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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 31)
CONTINENTAL MORTGAGE AND EQUITY TRUST
(Name of Issuer)
SHARES OF BENEFICIAL INTEREST, NO PAR VALUE
(Title of Class of Securities)
211-663-208
(CUSIP Number)
ROBERT A. WALDMAN, 10670 N. CENTRAL EXPRESSWAY, SUITE 600, DALLAS, TEXAS 75231
(214) 692-4758
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JULY 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 Rules 13d-1(b)(3) or (4), check the following box [ ].
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CUSIP NO. 637-353-301 PAGE 2
- --------------------------------------------------------------------------------
1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
AMERICAN REALTY TRUST, INC. 54-0697989
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) ..................................................................
(b) ..................................................................
- --------------------------------------------------------------------------------
3) SEC Use Only ..........................................................
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions) ....................................
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
................................................................................
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization GEORGIA
- --------------------------------------------------------------------------------
7) Sole Voting Power 1,640,919
Number of --------------------------------------------------------------
Shares
Beneficially 8) Shared Voting Power -0-
Owned by --------------------------------------------------------------
Each
Reporting 9) Sole Dispositive Power 1,640,919
Person --------------------------------------------------------------
With
10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,640,919
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
................................................................................
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 40.9%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
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CUSIP NO. 637-353-301 PAGE 3
- --------------------------------------------------------------------------------
1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
BASIC CAPITAL MANAGEMENT, INC. 75-2332719
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) ..................................................................
(b) ..................................................................
- --------------------------------------------------------------------------------
3) SEC Use Only ..........................................................
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions) ....................................
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
................................................................................
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization NEVADA
- --------------------------------------------------------------------------------
7) Sole Voting Power 605,822
Number of
Shares --------------------------------------------------------------
Beneficially 8) Shared Voting Power -0-
Owned by
Each --------------------------------------------------------------
Reporting 9) Sole Dispositive Power 605,822
Person
With --------------------------------------------------------------
10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
605,822
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
................................................................................
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 15.1%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions) CO
- --------------------------------------------------------------------------------
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CUSIP NO. 029-177-409 PAGE 4
- --------------------------------------------------------------------------------
1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
THE GENE E. PHILLIPS CHILDREN'S TRUST 13-6599759
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) ..................................................................
(b) ..................................................................
- --------------------------------------------------------------------------------
3) SEC Use Only ..........................................................
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions) ....................................
- --------------------------------------------------------------------------------
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
................................................................................
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization TEXAS
- --------------------------------------------------------------------------------
7) Sole Voting Power 49,299
Number of --------------------------------------------------------------
Shares
Beneficially 8) Shared Voting Power -0-
Owned by --------------------------------------------------------------
Each
Reporting 9) Sole Dispositive Power 49,299
Person --------------------------------------------------------------
With
10) Shared Dispositive Power -0-
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
49,299
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
................................................................................
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 1.2%
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions) OO
- --------------------------------------------------------------------------------
<PAGE> 5
CONTINENTAL MORTGAGE AND EQUITY TRUST
CUSIP NO. 211-663-208
ITEM 1. SECURITY AND ISSUER
Item 1 is hereby amended to read as follows:
This amendment relates to the Shares of Beneficial Interest, no par value
(the "Shares"), of CONTINENTAL MORTGAGE AND EQUITY TRUST ("CMET"), and amends
the amended statement on Schedule 13D filed on March 17, 1997. The principal
executive offices of CMET are located at 10670 North Central Expressway, Suite
600, Dallas, Texas 75231.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is hereby amended to read as follows:
This statement is being filed on behalf of American Realty Trust, Inc.
("ART"), Basic Capital Management, Inc. ("BCM") and the Gene E. Phillips
Children's Trust (the "GEP Trust") (collectively, 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 owns approximately 52.0% of the outstanding securities of ART and
BCM serves as the advisor to ART and CMET. BCM is beneficially owned by a trust
established for the benefit of Gene E. Phillips' children. Ryan T. Phillips is
the son of Gene E. Phillips, a beneficiary of the GEP Trust and a director of
BCM.
(I) ART is a real estate investment company organized and existing as a
Georgia corporation. ART's principal business activities include investment in
real estate and in other business ventures. The principal place of business and
principal office of ART is located at 10670 North Central Expressway, Suite 600,
Dallas, Texas 75231.
