formsc13d.htm

0001140361-07-023473.txt : 20071205 0001140361-07-023473.hdr.sgml : 20071205 20071204173136 ACCESSION NUMBER: 0001140361-07-023473 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20071205 DATE AS OF CHANGE: 20071204 GROUP MEMBERS: HARVEY HANERFELD GROUP MEMBERS: ROGER FELDMAN GROUP MEMBERS: WEST CREEK CAPITAL, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CAPITAL SENIOR LIVING CORP CENTRAL INDEX KEY: 0001043000 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-NURSING & PERSONAL CARE FACILITIES [8050] IRS NUMBER: 752678809 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-53101 FILM NUMBER: 071284717 BUSINESS ADDRESS: STREET 1: 14160 DALLAS PARKWAY STREET 2: SUITE 300 CITY: DALLAS STATE: TX ZIP: 75254 BUSINESS PHONE: 9727705600 MAIL ADDRESS: STREET 1: 14160 DALLAS PARKWAY STREET 2: SUITE 300 CITY: DALLAS STATE: TX ZIP: 75254 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: West Creek Capital, L.P. CENTRAL INDEX KEY: 0001409863 IRS NUMBER: 522241494 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1919 PENNSYLVANIA AVE., N.W. STREET 2: STE. 725 CITY: WASHINGTON STATE: DC ZIP: 20006 BUSINESS PHONE: 202 416 4738 MAIL ADDRESS: STREET 1: 1919 PENNSYLVANIA AVE., N.W. STREET 2: STE. 725 CITY: WASHINGTON STATE: DC ZIP: 20006 SC 13D 1 formsc13d.htm WEST CREEK CAPITAL SC 13D 12-3-2007 formsc13d.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

Capital Senior Living Corp.

(Name of Issuer)

Common Stock, par value $.01 per share

(Title of Class of Securities)

140475104

(CUSIP Number)

Mr. Scott Zimmerman, Esq.

Dechert LLP

30 Rockefeller Plaza

New York, NY 10112

(212) 698-3500

(Name, Address and Telephone Number of Person Authorized to

Receive Notices and Communications)

December 03, 2007

(Date of Event which Requires Filling of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ·· 240.13d-1(e), 240.13d-1 (f) or 240.13d-1(g), check the following box. ( X )

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See · 240.13d-7 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).

SCHEDULE 13D
CUSIP No. 140475104

	1.	Names of Reporting Persons. West Creek Capital, LP

	2.	Check the Appropriate Box if a Member of a Group* (a.) o (b.) o

	3.	SEC USE ONLY

	4.	Source of Funds* AF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to items 2(d) or 2(e) ( )

	6.	Citizenship or Place of Organization Delaware

Number of Shares	7.	Sole Voting Power 0
Beneficially Owned by	8.	Shared Voting Power 1,706,650
Each Reporting	9.	Sole Dispositive Power 0
Person With	10.	Shared Dispositive Power 1,706,650


	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,706,650

	12.	Check if the Aggregate Amount Represented by Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 6.4%

	14.	Type of Reporting Person IA PN

SCHEDULE 13D
CUSIP No. 140475104

	1.	Names of Reporting Persons. West Creek Capital, Inc.

	2.	Check the Appropriate Box if a Member of a Group* (a.) o (b.) o

	3.	SEC USE ONLY

	4.	Source of Funds* AF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to items 2(d) or 2(e) ( )

	6.	Citizenship or Place of Organization Delaware

Number of Shares	7.	Sole Voting Power 0
Beneficially Owned by	8.	Shared Voting Power 1,706,650
Each Reporting	9.	Sole Dispositive Power 0
Person With	10.	Shared Dispositive Power 1,706,650


	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,706,650

	12.	Check if the Aggregate Amount Represented by Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 6.4%

	14.	Type of Reporting Person IA CO

SCHEDULE 13D
CUSIP No. 140475104

	1.	Names of Reporting Persons. Roger Feldman

	2.	Check the Appropriate Box if a Member of a Group* (a.) o (b.) o

	3.	SEC USE ONLY

	4.	Source of Funds* AF PF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to items 2(d) or 2(e) ( )

	6.	Citizenship or Place of Organization United States Citizen

Number of Shares	7.	Sole Voting Power 28,000
Beneficially Owned by	8.	Shared Voting Power 1,706,650
Each Reporting	9.	Sole Dispositive Power 28,000
Person With	10.	Shared Dispositive Power 1,706,650


