0001387749-15-000003.txt : 20150204 0001387749-15-000003.hdr.sgml : 20150204 20150204075230 ACCESSION NUMBER: 0001387749-15-000003 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20150204 DATE AS OF CHANGE: 20150204 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ADCARE HEALTH SYSTEMS, INC CENTRAL INDEX KEY: 0001004724 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 311332119 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-83967 FILM NUMBER: 15573504 BUSINESS ADDRESS: STREET 1: 1145 HEMBREE ROAD CITY: ROSWELL STATE: GA ZIP: 30076 BUSINESS PHONE: 404-781-2895 MAIL ADDRESS: STREET 1: 1145 HEMBREE ROAD CITY: ROSWELL STATE: GA ZIP: 30076 FORMER COMPANY: FORMER CONFORMED NAME: ADCARE HEALTH SYSTEMS INC DATE OF NAME CHANGE: 19951208 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Doucet Asset Management CENTRAL INDEX KEY: 0001387749 IRS NUMBER: 030600882 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2204 LAKE SHORE DRIVE STREET 2: SUITE 218 CITY: BIRMINGHAM STATE: AL ZIP: 35209 BUSINESS PHONE: 2054149788 MAIL ADDRESS: STREET 1: 2204 LAKE SHORE DRIVE STREET 2: SUITE 218 CITY: BIRMINGHAM STATE: AL ZIP: 35209 SC 13D 1 r13d_adk02032015.txt OMB APPROVAL OMB Number: 3235-0145 Expires: February 28, 2015 Estimated average burden Hours per response 14.5 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. _)* Adcare Health Systems Inc. ------------------------------------------------------------------------------- (Name of Issuer) Common Stock ------------------------------------------------------------------------------- (Title of Class of Securities) 00650W300 ---------------------------------------- (CUSIP Number) Chris Doucet, 2204 Lakeshore Drive, Suite 304,Birmingham, Alabama 35209 205-414-9788 ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Feburay 4, 2015 ------------------------------------------------------------------------------- (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 ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-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 Section 240.13d-7 for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting persons 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 for the purpose of Section 18 of the Securities Exchange Act of 1934 () 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). Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1746 (3-06) ------------------------------------------------ CUSIP No. 00650W300 ------------------------------------------------ -------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of above persons (entities only) Doucet Capital,LLC, sole owner of Doucet Asset Management, LLC 03-0600886 -------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] -------------------------------------------------------------------------- 3 SEC Use Only -------------------------------------------------------------------------- 4 Source of Funds (See Instructions) HC -------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)[ ] -------------------------------------------------------------------------- 6 Citizen or Place of Organization Delaware, US -------------------------------------------------------------------------- Number of 7 Sole Voting Power 0 -------------------------------------------------------- Shares Beneficially 8 Shared Voting 1,433,659 -------------------------------------------------------- Owned by Each 9 Sole Dispositive Power 0 -------------------------------------------------------- Reporting Person With 10 Shared Dispositive Power 1,433,659 -------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,433,659 -------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] -------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 8.2% -------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) HC -------------------------------------------------------------------------- ------------------------------------------------ CUSIP No. 00650W300 ------------------------------------------------ -------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of above persons (entities only) Doucet Asset Management, LLC 03-0600882 -------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] -------------------------------------------------------------------------- 3 SEC Use Only -------------------------------------------------------------------------- 4 Source of Funds (See Instructions) IA -------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)[ ] -------------------------------------------------------------------------- 6 Citizen or Place of Organization Delaware, US -------------------------------------------------------------------------- Number of 7 Sole Voting Power 0 -------------------------------------------------------- Shares Beneficially 8 Shared Voting 1,433,659 -------------------------------------------------------- Owned by Each 9 Sole Dispositive Power 0 -------------------------------------------------------- Reporting Person With 10 Shared Dispositive Power 1,433,659 -------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,433,659 -------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] -------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 8.2% -------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IA -------------------------------------------------------------------------- ------------------------------------------------ CUSIP No. 00650W300 ------------------------------------------------ -------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of above persons (entities only) Christopher L. Doucet, managing member of Doucet Capital, LLC and CEO and control person of Doucet Asset Management -------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] -------------------------------------------------------------------------- 3 SEC Use Only -------------------------------------------------------------------------- 4 Source of Funds (See Instructions) IN -------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)[ ] -------------------------------------------------------------------------- 