Corning Natural Gas Corporation SC 13D/A

0000950152-06-006237.txt : 20060728 0000950152-06-006237.hdr.sgml : 20060728 20060728142423 ACCESSION NUMBER: 0000950152-06-006237 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20060728 DATE AS OF CHANGE: 20060728 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CORNING NATURAL GAS CORP CENTRAL INDEX KEY: 0000024751 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 160397420 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-17939 FILM NUMBER: 06987531 BUSINESS ADDRESS: STREET 1: 330 W WILLIAM ST STREET 2: P O BOX 58 CITY: CORNING STATE: NY ZIP: 14830 BUSINESS PHONE: 6079363755 MAIL ADDRESS: STREET 1: 330 W WILLIAM STREET STREET 2: P O BOX 58 CITY: CORNING STATE: NY ZIP: 14830 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: OSBORNE RICHARD M TRUST CENTRAL INDEX KEY: 0001006422 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 000000000 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 8500 STATION ST STREET 2: SUITE 113 CITY: MENTOR STATE: OH ZIP: 44060 BUSINESS PHONE: 4409743770 MAIL ADDRESS: STREET 1: 8500 STATION ST STREET 2: SUITE 113 CITY: MENTOR STATE: OH ZIP: 44060 SC 13D/A 1 l21599asc13dza.htm CORNING NATURAL GAS CORPORATION SC13D/A Corning Natural Gas Corporation SC 13D/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT RULE 13d-2(a)
(Amendment No. 1)

Corning Natural Gas Corporation

(Name of Issuer)

Common Stock

(Title of Class of Securities)

219381100

(CUSIP Number)

Marc C. Krantz, Kohrman Jackson & Krantz P.L.L., 1375 East 9^th Street, 20^th Floor, Cleveland, OH 44114, (216) 696-8700

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

July 20, 2006

(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 which 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(b) 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 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.		219381100		Page		2		of		6

NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Richard M. Osborne Trust

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

(A) o

(B) o

SEC USE ONLY

SOURCE OF FUNDS

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)

CITIZENSHIP OR PLACE OF ORGANIZATION

Ohio

SOLE VOTING POWER

NUMBER OF

83,233

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

83,233

WITH

SHARED DISPOSITIVE POWER

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

83,233

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

16.4%

TYPE OF REPORTING PERSON*

TABLE OF CONTENTS


	Item 3. Source and Amount of Funds or Other Consideration
	Item 4. Purpose of Transaction
	Item 5. Interest in Securities of the Issuer
	Item 7. Material to be Filed as Exhibits
SIGNATURE
EXHIBIT INDEX
EX-7.1


CUSIP No. 219381100		Page 3 of 6

Introduction.

This Amendment No. 1 to Schedule 13D is filed on behalf of the Richard M. Osborne Trust, an Ohio trust (the “Trust”), relating to the acquisition of shares of common stock, par value $5.00 per share (the “Shares”), of Corning Natural Gas Corporation, a New York corporation (“Corning”). Richard M. Osborne is the sole trustee of the Trust.

Item 3. Source and Amount of Funds or Other Consideration.

The Shares reported in Item 5(c) as having been acquired by the Trust were acquired for an aggregate purchase price of approximately $1,002,267.50 (excluding commissions) with funds of the Trust.

Item 4. Purpose of Transaction.

Mr. Osborne has acquired additional Shares of Corning because he believes that they are undervalued. On July 19, 2006, Corning filed a Preliminary Proxy Statement on Schedule 14A with the Securities and Exchange Commission (the “Proxy Statement”) relating to the special meeting of stockholders of Corning to consider and vote on a proposed Agreement and Plan of Merger in which Corning would be acquired by C&T Enterprises, Inc. (the “Merger”). Mr. Osborne believes that the consideration proposed in the Merger does not represent adequate value for the stockholders of Corning. In its own Proxy Statement, Corning’s management admitted they have struggled with maintaining the supplies of natural gas due to a lack of capital and human resources which has stymied increases in stockholder value. Mr. Osborne is opposed to selling his Shares at what he believes is a price distressed by management’s failure to effectively run the business of Corning. Accordingly, Mr. Osborne intends to vote all of the Shares owned by the Trust against the Merger at the special meeting.

The Proxy Statement states that Corning’s stockholders will receive $13.71 in cash, subject to adjustments, for each Share owned by them. Corning expects that after adjustments are made, the actual price per Share received in the Merger will range from between $12.63 and $17.66. However, the actual price per Share will not be determined until the closing of the Merger and could fall outside the range of prices predicted in the Proxy Statement. Even assuming the ultimate price per Share does fall within the predicted range, Mr. Osborne questions how stockholders will be able to make an informed decision on the Merger when the expected range of prices varies by almost 40%.

