SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
NAME OF ISSUER: Excal Enterprises, Inc.
TITLE OF CLASS OF SECURITIES: Common Stock
CUSIP NUMBER: 300902103000
NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS:
Natalie I. Koether, Esq., Rosenman & Colin
211 Pennbrook Road, P. O. Box 97
Far Hills, New Jersey 07931 (908) 766-4101
DATE OF EVENT WHICH REQUIRES FILING: December 11, 1996
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: ________
Check the following 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 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).
(Continued on following pages)
<PAGE>
CUSIP NO.: 300902103000
1. NAME OF REPORTING PERSON: Asset Value Fund Limited Partnership
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) (b) XX
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): YES NO XX
6. CITIZENSHIP OR PLACE OF ORGANIZATION: New Jersey
7. SOLE VOTING POWER: 259,500
8. SHARED VOTING POWER:
9. SOLE DISPOSITIVE POWER: 259,500
10. SHARED DISPOSITIVE POWER:
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 259,500
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES: YES NO XX
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 6.45%
14. TYPE OF REPORTING PERSON: PN
<PAGE>
Item 1. SECURITY AND ISSUER
This Schedule 13D (this "Schedule") relates to the common stock, par value
$.001 per share ("Shares"), of Excal Enterprises, Inc., a Delaware corporation
(the "Company"), with principal executive offices located at 100 North Tampa
Street, Suite 3575, Tampa, Florida 33602.
Item 2. IDENTITY AND BACKGROUND
(a), (b) and (c) This Schedule is being filed by Asset Value Fund Limited
Partnership ("Asset Value"), a limited partnership engaged in investing in
securities. The sole general partner of Asset Value is Asset Value Management,
Inc., ("Asset Value Management"). Asset Value Management is a wholly-owned
subsidiary of Kent Financial Services, Inc. ("Kent"), whose principal business
is the operation of T. R. Winston & Company, Inc. ("TRW"), its wholly-owned
subsidiary. TRW is a securities broker-dealer registered with the National
Association of Securities Dealers, Inc. Asset Value, Asset Value Management,
Kent and TRW maintain offices at 376 Main Street, Bedminster, New Jersey 07921.
(See Exhibits A and B for information, including addresses and principal
businesses or occupations, about the executive officers and directors of Asset
Value Management and Kent, respectively.)
(d) During the past five years, none of Asset Value, Asset Value Mangement,
Kent, and any of the persons listed on Exhibits A and B has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
<PAGE>
(e) During the past five years, neither Asset Value, Asset Value
Management, Kent, nor any of the persons listed on Exhibits A and B has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of which was subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Asset Value is a New Jersey limited partnership, and Asset Value
Management and Kent are Delaware corporations. TRW is a New Jersey corporation.
All individuals listed on Exhibits A and B are citizens of the United States.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As of December 20, 1996, Asset Value has acquired 259,500 Shares at an
aggregate purchase price of $524,088.85, including brokerage commissions. Asset
Value purchased the Shares with its cash reserves.
Item 4. PURPOSE OF TRANSACTION.
Asset Value has acquired the Shares for capital appreciation but reserves
the right to take any action it deems appropriate to enhance its investment
including tendering for additional Shares or soliciting proxies to elect its
nominees as a majority of the Company's board of directors or using any other
means of seeking control of the Company, although it has no such plan at this
time. Asset Value will evaluate its investment in the Company on an ongoing
basis and will take whatever action it concludes is in its own interests,
including buying additional Shares or selling the Shares without any further
prior disclosure.
In September, 1996 the Chairman of Asset Value Management spoke by
telephone with fewer than ten of the Company's shareholders to discuss the
Company's consent solicitation which was then ongoing. On September 24, 1996,
four shareholders, including Asset Value, met together with an agent of the
Company to discuss the shareholders' opposition to the Company's proposals. No
understandings were reached. Subsequently Asset Value received a letter from the
president of the Company, a copy of which is annexed to this Schedule as
Exhibit D.
