CUSIP No. 561063-10-8 Page 1 of 16 pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)
MALAN REALTY INVESTORS, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
561063-10-8
(CUSIP Number)
Peter T. Kross
248 Grosse Pointe Blvd.
Grosse Pointe Farms, MI 48236
(313) 882-8604
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 17, 1999
(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 [ ].
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CUSIP No. 561063-10-8 Page 2 of 16 pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Peter T. Kross
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF, OO
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
410,060 shares
Number of
Shares 8 Shared Voting Power
Beneficially 57,100 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 410,060 shares
10 Shared Dispositive Power
57,100 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
467,160 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.0%
14 Type of Reporting Person
IN
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CUSIP No. 561063-10-8 Page 3 of 16 pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Richard J. Nelson
2 Check The Appropriate Box If a Member of a Group (a)[ ]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
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
7,900 shares
Number of
Shares 8 Shared Voting Power
Beneficially 0 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 7,900 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
7,900 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
0.2%
14 Type of Reporting Person
IN
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CUSIP No. 561063-10-8 Page 4 of 16 pages
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Margaret G. Kross
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: PF
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
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 57,100 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
57,100 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
57,100 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
1.1%
14 Type of Reporting Person
IN
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CUSIP No. 561063-10-8 Page 5 of 16 pages
This is Amendment No. 8 to a Schedule 13D (as earlier amended, the
"Original 13D") filed originally by Peter T. Kross ("Mr. Kross"). This Amendment
is filed jointly by Mr. Kross, Richard J. Nelson ("Mr. Nelson") and Margaret G.
Kross ("Mrs. Kross"). As of this Amendment, Mr. Nelson is no longer a member of
the joint filing group that filed earlier amendments to the Original 13D and
will no longer file reports with respect to his ownership of the Common Stock.
This Schedule 13D relates to the common stock, $.01 par value (the
"Common Stock"), of Malan Realty Investors, Inc. (the "Issuer"). The following
items in the Original 13D are amended to read in their entirety as follows:
Item 4. Purpose of Transaction
The goal of Mr. Kross, Mr. Nelson and Mrs. Kross is to profit from
appreciation in the market price of the Common Stock. Mr. Kross expects to
actively assert shareholder rights, in the manner described below. Mr. Kross
intends to attempt to influence the Board of Directors to consider all possible
strategic alternatives available to the Issuer in order to increase the market
price of the Common Stock.
On August 16, 1999, Mr. Kross met with management of the Issuer. At
that time, Mr. Kross indicated that he would be filing an amendment to the
Original 13D to report a change in his investment intent from that of passive
investor to that outlined herein. Mr. Kross also informed the Issuer that in his
opinion the Issuer should explore different strategies for maximizing
shareholder value, including (a) hiring an investment banker to explore finding
an acquiror for the Company, (b) consider selling properties owned by the Issuer
and (c) consider using cash raised by the sale of properties owned by the Issuer
to repurchase shares of the Issuer's stock. Mr. Kross also stated that he
previously believed and still believes that the Issuer should eliminate its
"poison pill," as it serves to limit and restrict shareholder rights. In
addition, Mr. Kross asked that he or his representative be added immediately to
the Board of Directors of the Issuer. Shortly thereafter, management of the
Issuer responded that the Board of Directors would meet to consider that
request.
Mr. Kross was later informed that the Board of Directors met on August
23, 1999 to consider his request for Board representation but deferred any
discussion until its September meeting. Upon learning of the Board of Directors'
decision to revisit Mr. Kross' request for Board representation, Mr. Kross sent
a letter to a representative of the Issuer's management on September 2, 1999,
requesting an opportunity to meet with the members of the Board of Directors in
person to present his views and respond to any questions they might have. A copy
of this letter is attached as Exhibit 3.
