0001005794-11-000083.txt : 20110520 0001005794-11-000083.hdr.sgml : 20110520 20110520161044 ACCESSION NUMBER: 0001005794-11-000083 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20110520 DATE AS OF CHANGE: 20110520 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ADVOCAT INC CENTRAL INDEX KEY: 0000919956 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 621559667 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-43225 FILM NUMBER: 11861735 BUSINESS ADDRESS: STREET 1: 1621 GALLERIA BLVD. CITY: BRENTWOOD STATE: TN ZIP: 37027 BUSINESS PHONE: 6157717575 MAIL ADDRESS: STREET 1: 1621 GALLERIA BLVD. CITY: BRENTWOOD STATE: TN ZIP: 37027 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Covington Health Group, LLC CENTRAL INDEX KEY: 0001520976 IRS NUMBER: 452041708 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1175 PEACHTREE STREET STREET 2: SUITE 1230 CITY: ATLANTA STATE: GA ZIP: 30361 BUSINESS PHONE: 404-873-3434 MAIL ADDRESS: STREET 1: 1175 PEACHTREE STREET STREET 2: SUITE 1230 CITY: ATLANTA STATE: GA ZIP: 30361 SC 13D 1 advocat13d051111.htm ADVOCAT INC. 13D MAY 11, 2011 advocat13d051111.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

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

Advocat Inc.
 
(Name of Issuer)

Common Stock
 
(Title of Class of Securities)

007586100

(CUSIP Number)

Sam D. Chafetz
Baker Donelson Bearman Caldwell & Berkowitz, PC
165 Madison Avenue #2000
Memphis, TN 38103
(901) 577-2148
 
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

May 11, 2011
 
(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 §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [   ]
 
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 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 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).
 
(Continued on following pages)
 

(Page  of 1 of 11 Pages)
 
 
 
 
CUSIP No. 007586100
 
 
 
  1.  Names of Reporting Persons.  I.R.S. Identification Nos. of above persons (entities only).
 
  Covington Health Group, LLC
  45-2041708
 
 
 
  2.    Check the Appropriate Box if a Member of a Group (See Instructions)
  (a)  ............................................................................................................................................................................................................... ü
  (b)    ............................................................................................................................................................................................................... £
                                                            
 
 
  3.  SEC Use Only ............................................................................................................................................................................................   
 
 
 
  4.  Source of Funds (See Instructions) ........................................................................................................................................................ WC
 
 
 
  5.  Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ................................................................... o
 
 
 
  6.  Citizenship or Place of Organization  DE
                                                                    
 
 
  7. Sole Voting Power              -0-
Number of      
Shares      
Beneficially  8.   Shared Voting Power          103,842
Owned by      
Each      
Reporting  9.   Sole Dispositive Power                -0-
Person      
With   10. Shared Dispositive Power           103,842
                       
 
 
  11. Aggregate Amount Beneficially Owned by Each Reporting Person ................................................................................................ 103,842
 
 
 
  12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ............................................................ o
 
 
 
  13.  Percent of Class Represented by Amount in Row (11) ........................................................................................................................ 1.8%**
 
 
 
  14. Type of Reporting Person (See Instructions) ....................................................................................................................................... OO
 
 
**Based on 5,817,387 shares of common stock outstanding as of April 28, 2011, as reported by Advocat Inc. in its Quarterly Report on Form 10-Q for its quarter ended March 31, 2011.


 
(Page  of 2 of 11 Pages)
 
 
 
 
CUSIP No. 007586100
 
 
 
  1.  Names of Reporting Persons.  I.R.S. Identification Nos. of above persons (entities only).
     
    John E. McMullan
 
 
 
  2.    Check the Appropriate Box if a Member of a Group (See Instructions)
  (c)  ............................................................................................................................................................................................................... ü
  (d)    ............................................................................................................................................................................................................... £
  
 
       
  3.  SEC Use Only ............................................................................................................................................................................................   
       