Recently the Chairman of Asset Value Management was sued by the Company for
failing to file a Schedule 13D disclosing that he was a member of a group with
the shareholders who attended the meeting. Asset Value believes that the
Company's lawsuit is groundless.
Except as described above, Asset Value currently has no plan or proposal
which relate to or would result in any of the actions or matters referred to in
the text of Item 4 of Schedule 13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on December 20, 1996, Asset Value
beneficially owned 259,500 Shares, representing 6.45% of Shares reported as
outstanding in the Company's Form 10-QSB for the quarter ended September 30,
1996.
<PAGE>
(b) The information presented in Items 7 through 10 of the cover sheet to
this Schedule 13D is incorporated herein by reference.
(c) Exhibit C annexed hereto sets forth all transactions in Shares effected
by Asset Value in the sixty days preceding the date of this Statement, the dates
of such transactions, and the per Share purchase price. The transactions
reported herein, unless otherwise indicated, were open market transactions
effected in the over-the-counter market.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Executive Officers and Directors of Asset Value Management
Exhibit B - Executive Officers and Directors of Kent
Exhibit C - Transactions in Shares for the past 60 days
Exhibit D - Letter received from R. Park Newton III
<PAGE>
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.
Dated: December 20, 1996
ASSET VALUE FUND LIMITED PARTNERSHIP
By: Asset Value Management, Inc.
General Partner
By: /s/ John W. Galuchie, Jr.
--------------------------------
John W. Galuchie, Jr.
Treasurer and Secretary
<PAGE>
EXHIBIT A
ASSET VALUE MANAGEMENT (See Item 2 of this Schedule)
Executive Officers and Directors
<TABLE>
<CAPTION>
<S> <C>
NAME AND BUSINESS ADDRESS PRESENT POSITION(S) WITH ADDRESS
- ------------------------- ---------------------------------
Paul O. Koether See Exhibit B for information about
Mr. Koether
John W. Galuchie, Jr. See Exhibit B for information about
Mr. Galuchie
</TABLE>
<PAGE>
EXHIBIT B
KENT (See Item 2 of this Schedule)
Executive Officers and Directors
<TABLE>
<CAPTION>
<S> <C>
NAME AND BUSINESS ADDRESS* PRESENT POSITION(S) WITH ADDRESS*
- ------------------------- ---------------------------------
Paul O. Koether Chairman, President and Director
of Kent
Registered Representative, Chairman
and Director of TRW
President and Director of Asset
Value Management
Chairman, President and Director
Pure World, Inc. ("Pure World")
(Engaged in the business of
manufacturing and distrubuting
natural products)
Chairman, President and Director
Sun Equities Corporation ("Sun")
(Sun is a closely-held private
company, the business of which is
to own shares of other
corporations. Sun and parties
affiliated with Sun own
approximately 38 percent of Pure
World's outstanding common stock)
General Partner
Shamrock Associates
(Investment limited partnership;
owner of approximately 39 percent
of Kent's outstanding common stock)
Chairman, President and Director
American Metals Service, Inc.
("AMTS")
(Engaged in redeploying its assets)
*Unless otherwise designated, the address of the executive officers,
directors, and companies referred herein, is 376 Main Street, Bedminster, New
Jersey 07921.
<PAGE>
John W. Galuchie, Jr. Vice President and Treasurer of
Kent
Secretary, Treasurer and Director
of Asset Value Management
Registered Representative,
President, Treasurer and Director
of TRW
Vice President and Director of Sun
Executive Vice President, Treasurer
and Secretary of Pure World
Vice President, Treasurer and
Director of AMTS
M. Michael Witte Director of Kent
1120 Granville Avenue
Suite 102 President
Los Angeles, CA 90049 M.M. Witte & Associates, Inc.
("1120 Granville") 1120 Granville
(Oil and gas consulting and
investment management)
Co-Chairman
The American Drilling Company, LLC
1301 Montana Avenue
Suite D
Santa Monica, CA 90402
(Oil and gas exploration and
production)
President and Chief Executive
Officer
South Coast Oil Corporation
800 W. 6th Street
Pacific Financial Center
Suite 1600
Los Angeles, CA 90017
<PAGE>
Casey K. Tjang Director of Kent
350 Fifth Avenue
Empire State Building Chief Finanical Officer and
Room 3922 Secretary
New York, NY 10118 Leading Edge Packaging, Inc.
