UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)*
Citadel Holding Corporation
_________________________________________________________________
(Name of Issuer)
Common Stock, No Par Value
_________________________________________________________________
(Title of Class of Securities)
172862104
__________________________________
(CUSIP Number)
Mr. Randall J. Demyan
Dillon Capital Management
Suite 1410
21 East State Street
Columbus, OH 43215
(614) 222-4204
_________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 13, 1995
_______________________________________________________
(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 this
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).
Page 1 of 14 Pages
SCHEDULE 13D
CUSIP NO. 172862104 Page 2 of 14 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Dillon Investors, 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:
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7. SOLE VOTING POWER: 700,000
8. SHARED VOTING POWER: None
9. SOLE DISPOSITIVE POWER: 700,000
10. SHARED DISPOSITIVE POWER: None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
700,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*:
____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
10.49%
14. TYPE OF REPORTING PERSON*:
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP NO. 172862104 Page 3 of 14 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Roderick H. Dillon Jr.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) _X_
(b) ___
3. SEC USE ONLY:
4. SOURCE OF FUNDS*:
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e):
____
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
U.S.A.
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7. SOLE VOTING POWER: 5,000
8. SHARED VOTING POWER: None
9. SOLE DISPOSITIVE POWER: 5,000
10. SHARED DISPOSITIVE POWER: None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
5,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*:
____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
.075%
14. TYPE OF REPORTING PERSON*:
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP NO. 172862104 Page 4 of 14 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Roderick H. Dillon, Jr. - IRA
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*:
(a) _X_
(b) ___
3. SEC USE ONLY:
4. SOURCE OF FUNDS*:
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e):
____
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
U.S.A.
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7. SOLE VOTING POWER: 90,000
8. SHARED VOTING POWER: None
9. SOLE DISPOSITIVE POWER: 90,000
10. SHARED DISPOSITIVE POWER: None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
90,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*:
____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
1.35%
14. TYPE OF REPORTING PERSON*:
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP NO. 172862104 Page 5 of 14 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Roderick H. Dillon, Jr. Foundation
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:
Ohio
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7. SOLE VOTING POWER: 2,000
8. SHARED VOTING POWER: None
9. SOLE DISPOSITIVE POWER: 2,000
10. SHARED DISPOSITIVE POWER: None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
2,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*:
____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
.030%
14. TYPE OF REPORTING PERSON*:
OO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP NO. 172862104 Page 6 of 14 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Bradley C. Shoup - IRA
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) _X_
(b) ___
3. SEC USE ONLY:
4. SOURCE OF FUNDS*:
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e):
____
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
U.S.A.
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7. SOLE VOTING POWER: 2,000
8. SHARED VOTING POWER: None
9. SOLE DISPOSITIVE POWER: 2,000
10. SHARED DISPOSITIVE POWER: None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
2,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*:
____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
.030%
14. TYPE OF REPORTING PERSON*:
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Supplement to Amendment No. 9 to Schedule 13D
Issuer - Citadel Holding Corporation
Reporting Persons - Dillon Investors, L.P., Roderick H. Dillon,
Jr., Roderick H. Dillon, Jr. - IRA, Roderick H. Dillon, Jr.
Foundation and Bradley C. Shoup - IRA.
Item 1. Security and Issuer.
This Amendment No. 9 to Schedule 13D filed by the
reporting persons Dillon Investors, L.P. ("DI"), Roderick H.