	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,734,650

	12.	Check if the Aggregate Amount Represented by Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 6.5%

	14.	Type of Reporting Person IN

SCHEDULE 13D
CUSIP No. 140475104

	1.	Names of Reporting Persons. Harvey Hanerfeld

	2.	Check the Appropriate Box if a Member of a Group* (a.) o (b.) o

	3.	SEC USE ONLY

	4.	Source of Funds* AF PF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to items 2(d) or 2(e) ( )

	6.	Citizenship or Place of Organization United States

Number of Shares	7.	Sole Voting Power 50,000
Beneficially Owned by	8.	Shared Voting Power 1,706,650
Each Reporting	9.	Sole Dispositive Power 50,000
Person With	10.	Shared Dispositive Power 1,706,650


	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,756,650

	12.	Check if the Aggregate Amount Represented by Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 6.6%

	14.	Type of Reporting Person IN

Item 1. Security and Issuer

This Schedule 13D relates to the shares of common stock, par value $0.01 per share (the "Shares"), of Capital Senior Living Corp. (the "Issuer"). The principal executive offices of the Issuer are located at 14160 Dallas Parkway, Suite 300, Dallas, TX 75254

Item 2. Identity and Background.

(a)

Name: This Schedule 13D is being filed jointly by (i) West Creek Capital, LP, a Delaware limited partnership, (ii) West Creek Capital, Inc., a Delaware corporation, and (iii) Roger Feldman and (iv) Harvey Hanerfeld (collectively the "Reporting Persons" and each individually a "Reporting Person"). Roger Feldman and Harvey Hanerfeld are the sole stockholders, directors and executive officers of West Creek Capital, Inc., the general partner of West Creek Capital, LP. Each of the Reporting Persons either individually and/or collectively is deemed to be the beneficial owner of shares held by (i) WC Select LP, a Delaware limited partnership ("Select"), (ii) West Creek Partners Fund LP, a Delaware limited partnership ("Partners Fund"), (iii) Cumberland Investment Partners, LLC, a Delaware limited liability company ("Cumberland"), (iv) Roger Feldman, (v) Harvey Hanerfeld and (vi) certain private accounts (the "Accounts") with respect to which West Creek Capital, LP is an investment advisor pursuant to investment advisory agreements (together, the "Holders"). The Reporting Persons disclaim that they and/or the Holders are members of a group as defined in Regulation 13D. An Agreement for Joint Filing by the Reporting Persons is annexed hereto as Exhibit 1.

(b)	Residence or business address: The principal business address of the Reporting Persons is 1919 Pennsylvania Ave., NW, Ste. 725, Washington, DC 20006.

(c)

Present Principal Occupation or Employment: The principal business of West Creek Capital, LP is providing investment management services to investment partnerships and other entities. The principal business of West Creek Capital, Inc. is providing investment management services. The principal occupation or employment of Roger Feldman is serving as owner, director and Vice President and Treasurer of West Creek Capital, Inc., the general partner of West Creek Capital, LP. The principal occupation or employment of Harvey Hanerfeld is serving as owner, director and Vice President and Secretary of West Creek Capital, Inc., the general partner of West Creek Capital, LP.

(d)	Criminal Conviction: None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)

Court or Administrative Proceedings: None of the Reporting Persons has, during the last five years, 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.

(f)	Citizenship: Roger Feldman and Harvey Hanerfeld are each a citizen of the United States of America.

Item 3. Source and Amount of Funds or Other Consideration:

Funds for the purchase of the Shares reported herein were derived from available capital of the Holders. A total of approximately $11,609,202 was paid to acquire the Shares.

Item 4. Purpose of Transaction

The Reporting Persons purchased the Shares for the purpose of investment and subject to the statements in this Item 4, have no present plans or proposals which relate to or would result in a transaction with the purpose or effects enumerated in clauses (a) through (j) of Item 4 of Schedule D.