("350 Fifth") 350 Fifth
(Marketing wholesaler and
distribution of consumer product
packagings)
Andrew-Case International Limited
c/o L.B. Saw & Associates
17th Floor
China Insurance Building
48 Cameron Road
TST Kowloon, Hong Kong
(International corporate finance
and trading)
Mathew E. Hoffman, Esq. Director of Kent
757 Third Avenue, 6th Floor
New York, NY 10017 Partner
("757 Third") Rosen & Reade, a Law Firm
757 Third
</TABLE>
<PAGE>
EXHIBIT C
Transactions in Shares for the Past 60 Days
<TABLE>
<CAPTION>
<S> <C> <C>
NUMBER OF PRICE
DATE SHARES PURCHASED PER SHARE*
- -------- ---------------- ----------
10/25/96 3,500 1.8736
10/29/96 6,500 1.9375
10/30/96 2,500 1.9375
11/06/96 1,500 1.85
11/08/96 5,000 1.85
11/15/96 10,500 1.85
11/20/96 9,500 1.9457
12/03/96 1,000 2.125
12/11/96 6,500 2.00
12/11/96 17,500 1.961
12/12/96 1,500 2.00
12/12/96 7,500 2.03125
12/13/96 4,000 2.0625
12/16/96 2,000 2.125
12/16/96 2,500 2.25
12/16/96 3,000 2.1875
12/17/96 2,500 2.25
12/19/96 4,500 2.3125
12/19/96 1,000 2.34375
12/19/96 5,000 2.375
12/20/96 1,000 2.4375
12/20/96 1,000 2.4675
* Exclusive of brokerage commissions.
</TABLE>
<PAGE>
EXHIBIT D
Letter received from R. Park Newton III
R PARK NEWTON III
2525 Bayshore Blvd. - Tampa, FL 33629
Tele: (813) 251-6712 - Fax: (813) 251-0529
To: Mr. Paul Koether
Mr. John Sanford
Mr. Walter Carucci
Mr. Nelson Obus
From: R. Park Newton III
Date: October 8, 1996
Subject: Demand that Excal repurchase your respective investments:
Carey Webb has briefed me on your meeting of September 24, and furnished
Lexus-Nexus data on Paul Koether. I see the current situation a result of the
invalidation of Smith's "investment selling-story", when he "jumped ship",
deserting his Excal investment and those supporting his efforts! Certainly not
the responsibility of Excal.
The net effect of this situation could have a prolonged negative impact on
Excal and a majority of it's shareholders. For this reason, I am convinced that
it would be in the best interest of all shareholders if the Company participated
with any investor impacted by Smith's actions who wishes to exit their Excal
investment.
Although clearly not the Company's problem or responsibility, I am willing
to propose necessary actions to allow the Company to buy-out your investment.
The purchase price would be at some small, to be negotiated market premium,
within financial terms not disruptive to normal continuing Company operations.
Under the current situation, all terms of payment must address the following
concepts.
(A) The financial structure of the buy-out must fit within the
Company's financial capacity to perform on a worst case basis.
(B) Penalties for default under the terms of the "purchase
instrument" (preferred stock , bond, note, etc.) must be financial in nature.
The Company will not agree to any deal that could jeopardize the remaining
shareholders where the results could force the Company into foreclosure,
insolvency, etc.
I am the one most knowledgeable of the components that makeup Excal. I have
access to the information, and understand the dynamics of the shareholder
makeup. My knowledge and background indicate certain points you have put forth
only negatively impact your basic investment objective.
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<PAGE>
Since these actions clearly are not those taken by experienced,
intelligent, professional investors, I can only conclude that you do not have
the needed information and relevant facts to make a fully informed decision. I
hope the following will assist you with this decision.
