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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
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INTERSTATE HOTELS CORPORATION
(Name of Issuer)
Common Stock, $0.01 par value per share 46088R108
(Title of class of securities) (CUSIP number)
Robert Lamse
545 E. John Carpenter Freeway
Suite 1400
Irving, Texas 75062
(972) 444-9700
(Name, address and telephone number of person authorized
to receive notices and communications)
With a copy to:
Stephen M. Besen, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153-0119
(212) 310-8000
June 29, 1999
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-(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 ss. 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 purposes of Section 18 of the Securities Exchange Act of
1934 (the "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.)
(Continued on following pages)
(Page 1 of 6 Pages)
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<TABLE>
<CAPTION>
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CUSIP No. 46088R108 13D Page 2 of 6 Pages
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<S> <C>
1 NAME OF REPORTING PERSON KFP GRAND, LTD.
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e):
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: Texas
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7 SOLE VOTING POWER: 613,666
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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8 SHARED VOTING POWER: 0
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9 SOLE DISPOSITIVE POWER: 613,666
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10 SHARED DISPOSITIVE POWER: 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON:
613,666
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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): 9.83%
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14 TYPE OF REPORTING PERSON: PN
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ITEM 1. Security and Issuer
This statement of beneficial ownership on Schedule 13D
("Schedule 13D") relates to the common stock, par value $0.01 per share ("Common
Stock"), of Interstate Hotels Corporation (the "Issuer"). The address of the
principal executive office of the Issuer is 680 Andersen Drive, Foster Plaza
Ten, Pittsburgh, Pennsylvania 15220.
ITEM 2. Identity and Background
The person filing this Schedule 13D is KFP Grand, Ltd., a
Texas limited partnership (the "Reporting Person"). The principal business of
the Reporting Person is portfolio investments and the Reporting Person has its
principal place of business at 545 E. John Carpenter Freeway, Suite 1400,
Irving, Texas 75062.
The general partner of the Reporting Company is Grosvenor,
L.C., a Texas limited liability company (the "General Partner"). The principal
business of the General Partner is acting as a general partner for various
investment partnerships and the General Partner has its principal place of
business at 545 E. John Carpenter Freeway, Suite 1400, Irving, Texas 75062.
The members of the General Partner are Mahmood Khimji, Mehdi
Khimji and Jaffer Khimji (the "Members"). The business address of each Member is
545 E. John Carpenter Freeway, Suite 1400, Irving, Texas 75062. The present
principal employment of Mahmood Khimji, Mehdi Khimji and Jaffer Khimji is
President, Vice President and Secretary, respectively, of Highgate Holdings,
Inc. ("Highgate"). Highgate is a private investor and has its principal place of
business at 545 E. John Carpenter Freeway, Suite 1400, Irving, Texas 75062. Each
Member is a citizen of Canada.
None of the Reporting Person, the General Partner and the
Members has, during the last five years, (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person 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 a
violation with respect to such laws.
ITEM 3. Source and Amount of Funds or Other Consideration
The source of funds used by the Reporting Person for the
purchase of Common Stock was working capital of the Reporting Person. The
aggregate amount paid for the Common Stock acquired by the Reporting Person was
approximately $2,699,129, which amount does not include any brokerage
commissions paid. In addition, the Reporting Person acquired 6,666 shares of
Common Stock as a dividend in respect of shares of common stock of Patriot
American Hospitality, Inc. ("Patriot") in connection with the spin-off of 92% of
the Issuer from Patriot on June 18, 1999.
ITEM 4. Purpose of Transaction
The Common Stock was acquired by the Reporting Person for
investment purposes and in contemplation that the Reporting Person, either alone
or as a part of a group, might acquire sufficient additional Common Stock to
permit the Reporting Person or such group to have control of the Issuer. The
Reporting Person is not currently a part of any group formed for the purpose of
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acquiring Common Stock or control of the Issuer. The Reporting Person may make
additional purchases of Common Stock in the open market or in private
transactions depending on, among other factors, its evaluation of the Issuer's
business, prospects and financial condition, the market for the Common Stock,
the availability to the Reporting Person of funding to make such purchases and
the ability to make such purchases without triggering exercisability of the
rights issued pursuant to the Issuer's Shareholder Rights Plan. In addition, the
Reporting Person will assess whether it is desirable and possible for the
Reporting Person to acquire sufficient additional Common Stock in order for it
to have control of the Issuer or to otherwise influence the management and
policies of the Issuer. The Reporting Person has not made any final
determination to acquire control or otherwise attempt to influence the
management or policies of the Issuer.
ITEM 5. Interest in Securities of the Issuer
(a) The Reporting Person beneficially owns 613,666 shares of Common Stock,
which represents approximately 9.83% of the outstanding Common Stock,
assuming that 6,245,795 shares of Common Stock were outstanding at the date
of this filing, based on information set forth in Amendment No. 6 to the
Issuer's Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on June 8, 1999.
(b) In its capacity as the general partner of the Reporting Person, the General
Partner exercises the voting and dispositive power with respect to the
Common Stock owned by the Reporting Person; provided that the dispositive
power is exercised in accordance with the terms of the limited partnership
agreement governing the Reporting Person. The managers of the General
Partner determine how to vote the Common Stock and whether to dispose of
the Common Stock.
(c) Within the past 60 days the following transactions were effected by the
Reporting Person in the Common Stock:
<TABLE>
<CAPTION>
No. of Capital
Date of Transaction Shares Purchased Price per Share Paid
<S> <C> <C>
6/22/99 20,000 $ 4 5/8
6/22/99 77,000 $ 4 13/19
6/23/99 45,000 $ 4 1/2
6/24/99 45,000 $ 4 7/16
6/25/99 100,000 $ 4 7/16
6/29/99 320,000 $ 4 3/8
</TABLE>
All of the foregoing transactions were open market purchases by the
Reporting Person. In addition, the Reporting Person acquired 6,666 shares
of Common Stock as a dividend in respect of shares of common stock of
Patriot in connection with the spin-off of 92% of the Issuer from Patriot
on June 18, 1999.
(d) None.
(e) Not applicable.
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ITEM 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
To the best knowledge of the undersigned, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any person with
respect to any securities of the Issuer, including but not limited to transfer
or voting of any of the securities, finder's fees, joint ventures, loan or
option agreement, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withhholding of proxies.
ITEM 7. Material to be Filed as Exhibits
None.
[The remainder of this page intentionally left blank.]
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SIGNATURES
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: July 6, 1999
KFP GRAND, LTD.
By: GROSVENOR, L.C., Its General Partner
By: /s/ Robert Lamse
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Vice President
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