6 Citizen or Place of Organization US Citizen -------------------------------------------------------------------------- Number of 7 Sole Voting Power 0 -------------------------------------------------------- Shares Beneficially 8 Shared Voting 1,433,659 -------------------------------------------------------- Owned by Each 9 Sole Dispositive Power 0 -------------------------------------------------------- Reporting Person With 10 Shared Dispositive Power 1,433,659 -------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,433,659 -------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] -------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 8.2% -------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IN -------------------------------------------------------------------------- ------------------------------------------------ CUSIP No. 00650W300 ------------------------------------------------ -------------------------------------------------------------------------- 1 Name of Reporting Persons I.R.S. Identification Nos. of above persons (entities only) Suzette A. Doucet, CFO and control person of Doucet Asset Management, LLC -------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] -------------------------------------------------------------------------- 3 SEC Use Only -------------------------------------------------------------------------- 4 Source of Funds (See Instructions) IN -------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)[ ] -------------------------------------------------------------------------- 6 Citizen or Place of Organization US Citizen ------------------------------------------------------------------------- Number of 7 Sole Voting Power 0 -------------------------------------------------------- Shares Beneficially 8 Shared Voting 1,433,659 -------------------------------------------------------- Owned by Each 9 Sole Dispositive Power 0 -------------------------------------------------------- Reporting Person With 10 Shared Dispositive Power 1,433,659 -------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,433,659 -------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] -------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 8.2% -------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IN -------------------------------------------------------------------------- Item 1. Security and Issuer The class of equity to which this statement relates is the common stock $0.001 par value (the "Common Stock") of Adcare Health Systems. Inc. (the "Company"), which has its principal executive offices at: 1145 Hembree Road Roswell, GA 30076 Item 2. Identity and Background Doucet Capital LLC, Doucet Asset Management LLC, Christopher L. Doucet, and Suzette A. Doucet are the persons filing this statement. Doucet Capital is a holding company which owns Doucet Asset Management LLC, a SEC registered investment adviser firm that exercises discretionary authority over client investments. Both firms are limited liability companies organized under the laws of the state of Delaware. Christopher L. Doucet is the managing member of Doucet Capital LLC and Chief Execu- tive Officer of Doucet Asset Management. Suzette A. Doucet is a member of Doucet Capital and the Chief Financial Officer of Doucet Asset Manage- ment. As such, Mr. and Mrs. Doucet control the activities of Doucet Capital and Doucet Asset Management. Both Mr. and Mrs. Doucet are US citizens. The business address of each of the Reporting Persons is 2204 Lakeshore Drive, Suite 304, Birmingham, Alabama 35209. During the last five years, neither of the Reporting Persons has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) 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 to such laws. Item 3. Source and Amount of Funds or Other Consideration As of February 4, 2015 Doucet Asset Management has acquired 1,433,659 shares of the Common Stock of the Company on the open market for total consideration of $5,920,880. The above amount of total consideration includes any commissions incurred in the making of the investments. The source of these funds was the investment capital of the discretionary clients of Doucet Asset Manage- ment, which include Christopher and Suzette Doucet. Item 4. Purpose of Transaction All of the shares of Common Stock reported herein were acquired for investment purposes, and were originally acquired without the purpose or effect of changing or influencing control of the Company. The Reporting Persons review on a continuing basis the investment in the Company. Based on such review and depending on the price and availability of the Company's securities, the Reporting Persons may acquire, or cause to be acquired, additional securities of the Company, in the open market or otherwise, dispose of, or cause to be disposed of, securities of the Company, in the open market or otherwise, at any time, or formulate other purposes, plans or proposals regarding the Company or any of its securities, to the extent deemed advisable in light of general investment and policies of the Reporting Persons, the Company s business, financial condition and operating results, general market and industry conditions or other factors. Doucet Asset Management and would like to see management maximize stockholder value, and has sent the following letter to the Company's Board of Directors: February 4, 2015 AdCare Health Systems Inc. Board of Directors 3050 Peachtree Road NW Suite 355 Atlanta, GA 30305 Dear AdCare Board: My name is Chris Doucet and I am CEO and Managing Partner of Doucet Asset Management. Doucet Asset Management has control of approximately 1,433,659 shares of AdCare Stock (NYSE ADK) through its holdings of the common stock in our managed accounts and personal accounts as well as through our holdings of convertible bonds in which the firm has discretion. It is our belief that we are the largest investors in ADK. We would like to begin by commending the Board on its decision to offer Bill McBride the position of CEO of ADK last fall and convincing him to accept