<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. .....)
AMERICAN REALTY INVESTORS, INC.
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(Name of Issuer)
Common Stock, $0.01 par value
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(Title of Class of Securities)
029174-10-9
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(CUSIP Number)
Robert A. Waldman
10670 N. Central Expressway, Suite 600
Dallas, Texas 75231
(214) 692-4758
(214) 750-0779 (Facsimile)
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 3, 2000
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(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 Rules 13d-1(b)(3) or (4), check the following box [ ].
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).
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CUSIP No. 029174-10-9
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
Basic Capital Management, Inc., FEI No. 75-2261065
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
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3) SEC Use Only
--------------------------------------------------------------------------------
OO
4) Source of Funds (See Instructions)
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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Nevada
6) Citizenship or Place of Organization
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6,052,957
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With 6,052,957
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
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6,052,957
11) Aggregate Amount Beneficially Owned by Each Reporting Person
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
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50.9%
13) Percent of Class Represented by Amount in Row (11)
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CO
14) Type of Reporting Person (See Instructions)
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CUSIP No. 029174-10-9
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1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
The Gene E. Phillips Children's Trust, I.D. No. 13-6599759
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
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3) SEC Use Only
--------------------------------------------------------------------------------
OO
4) Source of Funds (See Instructions)
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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Texas
6) Citizenship or Place of Organization
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27,602
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With 27,602
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
27,602
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
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0.2%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
OO
14) Type of Reporting Person (See Instructions)
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CUSIP No. 029174-10-9
1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons
(entities only)
Transcontinental Realty Investors, Inc., FEI No. 94-656582
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
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3) SEC Use Only
--------------------------------------------------------------------------------
OO
4) Source of Funds (See Instructions)
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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Nevada
6) Citizenship or Place of Organization
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746,972
7) Sole Voting Power
Number of
Shares Bene- --------------------------------------------------------------
ficially -0-
Owned by 8) Shared Voting Power
Each Report-
ing Person --------------------------------------------------------------
With 746,972
9) Sole Dispositive Power
--------------------------------------------------------------
-0-
10) Shared Dispositive Power
--------------------------------------------------------------------------------
746,972
11) Aggregate Amount Beneficially Owned by Each Reporting Person
--------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
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6.3%
13) Percent of Class Represented by Amount in Row (11)
--------------------------------------------------------------------------------
CO
14) Type of Reporting Person (See Instructions)
<PAGE> 5
ITEM 1. SECURITY AND ISSUER
This initial Statement on Schedule 13D (the "Statement") relates to
shares of Common Stock, par value $0.01 per share (the "Shares") of American
Realty Investors, Inc., a Nevada corporation (the "Issuer" or "ARL"), which has
its principal executive offices located 10670 N. Central Expressway, Suite 600,
Dallas, Texas 75231. The CUSIP number of the Shares is 029174-10-9.
The Issuer is a Nevada corporation formed pursuant to the terms of that
certain Agreement and Plan of Reorganization dated as of November 3, 1999, among
ARL, National Realty, L.P., a Delaware limited partnership ("NRLP") and American
Realty Trust, Inc., a Georgia corporation ("ART"). At Special Meetings of the
stockholders of ART and the Unitholders of NRLP, each held on March 21, 2000,
the security holders of each entity approved a proposal for a tax-free
reorganization and combination of the ownership of the two entities by
consolidation with and into ARL. The consolidation was effectuated by a closing
on August 3, 2000, of separate mergers of ART and NRLP with and into
wholly-owned subsidiaries of ARL with the result that ART and NRLP became
wholly-owned subsidiaries of ARL with the securities of ART and NRLP converted
into securities of ARL. At such closing, effective August 3, 2000, ART
stockholders received 0.91 shares of ARL Common Stock in exchange for each share
of ART Common Stock then held, and the NRLP Unitholders received one share of
ARL Common Stock for each Unit held. ART and NRLP each continue business
operations as wholly-owned subsidiaries of ARL with no change in management of
the combined entities or their properties. With the consummation of the
transaction, the "Reporting Persons" (as defined in Item 2 below) became the
holders of the Shares specified in Item 5 below.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) and (f) This Statement is filed on behalf of Basic Capital
Management, Inc., a Nevada corporation ("BCM"), the Gene E. Phillips Children's
Trust, a trust formed under the laws of the state of Texas (the "GEP Trust"),
and Transcontinental Realty Investors, Inc., a Nevada corporation ("TCI"), each
of which has its principal executive offices located at 10670 N. Central
Expressway, Suite 600, Dallas, Teas 75235. All of BCM, NOLP, GEP Trust and TCI
are collectively referred to as the "Reporting Persons." The Reporting Persons
may be deemed to constitute a "person" within the meaning of Section 13(d) of
the Securities Exchange Act of 1934, as amended, because BCM is beneficially
owned by a trust established for the benefit of Gene E. Phillips' children and
the executive officers of TCI are also executive officers of BCM. Mr. Phillips'
son, Ryan T. Phillips, serves as a director of BCM and is a beneficiary of the
GEP Trust. The executive officers of ARL are also executive officers of BCM and
TCI. BCM also serves as the contractual advisor to ARL and TCI.