The following is a list of the executive officers and directors of ART:
Name Position(s)
- ---- -----------
Roy E. Bode Director
Oscar W. Cashwell Director
Al Gonzalez Director
Cliff Harris Director
Karl L. Blaha Director\President
Thomas A. Holland Executive Vice President and
Chief Financial Officer
5
<PAGE> 6
Name Position(s)
- ---- -----------
Steven K. Johnson Executive Vice President -
Residential Asset Management
Randall M. Paulson Executive Vice President
Bruce A. Endendyk Executive Vice President
Robert A. Waldman Senior Vice President, Secretary
and General Counsel
Drew D. Potera Vice President and Treasurer
Mr. Bode's business address is 2435 E. FM 879, Palmer, Texas 75152. Mr.
Bode's present principal occupation is Vice President for Public Affairs at the
University of Texas Southwestern Medical Center at Dallas. Mr. Bode is a citizen
of the United States of America.
Mr. Cashwell's business address is 10670 North Central Expressway, Suite
600, Dallas, Texas 75231. Mr. Cashwell's present principal occupation is real
estate consultant. Mr. Cashwell is a citizen of the United States of America.
Mr. Gonzalez' business address is 4455 Alpha Road, Building #2, Dallas,
Texas 75244. Mr. Gonzalez' present principal occupation is President of AGE
Refining, Inc. Mr. Gonzalez is a citizen of the United States of America.
Mr. Harris's business address is 2838 Woodside Street, Dallas, Texas 75204.
Mr. Harris' present principal occupation is President of Energy Transfer Group,
L.L.C. Mr. Harris is a citizen of the United States of America.
Mr. Blaha's business address is 10670 North Central Expressway, Suite 700,
Dallas, Texas 75231. Mr. Blaha's present principal occupation is Executive Vice
President of Carmel Realty, Inc. Mr. Blaha is a citizen of the United States of
America.
Mr. Holland's business address is 10670 North Central Expressway, Suite
600, Dallas, Texas 75231. Mr. Holland's present principal occupation is
Executive Vice President and Chief Financial Officer of BCM. Mr. Holland is a
citizen of the United States of America.
Mr. Johnson's business address is 10670 North Central Expressway, Suite
600, Dallas, Texas 75231. Mr. Johnson's present principal occupation is
Executive Vice President - Residential Asset Management of BCM. Mr. Johnson is a
citizen of the United States of America.
Mr. Paulson's business address is 10670 North Central Expressway, Suite
600, Dallas, Texas 75231. Mr. Paulson's present principal occupation is
President of BCM. Mr. Paulson is a citizen of the United States of America.
6
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Mr. Endendyk's business address is 10670 North Central Expressway, Suite
500, Dallas, Texas 75231. Mr. Endendyk's present principal occupation is
Executive Vice President of BCM. Mr. Endendyk is a citizen of the United States
of America.
Mr. Waldman's business address is 10670 North Central Expressway, Suite
600, Dallas, Texas 75231. Mr. Waldman's present principal occupation is Senior
Vice President, General Counsel and Secretary of BCM. Mr. Waldman is a citizen
of the United States of America.
Mr. Potera's business address is 10670 North Central Expressway, Suite 600,
Dallas, Texas 75231. Mr. Potera's present principal occupation is Vice
President, Treasurer and Securities Manager of BCM. Mr. Potera is a citizen of
the United States of America.
(I) BCM is a corporation organized and existing under the laws of the
State of Nevada. BCM's principal business activity is the provision of advisory
services for real estate investment trusts. Its principal place of business and
principal office is located at 10670 North Central Expressway, Suite 600,
Dallas, Texas 75231.
BCM is owned by Realty Advisors, Inc., a Nevada corporation. Realty
Advisors, Inc. is owned by a trust established for the benefit of the
children of Gene E. Phillips. The directors and executive officers of
BCM are as follows:
Name Position(s) with BCM
- ---- --------------------
Randall M. Paulson President
Thomas A. Holland Executive Vice President and
Chief Financial Officer
Clifford C. Towns, Jr. Executive Vice President - Finance
Karl L. Blaha Executive Vice President -
Commercial Asset Management
Steven K. Johnson Executive Vice President -
Residential Asset Management
Bruce A. Endendyk Executive Vice President
A. Cal Rossi, Jr. Executive Vice President
Cooper B. Stuart Executive Vice President
Dan S. Allred Senior Vice President -
Land Development
Robert A. Waldman Senior Vice President,
General Counsel and Secretary
Drew D. Potera Vice President, Treasurer
and Securities Manager
7
<PAGE> 8
Name Position(s) with BCM
- ---- -----------------------
Mickey Ned Phillips Director
Ryan T. Phillips Director
Information with repsect to Paulson, Holland, Blaha, Johnson, Endendyk,
Waldman and Potera is discloved in (I) above.