 
 
  4.  Source of Funds (See Instructions) ......................................................................................................................................................   PF
 
 
 
  5.  Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ................................................................... o

 
 
  6. Citizenship or Place of Organization ............................................................................................................................................. United States
 
 
 
  7. Sole Voting Power                 25,000 
Number of      
Shares      
Beneficially  8.   Shared Voting Power                 103,842
Owned by      
Each      
Reporting  9.   Sole Dispositive Power                  25,000
Person      
With   10. Shared Dispositive Power                 103,842
 
 
 
  11. Aggregate Amount Beneficially Owned by Each Reporting Person ................................................................................................ 128,842*
 
 
 
  12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ............................................................ o
 
 
 
  13.  Percent of Class Represented by Amount in Row (11) ........................................................................................................................ 2.2%**
 
 
 
  14.  Type of Reporting Person (See Instructions) IN
 
 
* 25,000 shares are directly owned by John E. McMullan, and 103,842 are directly owned by Covington Health Group, LLC.
**Based on 5,817,387 shares of common stock outstanding as of April 28, 2011, as reported by Advocat Inc. in its Quarterly Report on Form 10-Q for its quarter ended March 31, 2011.


(Page  of 3 of 11 Pages)
 
 
 
                     
 
CUSIP No.  007586100
 
 
 
  1.  Names of Reporting Persons.  I.R.S. Identification Nos. of above persons (entities only).
     
    John F. McMullan
 
 
  2.    Check the Appropriate Box if a Member of a Group (See Instructions)
  (e)  ............................................................................................................................................................................................................... ü
  (f)    ............................................................................................................................................................................................................... £
  
 
 
  3. SEC Use Only ............................................................................................................................................................................................  
 
 
 
  4. Source of Funds (See Instructions)  PF

 
 
  5.  Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ................................................................... o
 
 
 
  6. Citizenship or Place of Organization ............................................................................................................................................. United States
 
 
 
  7. Sole Voting Power                 63,000 
Number of      
Shares      
Beneficially  8.   Shared Voting Power                 103,842
Owned by      
Each      
Reporting  9.   Sole Dispositive Power                  63,000
Person      
With   10. Shared Dispositive Power                 103,842
 
 
  11. Aggregate Amount Beneficially Owned by Each Reporting Person ................................................................................................ 166,842*

 
 
  12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ............................................................ o
 
 
 
  13.  Percent of Class Represented by Amount in Row (11)   2.9%**
 
 
 
  14.  Type of Reporting Person (See Instructions) IN

 
* 63,000 shares are directly owned by John F. McMullan, and 103,842 are directly owned by Covington Health Group, LLC.
**Based on 5,817,387 shares of common stock outstanding as of April 28, 2011, as reported by Advocat Inc. in its Quarterly Report on Form 10-Q for its quarter ended March 31, 2011.


(Page of 4 of 11 Pages)
 
 
 
 
CUSIP No.   007586100
                    
 
 
  1.  Names of Reporting Persons.  I.R.S. Identification Nos. of above persons (entities only).
 
  Camden Real Estate Company
  58-1913586
 
 
  2.    Check the Appropriate Box if a Member of a Group (See Instructions)
  (g)  ............................................................................................................................................................................................................... ü
  (h)    ............................................................................................................................................................................................................... £
 
 
  3. SEC Use Only ............................................................................................................................................................................................  
       
 
 
  4.  Source of Funds (See Instructions) ....................................................................................................................................................... WC
        
 
 
  5.  Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ................................................................... o
       
 
 
  6.  Citizenship or Place of Organization  ..................................................................................................................................................... ME
 
 
 
  7. Sole Voting Power                 30,000 
Number of      
Shares      
Beneficially  8.   Shared Voting Power                 103,842
Owned by      
Each      
Reporting  9.   Sole Dispositive Power                  30,000
Person      
With   10. Shared Dispositive Power                 103,842
 
 
  11. Aggregate Amount Beneficially Owned by Each Reporting Person ................................................................................................ 133,842*
       
 
 
  12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ............................................................ o

 
 
  13.  Percent of Class Represented by Amount in Row (11)   2.3%**
       
 
 
  14.  Type of Reporting Person (See Instructions) CO
 
* 30,000 shares are directly owned by Camden Real Estate Company, and 103,842 are directly owned by Covington Health Group, LLC.
**Based on 5,817,387 shares of common stock outstanding as of April 28, 2011, as reported by Advocat Inc. in its Quarterly Report on Form 10-Q for its quarter ended March 31, 2011.
 
