UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D/A

 

Under the Securities Exchange Act of 1934
(Amendment No. 9)*

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(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. o

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).

 

 

 

(1) Includes beneficial ownership of common stock of the issuer through vested restricted stock units for 22,367 shares of the issuer’s common stock.

 

(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(2) Beneficial ownership of common stock of the issuer is through warrants to purchase an aggregate of 12,500,000 shares of the issuer’s common stock.  Exercise of the warrants is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

5

 

 

(3) Beneficial ownership of common stock of the issuer is through a warrant to purchase 7,535,580 shares of the issuer’s common stock.  Exercise of the warrant is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

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(4) Beneficial ownership of common stock of the issuer is through a warrant to purchase 4,964,420 shares of the issuer’s common stock.  Exercise of the warrant is subject to mandatory cashless exercise, which reduces the shares of issuer’s common stock received upon exercise, and the number of shares received will be determined by the fair market value of the issuer’s common stock at the time of such exercise.  The percent of class of the issuer’s common stock beneficially owned is based on 32,418,558 shares of the issuer’s common stock outstanding as of May 7, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended March 31, 2013, as filed on May 8, 2013 and does not reflect any reduction for the effect of the mandatory cashless exercise as the amount of such reduction is not determinable until the time of exercise.

 

* See Instructions

 

7

 

This Amendment No. 9 to Schedule 13D amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on November 25, 2009 (as amended to date, this “Schedule 13D”) by (i) Ronald W. Burkle, an individual, (ii) Yucaipa American Management, LLC, a Delaware limited liability company (“Yucaipa American”), (iii) Yucaipa American Funds, LLC, a Delaware limited liability company (“Yucaipa American Funds”), (iv) Yucaipa American Alliance Fund II, LLC, a Delaware limited liability company (“YAAF II LLC”), (v) Yucaipa American Alliance Fund II, L.P., a Delaware limited partnership (“YAAF II”), and (vi) Yucaipa American Alliance (Parallel) Fund II, L.P., a Delaware limited partnership (“YAAF II Parallel” and, together with YAAF II, the “Investors”; and the Investors, together with Mr. Burkle, Yucaipa American, Yucaipa American Funds, and YAAF II LLC, are referred to herein as the “Reporting Persons”), with respect to the common stock, par value $0.01 per share (the “Common Stock”), of Morgans Hotel Group Co., a Delaware corporation (the “Company”).  The filing of any amendment to this Schedule 13D (including the filing of this amendment) shall not be construed to be an admission by the Reporting Persons that a material change has occurred in the facts set forth in this Schedule 13D or that such amendment is required under Rule 13d-2 of the Securities Exchange Act of 1934, as amended.

 

Item 4.           Purpose of the Transaction.

 

Item 4 of this Schedule 13D is hereby supplemented to add the following:

 

On June 27, 2013, the Yucaipa Parties sent a letter to the Company terminating the Exchange Agreement based on the Company’s failure to respond to the Yucaipa Securityholder’s earlier demand for a response as to whether the Company still intended to consummate the transactions contemplated by the Transaction Agreements, public statements of OTK Associates, LLC (“OTK”) to the effect that its candidates to the Company’s board of directors will prevent the transactions contemplated by the Transaction Agreements from occurring, and OTK’s filing of a motion in Delaware Chancery Court alleging that the Exchange Agreement and the other Transaction Agreements are void. A copy of the June 27 letter is attached as an exhibit to this Schedule 13D.

 

On June 27, 2013, the Yucaipa Parties filed a complaint against the Company in New York Supreme Court. The Yucaipa Companies issued a press release announcing the filing of this complaint. A copy of the press release is attached as an exhibit to this Schedule 13D.

 

On July 1, 2013, Ronald W. Burkle filed a complaint against OTK in the US District Court for the Southern District of New York. The Yucaipa Companies issued a press release announcing the filing of this complaint. A copy of the press release is attached as an exhibit to this Schedule 13D.

 

On July 1, the Investors sent a letter to the Company reminding the Company of its obligation, pursuant to the Purchase Agreement, to invite the Investors’ nominee to all meetings of the Company’s board of directors and to provide the nominee copies of all materials provided to the Company’s directors. A copy of the July 1 letter is attached as an exhibit to this Schedule 13D.

 

Item 7.                   Material to be Filed as Exhibits.

 

Exhibit No.		Description of Exhibit
1.		Letter dated June 27, 2013 to the Company Re: Termination Notice.
2.		Press Release dated June 27, 2013.
3.		Press Release dated July 1, 2013.
4.		Letter dated July 1, 2013 to the Company Re: Observation Rights and Rights to Director Materials.

 

8

 

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.

