0001162893-12-000011.txt : 20121212 0001162893-12-000011.hdr.sgml : 20121212 20121212132730 ACCESSION NUMBER: 0001162893-12-000011 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20121212 DATE AS OF CHANGE: 20121212 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STABOSZ TIMOTHY J CENTRAL INDEX KEY: 0001162893 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 1307 MONROE STREET CITY: LA PORTE STATE: IN ZIP: 46350 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SCOTTS LIQUID GOLD INC CENTRAL INDEX KEY: 0000088000 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 840920811 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-10347 FILM NUMBER: 121258547 BUSINESS ADDRESS: STREET 1: 4880 HAVANA ST CITY: DENVER STATE: CO ZIP: 80239 BUSINESS PHONE: 3033734860 MAIL ADDRESS: STREET 1: PO BOX 39S CITY: DENVER STATE: CO ZIP: 80219-0019 SC 13D/A 1 slgd13d5.txt SLGD FORM 13D AMENDMENT NUMBER 3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (AMENDMENT NO. 3) Under the Securities Exchange Act of 1934 SCOTT'S LIQUID GOLD, INC. ------------------------------------------------------------------------------- (Name of issuer) COMMON STOCK ------------------------------------------------------------------------------- (Title of class of securities) 810-202101 -------------------------------------------------------- (CUSIP number) TIMOTHY J. STABOSZ, 1307 MONROE STREET, LAPORTE, IN 46350 (219) 324-5087 ------------------------------------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) DECEMBER 11, 2012 -------------------------------------------------------- (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 Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [_] 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). CUSIP No. 810-202101 -------------------------------------------------------------------------------- 1. Name of Reporting Person TIMOTHY JOHN STABOSZ -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_] NOT APPLICABLE (b) [_] -------------------------------------------------------------------------------- 3. SEC Use Only -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) 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 -------------------------------------------------------------------------------- Number of (7) Sole Voting Power 764,227 Shares ____________________________________________ Beneficially (8) Shared Voting Power 0 Owned by ____________________________________________ Each (9) Sole Dispositive Power 764,227 Reporting ____________________________________________ Person With (10) Shared Dispositive Power 0 -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned 764,227 by each Reporting Person -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes [_] Certain Shares -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 7.0% -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN -------------------------------------------------------------------------------- ITEM 1. Security and Issuer Common stock of Scott's Liquid Gold, Inc. ("the company"), 4880 Havana Street, Denver, CO 80239. ITEM 2. Identity and Background The reporting person, Timothy J. Stabosz, 1307 Monroe Street, LaPorte, IN 46350, a natural person and United States citizen, is engaged as a private investor. He has not been convicted in a criminal proceeding (excluding traffic violations or other similar misdemeanors) in the last 5 years, and has not been a party to any proceedings, or subject to any judgements, enjoinments, decrees, et al., related to violations of state or federal securities laws, in his lifetime. ITEM 3. Source and Amount of Funds or Other Consideration Personal funds in the aggregate amount of $174,039 have been used to effect the purchases. No part of the purchase price represents borrowed funds. ITEM 4. Purpose of Transaction The reporting person has acquired the shares for investment purposes. He continues to believe he is the largest unaffiliated shareholder of Scott's Liquid Gold. The reporting person submitted a letter to the board of directors, dated December 11, 2012 (see Exhibit #1). In the letter, the reporting person chastises the board for fabricating a far flung assortment of phantasmagoric allegations against the reporting person, in a degraded "bought attorney letter." (See the company's 8-K filing dated December 3, 2012.) The reporting person believes that a truly independently-governed, and self-respecting board would communicate DIRECTLY with its largest outside shareholder, rather than hiring a 3rd party "mercenary" to engage in destructive and demeaning threats, bluster, and brinksmanship. The reporting person further alleges that, besides countenancing charges that the board knows are patently false, even more troublingly, the board has brazenly attempted to coerce and stifle the reporting person, in the