-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/yPWRHAj0ef1SbvDNO+SQnvOyn+q+g+bA5QBLGAdUdw35s5GzVgEGtk12L7Uvn4 ncL8ljYrzC1LvNltG7iC7g== /in/edgar/work/20000918/0000950142-00-000793/0000950142-00-000793.txt : 20000923 0000950142-00-000793.hdr.sgml : 20000923 ACCESSION NUMBER: 0000950142-00-000793 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20000918 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LODGIAN INC CENTRAL INDEX KEY: 0001066138 STANDARD INDUSTRIAL CLASSIFICATION: [7011 ] IRS NUMBER: 522093696 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-54947 FILM NUMBER: 724384 BUSINESS ADDRESS: STREET 1: 3445 PEACHTREE ROAD N E SUITE 700 CITY: ATLANTA STATE: CA ZIP: 30326 BUSINESS PHONE: 4043649400 MAIL ADDRESS: STREET 1: 3445 PEACHTREE ROAD N E SUITE 700 CITY: ATLANTA STATE: CA ZIP: 30326 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EDGECLIFF HOLDINGS LLC CENTRAL INDEX KEY: 0001109862 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 611359148 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 207 GRANDVIEW DRIVE CITY: FORT MITCHELL STATE: KY ZIP: 41017 BUSINESS PHONE: 6065781100 MAIL ADDRESS: STREET 1: 207 GRANDVIEW DRIVE CITY: FORT MICTCHELL STATE: KY ZIP: 41017 SC 13D/A 1 0001.txt AMENDMENT NO. 16 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 16) LODGIAN, INC. (Name of Issuer) Common Stock (Title of Class of Securities) 54021P106 (CUSIP Number) Edgecliff Holdings, LLC Casuarina Cayman Holdings Ltd. Edgecliff Management, LLC 1994 William J. Yung Family Trust Joseph Yung William J. Yung The 1998 William J. Yung and Martha A. Yung Family Trust 207 Grandview Drive Fort Mitchell, Kentucky 41017 Attn: Mr. William J. Yung with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, NY 10019-6064 Attn: James M. Dubin, Esq. September 15, 2000 (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 o. 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. 2 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). 3 Edgecliff Holdings, LLC ("Edgecliff"), Casuarina Cayman Holdings Ltd. ("Casuarina"), Edgecliff Management, LLC ("Management"), the 1994 William J. Yung Family Trust (the "1994 Trust"), William J. Yung, Joseph Yung, and The 1998 William J. Yung and Martha A. Yung Family Trust (the "1998 Trust") (collectively, the "Reporting Persons") hereby amend the report on Schedule 13D filed by certain of the Reporting Persons on October 19, 1999, as amended by Amendment No. 1 filed on November 12, 1999, as amended by Amendment No. 2 filed on November 16, 1999, as amended by Amendment No. 3 filed on November 22, 1999, as amended by Amendment No. 4 filed on December 29, 1999, as amended by Amendment No. 5, filed on January 18, 2000, as amended by Amendment No. 6 filed on April 7, 2000, as amended by Amendment No. 7 filed on April 18, 2000, as amended by Amendment No. 8 filed on May 4, 2000, as amended by Amendment No. 9 filed on May 30, 2000, as amended by Amendment No. 10 filed on July 14, 2000, as amended by Amendment No. 11 filed on July 19, 2000, as amended by Amendment No. 12 filed on July 20, 2000, as amended by Amendment No. 13 filed on August 22, 2000, as amended by Amendment No. 14 on August 31, 2000 and as amended by Amendment No. 15 on September 8, 2000 (the "Schedule 13D"), in respect of the common stock, par value $.01 per share, of Lodgian, Inc., a Delaware corporation ("Lodgian"), as set forth below. Item 1. SECURITY AND ISSUER. ------------------- Unchanged Item 2. IDENTITY AND BACKGROUND. ----------------------- Unchanged. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. ------------------------------------------------- Unchanged. Item 4. PURPOSE OF TRANSACTION. ---------------------- The information below supplements the information previously reported in item 4. On or about September 15, 2000, Edgecliff commenced the mailing of additional soliciting materials in connection with its solicitation of proxies from stockholders of Lodgian to be used at Lodgian's 2000 Annual Meeting of Stockholders. Copies of these additional soliciting materials are attached hereto as Exhibits 25 and 26. Item 5. INTEREST IN SECURITIES OF THE ISSUER. ------------------------------------ Unchanged. 