it. We have been impressed with the job he has done thus far on executing the strategic plan laid out by the Board this past summer, stabilizing the existing business in rapid fashion, significantly reducing expenses and refinancing short-term debt at extremely attractive rates. It is still our desire to see the Company sold as soon as possible. Mergers and acquisition activity in the space is still robust and we would like to see ADK have adequate leverage to command a premium price in the marketplace. We fully understand what Bill must do so stockholder value can ultimately be realized. We also understand that there are diseconomies of scale in the REIT market and we are likely to receive a higher price in an ultimate sale in the future if ADKs portfolio is larger versus smaller, all other things being equal. As a result of this aforementioned basic fact of the REIT market, we would like to propose a simple plan-ADK should merge with Global Healthcare REIT (OTC GBCS) at the appropriate prices. There would be several benefits to this simple plan. Merging ADK and GBCS at current prices would significantly benefit both companies. Currently, both ADK and GBCS: - share the same office space - are in the same exact business - compete with one another in the same market for the same properties - are in similar geographies with similar clientele - have portfolios which were both assembled by the same person - have some of the same operators - were done with similar economics - have an identical investment thesis - share many of the same investors - trade roughly at the same discount to their implied intrinsic values - are too small on their own to trade at large premiums to their intrinsic values - have duplicate boards and management teams - pay duplicate public costs The combined Company would: - instantly grow to 50 properties - save on duplicate board and management expenses - save on duplicate public costs - enjoy more attractive cost of capital - be able to pay out a higher dividend stream as a combined company versus on a standalone basis - appear on more radar screens of Wall Street and potential acquirers because of the increased size of the Company - be able to maintain the use of ADK s $23 million tax loss carry-forward In short, having GBCS and ADK continue to exist as two separate companies simply does not make sense and never did. Combining the two companies would create a plethora of benefits to both shareholder bases. Once again, we commend the Board on making the decision to hire Bill. He is doing the hard work to get this company cleaned up and doing this heavy lifting in an expedient fashion. We appreciate the consideration of my proposal as we believe it makes perfect sense for both Companies to work together and not compete with each other and duplicate costs. Regards, Chris L. Doucet CEO and Managing Partner Doucet Asset Management Doucet reserves the right from time to time to formulate plans and proposals regarding the Company or any of its securities, and to carry out any of the actions or transactions to protect the interests of its clients. Doucet may in the future acquire additional Common Stock or other securities of the Company in the open market, in privately negotiated purchases or otherwise and may also, depending on the current circumstances, dispose of all or a portion of the Common Stock beneficially owned by them in one or more transactions. Item 5. Interest in Securities of the Issuer (a) As of the close of business on February 3, 2015 Doucet Capital, Doucet Asset Management, Christopher L. Doucet, and Suzette A. Doucet were the beneficial owners of 1,433,659 shares of Common Stock, which constitute in the aggregate 8.2% of the outstanding shares of Common Stock of the Company based on 17,505,444 shares of Common Stock Outstanding pursuant to the Form 10-Q for the quarterly period ending March 31, 2014 filed by the Company. (b) Doucet Capital, Doucet Asset Management, Christopher L. Doucet, and Suzette A. Doucet have shared power to vote, direct the vote of, dispose of and direct the disposition of the Common Stock beneficially owned as described in Item 5(a) above. Such power is shared among the Reporting Persons. (c) Transactions in the Common Stock by the Reporting Persons affected in the last 60 days are as set forth in the table below. All such trades were made in open market transactions. (d) The Reporting Persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock beneficially owned by them. (e) Not applicable. 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. Joint Filing Agreement 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. Date: February 4, 2015 DOUCET CAPITAL, LLC /S/ Christopher L. Doucet --------------------------- Name: Christopher L. Doucet Title: Managing Member DOUCET ASSET MANAGEMENT, LLC By: Doucet Capital, LLC, its managing member /S/ Christopher L. Doucet --------------------------- Name: Christopher L. Doucet Title: Managing Member CHRISTOPHER L. DOUCET /S/ Christopher L. Doucet -------------------------- Christopher L. Doucet, individually SUZETTE A. DOUCET /S/ Suzette A. Doucet ----------------------- Suzette A. Doucet, individually EXHIBIT 1 JOINT ACQUISITION STATEMENT PURSUANT TO RULE 13d-1(k) The undersigned acknowledge and agree that the foregoing statement on Schedule 13G, is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D, shall be filed on behalf of each of the undersigned without the necessity of filing additional joint acquisition statements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate. Date: February 4, 2015 DOUCET CAPITAL, LLC /S/ Christopher L. Doucet --------------------------- Name: Christopher L. Doucet Title: Managing Member DOUCET ASSET MANAGEMENT, LLC By: Doucet Capital, LLC, its managing member /S/ Christopher L. Doucet --------------------------- Name: Christopher L. Doucet Title: Managing Member CHRISTOPHER L. DOUCET /S/ Christopher L. Doucet ------------------------- Christopher L. Doucet SUZETTE A. DOUCET /S/ Suzette A. Doucet --------------------- Suzette A. Doucet