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I. BCM is a corporation organized and existing under the laws of the
State of Nevada. BCM's principal business activity is the provision of advisory
services for real estate and investment trusts and other real estate entities.
The name, business address and capacity with BCM of each of the executive
officers or directors of BCM are set forth on Schedule 1 attached hereto. Each
of the individuals listed on Schedule 1 is a citizen of the United States of
America. BCM is owned by Realty Advisors, Inc., a Nevada corporation. Realty
Advisors, Inc. is owned by a trust established for the benefit of the children
of Gene E. Phillips.
II. The GEP Trust is a trust formed under the laws of the state of
Texas for the benefit of the children of Mr. Gene E. Phillips. The trustee of
the GEP Trust is Donald W. Phillips, brother of Gene E. Phillips.
Mr. Gene E. Phillips' business address is 10670 N. Central Expressway,
Suite 600, Dallas, Texas 75231. Mr. Gene E. Phillips' present principal
occupation is Chief Executive Officer and President of Syntek West, Inc. Mr.
Gene E. Phillips is a citizen of the United States of America.
Mr. Donald W. Phillips' business address is 10670 N. Central
Expressway, Suite 515, Dallas, Texas 75231. Mr. Donald W. Phillips' present
principal occupation is President and owner of Big D Oil Field Equipment Sales.
Mr. Donald W. Phillips is a citizen of the United States of America.
III. TCI is a real estate investment company organized and existing
under the laws of the state of Nevada. TCI's principal business activity is
investment in real estate. The name, business address and capacity with TCI of
each of the executive officers or directors of TCI are set forth on Schedule 2
attached hereto. Each of the individuals listed on Schedule 2 is a citizen of
the United States of America.
(d) During the last five years, none of BCM, GEP Trust or TCI, nor any
of their respective executive officers or directors has been convicted in a
criminal proceeding (excluding traffic violations and/or similar misdemeanors).
(e) During the last five years, none of BCM, GEP Trust or TCI, nor any
of their respective executive officers or directors has been a party to any
civil proceeding of a judicial or administrative body of competent jurisdiction
which resulted in 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.
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
No funds were required of the Reporting Persons to acquire the Shares
pursuant to the consolidation transaction described in Item 1 above.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Persons acquired the Shares described in Item 5 below in
connection with the consolidation transaction described in Item 1 above. The
Reporting Persons have no present plans or proposals which would result in the
Reporting Persons seeking to acquire the entire equity interest in the Issuer.
Except as set forth in this Statement, the Reporting Persons have no present
plans or proposals which relate to or would result in:
(a) the acquisition by any person of any additional securities
of the Issuer or the disposition of securities of the Issuer except
that the Reporting Person may, if the appropriate opportunity exists,
acquire additional securities of the Issuer or dispose of any portion
or all of the securities of the Issuer presently owned; or
(b) an extraordinary corporate transaction such as a merger,
reorganization or liquidation involving the Issuer or any of its
subsidiaries;
(c) a sale or transfer of a materially amount of assets of the
Issuer or any of its subsidiaries; or
(d) a change in the present Board of Directors or management
of the Issuer, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the Board; or
(e) any materially change in the present capitalization or
dividend policy of the Issuer; or
(f) any other material change in the Issuer's business or
corporate structure; or
(g) changes in the Issuer's Charter, Bylaws or instruments
corresponding thereto, or other actions which may impede the
acquisition of control of the Issuer by any person; or
(h) causing a class of securities of the Issuer to be
de-listed from any national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; or
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(i) a class of equity securities of the Issuer becoming
eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934; or
(j) any actions similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) According to the latest information available from the Issuer, as
of August 3, 2000, the total number of issued and outstanding Shares was
11,890,125 Shares. As of August 18, 2000, after giving effect to the transaction
described in (c) below and Item 1 above, the Reporting Persons own and hold
directly and beneficially the following Shares:
<TABLE>
<CAPTION>
No. of Shares Approximate
Name Owned Directly % of Class
---- -------------- -----------
<S> <C> <C>
BCM 6,052,957 50.9%
GEP Trust 27,602 0.2%
TCI 746,972 6.3%
--------- ----
TOTALS 6,827,531 57.4%
========= ====
</TABLE>
Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934 (the
"Exchange Act"), each of the directors of BCM may be deemed to beneficially own
the number of Shares owned by BCM described above; each of the directors of TCI
may be deemed to beneficially own the Shares held directly by TCI; Ryan T.