Thereafter, on September 14, 1999, Mr. Kross met with the Board of
Directors to discuss his qualifications for membership on the Issuer's Board of
Directors. Yet, prior to the meeting with Mr. Kross, the Issuer's Board of
Directors held a special meeting on September 7, 1999, in order to take steps to
limit shareholder action by amending the Issuer's by-laws with respect to
special meetings, shareholder proposals and nomination of directors. The amended
by-laws set forth new procedural requirements for shareholder proposals and
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CUSIP No. 561063-10-8 Page 6 of 16 pages
nominations as well as limit the ability to call a special meeting of
shareholders to those shareholders who are record holders of at least fifty-one
percent (as opposed to twenty-five percent under the previous by-laws) of the
Issuer's stock.
After the September 14 meeting of the Board of Directors, management
informed Mr. Kross that the Board of Directors had declined Mr. Kross' request
to be added to the Issuer's Board of Directors. Immediately thereafter, by
letter dated September 16, 1999, Mr. Kross requested the stock ledger,
stockholder list and books and records of the Issuer. A copy of that letter is
attached as Exhibit 4.
By letter dated November 29, 1999, Mr. Kross stated his present
intention to run a full slate of five director nominees for the 2000 annual
meeting of shareholders and formally withdrew his request for appointment to the
Board. A copy of that letter is attached as Exhibit 5. By a second letter dated
November 29, 1999, Mr. Kross requested an updated stock ledger, stockholder list
and books and records of the Issuer. A copy of that letter is attached as
Exhibit 6.
In response to Mr. Kross's letter of November 29, 1999, Mr. Kross
received a letter from Malan's President and CEO indicating that no additional
information would be forthcoming for reasons set forth in the letter. A copy of
that letter is attached as Exhibit 7. As a result of a communication between
counsel for Mr. Kross and counsel for Malan, on or about December 10, 1999,
Malan revised its position agreeing to provide certain information responsive to
Mr. Kross's November 29, 1999 letter demanding certain shareholder information.
At or about this same time period, the President and CEO of Malan sent
a letter dated December 7, 1999 to the Chairman and Chief Executive Officer of
First Union Corp., the parent corporation of Mr. Kross's employer, First Union
Securities, Inc. In that December 7, 1999 letter, Malan's President and CEO
stated, among other things, that "Mr. Kross has taken an extremely hostile
position against Malan and its management." A copy of that letter is attached as
Exhibit 8. On December 17, 1999, the President and CEO of First Union Securities
responded to that letter by indicating, in part, that First Union Securities had
"requested Kross to not seek or accept a Malan Realty Board position, and to not
nominate any other candidate for a Malan Realty Board position." A copy of that
letter is attached as Exhibit 9. The letter went on to add that "he (Kross)
will, however, continue to be free to vote his shares for candidate(s) of his
choice, and, in compliance with any applicable legal and regulatory
requirements, to disclose his voting intentions." Therefore, as a result of
Malan's December 7, 1999 letter and the request by his employer to refrain from
seeking or accepting a Malan Realty Board position for himself or his nominee,
Mr. Kross no longer intends, as of the date of this filing, to nominate a slate
of directors for Malan's Board. Mr. Kross continues to hold the views previously
expressed in 13D filings and correspondence attached thereto concerning Malan's
Board of Directors and Management and the strategic alternatives which they
should be considering to maximize shareholder value. Therefore, in the event
that any other shareholder seeks to nominate a slate of directors for Malan's
Board in connection with the upcoming annual meeting of shareholders, Mr. Kross
will carefully evaluate such a slate
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CUSIP No. 561063-10-8 Page 7 of 16 pages
and, if supportive of the strategy previously outlined by Mr. Kross, Mr. Kross
will likely vote his shares in their favor at the annual shareholder meeting.
In addition to the activities outlined in the previous paragraph, Mr.
Kross intends to continue to evaluate the Issuer and its business prospects and
to consult with management of the Issuer, other shareholders of the Common Stock
and other persons to further the aforementioned alternatives and strategies.