Dillon, Jr. ("RHD"), Roderick H. Dillon, Jr.-IRA ("RHD-IRA") and
Roderick H. Dillon, Jr. Foundation ("RHD-Foundation")
(collectively, the "Dillon Entities") and Bradley C. Shoup
("Shoup") (the "Dillon Entities" and "Shoup" are collectively
referred to as the "Reporting Persons") with the Securities and
Exchange Commission (the "SEC") relates to the common stock,
without par value ("Common Stock"), of Citadel Holding
Corporation, a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 700
North Central, Suite 500, Glendale, California 91203. This
Amendment No. 9 amends certain information set forth in the
Schedule 13D filed by the Dillon Entities on March 18, 1994, as
amended by Amendment No. 1 filed on September 9, 1994 ("Amendment
No. 1"), Amendment No. 2 filed on October 17, 1994 ("Amendment
No. 2"), Amendment No. 3 filed on November 4, 1994 ("Amendment
No. 3"), Amendment No. 4 filed on November 8, 1994 ("Amendment
No. 4"), Amendment No. 5 filed on November 18, 1994 ("Amendment
No. 5"), Amendment No. 6 filed on December 1, 1994 ("Amendment
No. 6"), Amendment No. 7 filed on December 16, 1994 ("Amendment
No. 7") and Amendment No. 8 filed on January 10, 1995 ("Amendment
No. 8") (collectively, the "Previous Amendments").
Item 4. Purpose of Transaction
In response to the request of the Dillon Entities for
interpretative advice, the Dillon Entities have been advised by
the Office of Thrift Supervision (the "OTS"), by letter dated
January 13, 1995 (the "OTS No Action Letter"), that the Office of
Chief Counsel would refrain from recommending an enforcement
action against the Dillon Entities if they proceed with a proxy
or written consent solicitation with respect to the Issuer with-
out having first filed a holding company application or rebuttal
of control submission pursuant to Section 10(e) of the Homeowners
Loan Act and the OTS Acquisition of Control Regulations, 12
C.F.R. Part 574 (the "Control Regulations"). Such advice is
based on the factual representations contained in the materials
submitted to the OTS and depends upon the accuracy and complete-
ness of such materials. The Dillon Entities have no reason to
believe that any such materials submitted to the OTS by the
Dillon Entities are not accurate and complete. Any material
change in the facts or circumstances, however, could result in a
different conclusion by the OTS.
In the OTS No Action Letter, the OTS advised the Dillon
Entities that the OTS would not assert that the Issuer currently
controls Fidelity Federal Bank, a Federal Savings Bank
("Fidelity"). Based on such advice from the OTS, the Dillon
Entities believe that they may now conduct a consent solicitation
or pursue an acquisition proposal, within the parameters of the
Homeowners Loan Act and the Control Regulations, as interpreted
and applied by the OTS with respect to the Issuer. Any such
acquisition proposal would be structured to ensure that it not
result in any person acquiring, directly or indirectly, control
of Fidelity.
On January 18, 1995, DI received a written response
(the "Issuer Response Letter") from the Issuer with respect to
the matters raised in the letter sent by DI to the Board of
Directors of the Issuer on January 10, 1995 (the "DI Letter").
A copy of the DI Letter was attached to Amendment No. 8 as
Exhibit B. A copy of the Issuer Response Letter is attached
hereto as Exhibit B to this Amendment No. 9 and incorporated
herein by this reference.
The Reporting Persons are considering their position
with respect to a new consent solicitation in light of the OTS No
Action Letter and the acquisition proposal described in the DI
Letter.
Item 7. Material to Be Filed as Exhibits.
Exhibit A - Joint Filing Agreement, dated November 11,
1994, among the Reporting Persons. (Incorporated
herein by reference to Exhibit A of Amendment No. 5 to
Schedule 13D filed on November 18, 1994 with the SEC).
Exhibit B - Letter, dated January 17, 1995, from the
Issuer to DI. (Attached hereto beginning at page 10).
SIGNATURE
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.
Date: January 19, 1995 Dillon Investors, L.P.
By: /s/ Roderick H. Dillon, Jr.
Roderick H. Dillon, Jr.,
General Partner
Roderick H. Dillon, Jr.
By: /s/ Roderick H. Dillon, Jr.
Roderick H. Dillon, Jr.
Roderick H. Dillon, Jr. - IRA
By: /s/ Roderick H. Dillon, Jr.
Roderick H. Dillon, Jr.
Roderick H. Dillon, Jr. Foundation
By: /s/ Roderick H. Dillon, Jr.
