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

 

Under the Securities Exchange Act of 1934
(Amendment No. 10)*

 

(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 32,628,078 shares of the issuer’s common stock outstanding as of August 6, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2013, as filed on August 6, 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

 

2

 

 

(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 32,628,078 shares of the issuer’s common stock outstanding as of August 6, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2013, as filed on August 6, 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

 

3

 

 

(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 32,628,078 shares of the issuer’s common stock outstanding as of August 6, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2013, as filed on August 6, 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

 

4

 

 

(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 32,628,078 shares of the issuer’s common stock outstanding as of August 6, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2013, as filed on August 6, 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 32,628,078 shares of the issuer’s common stock outstanding as of August 6, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2013, as filed on August 6, 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

 

6

 

 

(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 32,628,078 shares of the issuer’s common stock outstanding as of August 6, 2013, as reported on the issuer’s quarterly report on form 10-Q for the fiscal quarter ended June 30, 2013, as filed on August 6, 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. 10 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 August 30, 2013, the Yucaipa Parties sent a letter to the interim chief executive officer of the Company relating to the board observation rights granted pursuant to the Purchase Agreement. The letter is filed as an Exhibit to this Amendment to Schedule 13D.

 

Item 7.                   Material to be Filed as Exhibits.

 

Exhibit No.		Description of Exhibit
1.		Letter dated August 30, 2013 to the Company.

 

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:  September 3, 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

 

The Yucaipa Companies

 

 

Ron Burkle

 

 

August 30, 2013
Jason Kalisman	via e-mail: JTK@talismangi.com
Interim CEO	and Federal Express
Morgans Hotel Group Co.	Airbill Number: 796586073386
475 Tenth Avenue
New York, NY 10018
Dear Jason:

 

Without question, you could tell I was extremely frustrated by the way things were handled at your board meeting on August 29th. Since you took over you have not given one update as to any sales process or inquiries. I believe you are in breach of your obligation to provide us with observation rights as well as your fiduciary duties to the stockholders of the company. Please keep in mind that we have over $200 million of your debt and in the money warrants for approximately 30% of your stock, but you act like your less than 15 percent is sole control.

 

For reasons only you and your family know, you have chosen to pay a 4% penalty interest on approximately $100 million in preferred for not putting a Yucaipa representative on your board. That’s more than 10 thousand dollars per day you’ve decided the shareholders should pay to not hear our opinions. With a board full of cousins you’re afraid to have one other voice in the room. Are you afraid one of your cousins won’t agree with you? Should the shareholders pay 4 million dollars per year for your insecurities? Because we don’t have a seat, we are supposed to have real observation rights. Yours truly, Ira Tochner and Brad Nugent have signed confidentiality agreements to be allowed to be “observers”. That’s fine, you pay us 4 million dollars to not talk . . . we understand we don’t have a right to comment or vote, but you cannot exclude us from discussions of company refinancings, new CEOs, terminated CEOs and like matters. If the board is discussing litigation matters associated with Yucaipa it’s obvious we should be excluded, but that should be about it.

 

The entire incident with Michael Gross is a great example of not keeping the board informed or board observers informed of what’s going on. Mr. Gross sent a notice of resignation to you weeks ago because he had not been offered a board seat as required by his employment contract. My understanding is he was threatened with litigation if he didn’t withdraw his notice. You did this hours before the SEC notice was required and you did not discuss it with the

 

 

9130 West Sunset Boulevard / Los Angeles, California 90069
Telephone (310) 789-7295 / Fax (310) 789-7208

 

 

 

Jason Kalisman

August 30, 2013

Page 2

 

 

board. How in the world is this not a board issue? Who authorized you to threaten him? Did he send the letter to the entire board? None of these matters were disclosed to the board for well over a month. Instead, the board only found out about Michael Gross’ departure and his exit package at the August 29th board meeting within a few hours of when you were required to file an 8K on the entire matter - at best this is poor governance, at worst it’s probably a violation of the securities law concerning disclosure of material information involving the company.

 

I understand that you are a stockholder (along with members of your family) but we have more upside through our warrants and are bigger stake holders through our converts and preferred than you and your entire family by a multiple of about 10x and we are not being treated equitably or fairly.

 

We have a lot of experience in the hospitality sector, we own a tremendous number of hospitality investments, including hotels and hostels and have a lot of experience in building, renovating and managing those facilities that you do not - that experience and resource is being ignored. In fact you are paying us 4 million dollars per year to not hear it. Now you are paying Michael Gross over a million dollars to not have his experience or his relationships. Why and in whose best interest is this?

 

I’ve heard comments through your associates that it would be “a cold day in hell” before Yucaipa owns the Delano Hotel. This is indeed an unfortunate statement. You should be looking to the best interest of the stockholders, not what you think is in the best interest of you and your family.

 

Stop acting like a spoiled child. Stop playing with the company as though it’s your new toy. Get Morgans on the market and sell it to an appropriate buyer. It’s time to sell now for all stockholders benefit. Ask your mother to buy you something else.

 

We expect in the future that our board observation rights will be observed to the fullest extent intended by the agreements between us and that you will quickly follow up on those who have expressed an interest in the sales process.

 

Sincerely,

/s/ Ron Burkle

Ron Burkle