<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 1)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
TOREADOR ROYALTY CORPORATION
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.15625 PER SHARE
(Title of Class of Securities)
891041105
(CUSIP Number)
JANICE V. SHARRY, ESQ.
HAYNES AND BOONE, LLP
901 MAIN STREET, SUITE 3100
DALLAS, TEXAS 75202
(214) 651-5562
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
JULY 31, 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: [ ]
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 891041105
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lee Global Energy Fund, L.P.
75-2569264
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(A) [ ]
(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
Texas
(7) SOLE VOTING POWER
NUMBER OF 508,000
SHARES
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 0
EACH
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH 508,000
(10) SHARED DISPOSITIVE POWER
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
508,000
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
(14) TYPE OF REPORTING PERSON
PN
SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
This Amendment No. 1 to Schedule 13D (this "Amendment") amends and
supplements the Schedule 13D filed by Lee Global Energy Fund, L.P. (the
"Fund"), by furnishing the information set forth below. Unless set forth
below, all previous Items are unchanged.
Item 4. Purpose of Transaction.
Item 4 is hereby amended in its entirety as follows:
The Fund initially acquired the Shares in the ordinary course of
business for investment purposes. As a significant investor in the Company,
the Fund has engaged, and may continue to engage, in communications with one or
more of the Company's stockholders and/or one or more of the Company's officers
or members of the Company's Board of Directors regarding the Company,
including, without limitation, its operations. In the course of its
communications, the Fund has become aware of certain matters of concern
relating to the Company. As a result, on July 31, 1997, the Fund sent to the
Board of Directors of the Company the letter attached hereto as Exhibit 7.1 and
incorporated herein by reference.
The Fund may at any time and from time to time (i) acquire or
dispose of the Shares, (ii) review or reconsider its position, (iii) change its
purpose and/or (iv) formulate additional plans or proposals specified in
clauses (a) through (j) of Item 4 of Schedule 13D.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended in its entirety as follows:
7.1 Letter dated July 31, 1997, from the Fund to the Company's
Board of Directors.
<PAGE> 4
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
LEE GLOBAL ENERGY FUND, L.P.
By: Gralee Partners, L.P., its general partner
By: Gralee Capital Corp., its general partner
By: /s/ G. Thomas Graves III
-------------------------------
Name: G. Thomas Graves III
-----------------------------
Title: President
----------------------------
August 5, 1997
<PAGE> 5
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
7.1 Letter dated July 31, 1997, from the Fund to the Company's
Board of Directors.
<PAGE> 1
EXHIBIT 7.1
July 31, 1997
VIA FEDERAL EXPRESS
Board of Directors
Toreador Royalty Corporation
530 Preston Commons West
8117 Preston Road
Dallas, Texas 75225
Dear Sirs:
We have recently been advised that the Board of Directors of Toreador Royalty
Corporation ("TRC") has decided to sell the company using a data room-auction
format. We also understand that the Board has agreed among themselves that the
only acceptable tender will be one that is cash or a "very liquid security."
As the holder of 508,000 shares of TRC common stock, we are compelled to write
to you in our capacity as the single largest holder of the Company's
securities. Our position with regard to this potential transaction is as
follows:
SALE OR REORGANIZATION
We agree with the Board that some type of sale or reorganization is appropriate
at this time. While the Company was making significant progress prior to Mr.
Peter Vig's departure, it is now without management, simply adrift,
anticipating some exploration event that might or might not change its fortune.
We have been told that the Company has no plans to replace Mr. Vig pending the
result of two ongoing seismic surveys and the outcome of exploratory drilling.
To let the Company sit idle while awaiting the results of events beyond its
control is not in the best interest of its shareholders. However, if this is
the position of the Board of Directors, then making plans for a sale or
reorganization is a logical step.
AUCTION-FORMAT SALE
If there is to be a sale, we will not support such an undertaking if the
consideration consists primarily of "highly liquid stock" which promises no
significant capital appreciation for the stockholders and which may be subject
to restrictions on disposal which limit its purported liquidity.
By trading for "highly liquid stock" with an inflated market price, TRC negates
the premium one expects to receive through the auction process. Only with a
pure cash trade can the Company possibly receive the premium it is seeking in
the auction process.
Furthermore, and as noted above, from our experience, we would note that few
deals are made without some restriction on the disposal of shares. This
impediment might not arise as a "deal point", but it often shows up as a
"closing point."
<PAGE> 2
In conclusion, let me reaffirm that, in the event of a proposed auction-format
sale, we will vote our shares to accept only a cash price. Save and except some
extraordinary event that might cause an "Exxon" to table their shares as
tender, all stockholders are likely to be ill served by taking stock,
especially in a market that is due for and will have a substantial correction.
ALTERNATIVE TRANSACTIONS
We are also not in agreement that the only appropriate form of reorganization
is a sale. We strongly believe that the Board must consider other alternatives
which will likely result in a greater long-term value for the shareholders.
These alternatives include, but are not limited to, a two-step sale of the
Company or a possible combination with another operating entity that would add
management, income and assets to the existing Company. In the present market
environment, this may not be the time to sell and the right combination with
another entity may provide a significant opportunity for capital appreciation
for the stockholders in the continuing Company or surviving entity. We would
also like the opportunity to discuss a possible transaction or combination with
us, which would again potentially offer stockholders a greater value than an
auction-format sale of the Company.
We are ready to meet with the Board to discuss a number of alternative
transactions for the company, and are willing to assist the Board in
structuring a sale or combination, which provides the greatest stockholder
value. We feel that given the Board's responsibilities under the law, it is in
the Board's best interest for you to meet with us as soon as possible. We are
available at your convenience.
CONCLUSION
While we agree that the Company and its Board should move expeditiously to seek
some type of reorganization or disposition, we believe that it is premature for
the Board to consider only an auction-format sale. It is in the best interest
of the stockholders for the Board to consider our proposals for alternative
transactions and to allow sufficient time for a more profitable transaction to
be structured.
We have sent this letter to you with the belief that you will act in good faith
and will carry out your fiduciary duties to all of the stockholders. We,
therefore, trust that the Board will recognize the benefits of considering
other alternative transaction and will accept promptly our offer to discuss
these alternatives and to provide assistance with structuring a transaction,
which maximizes stockholder value. We further believe that a rejection of this
offer would be a material fact which should be disclosed to the stockholders
for their consideration in approving any sale or reorganization of the Company
recommended by the Board.
We want to move forward on a timely basis and therefore, we look forward to
meeting with you at your convenience.
Very truly yours,
GRALEE CAPITAL CORP.
G. Thomas Graves III
President
GTG:gc