 

Dated:  July 2, 2013

 

	RONALD W. BURKLE
	By:	/s/ Ronald W. Burkle
	YUCAIPA AMERICAN MANAGEMENT, LLC
	By:	/s/ Ronald W. Burkle
		Name: Ronald W. Burkle
		Its: Managing Member
	YUCAIPA AMERICAN FUNDS, LLC
	By: Yucaipa American Management, LLC
	Its: Managing Member
		By:	/s/ Ronald W. Burkle
			Name: Ronald W. Burkle
			Its: Managing Member
	YUCAIPA AMERICAN ALLIANCE FUND II, LLC
	By: Yucaipa American Funds, LLC
	Its: Managing Member
		By: Yucaipa American Management, LLC
		Its: Managing Member
			By:	/s/ Ronald W. Burkle
				Name: Ronald W. Burkle
				Its: Managing Member

 

9

 

	YUCAIPA AMERICAN ALLIANCE FUND II, L.P.
	By: Yucaipa American Alliance Fund II, LLC
	Its: General Partner
		By: Yucaipa American Funds, LLC
		Its: Managing Member
			By: Yucaipa American Management, LLC
			Its: Managing Member
				By:	/s/ Ronald W. Burkle
					Name: Ronald W. Burkle
					Its: Managing Member
	YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.
	By: Yucaipa American Alliance Fund II, LLC
	Its: General Partner
		By: Yucaipa American Funds, LLC
		Its: Managing Member
			By: Yucaipa American Management, LLC
			Its: Managing Member
				By:	/s/ Ronald W. Burkle
					Name: Ronald W. Burkle
					Its: Managing Member

 

10

Exhibit 1

 

YUCAIPA AMERICAN ALLIANCE FUND II, L.P.

YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.

YUCAIPA AGGREGATOR HOLDINGS, LLC
9130 W. Sunset Boulevard
Los Angeles, California 90069

 

June 27, 2013

 

VIA HAND DELIVERY

 

Morgans Hotel Group Co.

475 10th Avenue, 11th Floor

New York, NY 10018

Attn: David W. Smail

E-mail: david.smail@morganshotelgroup.com

 

Re:          Termination Notice

 

Ladies and Gentlemen:

 

Reference is made to that certain Exchange Agreement, dated as of March 30, 2013 (the “Exchange Agreement”), by and between Yucaipa Aggregator Holdings, LLC, Yucaipa American Alliance Fund II, L.P., Yucaipa American Alliance (Parallel) Fund II, L.P., and Morgans Hotel Group Co. (the “Company”). Capitalized terms used, but not otherwise defined herein shall have the meanings set forth in the Exchange Agreement.

 

Based on the Company’s failure to respond to our letter dated June 20, 2013, as well as (among other things) OTK Associates, LLC’s (“OTK”) public statements to the effect that its candidates to the Company’s Board of Directors (the “Board”) will prevent the Transactions from occurring and OTK’s filing of its motion for leave to file a second amended and supplemental complaint alleging that the Exchange Agreement and the Other Agreements are void, it appears that the Board has withdrawn its approval of the Transactions, that the Company has breached the representations, warranties and covenants made in the Exchange Agreement and Other Agreements, and that the Company has repudiated its obligation to use commercially reasonable efforts to carry out the intent and purposes of the Exchange Agreement and the consummation of the transactions contemplated thereby.  Because of the Company’s acts and omissions, which constitute a repudiation and breach of the terms, and a withdrawal and adverse modification, of the Exchange Agreement, we exercise our right to terminate the Exchange Agreement pursuant to Section 8.1.4 of such Agreement.  Because the Board has withdrawn its approval of the Transactions, the Termination Fee set forth in Section 8.4(a) of such Agreement is due and owing and demand is hereby made therefor.

 

 

Notwithstanding the foregoing, if the Company confirms to us in writing by 5 p.m. (Eastern Time) on July 1, 2013 that the Company is unconditionally committed to completing the Transactions, we will withdraw this Termination Notice.

 

This letter shall not constitute a waiver of any rights that the Yucaipa Parties may have against the Company or any other person or entity and shall not in any way limit the rights to pursue any remedies against available to it under the Exchange Agreement, the Other Agreements or at law or in equity.

 

	Very truly yours,
	YUCAIPA AMERICAN ALLIANCE FUND II, L.P.
	YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.
	YUCAIPA AGGREGATOR HOLDINGS, LLC
	By:	/s/ Robert P. Bermingham
	Name:	Robert P. Bermingham
	Title:	Vice President

 

Exhibit 2

 

Burkle Sues Morgans Hotel Group Co.

 

LOS ANGELES, June 27, 2013 — The Yucaipa Companies, an investment firm owned by Ron Burkle, announced today that it filed suit against Morgans Hotel Group Co. (NASDAQ: MHGC) to protect its rights in the Company.

 

Today Yucaipa filed a complaint in New York state court against Morgans, alleging Morgans’ breach of its transaction agreements with Yucaipa, and seeking to enforce rights and remedies under those agreements.  Yucaipa will continue to pursue all of its rights and remedies under all of its agreements with Morgans, which OTK Associates, which controls the Morgans board, has publicly stated it will honor.

 

Yucaipa released the following statement:

 

We previously expressed our disappointment with the election to the Morgans board of the slate of directors nominated by OTK Associates.  We continue to be skeptical that OTK’s representatives will pursue a sale of Morgans.  As the largest stakeholder in Morgans, through ownership of all of the Company’s outstanding preferred stock, over 50% of its convertible notes, as well as warrants for 12.5 million shares of common stock, Yucaipa must take action to protect its interests.