The Reporting Persons have sent a letter dated December 3, 2007, to Mr. James Moore, Director, Capital Senior Living Corp. (the "Moore Letter", a copy of which is annexed to this filing as Exhibit 2). The Moore Letter discusses the Reporting Persons' concerns about the Issuer, and requests that the Board of Directors (the "Board") retain an independent investment bank to explore strategic alternatives, including a potential sale or liquidation of the Issuer.

Representatives of the Reporting Persons have had conversations with members of the Issuer's operating management and with members of the Board. The Reporting Persons reserve the right to communicate further with the Issuer's operating management and with members of the Board, among others, about these and other matters. Such communications may result in proposing one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D.

The Reporting Persons also reserve the right to purchase or otherwise acquire additional Shares, or to sell or otherwise dispose of Shares beneficially owned by them, in each case in open market or privately negotiated transactions or otherwise.

Item 5. Interest in Securities of the Issuer.

(a)(b)

West Creek Capital, L.P., as the investment adviser to Select, Partners Fund, Cumberland, and the Accounts, West Creek Capital, Inc., as general partner of West Creek Capital, LP, and Mr. Feldman and Mr. Hanerfeld as sole stockholders, directors and executive officers of West Creek Capital, Inc., the general partner of West Creek Capital, L.P., may be deemed to have the shared power to direct the voting and disposition of a total of 1,706,650 total Shares held by Select, Partners Fund, Cumberland and the Accounts, such shares constituting approximately 6.4% of the Shares of the Issuer. Mr. Feldman has the sole power to vote or direct the voting of and to dispose and to direct the disposition of the 28,000 shares beneficially owned by him as an individual, and together with the 1,706,650 Shares referenced above, such Shares constitute approximately 6.5% of the Shares of the Issuer. Mr. Hanerfeld has the sole power to vote or direct the voting of and to dispose and to direct the disposition of the 50,000 shares beneficially owned by him as an individual, and together with the 1,706,650 Shares referenced above, such Shares constitute approximately 6.6% of the Shares of the Issuer. All percentage holdings described herein are based upon the 26,579,357 Shares outstanding as of November 5, 2007, according to the Issuer's most recent Form 10-Q filed November 7, 2007, for the period ending September 30, 2007.

(c)	No transactions in the Shares were effected by the Reporting Persons during the past 60 days.

(d)	No person other than the Reporting Persons and the Holders is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such Shares.

(e)	Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Except as otherwise set forth herein, the Reporting Persons do not have any contract, arrangement, understanding or relationship with any person with respect to the securities of the Issuer.

Item 7. Material to be Filed as Exhibits.

Exhibit 1: Joint Filing Agreement, dated as of December 3, 2007, by and among West Creek Capital, LP, Roger Feldman and Harvey Hanerfeld. Exhibit 2: Letter, dated December 3, 2007, to James Moore, Director, Capital Senior Living Corp.

Signature

After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: December 03, 2007

	West Creek Capital, LP, By: West Creek Capital, Inc. Its general partner
	By:	/s/ Harvey Hanerfeld
		Harvey Hanerfeld
	Title: VP and Secretary
	West Creek Capital, Inc.
	By:	/s/ Harvey Hanerfeld
		H arvey Hanerfeld
	Title: Vice President and Secretary
	Roger Feldman
	By:	/s/ Roger Feldman
		Roger Feldman
	Harvey Hanerfeld
	By:	/s/ Harvey Hanerfeld
		Harvey Hanerfeld

EX-1 2 ex1.htm EXHIBIT 1 ex1.htm

Exhibit 1

AGREEMENT FOR JOINT FILING

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other persons signatory below of a statement on Schedule 13D or any amendments thereto, with respect to the Common Stock of Capital Senior Living Corp., and that this Agreement be included as an attachment to such filing.

This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same Agreement.

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement on the 3rd day of December, 2007.