 
(Page 5 of 11 Pages)
 
 
 
CUSIP No. 007586100
                   
 
 
  1.  Names of Reporting Persons.  I.R.S. Identification Nos. of above persons (entities only).
     
    Joseph T. Watters, III
 
 
  2.    Check the Appropriate Box if a Member of a Group (See Instructions)
  (i)  ............................................................................................................................................................................................................... ü
  (j)    ............................................................................................................................................................................................................... £
       
 
 
  3. SEC Use Only ............................................................................................................................................................................................
     
 
 
  4.   Source of Funds (See Instructions) ........................................................................................................................................................ PF
                                                                                             
 
 
  5.   Check if Disclosure or Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)................................................................... o
 
 
 
  6. Citizenship or Place of Organization ............................................................................................................................................. United States
       
 
 
  7. Sole Voting Power                 163,900 
Number of      
Shares      
Beneficially  8.   Shared Voting Power                 103,842
Owned by      
Each      
Reporting  9.   Sole Dispositive Power                  163,900
Person      
With   10. Shared Dispositive Power                 103,842
 
 
  11. Aggregate Amount Beneficially Owned by Each Reporting Person ................................................................................................ 267,742*

 
 
  12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ............................................................ o
       
 
 
  13.  Percent of Class Represented by Amount in Row (11)   4.6%**

 
 
  14.  Type of Reporting Person (See Instructions) IN
 
* 163,900 shares are directly owned by Joseph T. Watters, III, and 103,842 are directly owned by Covington Health Group, LLC.
**Based on 5,817,387 shares of common stock outstanding as of April 28, 2011, as reported by Advocat Inc. in its Quarterly Report on Form 10-Q for its quarter ended March 31, 2011.


(Page  of  6 of 11 Pages)
 
 
 
 
 
Item 1. Security and Issuer
 
This Schedule 13D relates to shares of common stock of Advocat Inc. (the "Issuer"). The Issuer's principal executive offices are located at 1621 Galleria Boulevard, Brentwood, TN 37027.
 
Item 2. Identity and Background
 
  a) 
This Schedule 13D is being filed on behalf of the following persons (collectively, the “Reporting Persons”):
 
  (i)  Covington Health Group, LLC
  (ii)     John E. McMullan
  (iii)    John F. McMullan
  (iv)
Camden Real Estate Company
  (v) 
Joseph T. Watters, III
 
   b) 
The address of the principal business offices of each of the Reporting Persons, with the exception of Joseph T. Watters, III, is 1175 Peachtree Street, Suite 1230, Atlanta, GA 30361.  The address of the principal business offices of Joseph T. Watters, III is P.O. Box 470, Adairsville, GA 30103.
     
   c) 
Covington Health Group, LLC is a Delaware limited liability company engaged in the business of investments.  Camden Real Estate Company is a Georgia investment company.  The principal occupation of John E. McMullan and John F. McMullan is the operation of senior living communities, as well as other business endeavors; and the principal occupation of Joseph T. Watters, III, is wholesale manufacturing.
     
  d) 
None.
     
  e) 
None.
     
  f) 
Citizenship:
     
  (i)  Covington Health Group, LLC, a Delaware limited liability company
  (ii)  John E. McMullan: United States
  (iii)   John F. McMullan: United States
  (iv) 
Camden Real Estate Company, a Georgia corporation
  (v) 
Joseph T. Watters, III: United States
          
Item 3. Source and Amount of Funds or Other Consideration
 
Covington Health Group, LLC and Camden Real Estate Company funded their purchases of the Issuer’s common stock with working capital.  The individual Reporting Persons funded their purchases of the Issuer’s common stock with personal funds.
 