4 Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH ------------------------------------------------------------- RESPECT TO SECURITIES OF THE ISSUER. ----------------------------------- Unchanged. Item 7. MATERIAL TO BE FILED AS EXHIBITS. -------------------------------- The Exhibit Index incorporated by reference in Item 7 of the Schedule 13D is hereby supplemented by adding the following to the end thereof. 25. Additional Soliciting Material. 26. Additional Soliciting Material. 5 SIGNATURE 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. Dated: September 15, 2000 EDGECLIFF HOLDINGS, LLC By: /s/ William J. Yung ---------------------- Name: William J. Yung Title: President CASUARINA CAYMAN HOLDINGS LTD. By: /s/ William J. Yung ---------------------- Name: William J. Yung Title: President EDGECLIFF MANAGEMENT, LLC By: /s/ William J. Yung ---------------------- Name: William J. Yung Title: President 1994 WILLIAM J. YUNG FAMILY TRUST By: The Fifth Third Bank, as Trustee By: /s/ Robert M. Erickson ------------------------ Name: Robert M. Erickson Title: Trust Officer 6 /s/ Joseph Yung -------------------------------- Joseph Yung /s/ William J. Yung -------------------------------- William J. Yung THE 1998 WILLIAM J. YUNG AND MARTHA A. YUNG FAMILY TRUST By: The Fifth Third Bank, as Trustee By: /s/ Robert M. Erickson ------------------------ Name: Robert M. Erickson Title: Trust Officer 7 EXHIBIT INDEX ------------- EXHIBIT DESCRIPTION - ------- ----------- 1. Engagement Letter between Casuarina Cayman Holdings Ltd. and Greenhill & Co., LLC, dated November 10, 1999. 1/ 2. Letter to Lodgian, Inc. from Casuarina Cayman Holdings Ltd., dated November 16, 1999. 2/ 3. Letter to Casuarina Cayman Holdings Ltd. from Lodgian, Inc., dated November 19, 1999. 3/ 4. Letter to Lodgian, Inc. from Casuarina Cayman Holdings Ltd., dated November 22, 1999. 3/ 5. Joint Filing Agreement, dated November 22, 1999, among Casuarina Cayman Holdings Ltd., the 1994 William J. Yung Family Trust, Joseph Yung and William J. Yung. 3/ 6. Joint Filing Agreement, dated December 29, 1999, among Edgecliff Holdings, LLC, Casuarina Cayman Holdings Ltd., Edgecliff Management, LLC, 1994 William J. Yung Family Trust, Joseph Yung, William J. Yung and The 1998 William J. Yung and Martha A. Yung Family Trust. 4/ 7. Letter to Lodgian, Inc. from Casuarina Cayman Holdings Ltd., dated January 18, 2000. 5/ - ------------------------ 1/ Filed as an Exhibit to Amendment No. 1 to the Schedule 13D. 2/ Filed as an Exhibit to Amendment No. 2 to the Schedule 13D. 3/ Filed as an Exhibit to Amendment No. 3 to the Schedule 13D. 4/ Filed as an Exhibit to Amendment No. 4 to the Schedule 13D. 5/ Filed as an Exhibit to Amendment No. 5 to the Schedule 13D. 8 8. Joint Filing Agreement, dated January 18, 2000, among Edgecliff Holdings, LLC, Casuarina Cayman Holdings Ltd., Edgecliff Management, LLC, 1994 William J. Yung Family Trust, Joseph Yung, William J. Yung and The 1998 William J. Yung and Martha A. Yung Family Trust. 5/ 9. Complaint, dated April 7, 2000. 6/ 10. Motion, dated April 7, 2000. 6/ 11. Joint Filing Agreement, dated April 7, 2000, among Edgecliff Holdings, LLC, Casuarina Cayman Holdings Ltd., Edgecliff Management, LLC, 1994 William J. Yung Family Trust, Joseph Yung, William J. Yung and The 1998 William J. Yung and Martha A. Yung Family Trust. 6/ 12. Notice of Edgecliff Holdings, LLC to Lodgian, Inc., dated April 18, 2000. 7/ 13. Preliminary Proxy Statement of Edgecliff Holdings, LLC filed with the Securities and Exchange Commission on April 18, 2000. 7/ 14. Stockholder Request Letter to Lodgian, Inc. from Edgecliff Holdings, LLC, dated April 18, 2000. 