SCHEDULE 13D
Under the Securities Exchange Act of 1934
Crescent Operating, Inc.
(Name of Issuer)
Common Stock, $.01 par value
(Title of class of securities)
22575M 10 0
(CUSIP Number)
Peter A. Nussbaum, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
(212) 756-2000
(Name, address and telephone number of person authorized to
receive notices and communications)
August 22, 1997
(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).
<PAGE>
SCHEDULE 13D
CUSIP No. 22575M 10 0 Page 2 of 8 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 (a) [x]
GROUP* (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 919,837
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
9 SOLE DISPOSITIVE POWER
REPORTING 919,837
PERSON
WITH 10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
919,837
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11)
8.34%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 22575M 10 0 Page 3 of 8 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a) [x]
GROUP* (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 9,992
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
9 SOLE DISPOSITIVE POWER
REPORTING 9,992
PERSON
WITH 10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
9,992
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
.09%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
Page 4 of 8 Pages
Item 1. Security and Issuer
This statement on Schedule 13D (the "Statement") relates to the Common
Stock, $.01 par value ("Common Stock"), of Crescent Operating, Inc., a
Delaware corporation (the "Company"). The principal executive offices
of the Company are located at 777 Main Street, Fort Worth, Texas 76102.
Item 2. Identity and Background
This Statement is being filed by Gotham Partners, L.P., a New York
limited partnership ("Gotham"), and Gotham Partners II, L.P., a New York
limited partnership ("Gotham II", and together with Gotham, the
"Reporting Persons"). Each of Gotham and Gotham II was formed to
engage in the buying and selling of securities for investment for its
own account.
Section H Partners, L.P., a New York limited partnership ("Section H"),
is the sole general partner of Gotham and Gotham II. Karenina Corp., a
New York corporation ("Karenina"), and DPB Corp., a New York
corporation ("DPB"), are the sole general partners of Section H.
Karenina is wholly owned by Mr. William A. Ackman. DPB is wholly owned
by Mr. David P. Berkowitz. Messrs. Ackman and Berkowitz are citizens
of the United States of America, and the principal occupation of each
of them is managing the affairs of Karenina and DPB, respectively, and
through such entities the affairs of Section H, Gotham and Gotham II.
The business address of each of Gotham, Gotham II, Section H, Karenina,
DPB and Messrs. Ackman and Berkowitz is 110 East 42nd Street, 18th
Floor, New York, New York 10017.
During the last five years, none of Gotham, Gotham II, Section H,
Karenina, DPB, Mr. Ackman or Mr. Berkowitz (i) has been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is 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.
Any disclosures herein with respect to persons other than the Reporting
Persons are made on information and belief after appropriate inquiry.
Item 3. Source and Amount of Funds or Other Consideration
The aggregate purchase price of the Common Stock purchased by Gotham
was $12,993,310 and the aggregate purchase price of the Common Stock
purchased by Gotham II was $137,710. All of the funds required for
these purchases were obtained from the general funds of Gotham and
Gotham II, respectively.
The aggregate purchase price of the Common Stock purchased by two
individual retirement accounts for the benefit of Mr. Ackman's spouse
(the "IRA Accounts") is $21,716. Such Common Stock was purchased with
the assets of the IRA Accounts.
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Page 5 of 8 Pages
Item 4. Purpose of the Transaction
The Reporting Persons acquired the Common Stock for investment purposes,
and the Reporting Persons intend to continue to evaluate the performance
of such Common Stock as an investment in the ordinary course of their
business. The Reporting Persons pursue an investment objective that
seeks capital appreciation. In pursuing this investment objective, the
Reporting Persons analyze the operations, capital structure and markets
of companies in which they invest, including the Company, on a
continuous basis through analysis of documentation and discussions with
knowledgeable industry and market observers and with representatives of
such companies (often at the invitation of management). As a result of
these activities, one or more of the Reporting Persons may participate
in interviews or hold discussions with third parties or with management
in which the Reporting Person may suggest or take a position with
respect to potential changes in the operations, management or capital
structure of such companies as a means of enhancing shareholder values.
Such suggestions or positions may relate to one or more of the
transactions specified in clauses (a) through (j) of Item 4 of the
Schedule 13D form, including, without limitation, such matters as
disposing of one or more businesses, selling the Company or acquiring
another company or business, changing operating or marketing strategies,
adopting, not adopting, modifying or eliminating certain types of anti-
takeover measures, restructuring the Company's capitalization, and
reviewing dividend and compensation policies.
Each of the Reporting Persons intends to adhere to the foregoing
investment philosophy with respect to the Company.
Each Reporting Person will continuously assess the Company's business,
financial condition, results of operations and prospects, general
economic, financial and industry conditions, the securities markets and
future trading prices in general and those for the Company's securities
in particular, other developments and other investment opportunities.
Depending on such assessments, one or more of the Reporting Persons may
acquire additional Common Stock or may determine to sell or otherwise
dispose of all or some of its holdings of Common Stock.
