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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Statement of
Paul R. Dupee, Jr., George Bigelow and Lawrence Sosnow
Pursuant to Section 13(d) of the Securities Exchange Act of 1934
in respect of
MAXICARE HEALTH PLANS, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
577904204
(CUSIP Number)
Leonard Chazen
Howard, Darby & Levin
1330 Avenue of the Americas
New York, NY 10019
(212) 841-1096
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 2, 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 / /.
Check the following box if a fee is being paid with the statement / /. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement including all exhibits should be filed with
the Commission. See Rule 13d-1(a) for the other parties to whom copies are to be
sent.
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* The remainder of thus cover page shall be filled out for a reporting persons
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.
1. Names of Reporting Person I.R.S. Identification Nos. of Above Person
(Entities Only)
Paul R. Dupee, Jr.
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
PF
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e)
6. Citizenship or Place of Organization: United States citizen
7. Number of Shares Beneficially Owned With Sole Voting Power 333,100
8. Number of Shares Beneficially Owned With Shared Voting Power 0
9. Number of Shares Beneficially Owned With Sole Dispositive Power 333,100
10. Number of Shares Beneficially Owned With Shared Dispositive Power 0
11. Aggregate Amount Beneficially Owned 333,100
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares X
13. Percent of Class Represented by Amount in Row (11) 1.89%
14. Type of Reporting Person IN
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1. Names of Reporting Person I.R.S. Identification Nos. of Above Person
(Entities Only)
George Bigelow
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
PF
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e)
6. Citizenship or Place of Organization: United States citizen
7. Number of Shares Beneficially Owned With Sole Voting Power 1,000
8. Number of Shares Beneficially Owned With Shared Voting Power 0
9. Number of Shares Beneficially Owned With Sole Dispositive Power 1,000
10. Number of Shares Beneficially Owned With Shared Dispositive Power 0
11. Aggregate Amount Beneficially Owned 1,000
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11) .0056%
14. Type of Reporting Person IN
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1. Names of Reporting Person I.R.S. Identification Nos. of Above Person
(Entities Only)
Lawrence Sosnow
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds
PF
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e)
6. Citizenship or Place of Organization: United States citizen
7. Number of Shares Beneficially Owned With Sole Voting Power 9,000
8. Number of Shares Beneficially Owned With Shared Voting Power 0
9. Number of Shares Beneficially Owned With Sole Dispositive Power 9,000
10. Number of Shares Beneficially Owned With Shared Dispositive Power 0
11. Aggregate Amount Beneficially Owned 9,000
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11) .05%
14. Type of Reporting Person IN
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ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to the Common Stock, par value
$.01 per share, of Maxicare Health Plans, Inc., a Delaware corporation (the
"Company"), which has its principal executive offices at 1149 South Broadway
Street, Suite 910, Los Angeles, California 90015.
ITEM 2. IDENTITY AND BACKGROUND
Filing Parties:
This Statement is filed on behalf of the following three persons, who
are collectively referred to as the "Filing Parties":
a. Paul R. Dupee, Jr. ("Mr. Dupee") is an individual whose business address is
at 10 Wilton Row, London SW1X7NR, England. Mr. Dupee's present principal
occupation is as a private investor; such employment is conducted through
PCE Investments, whose principal business address is 10 Wilton Row, London
SW1XNR, England.
During the last five years, Mr. Dupee (a) has not been convicted in any
criminal proceeding (excluding traffic violations and similar misdemeanors)
and (b) has not been a party to any civil proceeding as a result of which he
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.
Mr. Dupee is a citizen of the United States.
b. George Bigelow is an individual whose business address is The Americana
Group LLC, 535 Boylston Street, Boston, Massachusetts 02116. His principal
present occupation is as President, Chief Operating Officer, Chief Financial
Officer and Director of Americana Hotels and Realty Corporation, a publicly
traded real estate investment trust whose principal business address is 535
Boylston Street, Boston, Massachusetts 02116.