Additionally, Mr. Kross intends to continue to explore his options regarding
exercising his rights as a shareholder. Mr. Kross, Mr. Nelson and/or Mrs. Kross
may make further purchases of shares of the Common Stock or may dispose of any
or all of their shares of the Common Stock at any time. At present, and except
as disclosed herein, none of Mr. Kross, Mr. Nelson or Mrs. Kross has any
specific plans or proposals that relate to, or could result in, any of the
matters referred to in paragraphs (a) through (j), inclusive, of Item 4 of
Schedule 13D. Mr. Kross and Mrs. Kross intend to continue to explore the options
available to them. Mr. Kross and Mrs. Kross may, at any time or from time to
time, review or reconsider their position with respect to the Issuer and may
formulate plans with respect to matters referred to in Item 4 of Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Mr. Kross is no longer retaining Mr. Nelson to advise him with regard
to Mr. Kross's activities regarding the Issuer and the Common Stock, and Mr.
Nelson has no other contracts, arrangements, understandings or relationships
with Mr. Kross or Mrs. Kross with respect to the securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
No. Description
--- -----------
1 Mr. Kross's margin account agreement with Prescott, Ball &
Turben, Inc., the predecessor to Everen.*
2 Joint Filing Agreement.*
3 Letter dated September 2, 1999 from Mr. Kross to Mr. Anthony
S. Gramer, President of the Issuer.*
4 Letter dated September 16, 1999 from Mr. Kross to Mr.
Anthony S. Gramer, President of the Issuer.*
5 Letter dated November 29, 1999 from Mr. Kross to Mr. Anthony
S. Gramer, President of the Issuer.*
6 Letter dated November 29, 1999 from Mr. Kross to Mr. Anthony
S. Gramer, President of the Issuer.*
7 Letter dated November 29, 1999 from Mr. Anthony S. Gramer,
President of the Issuer, to Mr. Kross.
8 Letter dated December 7, 1999 from Mr. Anthony S. Gramer,
President of the Issuer, to Mr. Edward E. Crutchfield,
Chairman and Chief Executive Officer of First Union
Corporation.
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CUSIP No. 561063-10-8 Page 8 of 16 pages
9 Letter dated December 17, 1999, from Mr. Daniel J. Ludeman,
President and CEO of First Union Corporation, to Mr. Anthony
S. Gramer, President of the Issuer.
*Filed as an exhibit to the Original 13D.
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CUSIP No. 561063-10-8 Page 9 of 16 pages
SIGNATURES
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.
Date: December 20, 1999
/s/ Richard J. Nelson
Richard J. Nelson
/s/ Peter T. Kross
Peter T. Kross
/s/ Margaret G. Kross
Margaret G. Kross
CUSIP No. 561063-10-8 Page 10 of 16 pages
EXHIBIT 7
[ON MALAN REALTY INVESTORS LETTERHEAD]
December 3, 1999
Mr. Peter T. Kross
c/o Phillip M. Goldberg, Esq.
Foley & Lardner
One IBM Plaza
330 N. Wabash Avenue
Chicago, IL 60611-3608
Dear Mr. Kross:
I am writing in response to your letter dated November 29, 1999
requesting an opportunity to inspect and/or receive copies of certain records of
Malan Realty Investors, Inc. (the "Company"). Set forth below is the Company's
response to each of the requests enumerated in such letter. For ease of
reference, I have referred to the lettered paragraphs in your letter.
1. In response to your request in item a, in my response on
September 23, 1999 to your earlier request, I enclosed
copies of the most recent reports prepared by each of The
Bank of New York and The Depository Trust Corporation
listing stockholders of record of the Company as of the
dates indicated thereon. The Company has not generated any
update to that list since it was provided.
2. In response to your request in item b, the list provided in
response to your earlier request contains such information
in the Company's possession relating to the breakdown of all
brokerage and financial institutions holding shares for
their customers in street name and a breakdown of holdings
which appear on the corporate stock ledger under the names
of any central depository system.
3. With respect to your request in item c (the "NOBO List") and
as indicated in my earlier response on September 23rd, the
Company does not have any such list.