Except as set forth above, none of the Reporting Persons has any plans
or proposals which would relate to or result in any of the matters set
forth in items (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) Gotham owns 919,837 shares of Common Stock as of the date of this
Statement, representing an aggregate of approximately 8.34% of the outstanding
Common Stock of the Company. Gotham II owns 9,992 shares of Common Stock as
of the date of this Statement, representing an aggregate of approximately .09%
of the outstanding Common Stock of the Company. Mr. Ackman's spouse owns
1,294 shares of Common Stock held in the IRA Accounts representing
approximately .01% of the outstanding Common Stock. The percentages in this
paragraph are calculated based upon 11,025,547 outstanding shares of Common
Stock of the Company, as of June 30, 1997, as reported in the Company's Form
10-Q for the quarter ended June 30, 1997. None of Section H, Karenina, DPB,
Mr. Ackman or Mr. Berkowitz beneficially own any Common Stock (other than the
Common Stock beneficially owned by Gotham and Gotham II and Mr. Ackman may be
deemed to be the beneficial owner of the shares held in his spouse's IRA
Accounts).
(b) Each of Gotham and Gotham II has sole power to vote and to dispose of
all of the Common Stock beneficially owned by it. Mrs. Ackman has sole power
to vote and to dispose of the Common Stock held in the IRA Accounts.
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Page 6 of 8 Pages
(c) The tables below set forth information with respect to all purchases and
sales of Common Stock by Gotham, Gotham II and the IRA Accounts. In each
case, the transactions were effected through open-market purchases, except as
indicated below.
Gotham
Date Common Stock Price per
Purchased Share ($)
06/13/97 66,770 3.00
07/02/97 27,650 12.625
07/11/97 58,288 .000*
08/12/97 100,145 16.6857
08/15/97 7,420 16.625
08/19/97 24,740 16.75
08/21/97 24,740 16.75
08/22/97 94,012 16.5197
08/22/97 247,400 16.50
08/28/97 494 16.375
08/28/97 269,178 15.5775
Gotham II
Date Common Stock Price per
Purchased Share ($)
06/13/97 1,000 3.00
07/02/97 300 12.625
07/09/97 621 .000*
08/12/97 1,055 16.6857
08/15/97 80 16.625
08/19/97 260 16.75
08/21/97 260 16.75
08/22/97 988 16.5197
08/22/97 2,600 16.50
08/28/97 6 16.375
08/28/97 2,822 15.5775
IRA Accounts
Date Common Stock Price per
Purchased Share ($)
08/27/97 919 16.75
08/27/97 375 16.86
*These shares were received as part of an option transaction described
in item six below.
Except as described above, none of Gotham, Gotham II, Section H,
Karenina, DPB, Mr. Ackman or Mr. Berkowitz has effected any
transactions in the securities of the Company during the past sixty
days.
(d) and (e). Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
On June 24, 1997 Gotham and Gotham II entered into option agreements
with Morgan Guaranty Trust Company of New York ("Morgan") in which
Gotham and Gotham II purchased call options on Crescent Real Estate
Equities Co. ("Crescent"). As part of the agreements, Morgan agreed to
deliver to Gotham at no cost any of the Company's Common Stock received
by Morgan as the result of its ownership of Crescent shares held in
order to hedge its short call position in Crescent. Gotham and Gotham
II received 58,288 and 621 shares, respectively, of the Common Stock as
a result of these agreements.
Other than the above-mentioned agreement, none of Gotham, Gotham II,
Section H, Karenina, DPB, Mr. Ackman or Mr. Berkowitz is a party to any
contract, arrangement, understanding or relationship with respect to any
securities of the Company, including but not limited to transfer or
voting of any of the securities, finder's fees, joint ventures, loan
or option agreements, puts or calls, guarantees of profits, divisions
of profit or losses or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
The following exhibit is being filed with this Schedule:
Exhibit 1 A written agreement relating to the filing of joint
acquisition statements as required by Rule 13d-1(f)(1) promulgated
under the Securities Exchange Act of 1934, as amended.
<PAGE>
Page 7 of 8 Pages
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.
September 2, 1997
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.
its general partner
By: Karenina Corp.,
a general partner of Section H Partners,
L.P.
By: /s/ William A. Ackman
William A. Ackman
President
GOTHAM PARTNERS II, L.P.
By: Section H Partners, L.P.
its general partner
By: Karenina Corp.,
a general partner of Section H Partners,
L.P.
By: /s/ William A. Ackman
William A. Ackman
President
Page 8 of 8 Pages
EXHIBIT 1
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13d-1(f)1
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13D, as amended, is filed on behalf of each of the undersigned
and that all subsequent amendments to this statement on Schedule 13D, as
amended, shall be filed on behalf of each of the undersigned without the
necessity of filing additional joint acquisition statements. The
undersigned acknowledge that each shall be responsible for the timely
filing of such amendments, and for the completeness and accuracy of the
information concerning him or it contained therein, but shall not be
responsible for the completeness and accuracy of the information
concerning the other, except to the extent that he or it knows or has
reason to believe that such information is inaccurate.
DATED: September 2, 1997
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.
its general partner
By: Karenina Corp.,
a general partner of Section H Partners,
L.P.
By: /s/ William A. Ackman
William A. Ackman
President
GOTHAM PARTNERS II, L.P.
By: Section H Partners, L.P.
its general partner
By: Karenina Corp.,
a general partner of Section H Partners,
L.P.
By: /s/ William A. Ackman
William A. Ackman
President