legitimate exercise of his First Amendment rights. The reporting person believes that the board's disproportionate and exceedingly antagonistic response, to his mere request for a MEETING with the board, evidences that the company's Chairman and CEO, Mark Goldstein, continues to have his yoke fully placed upon the board, maintaining it in a position of being fully subservient, subjugated, and docile to Mr. Goldstein's wishes...with the board's primary imperative being the maintenance of Mr. Goldstein's astonishing 22 year record of self-entrenchment as CEO. The reporting person repeats his demand that the board show appropriate accountability, and meet with major outside shareholders, no later than immediately after the closing of the real estate transaction described in the company's Form 8-K dated November 21, 2012, to discuss the appropriate use of the proceeds from said transaction. The reporting person intends to review his investment in the company on a continual basis and engage in discussions with management and the Board of Directors concerning the governance, business, operations, and future plans of the company. Depending on various factors, including, without limitation, the company's financial position and investment strategy, the price levels of the common stock, conditions in the securities markets, and general economic and industry conditions, the reporting person may, in the future, take such actions with respect to his investment in the company as he deems appropriate including, without limitation, communicating with other stockholders, seeking Board representation, making proposals to the company concerning the capitalization and operations of the issuer, purchasing additional shares of common stock or selling some or all of his shares, or changing his intention with respect to any and all matters referred to in Item 4. Other than as indicated in this (including the letter attached hereto) and previous 13D filings, the reporting person has no plans or proposals which relate to, or could result in, any matters referred to in subsections (a) through (j) of Item 4 of Schedule 13D. ITEM 5. Interest in Securities of the Issuer As of the close of business on December 11, 2012, the reporting person has sole voting and dispositive power over 764,227 shares of Scott's Liquid Gold, Inc.'s common stock. According to the company's 3rd quarter 2012 Form 10-Q, as of November 9, 2012 there were 10,937,000 common shares outstanding. The reporting person is therefore deemed to own 7.0% of the company's common stock. Transactions effected by the reporting person, since November 21, 2012, were performed in ordinary brokerage transactions, and are indicated as follows: 11/30/12 sold 10,000 shares @ $.3995 ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer None ITEM 7. Material to be Filed as Exhibits Exhibit #1: Letter dated December 11, 2012 to the SLGD Board of Directors 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 12/12/12 Signature Timothy J. Stabosz Name/Title Timothy J. Stabosz, Private Investor EX-1 2 slgdltr5.txt LETTER TO THE SLGD BOARD DATED 12/11/12 Timothy J. Stabosz 1307 Monroe Street LaPorte, IN 46350 PH: (219) 324-5087 Board of Directors Scotts Liquid Gold-Inc. 4880 Havana Street Denver, CO 80239 Mark E. Goldstein Jeffrey R. Hinkle Dennis H. Field Jeffry B. Johnson Gerald J. Laber Philip Neri December 11, 2012 Members of the Scott's Liquid Gold ("SLGD") Board: One truly has to wonder, with utmost awe and astonishment, what exactly it is about a letter from your largest outside shareholder, merely requesting a meeting with the SLGD board to discuss the intended use of proceeds from a pending real estate transaction, that would cause the board to go into a frenzy of conniptions, attacks, threats, and brinksmanship. Surely, you must realize, in its wild disproportion, how absurd your 8-K filing and attorney letter make the board look. Instead of engaging in this grotesque act of corporate waste, frittering away shareholder monies on an outside "hack job," why didn't you just pick up the telephone and CALL me, to listen to what my thoughts and ideas were, and where I was coming from? Why didn't you remotely consider THAT as the honorable, responsible, measured, and preferred course? I think the answer is clear. The disingenuous intent of the board is plainly evident: Procure a hired gun to "trump up" a host of baseless charges, and throw them against the wall to see how many "stick," in order to INTIMIDATE, MANIPULATE, AND SILENCE a shareholder, who (my legal counsel assures me) has every right to voice his opinion about Scott's Liquid Gold's failed corporate governance, failed executive oversight, and wanton destruction of shareholder value, at the hands of an incompetent CEO, who has been self-entrenched for 22 tragic years. In order to set the record