During the last five years, Mr. Bigelow (a) has not been convicted in any
criminal proceeding (excluding traffic violations and similar misdemeanors)
and (b) has not been a party to any civil proceeding as a result of which he
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.
Mr. Bigelow is a citizen of the United States.
c. Lawrence Sosnow is an individual whose business address is 850 Park Avenue,
New York, New York 10021. His principal present occupation is as a private
investor. He does not conduct that business through any entity.
During the last five years, Mr. Sosnow (a) has not been convicted in any
criminal proceeding (excluding traffic violations and similar misdemeanors)
and (b) has not been a party to any civil proceeding as a result of which he
was or is subject to a judgment, decree or final order
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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.
Mr. Sosnow is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Filing Parties used their personal funds to purchase the shares of
Common Stock of the Company (the "Shares") to which this Statement relates.
The amount of funds used to date to acquire the Shares is approximately
$4,539,609.60.
ITEM 4. PURPOSE OF TRANSACTION
The Filing Parties acquired their holdings of Common Stock because they
believed that the Common Stock represented a favorable investment opportunity.
The Filing Parties believe that the current market valuation of the Common Stock
does not fully reflect the inherent value of the Company's business. The Filing
Parties have come to believe that the policies followed by the Board of
Directors (the "Board") in recent years have failed to maximize shareholder
value and that current management of the Company has failed to capitalize on, or
consider thoroughly, potential opportunities to enhance shareholder value
through, among other options, a business combination or sale of the Company or
its assets.
Therefore, to seek to enhance shareholder value, Mr. Dupee has commenced
a formal solicitation of consents in accordance with applicable proxy
regulations (the "Consent Solicitation"). The Consent Solicitation seeks to
enact certain proposals that would elect a majority of the Board who are
committed, subject to their fiduciary duties, to pursuing strategic alternatives
to enhance shareholder value, including a business combination or sale of the
Company or its assets.
The Filing Parties believe that the Company could increase shareholder
value by engaging in a business combination with, or sale to, another Company in
the managed health care business because Mr. Dupee believes that the memberships
in the Company's HMOs are likely to be given a higher market value in such a
transaction than is reflected in the current market price for the Company's
stock. In addition, the Filing Parties believe that such a transaction would
improve the utilization of the Company's net operating loss carryforward, which
is presently providing little value to the Company because of the Company's low
level of profitability.
On April 8, 1998, Mr. Dupee filed a revised preliminary consent
solicitation statement (the "Preliminary Statement") with the Securities and
Exchange Commission pursuant to the Securities Act of 1934, as amended, and the
applicable rules thereunder. The Preliminary Statement described Mr. Dupee's
proposals, which would, among other things, add ten new directors to the Board,
thereby increasing the authorized number of directors to seventeen and fill the
resulting new directorships with the Soliciting Shareholder Nominees (defined
below), who would constitute a majority of the Board. Mr. Dupee has also
proposed repealing any bylaw amendments adopted by the Board since February 1,
1998.
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Mr. Dupee has proposed for election ten people (the "Soliciting
Shareholder Nominees") to fill the newly-created directorships, including
himself, George Bigelow and Lawrence Sosnow. Mr. Dupee, Mr. Bigelow and Mr.
Sosnow (the "Filing Party Nominees") are Filing Parties.
Mr. Dupee and certain other Soliciting Shareholder Nominees (not
including the other Filing Persons) will solicit individuals, brokers, banks,
bank nominees and other institutional holders in connection with the Consent
Solicitation and will not receive any compensation for such solicitation.
The Filing Party Nominees have no present intention to change the
existing senior management of the Company and intend to appoint a committee to
oversee the implementation of their plan to pursue strategic alternatives.
Mr. Dupee, J.O. Hambro Capital Management Limited, North Atlantic
Smaller Companies Investment Trust plc ("NASCIT") and American Opportunity Trust
("Opportunity") have entered into an oral agreement under which the costs of the
Consent Solicitation will be shared 40% by Mr. Dupee, 40% by NASCIT and 20% by
Opportunity. The Filing Parties intend to request, subject to their fiduciary
duties, reimbursement of costs and expenses in connection with the Consent
Solicitation.