Excal ownership & control issues:
- ---------------------------------
Excal shareholders can be viewed as being in three general classifications.
(I) Management. This group directly owns 25.9% (1,041,212 owned
of 4,025,594 outstanding). If "in the money" options are considered this
ownership increases to 43.2% (2,271,212 owned of 5,255,594 outstanding).
(II) Small "retail type" investors who were sold by management, or
an "agent/broker" initiated by management. This group owns 52.9% (2,129,315
owned of 4,025,594 outstanding). When "in the money" options are considered
their ownership declines to 40.5% (2,129,315 owned of 5,255,594 outstanding).
(III) The "professional type" investors with large block holdings.
Most of these investors (with one or two exceptions such as Carr Securities)
came into the investment because of Smith and the "investment story" he was
promoting. This group directly owns 21.2% (855,067 owned of 4,025,594
outstanding). When "in the money" options are considered their ownership
declines to 16.3% (855,067 owned of 5,255,594 outstanding).
I see shareholder satisfaction and support of management as follows:
Management group is pro-management. The typical small retail type investors
I view in two ways. Investment made pre-Sears or post-Sears. The older,
pre-Sears investors, sold by management are extremely pro-management. Early
stage investors who were not happy with management sold out years ago. Those
still in are friends! Post-Sears investors are generally pro-management. Since
the Sears settlement most have seen an increase in the value of their investment
and improving company performance. The professional investors generally want
out of the situation Smith left them in, and support his anti-management
story.
Since formation, Excal's leadership has been consistent and continual
without major complaint from traditional shareholders. The fact is, the large
majority of shareholders have and do support management. They have seen recent
increases in the value of their investment. They see Excal's value as being
better than ever - a direct result of management's commitment and continuing
effort. Smith's bail out, leaving his supporters as he did, seems indicative as
to how Excal's shareholders might have fared under his control of Excal.
Combined with direct ownership, management currently has required
shareholder support to continue managing Excal. With just exercising "in the
money" options it become problematic!
Consent Solicitation:
--------------------
2
<PAGE>
Given Mr. Koether's situation with Texas Real Estate Investment Trust, I
understand your initial concerns and fears surrounding the consent solicitation.
I agree that it does not seem proper that management, absent ownership, should
be allowed to continue control especially without support of a majority of the
shareholders. This is not the case with Excal. A shareholder rights plan has
been in place for some time, management currently has the support of well over a
majority of Excal's shareholders, owns 43.2% of Excal including options, and for
the past several years the "new management team" has produced ever improving
financial results.
With the exception of the Smith attracted professional investors, Excal's
shareholders are typical of the ones associated with most small cap entrepreneur
companies. At this retail level of the market, stocks are "always sold - never
bought". Generally they are not "in tune with" or interested in the type of
issues professionals look at, ones that you and Smith think important.
First ASX made a run at Excal with their own agenda; clearly not in the
best interest of other Excal shareholders. Smith came second, same thing "own
agenda", expensive, and not in the best interest of other Excal shareholders. At
this time, all of the shareholders have been told, and know that both ASX and
Smith represented a threat to the other shareholders, were time consuming for
management, and extremely costly for the Company.
Who knows what Wasserstein is up to? We have documentation where he
proposes a leverage buy out at the expense of all other Excal shareholders! If
you initiate litigation, Excal shareholders will only see it as "one more" large
professional investor group attempting to pressure Excal and its's management,
it will be perceived as "more of the same". ASX and Smith's actions, the
Wasserstein 13D filing, and actions on your part, provide more reason for
shareholders to support the consent solicitation!
I fail to see how the consent solicitation can materially effect the market
price of Excal's stock. Excal's traditional investors see the action being taken
as needed help in stopping large well financed professional investors from
taking advantage of their investment!
Effect of threatened litigation:
- --------------------------------
Whatever the outcome of the consent solicitation, it has no meaningful
impact on the issue of control. It is well documented that I am not intimidated
by and have been quite active in business litigation. I know how expensive it is
for both parties. Any litigation, in this area, will only serve to increase your
investment basis (your added expense), lower the values underlying your
investment (Excal's added expense), and extend your investment holding period.
