-----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, TUf4NMVJQUDdfNmCJsUwR9ynhw36F7mHlQVU1v5SFXO2/V0zN7kf0qgxnA9VN7ew HWuGvxuniDUbsh0XB2jAJA== 0000950159-07-000939.txt : 20070801 0000950159-07-000939.hdr.sgml : 20070801 20070801143421 ACCESSION NUMBER: 0000950159-07-000939 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20070801 DATE AS OF CHANGE: 20070801 GROUP MEMBERS: SPECTRUM GALAXY FUND, LTD. GROUP MEMBERS: ZEFF CAPITAL PARTNERS I, L.P. GROUP MEMBERS: ZEFF HOLDING COMPANY LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ZEFF DANIEL CENTRAL INDEX KEY: 0001271640 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 50 CALIFORNIA STREET STREET 2: SUITE 1500 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4154395273 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COMMERCE ENERGY GROUP, INC. CENTRAL INDEX KEY: 0001274150 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 200501090 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-81205 FILM NUMBER: 071015709 BUSINESS ADDRESS: STREET 1: 600 ANTON BOULEVARD, STE. 2000 CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: (714) 259-2500 MAIL ADDRESS: STREET 1: 600 ANTON BOULDVARD, STE. 2000 CITY: COSTA MESA STATE: CA ZIP: 92626 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCE ENERGY GROUP INC DATE OF NAME CHANGE: 20040223 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN ENERGY GROUP INC DATE OF NAME CHANGE: 20031222 SC 13D 1 zeff13d.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 COMMERCE ENERGY GROUP, INC. --------------------------- (Name of Issuer) Common Stock ------------ (Title of Class of Securities) 20061Q106 --------- (CUSIP Number) Emily Mason Covington & Burling LLP One Front Street, 35th Floor San Francisco, CA 94111 Telephone: (415) 591-7062 Facsimile: (415) 955-6562 ------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 25, 2007 ------------- (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 that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 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 Rule 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). CUSIP No. 20061Q106 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Daniel Zeff - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) N/A - -------------------------------------------------------------------------------- 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 Beneficially Owned by Each Reporting Person With - -------------------------------------------------------------------------------- 7. Sole Voting Power 3,238,096 - -------------------------------------------------------------------------------- 8. Shared Voting Power None - -------------------------------------------------------------------------------- 9. Sole Dispositive Power 3,238,096 - -------------------------------------------------------------------------------- 10. Shared Dispositive Power None - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 3,238,096 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 10.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP No. 20061Q106 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Spectrum Galaxy Fund Ltd. - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) N/A - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]. - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization British Virgin Islands Number of Shares Beneficially Owned by Each Reporting Person With - -------------------------------------------------------------------------------- 7. Sole Voting Power 1,421,864 - -------------------------------------------------------------------------------- 8. Shared Voting Power None - -------------------------------------------------------------------------------- 9. Sole Dispositive Power 1,421,864 - -------------------------------------------------------------------------------- 10. Shared Dispositive Power None - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,421,864 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 4.7% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- CUSIP No. 20061Q106 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Zeff Capital Partners I, L.P. - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) N/A - -------------------------------------------------------------------------------- 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 Beneficially Owned by Each Reporting Person With - -------------------------------------------------------------------------------- 7. Sole Voting Power 1,816,232 - -------------------------------------------------------------------------------- 8. Shared Voting Power None - -------------------------------------------------------------------------------- 9. Sole Dispositive Power 1,816,232 - -------------------------------------------------------------------------------- 10. Shared Dispositive Power None - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,816,232 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 6.0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- CUSIP No. 20061Q106 - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Zeff Holding Company, LLC - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) N/A - -------------------------------------------------------------------------------- 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 Beneficially Owned by Each Reporting Person With - -------------------------------------------------------------------------------- 7. Sole Voting Power 1,816,232 - -------------------------------------------------------------------------------- 8. Shared Voting Power None - -------------------------------------------------------------------------------- 9. Sole Dispositive Power 1,816,232 - -------------------------------------------------------------------------------- 