	WEST CREEK CAPITAL, LP
	By: WEST CREEK CAPITAL, INC.
	/s/ Harvey Hanerfeld
	By: Harvey Hanerfeld,
	Vice President and Secretary


	WEST CREEK CAPITAL, INC.
	/s/ Harvey Hanerfeld
	By: Harvey Hanerfeld,
	Vice President and Secretary


	/s/ Roger Feldman
	ROGER FELDMAN

	/s/ Harvey Hanerfeld
	HARVEY HANERFELD

EX-2 3 ex2.htm EXHIBIT 2 ex2.htm

EXHIBIT 2

WEST CREEK CAPITAL

1919 PENNSYLVANIA AVENUE NW

SUITE 725

WASHINGTON, D.C. 20006

(202) 416-4738

December 3, 2007

Mr. James A. Moore

Director

Capital Senior Living Corp.

14160 Dallas Parkway, Suite 300

Dallas, TX 75254

Capital Senior Living

Dear Mr. Moore:

As you know, entities advised by West Creek Capital currently own approximately 1.8 million shares of Capital Senior Living (the “Company”), representing nearly 7% of the outstanding stock. Our initial investment was made in 2004, and we consider ourselves patient, long-term shareholders. We are writing to you following a series of conversations in which we requested that a shareholder representative be added to the Board of Directors. Recently, you advised that the Board has declined our request. Our concerns about the Company’s direction, our desire to see value maximized for all shareholders, and our own fiduciary duties, now compel us to pursue these discussions in a public forum.

As we have discussed, our concerns relate principally to the Company’s corporate governance and strategic direction. Our governance concerns are most clearly highlighted by the fact that despite nearly thirty (30) years of collective service, independent directors have virtually no investment in the Company’s stock. Our concern about the lack of decision-makers’ alignment of interests with shareholders is dramatically heightened by the fact that Company Chairman James Stroud has recently sold roughly 70% of his shares. The unwillingness to add an owner to the Board is even more disappointing in light of the fact that in uncontested elections in each of the last two years, over 22% of the outstanding shares voted against the Company’s incumbent directors. When the Chairman’s stock (much of which has been sold) is excluded from the results, the plea for change becomes even more extraordinary. That independent directors have, to our knowledge, never reached out to shareholders to learn the basis of their concerns is hard to understand.

Our issues with the Company’s corporate governance are made more pressing by concerns about the Company’s lack of strategic direction. In summary, we believe that success in the senior living industry requires either geographic concentration and an entrepreneurial cost structure, or a national platform and efficiencies of scale. Unfortunately, the Company has neither. Today, Capital Senior Living has the scale of a regional business, with a portfolio spread across a national platform. Looking at the map of Company properties contained in the presentation filed under Form 8-K, dated November 20, 2007, one sees single assets in southern California, Arizona, Florida, New York, Connecticut, New Jersey, Virginia, Louisiana, and Kansas. As a result, the Company is at a disadvantage to almost all of its competitors. Focused local providers are not burdened by a public Company cost structure, have deeper roots in the community, and entrepreneurial owner/managers. True national providers, with both market density and scale, can better pursue business building initiatives like branding and internet based marketing, while spreading corporate costs across their larger asset base. We believe the Company’s relative position will grow weaker with time.

Mr. James Moore, Capital Senior Living

Page of 2 of 4

December 3, 2007

The November 20, 2007 8-K, also includes a discussion of strategies the Company is pursuing to build shareholder value. Aside from reducing vacancy and raising rates, outcomes largely dictated by market forces, the two primary strategies discussed are acquisitions and delivering ancillary services. This has been the case for most of the time we have been shareholders. Over the last three years, excluding activity with related parties, the Company appears to have invested a total of roughly $5 million in acquisitions. While this small investment involves approximately $200 million in assets, the bulk of the capital was provided, and the bulk of the economics are owned, by REIT lessors and JV partners. Even factoring in management agreements, and assuming extraordinary returns on the $5 million invested, acquisitions hardly appear to have been a key driver of shareholder value. Having seen so little accomplished during a period of rapid industry consolidation, we believe shareholders have little reason to expect much value creation from acquisitions in the future.

We have seen other publicly traded senior living companies create extraordinary shareholder value delivering ancillary services. As we discussed, we were large shareholders in American Retirement Corp., and are therefore familiar with the value a well executed ancillary services strategy can create. On numerous conference calls, the Company has detailed plans for taking action in this area. To date, we have seen little progress. We can only assume that this is at least partly a result of challenges caused by having properties spread across the entire country.