7/ 15. Amendment No. 1 to Preliminary Proxy Statement of Edgecliff Holdings, LLC filed with the Securities and Exchange Commission on May 4, 2000. 8/ 16. Letter to Lodgian, Inc. from Casuarina Cayman Holdings Ltd., dated July 13, 2000. 9/ 17. Press Release issued by Lodgian, Inc., dated July 17, 2000. 10/ - ------------------------ 5/ Filed as an Exhibit to Amendment No. 5 to the Schedule 13D. 6/ Filed as an Exhibit to Amendment No. 6 to the Schedule 13D. 7/ Filed as an Exhibit to Amendment No. 7 to the Schedule 13D. 8/ Filed as an Exhibit to Amendment No. 8 to the Schedule 13D. 9/ Filed as an Exhibit to Amendment No. 10 to the Schedule 13D. 10/ Filed as an Exhibit to Amendment No. 11 to the Schedule 13D. 9 18. Letter to Lodgian, Inc. from Casuarina Cayman Holdings Ltd., dated July 17, 2000. 10/ 19. Complaint, dated July 19, 2000. 11/ 20. Motion, dated July 19, 2000. 11/ 21. Lodgian Complaint, dated August 16, 2000. 12/ 22. Definitive Proxy Statement of Edgecliff Holdings, LLC filed with the Securities and Exchange Commission on August 31, 2000. 13/ 23. Press Release, dated August 31, 2000. 13/ 24. Motion to Dismiss, dated September 7, 2000. 14/ 25. Additional Soliciting Material. 15/ 26. Additional Soliciting Material. 15/ - ------------------------ 10/ Filed as an Exhibit to Amendment No. 11 to the Schedule 13D. 11/ Filed as an Exhibit to Amendment No. 12 to the Schedule 13D. 12/ Filed as an Exhibit to Amendment No. 13 to the Schedule 13D. 13/ Filed as an Exhibit to Amendment No. 14 to the Schedule 13D. 14/ Filed as an Exhibit to Amendment No. 15 to the Schedule 13D. 15/ Filed herewith. EX-25 2 0002.txt EXHIBIT 25 EDGECLIFF HOLDINGS, LLC 207 Grandview Drive Fort Mitchell, Kentucky 41017 September 15, 2000 Dear Fellow Lodgian Stockholder: We are Lodgian's largest stockholder, with 14.9% of the company's outstanding common stock. You should have recently received our proxy materials urging you to support our nominees for election to Lodgian's Board at the 2000 Annual Meeting of Stockholders. We're writing to highlight important facts you should think about in making your voting decision and to respond to certain claims made by Lodgian's Board about us and our nominees. YOUR BOARD IS FAILING YOU! Under your Board's poor leadership: o Lodgian's stock value has fallen by over 60% since May of last year. o The company has been unable to give you timely reports on its financial condition. o The company has been forced to admit that its internal financial and accounting controls do not comply with minimum regulatory standards. o The company has announced preliminary pre-tax losses of over $18 million for the first quarter of 2000. o The Board has failed to develop ANY specific transaction that would maximize the value of your shares despite having hired Morgan Stanley Dean Witter nine months ago. ON THE BASIS OF THESE FACTS, WE DO NOT HAVE ANY CONFIDENCE THAT YOUR CURRENT BOARD'S CONTINUED MANAGEMENT OF THE COMPANY WILL REVERSE THE TIDE OF LODGIAN'S DECLINING FINANCIAL CONDITION. WE BELIEVE THAT A SALE OF THE COMPANY TO THE HIGHEST BIDDER REPRESENTS THE BEST OPPORTUNITY FOR YOU TO MAXIMIZE THE VALUE OF YOUR SHARES. Since November of 1999, we have had numerous discussions with Lodgian concerning our interest in acquiring the company, and have made two definitive proposals to acquire your shares in all-cash transactions at prices of $6.50 and $5.75 per share, representing premiums of approximately 43% and 46%. We also requested additional information from Lodgian so that we could make an offer that would not be subject to any due diligence condition. Despite our willingness to enter into a customary confidentiality agreement in exchange for this information and despite the fact that we allowed Lodgian to meet our financing sources to confirm our ability to finance an acquisition, your Board has consistently refused to cooperate with us. WE BELIEVE THAT NOW IS THE APPROPRIATE