 

About The Yucaipa Companies

 

The Yucaipa Companies is a premier investment firm that has established a record of fostering economic value through the growth and responsible development of companies.  As an investor, Yucaipa works with management to strategically reposition businesses and implement operational improvements, resulting in value creation for stakeholders, customer and employees.  Since its founding in 1986, the firm has completed mergers and acquisitions valued at more than $35 billion.  For more information visit www.yucaipaco.com

 

 

Exhibit 3

 

Shareholder Sues Dissident Nominees To Morgans Hotel Group Board And Morgans Shareholder OTK Associates

 

LOS ANGELES, July 1, 2013 — Ron Burkle today filed suit against the dissident nominees to the board of directors of Morgans Hotel Group Co. (NASDAQ: MHGC) put forward by OTK Associates, a Morgans shareholder, and against OTK.  Burkle owns The Yucaipa Companies, an investment firm that is the largest stakeholder in Morgans.

 

Today’s complaint, filed in federal court in the Southern District of New York, alleges that the defendants engaged in federal proxy rule violations during the recent contest for control of the Morgans board.  In particular, the defendants are accused of making materially false and misleading statements and omissions in describing the recommendations of the country’s two leading proxy advisory firms, Glass Lewis & Co. and Institutional Shareholder Services Inc., which led to a tainted election.  The complaint seeks a new election for the Morgans board of directors.

 

Last week Yucaipa sued Morgans in New York state court for Morgans’ breach of its agreements with Yucaipa.  Yucaipa is the largest stakeholder in Morgans, through ownership of all of the Company’s outstanding preferred stock, over 50% of its convertible notes, and warrants for 12.5 million shares of common stock.  Burkle personally owns common stock of Morgans.

 

About The Yucaipa Companies

 

The Yucaipa Companies is a premier investment firm that has established a record of fostering economic value through the growth and responsible development of companies.  As an investor, Yucaipa works with management to strategically reposition businesses and implement operational improvements, resulting in value creation for stakeholders, customer and employees.  Since its founding in 1986, the firm has completed mergers and acquisitions valued at more than $35 billion.  For more information visit www.yucaipaco.com

 

Exhibit 4

 

YUCAIPA AMERICAN ALLIANCE FUND II, L.P.

YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.
9130 W. Sunset Boulevard
Los Angeles, California 90069

 

July 1, 2013

 

VIA HAND DELIVERY

 

Morgans Hotel Group Co. 475 10th Avenue, 11th Floor New York, NY 10018 Attn: David W. Smail E-mail: david.smail@morganshotelgroup.com

 

 

Re:                             Observation Rights and Rights To Director Materials

 

Ladies and Gentlemen:

 

Reference is made to that certain Securities Purchase Agreement, dated as of October 15, 2009 (the “SPA”), by and between Yucaipa American Alliance Fund II, L.P., Yucaipa American Alliance (Parallel) Fund II, L.P. (together, the “Investors”), and Morgans Hotel Group Co. (the “Company”). Capitalized terms used, but not otherwise defined herein shall have the meanings set forth in the SPA.

 

The Investors wish to remind the Company that, pursuant to Section 5.7(b)(ii)(4) of the SPA, “[u]nless and until the Investor Nominee [Ronald W. Burkle or a designee] is elected to the Board of Directors (and during any period of time that the Investor Nominee is not serving as a director of the Board of Directors),” the Company is obligated, subject to certain specified exceptions, to (1) invite the Investor Nominee to attend all meetings of the Company’s Board of Directors in a nonvoting observer capacity; and (2) provide the Investor Nominee “copies of all notices, minutes, consents and other material that [the Company] provides to its directors.”  SPA § 5.7(b)(ii)(4).

 

The Investor Nominee has not received any invitation to attend any meeting of the Board of Directors since the Board Meeting that occurred on June 19, 2013.  Please confirm that (1) no meeting of the Board of Directors has occurred or has been scheduled since June 19, 2013; and (2) that you have provided to the Investor Nominee “copies of all notices, minutes, consents and other material” that the Company has provided to its directors since the 2013 Annual Meeting on June 14, 2013.  Please further confirm that you will comply with your obligations under Section 5.7(b)(ii)(4) on an ongoing basis “[u]nless and until the Investor Nominee is elected to the Board of Directors (and during any period of time that the Investor Nominee is not serving as a director of the Board of Directors).”  SPA § 5.7(b)(ii)(4).

 

 

This letter shall not constitute a waiver of any rights that the Investors may have against the Company or any other person or entity and shall not in any way limit the rights to pursue any remedies available to them under the SPA or at law or in equity.

 

	Very truly yours,
	YUCAIPA AMERICAN ALLIANCE FUND II, L.P.
	YUCAIPA AMERICAN ALLIANCE (PARALLEL) FUND II, L.P.
	By:	/s/ Robert P. Bermingham
	Name:	Robert P. Bermingham
	Title:	Vice President