Our investment in the Company was based on the large discount between stock market value and our view of underlying asset value, and our belief that the senior living industry was entering a period of enormous opportunity. We hoped the Company would use this period to greatly advantage its owners. After three years, despite a significant increase in the stock price, we believe the large value gap remains. Sadly, although the senior living industry has enjoyed a wonderful three years, the Company has done little other than ride a tightening market. Having concluded that the Company is structurally challenged and has no meaningful strategy for building shareholder value, we are left with arguing that a sale is the sole means for shareholders to realize the value of the assets we own.As a result, we request that the Board promptly engage an independent investment bank to advise on strategic alternatives, including the sale or liquidation of the Company. Pending completion of such a transaction, we request that the Company be run to maximize free cash-flow, and that the Company eliminate all expenses not directly tied to maintaining the existing portfolio and preparing it for sale. Finally, we request that all excess balance sheet cash be returned to shareholders at the earliest possible time.

Mr. James Moore, Capital Senior Living

Page of 3 of 4

December 3, 2007

The 2006 proxy contained a proposal requesting that the Board “pursue a sale or liquidation” of the Company. That proposal garnered support from nearly 30% of the shares voted. Again, this support becomes much stronger if the Chairman’s shares (many of which have been sold) are excluded. The Board chose to view this vote as support for the status quo, a conclusion we disagree with strongly. Even accepting the Board’s view, we believe there are substantial reasons to consider this issue again. Most importantly, The Board of Directors’ Statement in Opposition to the Stockholder Proposal relied largely on a 2006 presentation by Jefferies & Company, Inc. (“Jefferies”). Jefferies concluded that “assuming the Company met its projections, the Company’s strategic plan should result in significant growth”. Based on the Company’s public statements regarding its growth strategies, we assume the key elements of the plan presented to Jefferies were that the Company would make a series of acquisitions and deliver an ancillary services strategy. Another year has now passed, and little progress has been made on either front. We have no confidence that this will change with additional time.

We think it is also important to note that while the Board’s Statement in Opposition argued that “Now is not the Time for a Sale” because “the fundamentals of our industry are strong” and “the Company is well positioned”, Chairman James Stroud continued to aggressively sell his stock. Further, we understand that these sales were executed by Jefferies, the investment bank on whose opinion the Board relied. Whatever the motivation for Mr. Stroud’s sales, we must certainly question his conviction in the optimism expressed in the Board’s Statement in Opposition. We believe that a 30% vote in favor of the sale or liquidation of the Company, is a strong statement of “no confidence”. Again, it is difficult to understand why independent directors faced with such strong dissent did not reach out to shareholders to understand the basis of their concerns.

We do not believe that we are alone in our views about the Company. We hope that you and the other independent directors will reach out to the Company’s other owners to solicit their opinions. If the Board learns that owners of a significant portion of the Company have views similar to those expressed in this letter, we would expect you to take appropriate action. Based on the actions taken by the independent directors over the next few months, we may determine that further action on our part is appropriate, including, potentially nominating directors whose interests will be more closely aligned with shareholders.

Mr. James Moore, Capital Senior Living

Page of 4of 4

December 3, 2007

Finally, it would be unfair not to note that our diligence confirms that the Company does an excellent job on an operating level. Assets are well maintained, residents are satisfied, and occupancies and rents are likely to continue to be strong. Unfortunately, the Company’s structural challenges have negatively impacted the valuable employees responsible for the asset level successes in much the same way owners have been impacted (their options have no more current market value than our shares). The senior living industry has changed dramatically in the three years we have owned shares in the Company. Capital Senior Living has not kept pace. In fact, as competitors grow larger and better able to leverage their scale to provide a fuller range of care, improve their branding and marketing strategies, and drive down their per-unit operating costs, the Company is falling further behind. Enough time has passed to know that a sale is the sole available mechanism for shareholders and employees to recognize the asset value created by their capital and labor.

Sincerely,		Sincerely,
/s/ Roger Feldman		/s/ Harvey Hanerfeld

Roger Feldman		Harvey Hanerfeld
Principal		Principal