10. Shared Dispositive Power None - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,816,232 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 6.0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) OO - -------------------------------------------------------------------------------- SCHEDULE 13D Item 1. Security and Issuer. This statement on Schedule 13D relates to the common stock (the "Common Stock") of Commerce Energy Group, Inc. (the "Company"), a Delaware corporation. The address of the Company's principal executive offices is 600 Anton Boulevard, Suite 2000, Costa Mesa, CA 92626. Item 2. Identity and Background. This Statement is filed as a joint statement pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") by Zeff Holding Company, LLC, a Delaware limited liability company ("Holding"), Zeff Capital Partners, I, L.P., a Delaware limited partnership ("Capital"), Spectrum Galaxy Fund Ltd., a company incorporated in the British Virgin Islands ("Spectrum"), and Daniel Zeff, and individual ("Zeff") (Holding, Capital, Spectrum and Zeff are hereinafter collectively referred to as the "Reporting Persons"). Zeff provides discretionary investment management services to Zeff Capital Offshore Fund, a class of shares of Spectrum. Zeff is the sole manager and member of Holding, which in turn serves as the general partner for Capital. Accordingly, the Reporting Persons are making a group filing because, due to the relationship between them, the Reporting Persons may be deemed to constitute a "group" for purposes of Section 13(d)(3) of the Exchange Act. The address of the principal business and principal office of each of the Reporting Persons is 50 California Street, Suite 1500, San Francisco, CA 94111. The principal business of Zeff is that of investing in securities in his capacity as investment manager for Zeff Capital Offshore Fund and as sole manager of Holding. The principal business of Spectrum is that of investing in securities. The principal business of Capital is that of an investment partnership. The principal business of Holding is acting as general partner for Capital. None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). 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 thereto. Zeff is a citizen of the United States. Spectrum is organized under the laws of the British Virgin Islands. Capital and Holding are organized under the laws of the State of Delaware. Item 3. Source and Amount of Funds or Other Consideration. This statement is not being filed in connection with any sale or purchase of Common Stock by the Reporting Persons. The Reporting Persons are making this filing to provide notice of their interest in encouraging the evaluation and negotiation of a potential acquisition transaction involving the Company and their solicitation of the same, as further described below in Item 4. Item 4. Purpose of Transaction. The Reporting Persons acquired shares of Common Stock of the Company for investment purposes in the ordinary course of their business. The Reporting Persons believe that the Company's operating performance is significantly lower than its potential performance. As such, the Reporting Persons intend to encourage the Company's Board of Directors to pursue strategic alternatives, including a cash merger, which may include some or all of the actions or matters described in Item 4 to Schedule 13D, in order to maximize shareholder value. Exhibit 99.2 to this Statement, which is incorporated herein by reference, is a letter from Daniel Zeff to Robert Perkins, Chairman of the Company's Board of Directors. The Reporting Persons may engage in discussions or negotiations with the Company, including its management or directors, with other stockholders of the Company and/or third parties with a view to encouraging or effecting strategic alternatives that the Reporting Persons believe will maximize stockholder value. Depending on various factors, including without limitation, the Company's financial performance, the price levels of the Common Stock, conditions in the securities markets and general economic and industry conditions, and future developments at the Company, the Reporting Persons may in the future take such actions with respect to their investment in the Company as they deem appropriate including, without limitation: o continuing to hold their shares for investment; o purchasing additional shares of Common Stock; o selling some or all of their shares of Common Stock; o seeking to change the composition of the Board; or o changing their intention with respect to any and all matters referred to in this Item. Item 5. Interest in Securities of the Issuer. (a) The aggregate percentage of the outstanding shares of Common Stock reported owned by each Reporting Person is based upon 30,385,868 shares of Common Stock outstanding as of June 11, 2007, as reported in the Company's Form 10-Q for quarterly period ended April 30, 2007. As of the close of business on July 30, 2007: (i) Spectrum beneficially owns 1,421,864 shares of Common Stock constituting approximately 4.7% of the shares of Common Stock outstanding; (ii) Capital beneficially owns 1,816,232 shares of Common Stock constituting approximately 6.0% of the shares of Common Stock outstanding; (iii) Holding beneficially owns 1,816,232 shares of Common Stock held by Capital, of which Holding is the general partner, constituting approximately 6.0% of the shares of Common Stock outstanding; and (iv) Zeff beneficially owns 3,238,096 shares of the Company's Common Stock comprised of 1,421,864 shares of Common Stock held by Spectrum (Zeff provides discretionary investment management services to Zeff Capital Offshore Fund, a class of shares of Spectrum) and 1,816,232 shares of Common Stock held by Capital (Zeff is the sole manger of Capital's general