4. With respect to your request in item d, the Company has
already provided a list of the Company's record owners.
Employee records are
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CUSIP No. 561063-10-8 Page 11 of 16 pages
confidential and such information is not directly connected
with the stated purposes of your request.
5. With respect to your requests in items e through i, the
Company does not have such proxy lists.
6. With respect to your request in item j, the minutes or other
records of meetings of the Board of Directors contain
confidential information and are not directly connected with
the stated purposes of your request.
7. With respect to your request in item k, in my response on
September 23d to our earlier request, I enclosed a copy of
the bylaws of the Company. The bylaws have not been amended
since then. The remaining documents, to the extent any
exist, are not directly connected with the stated purposes
of your request.
The Company has no obligation to continually update you with further
information, and therefore, it will not comply with your demand for
"modifications of, additions to or deletions from any and all information
referenced above." I you wish to obtain such information in the future, you may
request it as provided by law. Should you have any further questions or wish to
discuss these matters further, please contact the Company's attorneys, Kenneth
H. Gold or Marjorie Harris Loeb at Miro Weiner & Kramer, at 248/646-2400.
Sincerely,
/s/ A. S. Gramer
A. S. Gramer
President and CEO
ASG:ep
xc: Kenneth Gold, Esq.
Marjorie Harris Loeb, Esq.
CUSIP No. 561063-10-8 Page 12 of 16 pages
EXHIBIT 8
[ON MALAN REALTY INVESTORS LETTERHEAD]
December 7, 1999
Mr. Edward E. Crutchfield
Chairman and Chief Executive Officer
First Union Corporation
One First Union Center
Charlotte, North Carolina 28288
Dear Mr. Crutchfield:
As President and Chief Executive Officer of Malan Realty Investors, I
am writing to bring to your attention actions by a First Union Securities broker
which are inappropriate, wrongful and potentially damaging to my company. Malan
and Wheat First Securities have enjoyed a close banking relationship spanning
more than five years. We value the relationship we have had with Wheat First
who, as one of our lead underwriters, took Malan public. Since then, Wheat First
has provided research coverage, met with us in confidence to offer its services,
and has received confidential information concerning Malan to help formulate a
plan to assist us in evaluating various strategic planning and corporate finance
alternatives.
Given our relationship, you can imagine my surprise and dismay when I
learned that Peter Kross, a Senior Vice President working in your Gross Pointe,
Michigan office, together with certain affiliates, had purchased approximately
10% of Malan's outstanding common stock. Recently, Mr. Kross has taken an
extremely hostile position against Malan and its management. He stated that, in
essence, the company and/or its assets should be auctioned off. Then, although
Mr. Kross has absolutely no experience in managing or operating a real estate
investment trust or real estate in general, he demanded a seat on the company's
Board of Directors. Upon Malan's refusal to grant him a Board position, Mr.
Kross issued a press release stating that he intends to run a full slate of
candidates. Based on our long-standing relationship, we are appalled that one of
your employees is taking such hostile actions toward us.
As an employee of a firm with whom we have maintained a close working
relationship, we deem Mr. Kross' conduct to be inappropriate and wrongful. In
addition, based on Mr. Kross' comments, we are extremely concerned that he may
be utilizing First Union's name and resources to improperly obtain information
about Malan, thereby damaging our reputation and relationship. Such actions
could cause Malan and its shareholder tremendous injury.
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CUSIP No. 561063-10-8 Page 13 of 16 pages
Accordingly, we request that you review the actions of your employee
and those of your subsidiary to insure they are harmonious with the relationship
we have developed over the years and to be certain they are not making improper
use of your name, resources, relationships, contacts and information. We also
ask that you continue to protect our confidential information.
After you have investigated these matters, please call met to discuss
your findings.