Mr. Towns' business address is 10670 North Central Expressway, Suite 600,
Dallas, Texas 75231. Mr. Towns' present principal occupation is Executive Vice
President - Finance of BCM. Mr. Towns is a citizen of the United States of
America.
Mr. Rossi's business address is 10670 North Central Expressway, Suite 600,
Dallas, Texas 75231. Mr. Rossi's present principal occupation is Executive Vice
President of BCM. Mr. Rossi is a citizen of the United States of America.
Mr. Stuart's business address is 10670 North Central Expressway, Suite 600,
Dallas, Texas 75231. Mr. Stuart's present principal occupation is Executive Vice
President of BCM. Mr. Stuart is a citizen of the United States of America.
Mr. Allred's business address is 10670 North Central Expressway, Suite 600,
Dallas, Texas 75231. Mr. Allred's present principal occupation is Senior Vice
President - Land Development of BCM. Mr. Allred is a citizen of the United
States of America.
Mickey Ned Phillips' business address is 264 Rolling Hills Circle, Gaffney,
South Carolina 29340. Mr. M. Phillips' present principal occupation is owner of
Phillips Remodeling Co. Mr. M. Phillips is a citizen of the United States of
America.
Ryan T. Phillips' business address is 10670 North Central Expressway, Suite
600, Dallas, Texas 75231. Mr. R. Phillips' present principal occupation is an
independent real estate investor. Mr. R. Phillips is a citizen of the United
States of America.
(III) The GEP Trust is a trust formed under the laws of Texas for the
benefit of the children of Gene E. Phillips. The trustee of the GEP Trust is Mr.
Phillips' brother, Donald W. Phillips.
Gene E. Phillips' business address is 10670 North Central Expressway, Suite
600, Dallas, Texas 75231. Gene E. Phillips' present principal occupation is
Chief Executive Officer and President of Syntek West, Inc. Gene E. Phillips is a
citizen of the United States of America.
Donald W. Phillips' business address is 10670 North Central Expressway,
Suite 400, Dallas, Texas 75231. Donald W. Phillips' present principal occupation
is President and owner of Big D Oil Field Equipment Sales. Donald W. Phillips is
a citizen of the United States of America.
8
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During the last five (5) years, (i) none of the persons enumerated in (I)
through (III) above has been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors) and (ii) none of such persons was 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 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is hereby amended to read as follows:
(a) Share Ownership
The following tables show the Shares owned directly and beneficially by the
Reporting Persons on the date of this statement:
<TABLE>
<CAPTION>
Shares Owned Directly
---------------------
Number of Percent of
Reporting Person Shares Class(1)
- ---------------- --------- ----------
<S> <C> <C>
ART 1,640,919 40.9%
BCM 605,822 15.1%
GEP Trust 49,299 1.2%
--------- ----
Reporting Persons 2,296,039 57.2%
as a Group
</TABLE>
<TABLE>
<CAPTION>
Shares Owned Beneficially
-------------------------
Number of Percent of
Reporting Person Shares Class (1)
- ---------------- --------- ----------
<S> <C> <C>
ART 1,640,919 40.9%
BCM 605,822 15.1%
GEP Trust 49,299 1.2%
Al Gonzalez (2) 1,640,919 40.9%
Ryan Phillips (3) 605,822 15.1%
Mickey Ned Phillips (3) 605,822 15.1%
Cliff Harris (2) 1,640,919 40.9%
Oscar W. Cashwell (2) 1,640,919 40.9%
Roy E. Bode (2) 1,640,919 40.9%
Karl L. Blaha (2) 1,640,919 40.9%
--------- ----
Total 2,296,039 57.2%
</TABLE>
(1) Percentage calculations are based upon 4,012,404 Shares outstanding at
July 31, 1998. Total and addends may not match due to rounding.
(2) May be deemed to be a beneficial owner of the Shares owned directly by
ART by virtue of the relationship to ART as described in Item 2.
(3) May be deemed to be a beneficial owner of the Shares owned directly by
BCM by virtue of the relationship to BCM as described in Item 2.