TIME TO HOLD YOUR BOARD ACCOUNTABLE FOR ITS POOR MANAGEMENT OF THE COMPANY AND TO SEND YOUR BOARD A STRONG MESSAGE--THAT IT SHOULD ALLOW YOU TO MAXIMIZE THE VALUE OF YOUR SHARES THROUGH A SALE OF THE COMPANY TO THE HIGHEST BIDDER. Our nominees will strongly advocate a sale of the company to the highest bidder, whether to us or any competing bidder with a superior proposal. DON'T BE MISLED BY THE BOARD'S SLICK PUBLIC RELATIONS CAMPAIGN! YOUR BOARD IS NOT GIVING YOU ALL THE FACTS ABOUT ITS REFUSAL TO DEAL WITH US. Your Board claims that it has not provided us the information we requested in order to make a firm offer for your shares because we refused to sign a "customary" confidentiality agreement. This is simply NOT true. The only confidentiality agreement your Board was willing to sign would have also required us to agree to a one-year "standstill" provision--a one-year agreement that, among other things, would prohibit us from making any offer directly to Lodgian's stockholders without your Board's approval. We were willing to agree to a 30-day restriction, but your Board refused to negotiate with us. INSTEAD OF WORKING WITH US TO MAXIMIZE THE VALUE OF YOUR SHARES, YOUR BOARD'S PRIMARY FOCUS WAS ON MAINTAINING ITS CONTROL OF LODGIAN. WHY HAVEN'T WE MADE A TENDER OFFER? WE'RE INTERESTED IN MAKING A TENDER OFFER FOR YOUR SHARES, BUT YOUR BOARD HAS WITHHELD THE INFORMATION WE NEED TO DO SO. Your Board claims that our efforts to maximize the value of your shares are not "for real" because we haven't launched a formal tender offer for your shares. Since March of 1999, we have paid over $18 million in open market transactions to acquire 14.9% of Lodgian's outstanding common stock--the maximum amount that we could acquire without triggering Lodgian's poison pill and more than twice the number of shares held by all the members of your Board combined. We have hired a financial advisor and outside legal counsel to aid us in evaluating our alternatives in acquiring the company's remaining shares. We have launched this proxy fight to elect nominees to your Board who will strongly advocate selling the company to the highest bidder. We believe that these facts provide ample evidence that we are serious about acquiring the company. We would like to make a formal tender offer for your shares, but need to be able to properly evaluate Lodgian's current business and financial position so that we can make a FIRM offer. Because of your Board's poor management, the most current publicly available information on Lodgian--other than a single company press release announcing preliminary results that are almost six months old and that have not been fully reviewed by the company's auditors--is dated December 1999! In addition, without direct access to customary due diligence materials, we have no ability to independently verify the company's current condition. Your Board knows that our ability to do so is critical, especially in light of Lodgian's current financial and accounting irregularities. WE HAVE REPEATEDLY SOUGHT THIS INFORMATION FROM YOUR BOARD SO THAT WE COULD MAKE A FIRM OFFER, BUT YOUR BOARD HAS BEEN MORE FOCUSED ON ENTRENCHING ITSELF RATHER THAN COOPERATING WITH US TO MAXIMIZE THE VALUE OF YOUR SHARES. YOUR BOARD CLAIMS THAT IT WANTS US TO MAKE A TENDER OFFER FOR YOUR SHARES, BUT ITS ACTIONS PROVE OTHERWISE! OUR NOMINEES ARE FOCUSED ON MAXIMIZING THE VALUE OF YOUR SHARES. Unlike the current members of your Board: o Our nominees will encourage a sale of the company to the highest bidder. o Our nominees will seek to cooperate with potential bidders by providing access to current company information pursuant to STANDARD confidentiality agreements. 