UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
Transcontinental Realty Investors, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
893617209
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(CUSIP Number)
Marc Weingarten, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
(212) 756-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 3, 2000
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(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).
SCHEDULE 13D
CUSIP No. 893617209 Page 2 of 11 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
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,376,000
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 1,376,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,376,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.94%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS
SCHEDULE 13D
CUSIP No. 893617209 Page 3 of 11 Pages
1 NAME OF REPORTING PERSON/
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham International Advisors, L.L.C.
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 7 SOLE VOTING POWER
SHARES 447,040
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 447,040
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
447,040
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.18%
14 TYPE OF REPORTING PERSON*
OO;IA
*SEE INSTRUCTIONS
SCHEDULE 13D
CUSIP No. 893617209 Page 4 of 11 Pages
1 NAME OF REPORTING PERSON/
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners III, 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
NUMBER OF 7 SOLE VOTING POWER
SHARES 35,860
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 35,860
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
35,860
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.42%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS
ITEM 1. SECURITY AND ISSUER
Item 1 is hereby amended to add the following:
This Amendment Number 2 amends and supplements the statement on
Schedule 13D, as amended pursuant to Amendment Number 1 (the "Statement")
as it relates to the Common Stock, $.01 par value ("Common Stock"), of
Transcontinental Realty Investors, Inc., a Nevada corporation (the
"Company").
All defined terms not otherwise defined in this Amendment Number 2
have the meanings ascribed in the Statement.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION
Item 3 is hereby amended to add the following:
The aggregate purchase price for the purchases of Common Stock by
Gotham III described in Item 5(c) of this Amendment Number 2 was $2,441 and
the aggregate purchase price for the purchases of Common Stock by Gotham
International described in Item 5(c) of this Amendment Number 2 was
$121,790. All of the funds required for these purchases were obtained from
the working capital of Gotham III and Gotham International.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 is hereby amended to add the following:
On October 3, 2000, Gotham, Gotham III and Gotham International
(collectively, "Seller") entered into a Stock Option Agreement (the "Stock
Option Agreement") with American Realty Investors, Inc., a Nevada
corporation ("ARL"), and Income Opportunity Realty Investors, Inc., a Nevada
corporation ("IOT", and together with ARL, the "Purchaser"), a copy of
which is attached as Exhibit 3 hereto.
Pursuant to the Stock Option Agreement:
Seller granted Purchaser an option (the "Option") to
purchase the shares of Common Stock beneficially owned by
Seller. The Option may not be exercised prior to January 1,
2001 and will expire on April 5, 2001. As consideration for
the grant of the Option, Purchaser paid Seller a total of
$5,576,700, or $3.00 per share of Common Stock owned by
Seller on October 3, 2000. In addition, Purchaser is
required to pay to Seller on or before December 15, 2000 an
additional $2,788,350, or $1.50 per share of Common Stock
owned by Seller. The Option may be exercised in whole and
not in part at a total exercise price of $22,306,800, or
$12.00 per share of Common Stock.
The plaintiffs in a lawsuit styled American Realty
Trust, Inc., ART Holdings, Inc., and Transcontinental Realty
Investors, Inc. vs. Gotham Partners, L.P., Gotham Partners
III, L.P., Gotham Partners International, Ltd., Gotham
International Advisors, L.L.C., Section H Partners, L.P.,
Karenina Corporation, DPB Corp., William A. Ackman, David P.
Berkowitz and Basic Capital Management, Inc., Case No.
CC-00-10463-e, filed in County Court at Law No. 5, Dallas
County, Texas, filed on October 3, 2000 a notice of nonsuit
with prejudice and released and discharged the defendants
from all claims asserted in the complaint.
Through October 3, 2002, Seller agreed not to purchase,
directly or indirectly, through their owners, officers,
directors, shareholders, and general partners, employees,
agents and representatives, any security issued by ARL, the
Company or IOT; provided, however, that this restriction
shall terminate before October 3, 2002 if Purchaser (a) does
not deliver to Seller the $1.50 per share of Common Stock
described above on or before December 15, 2000, (b) does not
exercise the Option, (c) following exercise, fails to pay
the exercise price for the Option when due, or (d) otherwise
breaches its obligations under the Stock Option Agreement.
Each of Gotham, Gotham III and Gotham International
delivered proxies (the "Proxies") to ARL and IOT, copies of
which are attached as Exhibits 4, 5 and 6 hereto. Pursuant
to the Proxies, Gotham, Gotham III and Gotham International
each granted ARL and IOT a proxy to act jointly at the
annual shareholder's meeting of the Company to be held
October 19, 2000 and any continuation or adjournment
thereof, only for the sole purpose of approving proposal one
(to elect five directors); proposal two (to approve the
Company's director stock option plan); proposal three (to
approve the Company's 2000 stock option plan); and proposal
four (to approve an amendment to the articles of
incorporation of the Company to increase the number of
authorized shares of Common Stock and preferred stock of the
Company), all as more fully set forth in the proxy statement
with respect to such annual shareholder's meeting first
mailed to the Company's shareholders on or about September
11, 2000.