Item 4. Purpose of Transaction

The Reporting Persons have acquired shares of the Issuer’s common stock for investment purposes.  The Reporting Persons from time to time intend to review their investment in the Issuer on the basis of various factors, including the business of issuer, financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the stock of the Issuer in particular, as well as other developments and other investment opportunities.  Based upon such review, the Reporting Persons will take such actions in the future as the Reporting Persons may deem appropriate in light of the circumstances existing, from time to time, which may include further acquisitions of shares of the Issuer’s common stock or disposal of some or all of the shares of common stock currently owned by the Reporting Persons or otherwise acquired by Reporting Persons, as the case may be.
 
(Page 7 of 11 Pages)
 

In addition, the Reporting Persons may engage in communications with one or more stockholders, officers or directors of the Issuer, including discussions regarding potential changes in the operations of the Issuer and strategic direction that, if effected, could result in, among other things: (a) the acquisition by any person of additional securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or of any of its subsidiaries; (d) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any other person; (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act; or (j) any similar action to those enumerated above.  Except as expressly set forth in this Item 4, the Reporting Persons currently have no additional plans or proposals that relate to or would result in any of the actions required to be reported herein.  The Reporting Persons reserve the right, based on all relevant factors and subject to applicable law, at any time and from time to time, to review or reconsider their position, change their purpose, take other actions (including actions that could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) through (j) of Item 4 of this Schedule 13D) or formulate and implement plans or proposals with respect to any of the foregoing.
 
 
Item 5.  Interest in Securities of the Issuer
 
 
(a)
See pages 2 – 6 of cover pages.  The Reporting Persons together as a group own 384,842 shares of the Issuer's common stock, which constitutes 6.6% of the Issuer's common stock.
(b)           See pages 2 - 6 of cover pages.
 
(c)
Transactions in the Issuer’s securities in the last 60 days:

 
Reporting Person: Covington Health Group, LLC
 
 
- On May 19, 2011, Covington Health Group, LLC purchased the following number of shares at the following prices per share, all in open market transactions:
·  
1,600 shares at $6.98625 per share
·  
925 shares at $6.97 per share
·  
1,048 shares at $6.89954 per share
·  
600 shares at $6.80 per share
·  
1,800 shares at $6.79833 per share
·  
2,000 shares at $6.50 per share
·  
2,800 shares at $6.50 per share
·  
200 shares at $6.48 per share
 
- On May 17, 2011, Covington Health Group, LLC purchased the following number of shares at the following prices per share, all in open market transactions:
·  
1,000 shares at $6.55 per share
·  
500 shares at $6.60 per share
·  
7,400 shares at $6.6519 per share
·  
600 shares at $6.53 per share
·  
1,200 shares at $6.50 per share
·  
100 shares at $6.49 per share
·  
1,200 shares at $6.48 per share
·  
3,700 shares at $6.50 per share
 
(Page 8 of 11 Pages)
 
 
- On May 16, 2011, Covington Health Group, LLC purchased the following number of shares at the following prices per share, all in open market transactions:
·  
1,900 shares at $6.41
·  
1,800 shares at $6.42
·  
1,750 shares at $6.4192
·  
1,700 shares at $6.42
·  
1,185 shares at $6.42
·  
799 shares at $6.3775
·  
401 shares at $6.42
·  
370 shares at $6.35
 
- On May 13, 2011, Covington Health Group, LLC purchased the following number of shares at the following prices per share, all in open market transactions:
·  
7,500 shares at $6.30
·  
6,168 shares at $6.30
·  
5,000 shares at $6.2998
·  
2,500 shares at $6.30
·  
2,500 shares at $6.30
·  
1,500 shares at $6.30
 
- On May 12, 2011, Covington Health Group, LLC purchased the following number of shares at the following prices per share, all in open market transactions:
·  
1,012 shares at $6.30
·  
1,000 shares at $6.30
·  
988 shares at $6.29
·  
100 shares at $6.15
 
