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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 14, 2000
AMERICAN REALTY TRUST, INC.
(Exact name of registrant as specified in charter)
Georgia 1-9948 54-0697989
(State of other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
10670 North Central Expressway
Suite 300
Dallas, Texas 75231
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 692-4700
(Former name or former address; if changed since last report)
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ITEM 5. OTHER EVENTS.
On June 14, 2000, the United States Attorney for the Southern District of
New York charged 120 defendants with securities fraud and related charges.
Included in the indictment were Gene Phillips and A. Cal Rossi of Basic Capital
Management, Inc. ("BCM"). BCM is an advisor to and majority shareholder of the
Company. Mr. Phillips and Mr. Rossi have each pled not guilty to all charges.
The indictment and the press release issued in connection with the indictment
are included as exhibits to this Form 8-K.
There are no allegations in the indictment of wrongdoing on the part of the
Company or BCM. No Series J Preferred Stock referenced in the indictment has
ever been sold to any person.
Subsequent to the indictment, the Board of Directors of the Company
appointed a special committee of independent directors to conduct an inquiry
into the matter. The special committee has engaged outside counsel to review the
indictment on behalf of the special committee and to make a report to the
special committee regarding the findings.
On June 16, 2000, the Company received margin calls from numerous margin
lenders with respect to its existing margin debt in the total amount of
approximately $35 million, which is secured by the Company's equity investments
in its affiliates, Income Opportunity Realty Investors, Inc. ("IORI"),
Transcontinental Realty Investors, Inc. ("TCI"), and National Realty, L.P.
Several margin lenders sold some of the securities owned by the Company to
satisfy the margin calls. Approximately 1,243,407 shares of TCI were sold for
approximately $6.6 million, reducing the Company's ownership in TCI from
approximately 39.3% to approximately 24.8%. Approximately 62,273 shares of IORI
were sold for approximately $200,000, reducing the Company's ownership in IORI
from approximately 30.9% to approximately 26.8%. The Company has subsequently
paid down approximately $15 million of its margin debt and entered into
installment payment agreements with the remaining margin lenders with respect to
full payment by the Company of the amounts owed pursuant to these margin calls.
As of July 20, 2000, the Company's total margin debt has been reduced to
approximately $11.8 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Indictment
99.2 Press Release of United States Attorney for the Southern District of
New York dated June 14, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN REALTY TRUST, INC.
By: /s/ Robert A. Waldman
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Robert A. Waldman
Secretary
July 26, 2000
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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<S> <C>
99.1 Indictment
99.2 Press Release of United States Attorney for the Southern District of New York dated
Jun 14, 2000
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