UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 3)*
Banyan Mortgage Investment Fund
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
066 82 P 106
(CUSIP Number)
Monica Lord, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022
(212) 715-9100
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 19, 1996
(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: (i) 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 11 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 066 82 P 106
- -----------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gabriel Capital, 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
- --------------------------------------------------------------------------------
7) SOLE VOTING POWER
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 1,118,961
EACH REPORTING
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
--------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
1,118,961
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,118,961
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.4%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------------
Page 2 of 11 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 066 82 P 106
- -----------------------
1)NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ariel Fund Limited
- --------------------------------------------------------------------------------
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
Cayman Islands
- --------------------------------------------------------------------------------
7) SOLE VOTING POWER
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 1,650,393
EACH REPORTING
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
--------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
1,650,393
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,650,393
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 3 of 11 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 066 82 P 106
- -----------------------
1)NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ariel Management Corp.
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS
00
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
7) SOLE VOTING POWER
NUMBER OF 183,046
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 1,650,393
EACH REPORTING
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
183,046
--------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
1,650,393
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,833,439
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 4 of 11 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 066 82 P 106
- -----------------------
1)NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. Ezra Merkin
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS
00
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7) SOLE VOTING POWER
NUMBER OF 183,046
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY
EACH REPORTING 2,769,354
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
183,046
--------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
2,769,354
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,952,400
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
Page 5 of 11 Pages
<PAGE>
SCHEDULE 13D
This Amendment No. 3 amends and supplements the following Items of the
Reporting Persons' Statement on Schedule 13D, as previously amended by Amendment
No. 1 dated November 27, 1995 and Amendment No. 2 dated May 14, 1996 (the
"Schedule").
Item 4. Purpose of Transaction.
The information contained in Item 4 to the Schedule is hereby amended
and supplemented to read in its entirety as follows:
All of the shares of Common Stock reported herein were acquired for
investment purposes. Each of the Reporting Persons may acquire or dispose of
securities of the Issuer, including shares of Common Stock, directly or
indirectly, in open-market or privately negotiated transactions, depending upon
the evaluation of the performance and prospects of the Issuer by the Reporting
Persons, and upon other developments and circumstances, including, but not
limited to, general economic and business conditions and stock market
conditions.
With respect to the actions or events described in paragraphs (a)
through (j) of Item 4 of Schedule 13D, see Exhibits A and B hereto containing
letters sent by Gabriel to the Issuer on May 17, 1996 and November 19, 1996,
respectively. Gabriel is continuing to consider its options with respect to its
investment in the Issuer, including a possible proxy solicitation in opposition
to the Issuer's proposed merger with RGI U.S. Holdings, Inc. and the acquisition
of additional Common Stock from the Issuer, as described in the letters included
as Exhibit A to Amendment No. 2 to Schedule 13D and Exhibits A and B to this
Amendment No. 3 to Schedule 13D. The aforementioned private discretionary
investment account has no interest, and there is no current intention for it to
have an interest, in the courses of action described herein and in the
aforementioned Exhibits.
Except for the foregoing, no Reporting Person has any present plans or
proposals which relate to or would result in any of the actions or events
described in paragraphs (a) through (j) of Item 4 of Schedule 13D. However, the
Reporting Persons reserve their respective rights to modify their plans with
respect to the transactions described in this Item 4, to acquire or dispose of
securities of the Issuer and to formulate plans and proposals which could result
in the occurrence of any such events, subject to applicable laws and
regulations.
Item 5. Interest in Securities of Issuer.
The information contained in Items 5(a) and (b) to the Schedule is
hereby amended and supplemented to read in its entirety as follows:
(a) and (b) Gabriel is the beneficial owner of 1,118,961 shares of
Common Stock, for a total beneficial ownership of 2.4% of the outstanding shares
of Common Stock.
Ariel Fund is the beneficial owner of 1,650,393 shares of Common Stock,
for a total beneficial ownership of 3.5% of the outstanding shares of Common
Stock.
Page 6 of 11 Pages
<PAGE>
Ariel, as Investment Advisor to Ariel Fund, has the power to vote and
to direct the voting of and the power to dispose and direct the disposition of
the 1,650,393 shares of Common Stock owned by Ariel Fund. In addition, Ariel has
sole dispositive and voting power with respect to 183,046 shares of Common Stock
purchased by a private discretionary investment account. Accordingly, Ariel may
be deemed to be the beneficial owner of 1,833,439 shares of Common Stock, or
3.9% of the outstanding shares of Common Stock.
As the General Partner of Gabriel, Merkin has the power to vote and to
direct the voting of and the power to dispose and direct the disposition of the
1,118,961 shares of Common Stock owned by Gabriel. In addition, as the sole
shareholder and president of Ariel, Merkin may be deemed to have power to vote
and to direct the voting of and the power to dispose and direct the disposition
of the 1,650,393 shares of Common Stock owned by Ariel Fund and the 183,046
shares of Common Stock owned by Ariel's private account. Accordingly, Merkin may
be deemed to be the beneficial owner of 2,952,400 shares of Common Stock, or
6.2% of the outstanding shares of Common Stock.
The number of shares beneficially owned by each of the Reporting
Persons and the percentage of outstanding shares represented thereby, have been
computed in accordance with Rule 13d-3 under the Securities Exchange Act of
1934, as amended. The ownership of the Reporting Persons is based on 47,307,527
outstanding shares of Common Stock of the Issuer as of November 13, 1996, as
reported in the Issuer's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.
Jack N. Mayer, a portfolio manager employed by Ariel and Merkin,
individually owns 2,000 shares of Common Stock. The Reporting Persons disclaim
beneficial ownership of these shares of Common Stock.