These type of unproductive expenses only negatively impact your overall
investment returns. The concept of litigation as an attempt to force us to meet
your demand is not in your financial best interest, as it has no influence on
the issue of control! The long and costlier any litigation, the larger the
negative
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<PAGE>
impact. Most importantly, your investment will remain subject to market
fluctuations for the foreseeable future.
Your thought of a $1.00 stock price could prove accurate. I do not know,
but $1.00 was the price before Smith's outside influence, and there still exits
an 855,067 share overhang. If a portion of this investor group starts
liquidating, without off setting demand, who knows what the market will do!
I took these threats as posturing or negotiations, since I do not see these
actions taken by professional investors. I can assure you that management's
tolerance and patience in dealing with large, professional type investors
promoting their own agenda is wearing thin. Future threats on your part will be
counter productive to your overall efforts, and in fact could prevent a
successful sale to the Company.
Don't know where the Company is going:
- -------------------------------------
Since closing the Sears deal, we have been quite explicit as to the future
direction for the Company. (1) Stabilize the real assets in Jacksonville and
maximize the cash flow potential. (2) Determine the feasibility of remaining in
the automotive business and either grow or get out of the business. (3) Identify
one or two new business opportunities, that fit within management's experience,
for Excal to capitalize on.
Step one and two are substantially completed, and except for the disruption
created by the Smith Group, we would be a lot closer to meeting the objectives
of step three. The only major deviation has been the decision to invest Company
funds in a stock repurchase program, not only for the Smith Group, but for the
investors involved who were "left out in the cold" when Smith took his profit
and shut down the "investment story" that was fueling the demand in the market.
Basic investment strategies for Excal shareholders:
- ---------------------------------------------------
I see two basic investment strategies that existing shareholders can
follow. (I) Hold their investment for the near future and benefit from the
long-term results created by management. (II) Liquidate their investment when
they feel appropriate in the open market. New investors of course will create
future market demand, when purchasing stock as a direct result of management's
efforts and future financial results.
The situation created by Smith has left you and other professionals with
limited options, and the Company and the majority of its shareholders in a some
what tenuous position. Considering the fundamental components of investment;
buy, hold, sell; it seems you have executed two out of the three very well. No
efficient exit strategy seems available under current conditions, of course
should market demand be sufficient for you to efficiently dispose of your
holdings, no need exist for Excal's support!
4
<PAGE>
The Company and other shareholders either must live with the market impact
of disgruntled shareholders owning 855,067 shares, or deal with the situation,
and help them liquidate outside the public market. This is the only reason that
I am interested in working with you. To help you out of your situation!
Obviously the Company is the most likely buyer!
I am proposing that I help you sell the required Excal management personnel
to allow the Company to work with you because I think it is beneficial to all
Excal shareholders. Others in Excal's management lack my experience in dealing
with complex shareholder and public market issues. They must support any effort
if you are to succeed. I have to sell them!
The initial action of getting Carey Webb to New York under false pretenses
has left little room for some in Excal's management to trust, or have faith in
what you say or will do. Logically, to speed things along, I thing the most
effective action you could take would be to tender supporting proxies for the
consent solicitation. This would go a long way in rebuilding the trust lost with
others I must convince, and make my job easier. Would it not further your
overall investment objective - best of all it's free, you give up nothing!
If your final decision is to exit your Excal investment at this time, and
you would like me to help, then I suggest the following. Paul Koether and I meet
to develop a financial strategy with the required flexibility to address both of
our requirements. Once the concept is agreed on, the price and terms can be
negotiated and the transaction finalized. Using these terms and structure, an
offer would be made to other investors effected by this situation. Give me a
call, let's get going.
There is once other major point! John must agree that for an extended time
period, Aris and Park Newton are to be included in the invitation list for the
"best annual" dove shoot! Seems appropriate compensation for getting you out of
your trap - especially getting to keep some cheese!
/s/ R. Park Newton III
5