In addition, Mr. Osborne is troubled by the apparent conflict of interests of Thomas K. Barry, Corning’s President and Chief Executive Officer, and Kenneth J. Robinson, the company’s Executive Vice President. Mr. Barry and Mr. Robinson stand to receive substantial payments as a result of the Merger. For example, Corning disclosed in the Proxy Statement that, as a result of the Merger, Mr. Barry and Mr. Robinson are entitled to receive $766,639 and $531,570, respectively, under their employment and change in control agreements, and that life insurance policies will be transferred to Mr. Barry and Mr. Robinson with cash surrender values of $235,518 and $151,059, respectively. Assuming a price per Share of $13.71, Corning’s stockholders will receive only $6.9 million as a result of the Merger, while Mr. Barry and Mr. Robinson will receive a total of $1.7 million. Mr. Barry and Mr. Robinson appear further


CUSIP No. 219381100		Page 4 of 6

conflicted because one of the mechanisms to increase the price per Share that Corning’s stockholders will receive as a result of the Merger is subject to Mr. Barry and Mr. Robinson’s agreement to voluntarily reduce their severance packages. Although not referenced in the Proxy Statement, according to documents previously filed by Corning with the Securities and Exchange Commission, Corning would continue to pay Mr. Barry and Mr. Robinson – but not the stockholders – after the Merger. Mr. Barry and Mr. Robinson are entitled to receive annual pension benefits currently estimated by Corning to be $76,860 and $56,238, respectively, upon their retirement after the Merger.

None of the employment, change-in-control or insurance agreements referenced above appear to be filed with the Securities and Exchange Commission, as Mr. Osborne believes is required by applicable law and rules. Therefore, the amounts payable to Mr. Barry and Mr. Robinson are not able to be independently determined or verified. Mr. Osborne has requested these agreements from Corning in addition to requesting a stockholder list for the purpose of communicating with other stockholders regarding the affairs of Corning. This request is attached as Exhibit 7.1.

The Trust and Mr. Osborne may decide to solicit proxies in connection with the special meeting and specifically reserve their right to do so. However, this Amendment No. 1 to Schedule 13D is not and should not be deemed to be a solicitation of proxies or consents with respect to any meeting of Corning’s stockholders. Any such solicitation by the Trust or Mr. Osborne would be made only pursuant to separate proxy or solicitation materials complying with all applicable requirements of Section 14(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Item 5. Interest in Securities of the Issuer.

(a) According to the most recently available filing with the Securities and Exchange Commission by Corning, there are 506,918 Shares outstanding.

The Trust beneficially owns 83,233 Shares, or 16.4% of the outstanding Shares. As sole trustee of the Trust, Mr. Osborne may be deemed to beneficially own all Shares held by the Trust.

(b) Mr. Osborne, as sole trustee of the Trust, has sole power to vote, or to direct the voting of, and the sole power to dispose or to direct the disposition of, the Shares held by the Trust.

(c) On July 24, 2006, the Trust purchased a total of 49,642 Shares in a private transaction at a price of $18.75 a Share. In addition, since the filing of its original Schedule 13D, the Trust purchased 5,100 Shares in open market transactions as set forth below:


		Approximate Per Share Price (Excluding
Date	Number of Shares	Commissions)
5/18/06	600	$13.80
5/19/06	400	$14.15
5/25/06	600	$14.15


CUSIP No. 219381100		Page 5 of 6


			Approximate Per Share Price (Excluding
Date	Number of Shares		Commissions)
6/13/06		400	$14.00
6/25/06		10	$14.00
6/29/06		1,890	$14.00
6/30/06		100	$14.00
7/7/06		900	$14.00
7/20/06		200	$14.25

Item 7. Material to be Filed as Exhibits.

Exhibit 7.1 Request to Corning from the Trust dated July 28, 2006

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: July 28, 2006


		RICHARD M. OSBORNE TRUST

		/s/ Richard M. Osborne

		Richard M. Osborne, Trustee

Page 6 of 7

EXHIBIT INDEX


Exhibit Number		Description

Exhibit 7.1		Request to Corning from the Trust dated July 28, 2006

Page 7 of 7

EX-7.1 2 l21599aexv7w1.htm EX-7.1 EX-7.1

Exhibit 7.1

Richard M. Osborne Trust
8500 Station Street
Suite 113
Mentor, Ohio 44060

July 28, 2006

Via Fax and Registered Mail
Return Receipt Requested

Corning Natural Gas Corporation
330 W. William Street
PO Box 58
Corning, New York 14830
Attn: Thomas K. Barry, President and Chief Executive Officer

Re: Demand for Inspection of List of Stockholders and Request for Other Documents

Dear Mr. Barry:

The Richard M. Osborne Trust (the “Trust”) is the holder of record of 100 shares of the common stock of Corning Natural Gas Corporation, a New York corporation (the “Corporation”), and the beneficial owner of 83,133 shares of the common stock of the Corporation. We hereby demand a copy of the list of stockholders of the Corporation pursuant to the New York Business Corporation Law (“NYBC”).