The Filing Parties have not agreed, and are not contractually obligated,
to vote the shares of Common Stock beneficially owned by such Filing Parties in
any manner in connection with the Consent Solicitation or with respect to any
other vote of the shareholders of the Company. The Filing Parties reserve the
right to participate in or initiate, alone or with others, any plans, proposals
or transactions of a similar or different nature with respect to the Company or
its securities.
The Filing Parties intend to review their investment in the Company on a
continuing basis and, depending on various factors, including the Company's
business, affairs and financial position, other developments concerning the
Company, the price level of the Common Stock, conditions in the securities
markets and general economic and industry conditions, as well as other
investment opportunities available to the Filing Parties, may in the future take
such actions with respect to their investment in the Company as they deem
appropriate in light of the circumstances existing from time to time. Such
actions may include the purchase of additional Common Stock in the open market,
in privately negotiated transactions or otherwise, or the sale at any time of
all or a portion of the Common Stock now owned or hereafter acquired by the
Filing Parties to one or more purchasers. The Filing Persons may revise the
proposals or submit additional proposals for action by shareholders by written
consent or for adoption by shareholders at any meeting of shareholders.
Except as described in this Item 4, as of the date of this Statement
none of the Filing Parties has formulated any plans or proposals that relate to
or would result in: (a) the acquisition by any person of additional securities
of the Company, or the disposition of securities of the Company; (b) an
extraordinary corporate transaction; (c) a sale or transfer of a material amount
of assets of the Company or its subsidiaries, if any; (d) any change in the
present board of directors or management of the Company, including any change in
the number or term of directors or the filling of any existing vacancies on the
board; (e) any material change in the present capitalization or dividend policy
of the Company; (f) any other material change in the Company's business or
corporate structure; (g) changes in the Company's charter or bylaws or other
actions that may
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impede the acquisition of control of the Company by any person; (h) causing a
class of securities of the Company to be delisted from a national securities
exchange or securities association; (i) causing a class of equity securities of
the Company to become eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any
action similar to those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a)-(b) Set forth below is the aggregate number of shares and percentage
of the outstanding Common Stock of the Company beneficially owned (i) by each of
the Filing Parties and (ii) to the knowledge of the Filing Parties, by each
other person or entity that may be deemed to be a member of a group with the
Filing Parties for the purposes of Section 13(d) of the Exchange Act and the
rules promulgated thereunder:
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FILING PARTY AGGREGATE NUMBER OF NUMBER OF NUMBER OF APPROXIMATE
NUMBER OF SHARES: SHARES: SHARES: SOLE OR PERCENTAGE*
SHARES SOLE SHARED POWER SHARED POWER TO
POWER TO TO VOTE DISPOSE
VOTE
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<S> <C> <C> <C> <C> <C>
Paul R. 333,100 333,100 0 333,100 1.86%
Dupee, Jr.
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George Bigelow 1,000 1,000 0 1,000 .0056%
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Lawrence Sosnow 9,000 9,000 0 9,000 .05%
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J O Hambro 559,050 0 559,050 559,050 3.1%
& Company(1)
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J O Hambro 559,050 0 559,050 559,050 3.1%
Asset
Management (1)
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J O Hambro 480,200 0 480,200 480,200 2.7%
Capital
Management
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J O Hambro 78,850 0 78,850 78,850 0.4%
Investment
Management (1)
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FILING PARTY AGGREGATE NUMBER OF NUMBER OF NUMBER OF APPROXIMATE
NUMBER OF SHARES: SHARES: SHARES: SOLE OR PERCENTAGE*
SHARES SOLE SHARED POWER SHARED POWER TO
POWER TO TO VOTE DISPOSE
VOTE
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<S> <C> <C> <C> <C> <C>
Christopher 480,200 0 480,200 480,200 2.7%
H.B.