Roderick H. Dillon, Jr.,
Trustee
Bradley C. Shoup - IRA
By: /s/ Bradley C. Shoup
Bradley C. Shoup
Exhibit B
CITADEL HOLDING CORPORATION
Dillon Investors L.P.
21 East State Street #1410
Columbus, Ohio 43215-4228
January 17, 1995
Dear Mr. Dillon:
Although we have not yet received a copy of your letter Dated
January 10, 1995 and included as an exhibit to your most recent
filing with the Securities and Exchange Commission, we have now
had an opportunity to review your filing with the Commission. We
are pleased that you share our view that our Company is worth
more than would be indicated by the price at which its securities
have traded during recent periods. Moreover, we are always
appreciative of efforts by stockholders to support the price of
our Company's securities.
However, before responding to the proposal set forth in your
letter, let us correct some misperceptions which appear to
underlie certain statements and conditions set forth in your
letter. Specifically, please note that:
(1) Our Company is not for sale. The Board of Directors
has not made any determination to sell our Company, or even
to explore the possibility of such a sale. If a decision to
sell our Company were to be made, it would be the intention
of this Company to thoroughly investigate the possibilities
that might be available in this regard and not necessarily
to accept the first offer that might come down the road.
(2) The current conversion price of our Company's 3%
Cumulative Convertible Preferred Stock (the "Preferred
Stock") is currently above, not below, $3.00 per share.
Furthermore, the conversion price could go either up or down
depending upon the market price of our Company's Common
Stock between now and the date the conversion feature is
exercised, if it is in fact ever exercised. To the extent
more stockholders share your views as to the value of our
Company, and the market price increases, the conversion
price will likewise increase.
(3) Our Company has no current right to redeem the
Preferred Stock. Nor will it have any right to redeem the
Preferred Stock prior to November 1997, unless the holder(s)
of the Preferred Stock elects to exercise its conversion
feature and the exercise price is, at that time, below $3.00
per share.
(4) The Fairness Opinion delivered by Wedbush Morgan was
not based upon a single implied or static value for the
Common Stock of our Company, but rather tested the fairness
of the Preferred Stock against a range of Common Stock
values. The Wedbush opinion did not address the appropriate
price (or the implied control premium) for a sale of the
entire Company.
(5) Our Company has no power or authority either to rescind
the issuance of the Preferred Stock or to compel the holders
of that stock to accept cash of any amount for their shares.
You are, of course, free to negotiate directly with the
holders of such shares, if you so desire.
We do not disagree with you that cash in the amount of $4.00 per
share might be attractive to some of our current shareholders --
particularly to those who -- like Dillon Investors -- have
acquired shares in recent weeks at prices in the range of $2.00
per share or, possibly, less. However, whether the offer would
be attractive to stockholders generally is less than clear. It
is to be noted that since the restructuring of its investment in
Fidelity, the shares of our Company have closed at prices as high
as $5.00 and that as recently as November, shares of our Company
traded at a premium to the $4.00 price referenced in your
proposal.
In any event, even if a decision were at some time in the future
to be made that it would be in the best interests of our Company
and shareholders to pursue a sale of our Company, it appears --
at least preliminarily -- to the Board of Directors that your
proposal has a number of weaknesses that would need to be
addressed. These weaknesses include the following:
(1) Your proposal includes no third party assurances
whatsoever that you would in fact be able to procure the
financing necessary to perform on your proposal.
Furthermore, as Dillon Investors is a private limited
partnership, we have no financial information from which to
ascertain the scope or extent of its stand alone financial
resources.
(2) A number of the matters listed in your letter as
conditions to any obligation on your part to perform are
clearly beyond the power and authority of our Company. We
cannot compel you to terminate your litigation against this
Company. And, as already mentioned, we cannot compel the
holders of the Preferred Stock either to permit us to
rescind that issuance or to accept your $4.00 price.
(3) Your proposal asks that our company essentially stop
doing business while you seek your financing and the
satisfaction of you other conditions. However, you make no
provision for the lost opportunities or other costs that our
Company might suffer if you ultimately prove unsuccessful in
your efforts to obtain financing.