- On May 11, 2011, Covington Health Group, LLC purchased the following number of shares at the following prices per share, all in open market transactions:
·  
4,600 shares at $6.10
·  
4,500 shares at $5.95
·  
3,500 shares at $6.31
·  
3,500 shares at $6.01
·  
2,500 shares at $6.29
·  
2,200 shares at $6.20
·  
2,000 shares at $6.1999
·  
2,000 shares at $6.00
·  
1,801 shares at $5.90
·  
1,800 shares at $6.19
·  
1,600 shares at $6.00
·  
1,500 shares at $6.05
·  
600 shares at $6.2575
·  
500 shares at $6.0491
·  
400 shares at $6.08
·  
400 shares at $5.9488
·  
200 shares at $6.17
·  
100 shares at $5.94
·  
95 shares at $6.10
 
- On May 10, 2011, Covington Health Group, LLC purchased the following number of shares at the following prices per share, all in open market transactions:
·  
2,500 shares at $5.90
·  
1,000 shares at $5.80
·  
1,000 shares at $5.95
·  
500 shares at $6.02
·  
200 shares at $5.80
 

 
 
(Page 9 of 11 Pages)
 
 
Reporting Person: John F. McMullan

 
- On May 10, 2011, John F. McMullan sold 100 shares of the Issuer’s common stock at $6.18 per share in an open market transaction.

 
(d)
N/A
(e)           N/A
 
 
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to the Securities of the Issuer
 
The three individuals who are reporting ownership of Issuer stock by themselves or their affiliates do not have any written agreement which governs their relationship to one another with respect to such ownership.  They have determined as a group to invest in stock of the Issuer.  They intend to act by consensus with respect to their ownership and voting of the Issuer's stock (both as to their individual and affiliates' holdings, as well as the holdings of Covington Healthcare Group, LLC).  However, any of them may elect to dispose of their or their affiliates' stock in the Issuer or to acquire more stock in the Issuer on their own behalf and not through Covington Healthcare Group, LLC, and to vote their stock other than as determined by consensus.  The investments of the individuals in Covington Healthcare Group, LLC are equal, as would be their shares of profits or losses therefrom.


Item 7. Materials to be Filed as Exhibits

Exhibit A.                      Joint Filing Agreement


(Page  of  10 of 11 Pages)
 
 
 


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.
 
Dated: May 20, 2011
 
 
 
  COVINGTON HEALTH GROUP, LLC
 
 
By:
 /s/ John E. McMullan 
    Name: John E. McMullan
    Title: Manager
 
     
 
  CAMDEN REAL ESTATE COMPANY
 
 
By:
 /s/ John F. McMullan 
    Name: John F. McMullan
    Title: President
 
 
   /s/ John E. McMullan
  John E. McMullan
   
   
   
   /s/ John F. McMullan
   John F. McMullan
   
   
   
   /s/ Joseph T. Watters, III
  Joseph T. Watters, III
 
 

 
The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the filing person), evidence of the representative's authority to sign on behalf of such person shall be filed with the statement: provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.
 
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001)


 
(Page 11 of 11 Pages)
 



Exhibit A
 
Joint Filing Agreement
 
The undersigned each hereby agree and consent to the joint filing on their behalf of a Schedule 13D, including amendments thereto (as amended, the “Schedule 13D”) in connection with their beneficial ownership of shares of common stock of Advocat Inc., a Delaware corporation, and further agrees that this Joint Filing Agreement be included as an exhibit to the Schedule 13D, provided that, as contemplated by Rule 13d-1(k)(1)(ii) promulgated under the Securities Exchange Act of 1934, as amended, no person shall be responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate.  This Joint Filing Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.
 
Date: May 20, 2011
 
 
 
  COVINGTON HEALTH GROUP, LLC
 
 
By:
 /s/ John E. McMullan 
    Name: John E. McMullan
    Title: Manager
 
     
 
  CAMDEN REAL ESTATE COMPANY
 
 
By:
 /s/ John F. McMullan 
    Name: John F. McMullan
    Title: President
 
 
   /s/ John E. McMullan
  John E. McMullan
   
   
   
   /s/ John F. McMullan
   John F. McMullan
   
   
   
   /s/ Joseph T. Watters, III
  Joseph T. Watters, III