Sincerely,
/s/ A. S. Gramer
A. S. Gramer
President and CEO
ASG:ep
xc: Daniel J. Ludeman, President & CEO, Brokerage Group
John R. Georgias, President and COO
Charles L. Coltman, Vice Chaiman
G. Kennedy Thompson, Vice Chairman
B. J. Walker, Vice Chairman
Robert T. Atwood, Executive Vice President and CFO
Marion A. Cowell, Jr., Executive V. President, Secretary and General Counsel
Board of Directors:
Edward E. Barr
G. Alex Bernhardt, Sr.
W. Waldo Bradley
Robert J. Brown
A. Dano Davis
Norwood H. Davis, Jr.
R. Stuart Dickson
B. F. Dolan
Roddey Dowd, Sr.
Arthur M. Goldberg
William H. Goodwin, Jr.
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CUSIP No. 561063-10-8 Page 14 of 16 pages
Frank M. Henry
Ernest E. Jones
Terrence A. Larson
Herbert Lotman
Radford D. Lovett
Mackey J. McDonald
Malcolm S. McDonald
Patricia A. McFate
Joseph Neubauer
Randolph N. Reynolds
James M. Seabrook
Ruth G. Shaw
Charles M. Shelton, Sr.
Lanty L. Smith
Raymond W. Smith
CUSIP No. 561063-10-8 Page 15 of 16 pages
EXHIBIT 9
[ON FIRST UNION LETTERHEAD]
December 17, 1999
Mr. A. S. Gramer
President and CEO
Malan Realty Investors, inc.
30200 Telegraph Road
Suite 105
Bingham Farms, Michigan 48025-4503
Dear Mr. Gramer:
I am responding to your December 7, 1999 letter to Edward E. Crutchfield,
Chairman and Chief Executive Office of First Union Corporation, concerning the
activities of Peter Kross, Senior Vice President of First Union Securities in
Grosse Pointe, Michigan, as they relate to his holdings in the common stock of
Malan Realty Investors. As you may be aware, First Union Corporation closed
their acquisition of EVEREN Capital Corporation October 1, 1999 which included
the Gross Pointe office. In short, you have expressed concerns about Kross'
recently disclosed intention to run a full slate of candidates for the Board of
Directors of Malan. Your letter also references other statements attributed to
Kross which you view as both inappropriate and hostile to Malan. You have asked
that we review Kross' activities and any confidential information pertaining to
Malan which we may have as a result of prior relationships with Wheat First
Securities, and respond to you concerning the results of our review.
Your request has receive serious and quick attention, and I am able to provide a
summary of our findings and actions we have initiated. First Union Securities
was aware that Kross had accumulated a significant position in Malan. To our
knowledge, he did not violate any applicable law or firm policy in doing so. He
had requested and received approval to serve on Malan's board. The Firm
understood his request was for the purpose of obtaining Board representation as
an individual shareholder.
We have determined that Kross did not issue any press release nor has he spoken
to the press concerning Malan, his holdings, or his intentions with respect to
them. We believe the recent media comments are based on the recent Form 13D
amendment filed by Kross.
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CUSIP No. 561063-10-8 Page 16 of 16 pages
You can be assured that any confidential information which we may have because
of Malan Realty's past relationship with our Wheat First predecessor was not and
is not available to Kross.
We believe Kross has certain shareholder rights which we cannot and will not
deny him. Nevertheless, we have today requested Kross to not seek or accept a
Malan Realty Board position, and to not nominate any other candidate for a Malan
Realty Board position. He will, however, continue to be free to vote his shares
for candidate(s) of his choice, and, in compliance with any applicable legal and
regulatory requirements, to disclose his voting intentions.
Thank you for bringing this matter to our attention, and as you can see we have
made timely and appropriate responses to the issues you have raised.
Sincerely,
/s/ Daniel J. Ludeman
Daniel J. Ludeman
President and CEO
DJL/cws
Cc: Edward E. Crutchfield
Chairman and Chief Executive Officer
bcc: John R. Georgius
G. Kennedy Thompson
B. J. Walker
Robert T. Atwood
Mark C. Treanor
R. Gerald Baker
T. Howard Clarke