You are of course free to take your proposal directly to the
stockholders -- for example through an any and all cash tender
offer. Our Company has no anti-takeover provisions in its
charter and by-laws. Indeed, this Board of Directors is the
direct descendant of the Board of Directors that successfully
sought proxies to remove a staggered board provision from this
Company's charter and rescinded, in the face of an earlier third
party tender offer, this Company's poison pill preferred stock.
While we will naturally insist that stockholders be fully and
fairly informed and not coerced when called upon to make a
decision with respect to any tender offer, we believe that
stockholders should be permitted ultimately to make up their own
minds on such issues.
Regardless of what you determine to do with respect to your
proposal, we believe that you should seriously consider
termination of your litigation against our Company and its
Directors. Facts since the date of the stock issuances you now
attack have proven the judgment of these Directors. It is to be
noted that:
(1) The additional Common Stock was sold at $3.85 per
share; yesterday's closing price was $2.75.
(2) Your own buy-out proposal is only $.15 per share (a
premium of less than 4%) over the issuance price of this
Common Stock.
(3) Since the Preferred Stock was issued in consideration
of the forgiveness of indebtedness owed by our Company, the
prime interest rate has risen from 7.75% to 8.5%. Since the
debt forgiven bore interest at the rate of prime plus 300
basis points, interest at the rate of approximately 11.5%
has been avoided as a result of this transaction.
Furthermore, although the average closing price of our
Company's Common stock has declined over recent periods, the
conversion price remains at a premium to the current price
of our Company's Common Stock.
Based upon the results of the recent election -- at which shares
representing approximately 69 percent of the outstanding Common
Stock voted in favor of the reelection of our current directors
and approximately 66 percent of the outstanding Common Stock
voted in favor of the amendment proposed by the Board to
authorize additional shares of common stock -- it is questionable
whether any stockholders, other than those in some way associated
with you, are in fact troubled by the actions which form the
basis of your litigation against our Company. We note that
despite the publicity surrounding your claims and the efforts of
your proxy solicitors, in fact only approximately 14.8 percent of
the outstanding Common Shares were voted against or abstained
with respect to the election of any one or more of the incumbent
directors and that only 18.3 percent of the outstanding Common
Shares were voted against or abstained with respect to the
Board's recommended increase in the number of authorized Common
Shares from 10 million to 20 million shares.
This would appear to be at least an implicit affirmation of the
Board's judgment in issuing additional Common Shares or
securities convertible into additional Common Shares.
We have never understood your opposition to the issuance of
additional shares of Common Stock given the fact that, despite
our notice to you last September that it would be necessary to
raise additional capital for our Company and our invitation to
you to submit a proposal to purchase shares at your stated price
of $4.00 per share, no offer was forthcoming from you at that
time. We also cannot held but note that, despite your
protestations about the value of Fidelity, you likewise elected
not to take advantage of the opportunity afforded to you to
purchase shares in the Fidelity recapitalization at $5.25 per
share.
We believe that your efforts to force your desires and your view
of reality upon our Company and its stockholders have imposed
needless costs and expenses upon our Company. We estimate that
our Company's legal costs to date in responding to your
litigation and your on-again/off-again proxy solicitation and
consent solicitation has already cost our Company in the range of
$500,000. We estimate that defending your lawsuit in Delaware,
not even taking into account the disruption to our Company and
its business that will result from transporting the entire Board
of Directors to Delaware to appear as witnesses, will cost our
Company at least an additional $250,000. These nonproductive
costs and expenses are particularly frustrating to those of us
who worked so hard during 1994 to salvage value for your Company
and its stockholders out of the Fidelity recapitalization.
Thank you for your letter. Hopefully, we have made our position
clear in this response. If not, please feel free to contact
directly either myself or our Vice Chairman, S. Craig Tompkins,
as this matter has been delegated by the Board of Directors to
our care.
Yours sincerely,
Steve Wesson
President and Chief Executive Officer
