company ("Jacobs Entertainment") and
manager of CD Entertainment; and Jeffrey P. Jacobs
("Jacobs"), manager of Jacobs Entertainment (collectively,
the "Reporting Persons"). CD Entertainment is beneficially
owned by Jeffrey P. Jacobs and Gary L. Bryenton and Jeffrey
P. Jacobs as Trustees under the Opportunities Trust
Agreement dated February 1, 1996.
(b) 1231 Main Avenue
Cleveland, Ohio 44113
(for all Reporting Persons)
(c) CD Entertainment is a limited liability company formed to hold
interests in the Issuer. Jacobs Entertainment is its manager.
Jacobs is the beneficial owner and manager of Jacobs
Entertainment. Jacobs also is the Chief Executive Officer and
President of the Issuer.
(d) Criminal Convictions for Prior 5 Years: None.
(e) Civil Proceedings Resulting in Final Order in connection
with Securities Laws Activities: None.
(f) Citizenship: United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
CD Entertainment borrowed $800,000 under a credit line and used
$608,475 in cash on hand to purchase 650,000 shares of A Stock on
September 9, 1998 at $0.9375 per share and 490,000 shares of A Stock
on September 14, 1998 at an average price of $1.63 per share.
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Item 4. Purpose of Transaction.
CD Entertainment acquired the shares of Class A Common Stock for
investment purposes only. CD Entertainment also owns 1,500,000
shares of Class B Common Stock, which shares have five votes per
share on matters presented to the Issuer's shareholders (other than
matters relating to a merger or similar transaction or amendment of
the Issuer's charter documents). Accordingly, prior to its
acquisition of the shares of Class A Common Stock reported herein,
CD Entertainment had voting power of approximately 46.1% of the
outstanding stock of the Issuer (assuming five votes per share of
Class B Common Stock and not including shares subject to options or
possibly issued upon conversion of indebtedness). CD Entertainment
became aware of increased trading volume in the Issuer's A Stock
during the first several days of September. CD Entertainment elected
to make the purchases of the A Stock reported herein as a defensive
measure and to increase its voting power.
CD Entertainment has no plans or proposals which relate to or would
result in:
(a) the acquisition by any person of additional securities of
the Issuer or the disposition of the securities of the Issuer;
(b) an extraordinary corporate transaction involving the Issuer;
(c) a sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
(d) any change in the present board of directors or management of
the Issuer;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) any change in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) causing a class of securities of the Issuer 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;
(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to ss.12(g)(4) of the
Securities and Exchange Act of 1934; or
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(j) any actions similar to those listed above.
The Reporting Persons are aware that the Issuer has previously
stated that certain fundamental changes must be made in order for
pari-mutuel horse racing in Virginia to grow and thrive and for the
Issuer to improve its financial performance. Such fundamental
changes include (i) clarification of the amount of its management
fee due an affiliate of the Maryland Jockey Club, which amount is
currently subject to an arbitration proceeding; (ii) working with
the Virginia Racing Commission and horsemen representative groups to
determine the optimum number of race days and purse structure; (iii)
aggressively challenging internal cost structures; and (iv) opening
racing centers in Northern Virginia. The Issuer has stated that if
it is unable to make the foregoing changes and adjustments on a
cooperative basis with the parties involved, it will have to explore
other, more drastic options, including possible filing under the
United States bankruptcy laws.
Item 5. Interest in Securities of the Issuer.
(a) CD Entertainment is deemed to be the beneficial owner of an
aggregate of 1,779,931 shares of A Stock, all of which are held
directly by CD Entertainment. Jacobs Entertainment is deemed to be
the beneficial owner of the same shares indirectly through CD
Entertainment. The 1,779,931 shares represent 300,000 shares held in
the form of an option from other shareholders of the Issuer,
1,140,000 shares recently purchased on the open market, and 339,931
shares which are convertible at $1.625 per share under a note dated
August 26, 1998 (the "Note") issued by the Issuer to CD
Entertainment. CD Entertainment and Jacobs Entertainment are deemed
the beneficial owners of 33.3% of A Stock based upon 5,000,000
shares of A Stock issued and outstanding as of September 1, 1998 and
the 339,931 shares of A Stock which could be issued upon conversion
of the Note.
CD Entertainment is deemed to be the beneficial owner of an
aggregate of 2,250,000 shares of B Stock, all of which are held
directly. Jacobs Entertainment is deemed to be the holder of the
same shares indirectly through CD Entertainment. CD Entertainment
directly holds 1,500,000 shares of B Stock, a convertible
subordinated note dated March 17, 1997 ("Subordinated Note"),
convertible into 474,547 shares of B Stock at $11.59 per share, and
the Note which is also convertible into 275,453 shares of B Stock at
$1.625 per share in addition to the 339,931 shares of Class A Stock.
CD Entertainment and Jacobs Entertainment are deemed the
beneficial owners of 75.0% of B Stock based upon 2,250,000 shares of
B Stock issued and outstanding, the Subordinated Note convertible
into 474,547 shares of B Stock as of September 1, 1998 and the Note
convertible into 274,453 shares of B Stock.
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Jacobs may be deemed to be the indirect beneficial owner of
all shares owned by CD Entertainment through his relationship in
Jacobs Entertainment. Jacobs is also the direct beneficial owner of
20,000 shares of A Stock through an option from the Issuer to
purchase such shares at $9.50 per share. Jacobs is deemed the
beneficial owner of 33.6% of A Stock based on 5,000,000 shares of A
Stock outstanding, 339,031 shares to be issued upon conversion of
the Note and the 20,000 shares that Jacobs may obtain if he
exercises his option.
Jacobs may be deemed to be the beneficial owner of 75.0% of B
Stock based upon the 2,250,000 shares of B Stock outstanding, the
Subordinated Note convertible into 474,547 shares of B Stock and the
Note convertible into 274,453 shares of B Stock.
(b) CD Entertainment has sole voting and dispositive power
over 1,779,931 shares of A Stock and 2,250,000 shares of B Stock.
Jacobs Entertainment may be deemed to have voting and dispositive
power over the same shares.
Through his relationship in Jacobs Entertainment, Jacobs may
be deemed to have voting and dispositive power over 1,799,931
shares of A Stock and 2,250,000 shares of B Stock.
(c) Transactions in securities in prior 60 days: Other than
the transactions described in Item 3, CD Entertainment made a
$1,000,000 loan to the Issuer pursuant to the terms of the Note.
Under the terms of the Note, such loan is convertible into 339,931
shares of A Stock and 275,453 shares of B Stock.
(d) No other person has the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale, of the
securities reported upon.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
None.
Item 7. Material to Be Filed as Exhibits.
None.
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SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: September 21, 1998 CD ENTERTAINMENT LTD.
By: Jacobs Entertainment Ltd., Manager
By: /s/ Jeffrey P. Jacobs
--------------------------------
Jeffrey P. Jacobs, Manager
JACOBS ENTERTAINMENT LTD.
By: /s/ Jeffrey P. Jacobs
--------------------------
Jeffrey P. Jacobs, Manager
/s/ Jeffrey P. Jacobs
----------------------------------
Jeffrey P. Jacobs