straight, and defend my integrity, you have forced me to take the time to respond and rebut the false, misleading, and mendacious charges in the board's "purchased attack letter." I will have you know that I am none too pleased...and I reserve all rights to hold you accountable, as a civil matter, for soliciting an outside attorney to muckrake such utterly inane allegations that 1) were and are wrong, 2) you knew were wrong, and 3) that you made in reckless disregard of the truth. To wit: 1) Stabosz's public communications "give rise to an actionable claim...for interference with a prospective business opportunity." This is clearly a figment of your outside legal counsel's imagination. My counsel has made it clear to me that my PUBLIC SUPPORT of the real estate transaction makes this charge baseless, vexatious, and fraudulent in its essence. Furthermore, merely because the company is in the process of selling a piece of real estate, the notion that that precludes shareholders from voicing public opinions about the use of the proceeds, governance of the company, or any other matters, is an absolute canard, and represents a coercive attempt by the SLGD board to stifle a shareholder in the legitimate exercise of his 1st Amendment rights. 2) Stabosz's 13D "contains materially misleading statements, in violation of applicable securities laws." This claim is patently FALSE, and shows a reckless disregard for the truth on the part of the board. (See below items.) 3) "You have made omissions in the Schedule 13D regarding the shareholder group you claim to represent." I did not "claim" to represent anyone other than myself, nor could it, by any reasonable standard, be argued that I am part of a 13D group. I mentioned two other shareholders, in my filing, simply because I MET them at the 2011 annual meeting (a public venue)...and I happened to witness, at that meeting, that they contributed sustantially, in their own right, to the discussion about how Scott's Liquid Gold could best cure its dysfunctional governance. Since I didn't believe it appropriate to limit the input in my proposed private meeting with the board to myself, in my most recent board letter, I asked the board to consider including those two other major shareholders, AND OTHER LARGE SHAREHOLDERS. No self-respecting observer could claim that that somehow "morphs" me into a "group," and my counsel assures me that there is no legal precedent suggesting otherwise. 4) "You made...misstatements regarding the anticipated net proceeds" of the transaction. My definition of "net proceeds" apparently differs from the company's. My reference to "net proceeds" is accurate in the context I presented it (sale price of real estate, less estimated commission, less pay off of mortgage debt). 5) "You also suggest that the sale/leaseback transaction...would allow the company to pay a 50 cent dividend. This suggestion is materially inaccurate and dangerous..." There is nothing "dangerous" about it. What I DID say is that the sale/leaseback transaction, AS PART OF A MULTI-STEP PROCESS TO MAXIMIZE SHAREHOLDER VALUE, would, IN MY ESTIMATION (depending on how exactly the company chooses to restructure its balance sheet, management, operations, etc.), allow the company to pay a 50 cent dividend. I am still convinced that that is true. 6) "For years, the company's management and board has endured with patience your ongoing verbal assaults and character assasinations." The claim is false. My first public filing taking the board to task was not "years" ago...it was in March of 2011. Prior to that, I had tried to, in vain, discreetly and in the background, get Mr. Goldstein to confront his inherently conflicted position, vis a vis the company and "his" board. But it became increasingly clear to me that this was not something Goldstein, or the board, were interested in facing, without public pressure and accountability...since Goldstein's primary consideration, this whole time, has been the maintenance of his personal sinecure (i.e. his $400,000+ a year compensation package), as well as his spouse's employment, in what has been treated as a "family owned" company...in stark defiance of Goldstein's and the board's fiduciary responsibility to outside shareholders. 