Section 624 of the NYBC provides that any stockholder of record upon at least five days’ written demand has the right to inspect the list of a corporation’s stockholders for any purpose reasonably related to such person’s interest as a stockholder. The Trust hereby demands to examine the Corporation’s stockholder list for the purpose of obtaining the names, addresses and holdings of other stockholders with whom the Trust may wish to communicate with regarding the affairs of the Corporation. The Trust represents and affirms that the requested examination is not desired for a purpose which is in the interest of a business or object other than the business of the Corporation and that the Trust has not at any time sold or offered for sale any list of stockholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of stockholders for any such purpose. A copy of the affidavit provided for in Section 624 of the NYBC is attached.

Accordingly, please deliver the following information to Kohrman Jackson & Krantz P.L.L, 1375 East Ninth Street, One Cleveland Center, 20^th Floor, Cleveland, Ohio 44114, Attn: Marc C. Krantz, Esq.:

•		A list of the record holders of all shares of the Corporation’s stock as of the most recent practicable date, certified by the Corporation’s transfer agent, showing the names, addresses and the number and class of shares issued to or transferred of record to or by each stockholder;

•		A computer disk containing the record holders of all shares of the Corporation’s stock as of the most recent practicable date, showing the names, addresses and the number and class of shares issued to or transferred of record to or by each stockholder, including any computer processing data that is necessary to access and use the information; and

•		All information in the Corporation’s possession or control or which can reasonably be obtained from nominees of any central certificate depository system concerning the number and identity of the actual beneficial owners of the Corporation’s shares, including a breakdown of any holdings in the name of CEDE & Co., Kray & Co., Pacific & Co., NCC & Co., Philadep, DLH, NEST and other similar nominees, and any list of non-objecting beneficial owners (NOBO) in the Corporation’s possession.

The Trust will bear the reasonable costs incurred by the Corporation in connection with the production of the above information.

The Trust hereby designates and authorizes Kohrman Jackson & Krantz P.L.L., its partners, employees and any other representative or agent designated by them or us, acting alone or in any combination, to conduct an inspection of the requested list of stockholders.

In addition, we have reviewed the preliminary proxy statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on July 19, 2006 by the Corporation and other documents publicly available to us. We note that the Corporation references and describes various agreements between the Corporation and current executive officers, Thomas K. Barry and Kenneth J. Robinson, and former executive officers, Edward F. Lewis and J. Edward Barry. However, none of these agreements appear to be filed with the SEC as required by Item 601 of Regulation S-K. Accordingly, we request that the Corporation file immediately the following documents with the SEC on Form 8-K as material definitive agreements:

	•		Amended and Restated Employment Agreement between the Corporation and Thomas K. Barry dated December 14, 2000;

	•		Amended and Restated Severance Agreement between the Corporation and Thomas K. Barry dated December 14, 2000;

	•		Amended and Restated Survivor Benefit Deferred Compensation Agreement between the Corporation and Thomas K. Barry dated December 14, 2000;

	•		Assignment Agreement between the Corporation and Thomas K. Barry dated July 10, 2001;

	•		Amended and Restated Employment Agreement between the Corporation and Kenneth J. Robinson dated December 14, 2000;

	•		Amended and Restated Severance Agreement between the Corporation and Kenneth J. Robinson dated December 14, 2000;

	•		Amended and Restated Survivor Benefit Deferred Compensation Agreement between the Corporation and Kenneth J. Robinson dated December 14, 2000;

	•		Assignment Agreement between the Corporation and Kenneth J. Robinson dated July 10, 2001;

	•		Survivor Benefit Deferred Compensation Agreement between the Corporation and Edward F. Lewis dated January 1, 1992; and

	•		Employment Agreement between the Corporation and J. Edward Barry dated April 29, 1987.

Finally, we request that the Corporation provide the above agreements to Kohrman Jackson & Krantz P.L.L. simultaneously with filing such agreements with the SEC.

Please advise Marc C. Krantz, Kohrman Jackson & Krantz P.L.L., phone 216-696-8700, fax 216-621-6536, as to when the stockholder list and the requested agreements will be provided.


	Sincerely,

	Richard M. Osborne Trust

	By:	/s/ Richard M. Osborne
		Richard M. Osborne, Trustee

cc: Marc C. Krantz, Esq.


STATE OF OHIO	) SS.	AFFIDAVIT OF RICHARD M. OSBORNE
COUNTY OF LAKE	)

I, Richard M. Osborne, Trustee of the Richard M. Osborne Trust (the “Trust”) being first duly sworn according to law, depose and state upon oath as follows:

Requested examination by the Trust of the records of Corning Natural Gas Corporation (“Corning”) is not desired for a purpose which is in the interest of a business or object other than the business of Corning and the Trust has not at any time sold or offered for sale any list of shareholders of any domestic or foreign corporation or aided or abetted any person in procuring any such record of shareholders for any such purpose.


				/s/ Richard M. Osborne
				Richard M. Osborne

		SWORN TO AND SUBSCRIBED before me on July 27, 2006.

				/s/ Holly E. Kern

				Notary Public

				Holly E. Kern
		[SEAL]		Notary Public, State of Ohio
				My Commission Expires 9/17/08
				Recorded in Lake County

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