The above descriptions of the Stock Option Agreement and Proxies do
not purport to be complete and are subject to, and qualified in their
entirety by reference to, the text of the Stock Option Agreement, which is
filed as Exhibit 3 hereto, and the text of the Proxies, which are filed as
Exhibits 4, 5 and 6 hereto, each of which is incorporated herein by this
reference.
The Reporting Persons previously indicated in Amendment Number 1 that
they intended to remain actively involved in the Action (as defined in
Amendment Number 1). The Reporting Persons presently do not intend to
remain actively involved in the Action.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 is hereby amended and supplemented as follows:
(a) Gotham owns 1,376,000 shares of Common Stock, representing an
aggregate of approximately 15.94% of the outstanding shares of Common
Stock. Gotham III owns 35,860 shares of Common Stock, representing an
aggregate of approximately 0.42% of the outstanding shares of Common Stock.
Gotham International owns 447,040 shares of Common Stock, representing an
aggregate of approximately 5.18% of the outstanding shares of Common Stock.
The percentages in this paragraph are calculated based upon 8,633,845
shares of Common Stock outstanding as of July 31, 2000 as reflected in the
Company's Form 10-Q for the period ended June 30, 2000. None of Section H,
Karenina, DPB, Mr. Ackman, Mr. Berkowitz, or Gotham Advisors beneficially
owns any shares of Common Stock (other than the shares of Common Stock
beneficially owned by Gotham, Gotham III and Gotham International).
(b) Each of Gotham and Gotham III has the sole power to vote (subject
to the Proxies for Gotham and Gotham III, copies of which are attached as
Exhibits 4 and 5 hereto and are incorporated herein by this reference) and
to dispose (subject to the restrictions on dispositions through April 5,
2001 pursuant to the Stock Option Agreement, a copy of which is attached
hereto as Exhibit 3 and is incorporated herein by this reference) of all of
the shares beneficially owned by it. Pursuant to the Investment Management
Agreement, Gotham Advisors currently has the power to vote (subject to the
Proxy for Gotham International, a copy of which is attached hereto as
Exhibit 6 and is incorporated herein by this reference) and to dispose
(subject to the restrictions on dispositions through April 5, 2001 pursuant
to the Stock Option Agreement, a copy of which is attached hereto as
Exhibit 3 and is incorporated herein by this reference) of all of the
shares beneficially owned by Gotham International.
(c) The tables below set forth information with respect to all
purchases and sales of Common Stock by Gotham III and Gotham International
since the filing of Amendment Number 1 to this Statement. In each case, the
transactions took place in the over-the-counter market.
Date Shares of Common Stock Purchased Price per Share
Gotham III
9/19/00 200 $12.2063
Gotham International
9/14/00 1,300 $12.0163
9/15/00 1,200 $12.0552
9/20/00 3,300 $12.3871
9/21/00 1,700 $12.4250
9/22/00 2,300 $12.9141
Except as described above or previously reported pursuant to Amendment
Number 1 to this Statement, none of Gotham, Gotham III, Gotham
International, Gotham Advisors, Section H, Karenina, DPB, Mr. Ackman or Mr.
Berkowitz has effected any transactions in the securities of the Company
during the past sixty days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Item 6 is hereby amended to add the following:
As more fully described in Item 4, Gotham, Gotham III, Gotham
International and the Purchaser entered into the Stock Option Agreement on
October 3, 2000, a copy of which is attached as Exhibit 3 hereto. In
addition, as more fully described in Item 4, Gotham, Gotham III and Gotham
International have granted the Proxies to ARL and IOT, copies of which are
attached as Exhibits 4, 5 and 6 hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following is filed as Exhibit 3 hereto:
Stock Option Agreement, dated October 3, 2000, by and between Gotham,
Gotham III, Gotham International, ARL and IOT.
The following is filed as Exhibit 4 hereto:
Proxy of Gotham Partners dated October 3, 2000.
The following is filed as Exhibit 5 hereto:
Proxy of Gotham Partners III dated October 3, 2000.
The following is filed as Exhibit 6 hereto:
Proxy of Gotham International dated October 3, 2000.
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.
October 4, 2000
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
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William A. Ackman
President
GOTHAM PARTNERS III, 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
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William A. Ackman
President
GOTHAM INTERNATIONAL
ADVISORS, L.L.C.
By:
/s/ William A. Ackman
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William A. Ackman
Senior Managing Member