Phillips as a beneficiary of the GEP Trust may be deemed to beneficially own the
Shares held directly by the GEP Trust. Those individuals and the number of
Shares deemed beneficially owned pursuant to Rule 13d-3, and the approximate
percent of the class, as well as the relationship, are set forth in the
following table:
<TABLE>
<CAPTION>
No. of Shares % of
Name of Director Entity Beneficially Owned Class
---------------- ------ ------------------ -----
<S> <C> <C> <C>
Ryan T. Phillips BCM and 6,080,559 51.5%
GEP Trust
Mickey Ned Phillips BCM 6,052,957 50.9%
Ted P. Stokely TCI 746,972 6.3%
R. Douglas Leonhard TCI 746,972 6.3%
Murray Shaw TCI 746,972 6.3%
Martin L. White TCI 746,972 6.3%
Edward G. Zampa TCI 746,972 6.3%
--------- ----
Total Units beneficially 6,827,531 57.4%
owned by Reporting Persons ========= ====
and individuals listed
above
</TABLE>
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<PAGE> 9
(b) Each of the directors of BCM share voting and dispositive power
over the 6,052,957 Shares held by BCM. Each of the directors of TCI have shared
voting and dispositive power over the 746,972 Shares held by TCI. The Trustee of
the GEP Trust has complete voting and dispository power over the 27,602 Shares
held by the GEP Trust.
(c) During the sixty calendar days ended August 18, 2000, except for
the receipt of a total of 6,827,531 Shares of ARL Common Stock in conversion of
the shares of ART Common Stock and Units of NRLP held by the Reporting Persons
prior to the consummation of the transaction described in Item 1 above, none of
BCM, TCI or GEP Trust nor their respective executive officers or directors or
Trustees have engaged in any transaction in the Shares during the past sixty
days immediately prior to the date of this Statement. See also Item 6 below.
(d) No person other than the Reporting Persons or their respective
Board of Directors or Trustees is known to have the right to receive or the
power to direct receipt of dividends from, or proceeds of sale of, the Shares of
ARL Common Stock held by BCM, TCI and the GEP Trust.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
BCM has pledged 161,070 Shares to Foothill Capital, pledged 737,100
Shares to Preferred Bank, and pledged 36,600 Shares to United Pacific Bank
pursuant to loan agreements with such lenders. Prior to the conversion, each of
such lenders held Shares of Common Stock of ART by pledge.
BCM has also pledged 957,979 Shares to Florida Community Bank as an
accommodation pledge in connection with a loan from such bank to ART. BCM has
also pledged 54,600 Shares to First Enterprise Bank as an accommodation pledge
on behalf of David Morgan for a loan from such bank to David Morgan.
All 746,972 Shares owned by TCI may be deemed to be "collateral" for
borrowings pursuant to margin or other account arrangements with Morgan Stanley
Dean Witter relating to a brokerage account of TCI, which is a stock margin
account maintained by TCI with such broker pursuant to customary brokerage
account arrangements. Such standard arrangements involve margin securities of up
to a specified percentage of the market value of the Shares, as well as other
securities in such account, bear interest at varying rates and contain only
standard default and similar provisions, the operation of which should not give
any other person immediate voting power or investment power over the Shares.
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All 27,602 Shares owned by the GEP Trust may be deemed to be
"collateral" for borrowings pursuant to margin or other account arrangements
with Morgan Stanley Dean Witter relating to a brokerage account of the GEP
Trust, which is a stock margin account maintained by the GEP Trust with such
broker pursuant to customary brokerage account arrangements. Such standard
arrangements involve margin securities of up to a specified percentage of the
market value of the Shares, as well as other securities in such account, bear
interest at varying rates and contain only standard default and similar
provisions, the operation of which should not give any other person immediate
voting power or investment power over the Shares.
Except as set forth in the preceding paragraph, the Reporting Persons
do not have any contracts, arrangements, understandings or relationships (legal
or otherwise) with any person with respect to any securities of the Issuer,
including but not limited to, transfer or voting of any of the securities,
finders' fees, joint ventures, loan or option arrangements, puts or calls,
guaranties of profits, divisions of profits, divisions of profits or loss, or
the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
None.
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SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this Statement on
Schedule 13D is true, complete and correct.
Dated: August 24, 2000.
BASIC CAPITAL MANAGEMENT, INC.
By: /s/ Karl L. Blaha
--------------------------------------
Karl L. Blaha, President
TRANSCONTINENTAL REALTY INVESTORS,
INC.
By: /s/ Karl L. Blaha
--------------------------------------
Karl L. Blaha, President
GENE E. PHILLIPS CHILDREN'S TRUST
By: /s/ Donald W. Phillips
--------------------------------------
Donald W. Phillips, Trustee
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<PAGE> 12
SCHEDULE 1
EXECUTIVE OFFICERS AND DIRECTORS OF
BASIC CAPITAL MANAGEMENT, INC.