Mills
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GFS(1) 305,000 0 305,000 305,000 1.7%
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NASCIT 305,000 0 305,000 305,000 1.7%
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American 90,000 0 90,000 90,000 0.5%
Opportunity
Trust
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*Based on 17,925,381 shares of Common Stock, par value $.01 per share,
outstanding as of March 25, 1998, as reported in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997.
(1) Such entities may be deemed to beneficially own the shares set forth in the
table next to names of persons other than the Filing Parties and to be part of a
group pursuant to Rule 13d-3 under the Exchange Act, but such entities are not
participants in the Consent Solicitation.
(c) In the 60 days prior to the date of the filing of this Statement,
the Filing Parties have effected no transactions in the Common Stock other than
those set forth in the following table:
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FILING PARTY DATE NO. OF SHARES PRICE (US$) BROKER
<S> <C> <C> <C> <C>
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Dupee 2/17/98 4,600 $9.5300 BCS Brokerage
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Dupee 2/18/98 5,500 9.6000 BCS Brokerage
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Dupee 2/25/98 2,000 10.2562 BCS Brokerage
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Dupee 3/2/98 4,000 9.7500 BCS Brokerage
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Dupee 3/3/98 1,200 9.5000 BCS Brokerage
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Dupee 3/5/98 8,800 9.7500 BCS Brokerage
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Dupee 3/9/98 8,500 9.8750 BCS Brokerage
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Dupee 3/12/98 10,300 10.7500 BCS Brokerage
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Sosnow 3/13/98 7,000 10.9839 BCS Brokerage
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Dupee 3/13/98 5,000 10.9375 BCS Brokerage
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Dupee 3/13/98 5,000 10.9338 BCS Brokerage
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Dupee 3/13/98 5,000 10.9325 BCS Brokerage
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Bigelow 3/16/98 1,000 11.0625 Fidelity
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Sosnow 3/19/98 2,000 11.7094 BCS Brokerage
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Dupee 3/20/98 10,700 12.6210 BCS Brokerage
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FILING PARTY DATE NO. OF SHARES PRICE (US$) BROKER
<S> <C> <C> <C> <C>
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Dupee 3/26/98 20,600 11.7650 BCS Brokerage
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Dupee 3/27/98 11,000 11.9375 BCS Brokerage
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Dupee 3/27/98 900 12.000 BCS Brokerage
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Dupee 4/1/98 40,000 11.6250 BCS Brokerage
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Dupee 4/2/98 15,000 11.6250 BCS Brokerage
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All of the above transactions were effected in the open market.
(d) Not applicable
(e) Not applicable
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Except as set forth in Item 4, hereof, there are no agreements,
understandings or relationships between any of the Filing Parties and any other
person with respect to the securities of the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following documents are filed herewith:
(a) Joint Filing Agreement dated as of April 10, 1998, among Paul R.
Dupee, Jr., George Bigelow and Lawrence Sosnow
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SIGNATURES
After reasonable inquiry and to the best of the knowledge and belief of
each of the undersigned, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
Dated: April 13, 1998
Paul R. Dupee, Jr.
/s/ LEONARD CHAZEN
By:__________________________
Name: Leonard Chazen
Title: Attorney-in-Fact
George Bigelow:
/s/ LEONARD CHAZEN
By:__________________________
Name: Leonard Chazen
Title: Attorney-in-Fact
Lawrence Sosnow:
/s/ LEONARD CHAZEN
By:__________________________
Name: Leonard Chazen
Title: Attorney-in-Fact
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JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act of 1934, as
amended, the persons named below agree to the joint filing on behalf of each of
them of a Statement on Schedule 13D (including amendments thereto) with respect
to the common stock, par value $.01 per share, of Maxicare Health Plans, Inc.,
and further agree that this Joint Filing Agreement be included as an Exhibit to
such joint filings. In evidence thereof, the undersigned have executed this
Joint Filing Agreement as of this 10th day of April, 1998.
/s/ PAUL R. DUPEE, JR.
__________________________
Paul R. Dupee, Jr.
/s/ GEORGE BIGELOW
__________________________
George Bigelow
/s/ LAWRENCE SOSNOW
__________________________
Lawrence Sosnow
