UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 18)
First Union Real Estate Equity and Mortgage Investments
- -------------------------------------------------------------------------------
(Name of Issuer)
Shares of Beneficial Interest, $1.00 par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
337400105
--------------------------------------------------------------
(CUSIP Number)
Stephen Fraidin, P.C.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 859-8140
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
February 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
|_|. (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 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).
SEC1746(12-91)
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 337400105 PAGE 2 OF 6 PAGES
--------------- ----- -----
- ------------------------------ ------------------------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners, L.P.
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) |_|
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(e) |_|
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York, U.S.A.
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 2,601,951 Shares
SHARES
------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,601,951 Shares
------------------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,601,951 Shares
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.25%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS
SCHEDULE 13D
- ------------------------------ ------------------------------------
CUSIP NO. 337400105 PAGE 3 OF 6 PAGES
--------------- ----- -----
- ------------------------------ ------------------------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners II, L.P.
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) |_|
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(e) |_|
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York, U.S.A.
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 30,449 Shares
SHARES
------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 30,449 Shares
------------------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
30,449 Shares
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
|_|
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.11%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------
* SEE INSTRUCTIONS
This Amendment No. 18 amends and supplements the Statement on
Schedule 13D (the "Schedule 13D") relating to the shares of Beneficial
Interest, par value $1.00 per share ("Shares"), of First Union Real
Estate Equity and Mortgage Investments, an Ohio business trust (the
"Company") previously filed by Gotham Partners, L.P. ("Gotham") and
Gotham Partners II, L.P. ("Gotham II" and together with Gotham, the
"Reporting Persons"), both New York limited partnerships. Capitalized
terms used and not defined in this Amendment have the meanings set
forth in the Schedule 13D.
Except as specifically provided herein, this Amendment does not
modify any of the information previously reported on the Schedule 13D.
Item 4 is hereby amended to add the following information:
"Item 4. Purpose of the Transaction
On February 6, 1998, counsel for the Reporting Persons filed a
Motion for Leave to File Surreply Brief in Opposition to First Union's
Motion to Remand in the United States District Court for the Northern
District of Ohio, Eastern Division (the "U.S. District Court"). A copy
of such Motion is attached as Exhibit 34 hereto and incorporated
herein by this reference.
On February 6, 1998, counsel for the Reporting Persons filed a
Surreply Brief in Opposition to First Union's Motion to Remand in the
U.S. District Court. A copy of such Brief is attached as Exhibit 35
hereto and incorporated herein by this reference.
On February 6, 1998, counsel for the Reporting Persons filed a
Reply Memorandum in Support of Gotham's Motion for Court to Accept
Reassignment of Related Case in the U.S. District Court. A copy of
such Memorandum is attached as Exhibit 36 hereto and incorporated
herein by this reference.
On February 6, 1998, counsel for the Reporting Persons filed a
Plaintiffs' Reply Brief in Support of Their Motion for Reassignment in
the U.S. District Court. A copy of such Brief is attached as Exhibit
37 hereto and incorporated herein by this reference."
Item 7. Is hereby amended to add the following information:
"Item 7. Material to be Filed as Exhibits.
34. Motion for Leave to File Surreply Brief in Opposition to
First Union's Motion to Remand filed in the U.S. District Court by
counsel for the Reporting Persons on February 6, 1998.
35. Surreply Brief in Opposition to First Union's Motion to
Remand filed in the U.S. District Court by counsel for the Reporting
Persons on February 6, 1998.
36. Reply Memorandum in Support of Gotham's Motion for Court to
Accept Reassignment of Related Case filed in the U.S. District Court
by counsel for the Reporting Persons on February 6, 1998.
37. Plaintiffs' Reply Brief in Support of Their Motion for
Reassignment filed in the U.S. District Court by counsel for the
Reporting Persons on February 6, 1998."
After reasonable inquiry and to the best of our knowledge and
belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
February 9, 1998
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.,
its general partner
By: Karenina Corporation,
a general partner of Section H Partners, L.P.
By: /s/ William A. Ackman
----------------------------
William A. Ackman
President
By: DPB Corporation,
a general partner of Section H Partners, L.P.
By: /s/ David P. Berkowitz
----------------------------
David P. Berkowitz
President
GOTHAM PARTNERS II, L.P.
By: Section H Partners, L.P.,
its general partner
By: Karenina Corporation,
a general partner of Section H Partners, L.P.
By: /s/ William A. Ackman
----------------------------
William A. Ackman
President
By: DPB Corporation,
a general partner of Section H Partners, L.P.