7) "Your inflammatory remarks have added to the difficulty of navigating what has been one of the most challenging markets, particularly for this company's industry, that this country has ever experienced." It has nothing to do with "this country" or "this company's industry"; it has to do with Scott's Liquid Gold! The power to FIX the company LIES WITHIN. It does NOT LIE IN EXCUSE-MAKING...or feeling sorry for Mr. Goldstein, and sticking one's head in the sand. The statement shows that the board remains firmly ensconced in a world of denial and evasion, and, reflecting a staggering moral default, continues to allow Mr. Goldstein to live in a similarly illusory world, by pretending as if Scott's Liquid Gold's problems the last 15 or more years are because of "challenging markets," as opposed to facing the patently obvious truth...which is that the company has a MANAGERIAL PROBLEM at the top. 8) "Not only have you attacked management, you have also made baseless claims about the independence, judgement, and integrity of the outside directors of the board." The board has self-evidently been STACKED by Mark Goldstein, and, despite my ongoing demands that this nonsense stop, it still consists of 4 out of 6 members that are either employees, former employees, or otherwise beholden to the Goldstein family. It doesn't matter if the other 2 directors MIGHT be "nominally independent." They have engaged in a pattern of witnessing, countenancing, and enabling a board whose majority is collectively tethered to, exists exclusively as a rubber stamp for, and continues to do the bidding of the CEO, in a most unabashed and impudent of fashions. 9) "Despite your alleged grave concerns about the company's management and oversight...you have continued to acquire stock in the company." This claim is totally irrelevant. I have the right to buy or sell stock at any time for any reason. By buying MORE stock, in a company that needs "fixing," I can be more effective in my efforts to bring about necessary change, and draw more attention to the importance of my cause. 10) "The company demands that you refrain from any further tortious activity..." The company can fabricate "tortious activity" all it wants...but it is the TRUTH that will finally set Scott's Liquid Gold's outside shareholders free. And I fully intend to continue to tell that truth, with the exclusive goal of protecting, and enhancing, shareholder value. (Would that the derelict SLGD board had been been focused on the same thing, these last 22 years.) I wish to again emphasize that I fully support the pending real estate transaction, and believe it is a necessary step in the process of unlocking the value that remains, for ALL of Scott's Liquid Gold's shareholders. But I also reiterate my request that the board seek a meeting with its larger outside shareholders, sooner rather than later, so that said shareholders may give input as to the appropriate use of the proceeds from the transaction. (The fact that you suggested in your December 3, 2012 8-K filing that such input can wait until the shareholder meeting in May, is a grave affront, and clearly evidences that the board plans to continue remaining utterly passive, indulging the CEO's every whim and desire.) In my view, as we move forward from this point, it will be most intriguing to see just how far "out on a limb" this board is willing to go, in standing by Mr. Goldstein, and continuing to fulfill its longstanding role of providing a sinecure, and a "safe world," for the SLGD scion to exist in. In the case of Messrs. Johnson, Hinkle, and Field, I don't think anyone is surprised that they are incapable of making ANY kind of independent judgments. The case of bonafide outsiders Bud Laber and Philip Neri becomes much more interesting, and is going to be the true test. Should opportunities to "unlock value" present themselves, will Messrs. Laber and Neri stand up to be heard, and finally speak on behalf of the "rest of us"...or will they risk their professional reputations, and perversely fall on their swords, to "secure and bless" more of the same nonsense at Scott's Liquid Gold, that we've been seeing for years on end? If the latter, for what moral purpose, and to what fiduciary end? Surely, the Scott's Liquid Gold board, as unaccountable as it is, can be compelled to face this one stark reality: The sale of the real estate represents the LAST CHANCE for outside shareholders to salvage significant value, with their investment in this company. Passively sitting by, and allowing the board to just "hand over" the proceeds to a failed CEO, to be frittered away at will, while he collects another $400,000 a year for the privilege of doing it, is the height of insanity. It is not something your outside shareholders can afford, financially or morally, to tolerate. I certainly know I'm not going to...without fully calling you to task, holding you individually responsible, and otherwise providing a moral witness to this continued travesty. Large shareholders...all shareholders, in fact...deserve to be treated with respect, and it is long since time the board have the rectitude to place our rights and concerns on an equal footing to those of the inestimable Mr. Goldstein. I again request a private meeting with you to discuss my thoughts and ideas on the appropriate uses of the proceeds from the pending real estate transaction. With solemnity and resolve, Timothy J. Stabosz