(c) There were no transactions effected by the Reporting Persons during
the past 60 days.
Item 7. Material to be filed as Exhibits
Exhibit A: Letter to the Issuer dated May 17, 1996.
Exhibit B: Letter to the Issuer dated November 19, 1996.
Page 7 of 11 Pages
<PAGE>
Signature.
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
GABRIEL CAPITAL, L.P.
By:/s/ J. Ezra Merkin
--------------------
Name: J. Ezra Merkin
Title: General Partner
ARIEL FUND LIMITED
By: MEESPIERSON MANAGEMENT
(CAYMAN) LIMITED
By:/s/ R.H. Hanson/ /s/ S.M. Wight
-------------------------------
Name: R.H. Hanson / S.M. Wight
Title: Director / Secretary
ARIEL MANAGEMENT CORP.
By:/s/ J. Ezra Merkin
--------------------
Name: J. Ezra Merkin
Title: President
/s/ J. Ezra Merkin
--------------------
J. Ezra Merkin
Dated: November 19, 1996
Page 8 of 11 Pages
EXHIBIT A
GABRIEL CAPITAL GROUP
- --------------------------------------------------------------------------------
450 Park Avenue
New York, New York 10022
TELEPHONE 212 838-7200
FACSIMILE 212 838-9603
May 17, 1996
Leonard G. Levine, President and Director
Banyan Mortgage Investment Fund
150 S. Wacker Drive, Suite 2900
Chicago, Illinois 60606
Dear Mr. Levine:
I was disturbed to learn in our phone conversation yesterday evening
that the Board of Directors of Banyan Mortgage Investment Fund ("Banyan") is
apparently bent on pursuing the consummation of the Private Placement and Merger
notwithstanding our May 15th letter and the Board's inexcusable failure to
explore alternatives.1/
My attorneys have already made clear to your attorneys that we are
willing to enter into a reasonable confidentiality agreement, thereby obviating
any concern that our conversations may constitute "free discovery" or otherwise
prejudice Banyan in a future litigation. Indeed, litigation can be avoided only
by an honest and forthright dialogue. We stand ready to better understand and
resolve whatever legitimate concerns Banyan may have.
We continue to believe that the transactions contemplated by the Merger
Agreement severely compromise the interests of Banyan and its shareholders and
are inconsistent with the fiduciary duties of Banyan's directors and officers
(the "D&Os"). We have already indicated in our letter of May 15 that Gabriel
Capital, L.P. and/or its designee(s) is willing to invest $3.5 million so as to
permit Banyan to meet its immediate cash needs. We are highly confident, as your
largest shareholder, that terms can be fashioned that are more favorable to
Banyan than those set forth in the Merger Agreement. Should the Board fail to
explore this possibility, shareholders will hold the directors personally
accountable.
- --------
1/ Each capitalized term in this letter that is not otherwise defined
has the meaning ascribed to such term in the Agreement and Plan of Merger, dated
as of April 12, 1996, by and among RGI U.S. Holdings, Inc., RGI Holdings, Inc.
and Banyan (the "Merger Agreement").
Page 9 of 11 Pages
<PAGE>
We are ready, willing and able to devote substantial resources to
Banyan in an expeditious manner. For whatever reason, the consummation of the
Private Placement has been delayed. I suggest that we use the time productively
for the benefit of Banyan and its shareholders. The D&Os have a duty to do no
less.
I look forward to hearing from you.
Very truly yours,
/s/ Jack N. Mayer
-----------------
Jack N. Mayer
Page 10 of 11 Pages
EXHIBIT B
GABRIEL CAPITAL GROUP
450 Park Avenue
New York, New York 10022
November 19, 1996
Mr. Leonard G. Levine
President
Banyan Mortgage Investment Fund
150 S. Wacker Drive, Suite 2900
Chicago, Illinois 60606
Dear Mr. Levine:
In light of our letters to you dated May 14 and May 17 of this year, it
should come as no surprise that Gabriel Capital, L.P. and its affiliates intend
to vote against the proposed RGI- U.S. merger. Having carefully reviewed
management's stated reasons in support of the RGI merger, we remain convinced
that the RGI merger is ill-advised and not in the best interest of Banyan's
public shareholders. The recent all-cash offer made by Apollo Real Estate
Advisors II, L.P. underscores the disingenuousness of management's suggestion
that the RGI-U.S. transaction is the only available solution to Banyan's
liquidity problems. Your apparent failure to promptly disclose the Apollo offer
can only be characterized as astonishing and an egregious affront to
shareholders.
If the RGI transaction is not approved by shareholders -- an outcome we
fully expect -- Gabriel or its designee would remain interested in making a
significant equity investment in Banyan as outlined in our May letters. Gabriel
also remains ready, willing and able to move quickly in consummating the
transaction. Toward this end, given Banyan's immediate liquidity needs, it is
entirely appropriate for you to allow Gabriel to commence its due diligence
investigation now. A direct investment by Gabriel will offer the Board an
alternative which will allow those shareholders who wish to retain their Banyan
investment the opportunity to do so.
Please provide copies of this letter to the other Banyan directors.
Gabriel and its advisors are available at your reasonable convenience to discuss
these matters. We wish to emphasize, however, that we would oppose the RGI
transaction even if we were not willing to participate in a transaction to
create additional liquidity for Banyan.
Very truly yours,
GABRIEL CAPITAL, L.P.
By:/s/ Jack N. Mayer
-------------------------------
Jack N. Mayer, Authorized Agent
Page 11 of 11 Pages