2 Your Board claims that if our nominees are elected, we will be able to acquire Lodgian for an inadequate price, or will be able to force the company to buy back our shares--and only our shares--for a substantial premium to market price. These allegations are simply NOT true. o If elected to the Board, our nominees will owe Lodgian's stockholders a fiduciary duty to support the most favorable transaction available to ALL of the company's stockholders o Because of Lodgian's classified Board structure, our nominees would not constitute a majority of the Board, and would not be able to force the company to take ANY action (whether or not for our benefit) without the support of additional Board members. Your Board claims that you should not vote for our nominees because we may be deemed to compete with Lodgian and that certain of our nominees are affiliated with us. What your Board has failed to fully and clearly disclose is that one of THE BOARD'S nominees for election is the chairman and chief executive officer of the nation's tenth largest hotel company! YOUR CURRENT BOARD HAS FAILED TO EXPLAIN HOW IT WOULD IMPROVE UPON ITS POOR MANAGEMENT PERFORMANCE. The Board CLAIMS that it has been evaluating the company's strategic alternatives since January of 2000. Since that time, the company's stock price has lost more than 40% of its value, and Lodgian's most significant publicly announced transaction was to agree to sell ten core assets--at prices we believe to be below replacement value and fair market value--for a pre-tax loss of $50 million. Your Board now argues that you should vote for its nominees so that they can assist the Board in its continued efforts to maximize stockholder value. Your Board has not articulated any new specific plan or proposed transaction that would accomplish this goal. WE BELIEVE THE BOARD HAS FAILED TO PROVIDE ANY PERSUASIVE ARGUMENT AS TO WHY ITS POOR PAST PERFORMANCE WOULD NOT BE INDICATIVE OF ITS FUTURE RESULTS. * * * 3 NOW IS THE APPROPRIATE TIME TO HOLD YOUR BOARD ACCOUNTABLE FOR ITS POOR MANAGEMENT OF THE COMPANY AND TO SEND YOUR BOARD A STRONG MESSAGE--THAT IT SHOULD ALLOW YOU TO MAXIMIZE THE VALUE OF YOUR SHARES THROUGH A SALE OF THE COMPANY TO THE HIGHEST BIDDER. SEND YOUR BOARD A MESSAGE IT CAN'T IGNORE! SIGN, DATE AND RETURN THE ENCLOSED GREEN PROXY CARD TODAY. Thank you for your support. Sincerely, [Signature] William J. Yung President Edgecliff Holdings, LLC IMPORTANT - Please sign, date and return the enclosed GREEN proxy card today in the postage-paid envelope provided. - DO NOT sign any proxy card that you may receive from the Company, even as a protest vote against the Board and management. If you have already done so, you may revoke your previously signed proxy by signing, dating and returning a later dated GREEN proxy card using the envelope provided. If you have any questions regarding your proxy, or need assistance in voting your shares, please call: [MACKENZIE PARTNERS, INC. LOGO] 156 FIFTH AVENUE NEW YORK, NEW YORK 10010 TOLL FREE: 800-322-2885 OR CALL COLLECT: 212-929-5500 4 EX-26 3 0003.txt EXHIBIT 26 EDGECLIFF HOLDINGS, LLC 207 Grandview Drive Fort Mitchell, Kentucky 41017 September 15, 2000 Dear Former Servico Stockholder: We are the largest stockholder of Lodgian, Inc., and are currently soliciting proxies to elect our nominees to Lodgian's Board of Directors and in support of our stockholder proposal to be presented at Lodgian's 2000 annual meeting. Our records indicate that you are a former stockholder of Servico, Inc. Based on a statement contained in Lodgian's 1999 proxy materials, we had believed that former Servico stockholders who, like yourself, had not formally exchanged their share certificates for Lodgian share certificates were not entitled to vote at Lodgian's 2000 annual meeting. We now understand that this is not the case. Accordingly, we have enclosed our proxy materials for your consideration, and ask that you disregard any statement in our proxy materials disclaiming your right to vote at the annual meeting. Thank you for your support. Sincerely, William J. Yung President Edgecliff Holdings, LLC -----END PRIVACY-ENHANCED MESSAGE-----