<TABLE>
<CAPTION>
NAME AND CAPACITY WITH PRESENT BUSINESS IN
BASIC CAPITAL BUSINESS ADDRESS WHICH EMPLOYMENT IS
MANAGEMENT, INC. CONDUCTED
<S> <C> <C>
Ryan T. Phillips, 10670 N. Central Expwy. President, Signature
Director Sixth Floor Asset Management, Inc.
Dallas, Texas 75231
Mickey Ned Phillips, 264 Rolling Hills Circle President, Ned Phillips
Director Gaffney, SC 29340 Construction Company
Karl L. Blaha, President 10670 N. Central Expwy. President, Basic Capital
Suite 300 Management, Inc.
Dallas, Texas 75231
Mark W. Branigan, 10670 N. Central Expwy. Executive Vice
Executive Vice President Suite 600 President, Basic Capital
and Chief Financial Dallas, Texas 75231 Management, Inc.
Officer
Clifford C. Towns, Jr., 10670 N. Central Expwy. Executive Vice
Executive Vice President Suite 600 President, Basic Capital
- Finance Dallas, Texas 75231 Management, Inc.
Bruce A. Endendyk, 10670 N. Central Expwy. Executive Vice
Executive Vice President Suite 600 President, Basic Capital
Dallas, Texas 75231 Management, Inc.
David W. Starowicz, 10670 N. Central Expwy. Executive Vice
Executive Vice President Suite 600 President, Basic Capital
- Commercial Asset Dallas, Texas 75231 Management, Inc.
Management
Steven K. Johnson, 10670 N. Central Expwy. Executive Vice
Executive Vice President Suite 600 President, Basic Capital
- Residential Asset Dallas, Texas 75231 Management, Inc.
Management
Cooper B. Stuart, 10670 N. Central Expwy. Executive Vice
Executive Vice President Suite 600 President, Basic Capital
Dallas, Texas 75231 Management, Inc.
Robert A. Waldman, 10670 N. Central Expwy. Senior Vice President,
Senior Vice President, Suite 600 General Counsel and
Secretary and General Dallas, Texas 75231 Secretary, Basic Capital
Counsel Management, Inc.
</TABLE>
<PAGE> 13
SCHEDULE 2
EXECUTIVE OFFICERS AND DIRECTORS OF
TRANSCONTINENTAL REALTY INVESTORS, INC.
<TABLE>
<CAPTION>
NAME AND CAPACITY WITH
TRANSCONTINENTAL REALTY PRESENT BUSINESS IN WHICH
INVESTORS, INC. BUSINESS ADDRESS EMPLOYMENT IS CONDUCTED
<S> <C> <C>
Ted P. Stokely, Chairman 10670 N. Central General Manager, Minority
of the Board of Directors Expressway and Elderly Housing
Suite 515 Assistance Foundation,
Dallas, Texas 75231 Inc.
R. Douglas Leonhard, 13230 Hunters Lark Retired.
Director San Antonio, Texas 78230
Murray Shaw, Director 3713 Ebony Hollow Pass Chairman of the Board of
Austin, Texas 78745 Stephen F. Austin
University
Matin L. White, Director 8051 Coach Drive Chairman of the Board and
Oakland, California 94605 Chief Executive Officer of
Community Based
Developers, Inc.
Edward G. Zampa, Director No. Fifty Osgood Place General Partner, Edward G.
Suite 110 Zampa & Company
San Francisco, California
94133
Karl L. Blaha, President 10670 N. Central President, Basic Capital
Expressway Management, Inc.
Suite 600
Dallas, Texas 75231
Mark W. Branigan, 10670 N. Central Executive Vice President,
Executive Vice President Expressway Basic Capital Management,
and Chief Financial Suite 600 Inc.
Officer Dallas, Texas 75231
Bruce A. Endendyk, 10670 N. Central Executive Vice President,
Executive Vice President Expressway Basic Capital Management,
Suite 600 Inc.
Dallas, Texas 75231
David W. Starowicz, 10670 N. Central Executive Vice President,
Executive Vice President - Expressway Basic Capital Management,
Commercial Asset Suite 600 Inc.
Management Dallas, Texas 75231
Steven K. Johnson, 10670 N. Central Executive Vice President,
Executive Vice President - Expressway Basic Capital Management,
Residential Asset Suite 600 Inc.
Management Dallas, Texas 75231
Robert A. Waldman, Senior 10670 N. Central Senior Vice President,
Vice President, Secretary Expressway General Counsel and
and General Counsel Suite 600 Secretary, Basic Capital
Dallas, Texas 75231 Management, Inc.
</TABLE>