By: /s/ David P. Berkowitz
----------------------------
David P. Berkowitz
President
EXHIBIT 34
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
FIRST UNION REAL ESTATE EQUITY ) CIVIL ACTION NO. 98 CV 0105
AND MORTGAGE INVESTMENTS, )
) JUDGE ANN ALDRICH
Plaintiff, )
)
v. )
)
GOTHAM PARTNERS, L.P., et al., )
)
Defendants and Counterclaimants. )
GOTHAM'S MOTION FOR LEAVE
TO FILE SURREPLY BRIEF IN OPPOSITION
TO FIRST UNION'S MOTION TO REMAND
Defendants and Counterclaimants Gotham Partners, L.P. and Gotham
Partners II, L.P. move this Court for leave to file the attached
Surreply Brief to correct certain factual misstatements contained in
First Union's Reply to Gotham's Memorandum of Law in Opposition to
First Union's Motion To Remand.
Respectfully submitted,
OF COUNSEL: /s/ Michael J. Garvin
--------------------------------------
David C. Weiner (0013351)
Michael J. Garvin (0025394)
HAHN LOESER & PARKS LLP 3300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2301
Phone: (216) 621-0150
Fax: (216) 241-2824
OF COUNSEL:
/s/ Alexander R. Sussman
---------------------------------------
Alexander R. Sussman(FN1)
FRIED, FRANK, HARRIS, SHRIVER 25th Floor
& JACOBSON One New York Plaza
New York, New York 10004-1980
Attorneys for Defendants
and Counterclaimants
- -----------------------
[FN]
1 Application to appear pro hac vice pending.
</FN>
EXHIBIT 35
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
FIRST UNION REAL ESTATE EQUITY ) CIVIL ACTION NO. 98 CV 0105
AND MORTGAGE INVESTMENTS, )
) JUDGE ANN ALDRICH
Plaintiff, )
)
v. )
)
GOTHAM PARTNERS, L.P., et al., )
)
Defendants and Counterclaimants. )
GOTHAM'S SURREPLY BRIEF IN OPPOSITION
TO FIRST UNION'S MOTION TO REMAND
---------------------------------
Defendants and Counterclaimants Gotham Partners, L.P. and Gotham
Partners II, L.P. (the "Gotham Partnerships") are submitting this
Surreply Brief in Opposition to Plaintiff First Union's Motion to
Remand because First Union has asserted factually misleading arguments
in its Reply in support of that Motion.
ARGUMENT
--------
First Union suggests that it should not be estopped from
asserting that it has citizenship in states other than Ohio, despite
the fact that it alleged that it was a citizen of Ohio in federal
lawsuits invoking diversity jurisdiction which it filed in 1992 and
1993. Carefully choosing its words, First Union asserts that at the
time of the filing these federal lawsuits, "it had a different Board
of Trustees" and "Mr. DeVos, for instance, was not even a Trustee at
the time." See Reply Mem. at 2. First Union thus intimates that at the
time it filed the suits asserting that it was an Ohio citizen for
purposes of diversity jurisdiction, its Trustees were all Ohio
citizens. Information contained in First Union's own proxy filings in
1992 and 1993 (the pertinent dates of the prior federal actions) is
evidence that at least two of First Union's trustees were
domiciliaries of states other than Ohio. See Exhibit A (chart of First
Union's Trustees' residencies based on its 1992 and 1993 proxy
statements) and Exhibit B (First Union's 1992 and 1993 proxy
statements). If, as the evidence suggests, First Union had Trustees
who were not Ohio citizens at the time it filed the 1992 and 1993
diversity complaints, its argument is entirely undermined and it
should be estopped from now claiming that it is not an Ohio citizen
for diversity purposes.
Moreover, the "evidence" submitted by First Union regarding
Trustee DeVos' citizenship raises more questions than answers. First
Union has failed properly to establish that Mr. DeVos' domicile is in
Michigan as required by the diversity statute. See Mas v. Perry, 489
F.2d 1396 (5th Cir. 1974); Webb v. Nolan, 361 F. Supp. 418 (D.N.C.
1972). Furthermore, an unexplained statement in affidavit from an
officer of First Union as to a Trustee's citizenship is hardly
sufficient; any such evidence should come from the Trustee himself, or
at least from a reliable source such as a filing by the Trust with the
Ohio Secretary of State.
Finally, First Union resorts to the unsubstantiated argument that
diversity does not exist because one of the Gotham Partnerships'
second-tier limited partners is an Ohio citizen. First Union fails,
however, to even attempt to rebut the factual showing in the affidavit
of David S. Klafter and the legal authorities submitted by the Gotham
Partnerships demonstrating that their second-tier partners should not
be considered for diversity purposes.