partner), in total constituting approximately 10.7% of the shares of Common Stock outstanding; (b) Spectrum has the sole power to vote or to direct the vote and to dispose or to direct the disposition of the 1,421,864 shares of Common Stock reported herein as being beneficially owned by it, which power is exercisable by Zeff as investment manager. Capital has the sole power to vote or to direct the vote and to dispose or to direct the disposition of the 1,816,232 shares of Common Stock reported herein as being beneficially owned by it, which power is exercisable by Zeff as the sole manager of Holding, Capital's general partner. (c) Set forth below is a description of all reportable transactions in shares of Common Stock that have been effected by the Reporting Person during the past 60 days. The following sales were made by Capital: Date Price per share Number of shares 7/24/07 $2.2 9,400 7/24/07 $2.22 5,100 7/24/07 $2.24 17,000 7/24/07 $2.28 100 (d) No other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock. Item 6. Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer. None. Item 7. Material to be Filed as Exhibits. Exhibit 99.1: Joint Filing Agreement, dated as of July 31, 2007, by and among the Reporting Persons. Exhibit 99.2: Letter, dated July 31, 2007, from Daniel Zeff to Robert Perkins, Chairman, Commerce Energy Group, Inc. SIGNATURES After reasonable inquiry and to the best of their knowledge and behalf, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: July 31, 2007 /s/ Daniel Zeff ------------------------------- Daniel Zeff ZEFF HOLDING COMPANY, LLC By:/s/ Daniel Zeff Name: Daniel Zeff Title: Manager ZEFF CAPITAL PARTNERS I, L.P. By: Zeff Holding Company, LLC, as general partner By: /s/ Daniel Zeff Name: Daniel Zeff Title: Manager SPECTRUM GALAXY FUND LTD. By: /s/ Dion R. Friedland Name: Dion R. Friedland Title: Director EX-99 2 ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Joint Filing Agreement In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing on behalf of each of them of a statement on Schedule 13D with respect to the Common Stock of Commerce Energy Group, Inc., and that this Agreement be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument. In witness hereof, the undersigned hereby executed this Agreement this 31st day of July, 2007. /s/ Daniel Zeff ------------------------------- Daniel Zeff ZEFF HOLDING COMPANY, LLC By: /s/ Daniel Zeff Name: Daniel Zeff Title: Manager ZEFF CAPITAL PARTNERS I, L.P. By: Zeff Holding Company, LLC, as general partner By: /s/ Daniel Zeff Name: Daniel Zeff Title: Manager SPECTRUM GALAXY FUND LTD. By: /s/ Dion R. Friedland Name: Dion R. Friedland Title: Director EX-99 3 ex99-2.txt EXHIBIT 99.2 Exhibit 99.2 July 31, 2007 Robert Perkins, Chairman Commerce Energy Group, Inc. 600 Anton Blvd., Suite 2000 Costa Mesa, CA 92626 Dear Mr. Perkins, I recently received information concerning a cash offer for all of the outstanding shares of Commerce Energy Group, Inc. ("Commerce Energy") at a significant premium to the company's current trading price. The potential buyer appears to be well-qualified with the financial resources to complete an acquisition. In addition, I have communicated with other qualified buyers who have expressed an interest in exploring an acquisition of Commerce Energy. As Commerce Energy's largest shareholder with 10.7% of the outstanding stock, Zeff Capital Partners urges you and the rest of the Board to review, negotiate and accept the best offer available for a sale of the company. I believe this is the best way to maximize shareholder value and to realize the long-term potential of the business. Through conversations with you and Steve Boss, it has become clear that in order to significantly increase earnings, Commerce Energy will have to either grow through acquisition or realign its existing cost structure with current operations. We are concerned with both of these alternatives as compared to a sale of the company. First, the company has a mixed history with acquisitions. Commerce Energy recently paid a settlement of $3.9 million (in addition to legal fees) to American Communications Network ("ACN") related to Commerce Energy's purchase of certain ACN assets in 2005 (and a subsequent lawsuit by ACN). Second, it appears that Commerce Energy's costs to service and maintain customers may be running above plan. Commerce Energy has had several years to restructure its business and management. The company has had three CEOs since 2005 and last week released its most recent CFO. Further changes to management or the company's internal cost structure involve time and risk and are not in the best interest of shareholders. Finally, potential financing initiatives, which may be under consideration by the company, risk diluting shareholders and/or damaging the company's strong balance sheet. Zeff Capital Partners applauds Commerce Energy's management and Board of Directors for returning the company to profitability but believes the shareholders will be best served by a merger with or acquisition by another company at a price that will maximize shareholder value now. We are not interested in ongoing restructurings, management changes, or financings leading to acquisitions by the company, all of which involve unnecessary risk and delay. The Board of Directors of Commerce Energy owns a combined 2% of the outstanding stock and must consider its outside shareholders' interests first. Commerce Energy is sitting on a valuable asset as evidenced by the interest in the company, but that value is best realized in a merger with a larger entity that can more efficiently leverage the business assets. Please inform the public of your plan of action and negotiate the best offer for a sale of the company. Sincerely, Daniel Zeff -----END PRIVACY-ENHANCED MESSAGE-----