(4) May be deemed to be a beneficial owner of the Shares owned directly by
the GEP Trust by virtue of the relationship to the GEP Trust as
described in Item 2.
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(b) Voting and Dispositive Power
Each of the directors of ART share voting and dispositive power over all of
the Shares owned by ART. Each of the directors of BCM share voting and
dispositive power over all of the Shares owned by BCM. The Trustee of GEP Trust
has complete voting and dispositive power over all of the Shares owned by the
GEP Trust.
(c) Transactions in Securities
The following table lists the purchase transactions in the Shares that were
effected by the Reporting Persons during the past 60 days:
<TABLE>
<CAPTION>
Reporting Number of Price Type of
Person Date Shares Per Share Transaction
- --------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C>
BCM 05/11/98 5,000 $16.625 Open Market
BCM 05/12/98 5,000 $16.625 Open Market
BCM 06/09/98 5,000 $16.625 Open Market
BCM 06/11/98 2,000 $16.625 Open Market
BCM 06/29/98 362 $16.3756 Open Market
ART 06/29/98 362 $16.3756 Open Market
ART 07/02/98 274 $16.375 Open Market
</TABLE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 is hereby amended to read as follows:
ART has pledged 15,000 shares to Arnold Securities, pledged 15,134 shares
to BA Investment Services, pledged 335,893 shares to Bear Stearns, pledged
15,000 shares to Brown & Co., pledged 32,100 shares to C.J. Lawrence, pledged
22,500 shares to Chase Securities, pledged 53,750 shares to Dain Rauscher,
pledged 175,125 shares to Dean Witter (CA), pledged 22,500 shares to First
Southwest, pledged 34,500 shares to First Union Brokerage, pledged 55,500 shares
to Global Strategies, pledged 21,000 shares to Hambrecht & Quist, pledged 35,000
shares to J.C. Bradford, pledged 22,706 shares to Legg Mason (TX), pledged
22,500 to Marsh Block, pledged 22,500 shares to May Financial, pledged 39,600
shares to McDonald & Co., pledged 90,467 shares to Morgan Keegan, pledged 34,056
shares to Mutual Securities, pledged 30,000 shares to Nationwide Securities,
pledged 28,000 shares to Raymond James, pledged 45,000 shares to Regions
Investments, pledged 15,122 shares to Roney & Co., pledged 17,949 shares to
Securities of America, pledged 274 shares to Southland Securities, pledged
30,000 shares to Southwest Securities, pledged 34,500 shares to Tucker Anthony,
pledged 15,000 shares to Wachovia and pledged 84,207 shares to Wedbush Morgan in
stock margin accounts maintained by it with such brokers.
ART has also pledged 65,035 shares to United Pacific and pledged 211,000
shares to Preferred Bank pursuant to loan agreements with such lenders.
10
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BCM has pledged 1,000 shares to BA Investment Services, pledged 72,185
shares to Bear Stearns, pledged 15,000 shares to Brown & Co., pledged 15,000
shares to Dain Rauscher, pledged 334,764 shares to Dean Witter (CA), pledged
6,500 shares to First Southwest, pledged 6,000 shares to First Union Brokerage,
pledged 4,500 shares to Global Strategies, pledged 21,000 shares to Hambrecht &
Quist, pledged 26,232 shares to J.C. Bradford, pledged 2,000 shares to Morgan
Keegan, pledged 34,056 shares to Mutual Securities, pledged 1,500 shares to
Olde, pledged 7,781 shares to Raymond James, pledged 15,000 shares to Regions
Investment, pledged 1,400 shares to Robb, Peck, McCooey, pledged 7,500 to Robert
Baird, pledged 29,611 shares to Southland Securities, and pledged 59,849 shares
to Wedbush Morgan in stock margin accounts maintained by it with such brokers.
GEP Trust has pledged 49,299 shares to Dean Witter (NY) in stock margin
accounts maintained by it with such broker.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 25, 1998.
AMERICAN REALTY TRUST, INC.
By: /s/Karl L. Blaha
--------------------------------------
Karl L. Blaha
President
BASIC CAPITAL MANAGEMENT, INC.
By: /s/Drew D. Potera
--------------------------------------
Drew D. Potera
Vice President and Treasurer
GENE E. PHILLIPS CHILDREN'S TRUST
By: /s/Donald W. Phillips
--------------------------------------
Donald W. Phillips
Trustee
11