CONCLUSION
----------
Based on the record before this Court, First Union's Motion to
Remand should be denied. If, however, this Court is not inclined to
deny that motion at this time, as shown above, evidence needs to be
adduced on the following significant fact questions: (1) whether First
Union should be estopped from asserting that it is not solely an Ohio
citizen for diversity purposes; and (2) whether its Trustee DeVos is a
Michigan citizen for diversity purposes. As the Gotham Partnerships
have previously suggested, it would make sense to adduce such evidence
at the time of the March 5, 1998 hearing on the parties' respective
motions for preliminary injunction.
Respectfully submitted,
OF COUNSEL:
/s/ Michael J. Garvin
--------------------------------------
David C. Weiner (0013351)
Michael J. Garvin (0025394)
HAHN LOESER & PARKS LLP 3300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2301
Phone: (216) 621-0150
Fax: (216) 241-2824
OF COUNSEL:
/s/ Alexander R. Sussman
---------------------------------------
Alexander R. Sussman(FN1)
FRIED, FRANK, HARRIS, SHRIVER 25th Floor
& JACOBSON One New York Plaza
New York, New York 10004-1980
Attorneys for Defendants
and Counterclaimants
- ----------------------
[FN]
1 Application to appear pro hac vice pending.
</FN>
CERTIFICATE OF SERVICE
----------------------
I hereby certify that a true and accurate copy of the foregoing
was served via messenger upon Frances Floriano Goins, Squire, Sanders
& Dempsey, attorneys for Plaintiff, this 6th day of February, 1998.
/s/ Michael J. Garvin
--------------------------------------
One of the Attorneys for Defendant
and Counterclaimants
EXHIBIT 36
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
FIRST UNION REAL ESTATE EQUITY ) CASE NO. 1:98CV0105
AND MORTGAGE INVESTMENTS, )
) JUDGE ALDRICH
Plaintiff, )
) REPLY MEMORANDUM IN
v. ) SUPPORT OF GOTHAM'S MOTION
) FOR COURT TO ACCEPT
GOTHAM PARTNERS, L.P., et al., ) REASSIGNMENT OF RELATED
) CASE
Defendants. ) --------------------------
Defendants and Counterclaimants ("Gotham"), which are also
plaintiffs and now counterclaim defendants in the related case before
Judge Nugent (Case No. 1:98CV0292) submit this memorandum in reply to
First Union's February 2, 1998 letter to this Court and to Judge
Nugent opposing Gotham's motion to transfer the case before Judge
Nugent to this Court. Copies of First Union's Brief in Opposition to
Plaintiff Gotham's Motion for Reassignment and First Union's Answer
and Counterclaim in the related case are attached as Exhibits A and B
for the Court's convenience. Gotham is also filing a reply brief in
response to First Union's Brief in Opposition on the reassignment
issue, a courtesy copy of which will also be provided to this Court.
It is now apparent that First Union has been court shopping and
it is, therefore, doubly ironic that First Union has falsely accused
Gotham of requesting reassignment of the related case to this Court
because, according to First Union, Gotham was "dissatisfied" with the
assignment of the related case to Judge Nugent. On the contrary, as
the Court docket reflects, the Complaint in the related case and the
Motion for Reassignment were filed simultaneously without regard to
which Judge would be or was assigned to that case. The sole reason for
the motion was the pendency of the earlier-filed action before this
Court.
It appeared to Gotham that, since this Court had considered the
pending scheduling motions in the instant case and Gotham's request
for a preliminary injunction and had set a briefing and hearing
schedule on both parties' motions for preliminary injunction, judicial
economy would be achieved by having the related case reassigned to
this Court in accordance with Local Rule 3.1(b). Given the clear
benefit of having related cases before the same Judge of this Court,
First Union's objection to reassignment rings hollow.
Indeed, it is now clear that First Union itself is engaged in
blatant court shopping. As alleged in Gotham's Complaint in the
related case, a copy of which is attached as Exhibit C, at P.P.34-44,
First Union's state law claims were filed prematurely on January 16,
1998, in state court. The reason is now clear. At the time of the
state court filing, First Union had related federal securities law
claims, for which there was exclusive federal jurisdiction, which it
first asserted yesterday in the related case. See First Union's Answer
and Counterclaim P.P.18-51 and Counts III-V. Thus, First Union
intentionally delayed making those claims, so that it could seek
immediate relief in state court, without risking consolidation of all
claims and proceedings in this Court.
Accordingly, Gotham respectfully requests that this Court accept
reassignment of the related case to ensure that all court proceedings
affecting the parties herein and the impending proxy contest are
adjudicated in this Court.
Respectfully submitted,
OF COUNSEL: /s/ Michael J. Garvin
-----------------------------------
David C. Weiner (0013351)
Michael J. Garvin (0025394)
HAHN LOESER & PARKS LLP
3300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2301
(216) 621-0150
-and-
OF COUNSEL:
/s/ Alexander R. Sussman
-----------------------------------
Alexander R. Sussman(FN1)
FRIED, FRANK, HARRIS, SHRIVER
& JACOBSON 25th Floor
One New York Plaza
New York, New York 10004-1980
(212) 859-8000
Attorneys for Defendants
- -------------------------
[FN]
1 Application to appear pro hac vice pending.
</FN>
CERTIFICATE OF SERVICE
----------------------
I hereby certify that a copy of the foregoing was served by
messenger upon Frances Floriano Goins, Squire, Sanders & Dempsey
L.L.P., 4900 Key Tower, 127 Public Square, Cleveland, Ohio 44114-1304,
attorneys for defendant, this 6th day of February, 1998.
/s/ Michael J. Garvin
-----------------------------------------
One of the Attorneys for Defendants
EXHIBIT 37
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
GOTHAM PARTNERS, L.P., et al., ) CASE NO. 1:98CV0272
)
Plaintiffs, ) JUDGE NUGENT
)
v. ) PLAINTIFFS' REPLY BRIEF IN SUPPORT
) OF THEIR MOTION FOR REASSIGNMENT
----------------------------------
FIRST UNION REAL ESTATE EQUITY AND )
MORTGAGE INVESTMENTS, )
)
Defendant. )
Plaintiffs ("Gotham") strenuously object to Defendant First
Union's false accusation that Gotham's motion to reassign this case to
Judge Aldrich had anything to do with their being "dissatisfied" with
the assignment of this case to this Court. See First Union's Brief in
Opp. at 2. As the docket herein reflects, the Complaint and Motion for
Reassignment were filed simultaneously without regard to which Judge
would be or was assigned to that case. The sole reason for the motion
was the pendency of the earlier-filed action before Judge Aldrich.
As Judge Aldrich had already considered the pending motions in
the earlier filed action and, after reviewing the parties' conflicting
views on the timing of a hearing, had set a schedule for briefing and
hearing both parties' motions for preliminary injunctions, Gotham
believed when the instant action was filed, as we do now, that
judicial economy can be achieved by this Court and Judge Aldrich
concurring in the reassignment of this case to Judge Aldrich. Local
Rule 3.1(b) was drafted to promote judicial economy and preclude judge
shopping by transferring cases to judges familiar with the underlying
dispute or who were assigned to related cases as a means of easing and
rationalizing the administration of the Court's business.
First Union argues for a highly mechanistic reading of Rule
3.1(b) that would defeat its purpose. Applied practically, its
undeniable purpose would be served by assigning this case to the judge
who has already gained some familiarity with the underlying dispute.
Apparently to bolster its claim that Gotham improperly removed the
earlier-filed action, First Union only provided its side of the remand
issue; it failed to provide this Court with Gotham's brief and
affidavit in opposition to the motion to remand. That brief and
affidavit, and the reply brief filed by Gotham, are attached for the
Court's convenience as Exhibits A and B.
Moreover, First Union's false accusation against Gotham is ironic
in that it appears First Union is the party that has been court
shopping. As alleged in Gotham's Complaint herein at P.P. 34-44, First
Union's state law claims were filed prematurely on January 16, 1998,
in state court. The reason is now clear. At the time of the state
court filing, First Union had related federal securities law claims,
for which there was exclusive federal jurisdiction, which it first
asserted yesterday in the instant action. See First Union's Answer and
Counterclaim P.P. 18-51 and Counts III-V. Thus, First Union
intentionally delayed making those claims, so that it could attempt to
fix a state court forum and avoid adjudication of all of both parties'
claims, federal and state, in this Court.
Accordingly, Gotham respectfully requests that this Court and
Judge Aldrich concur in the reassignment of the instant action to
Judge Aldrich and issue an order so indicating.
Respectfully submitted,
OF COUNSEL:
/s/ Michael J. Garvin
-----------------------------------
HAHN LOESER & PARKS LLP David C. Weiner (0013351)
Michael J. Garvin (0025394)
3300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2301
(216) 621-0150
-and-
OF COUNSEL:
/s/ Alexander R. Sussman
-----------------------------------
Alexander R. Sussman(FN1)
FRIED, FRANK, HARRIS, SHRIVER
& JACOBSON 25th Floor
One New York Plaza
New York, New York 10004-1980
(212) 859-8000
Attorneys for Plaintiffs
- --------
[FN]
1 Application to appear pro hac vice pending.
</FN>
CERTIFICATE OF SERVICE
----------------------
I hereby certify that a copy of the foregoing was served by
messenger upon Frances Floriano Goins, Squire, Sanders & Dempsey
L.L.P., 4900 Key Tower, 127 Public Square, Cleveland, Ohio 44114-1304,
attorneys for defendant, this 6th day of February, 1998.
/s/ Michael J. Garvin
-----------------------------------
One of the Attorneys for Plaintiffs
