-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DNb9mqeMJeNSr+gRrXVh15xPVICwE5jDB9zVqN4qYXQCf31lIw3YbYQIo1WabWXP +PAw5oyaCe05wtlPzc8a+w== 0000950142-98-000118.txt : 19980210 0000950142-98-000118.hdr.sgml : 19980210 ACCESSION NUMBER: 0000950142-98-000118 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980209 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PRIDE COMPANIES LP CENTRAL INDEX KEY: 0000859636 STANDARD INDUSTRIAL CLASSIFICATION: PIPE LINES (NO NATURAL GAS) [4610] IRS NUMBER: 752313597 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-52729 FILM NUMBER: 98526121 BUSINESS ADDRESS: STREET 1: 1209 N FOURTH ST CITY: ABILENE STATE: TX ZIP: 79601 BUSINESS PHONE: 9156748000 MAIL ADDRESS: STREET 1: PO BOX 3237 CITY: ABILENE STATE: TX ZIP: 79604 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: VARDE PARTNERS INC CENTRAL INDEX KEY: 0001054846 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 3600 WEST 80TH STREET STREET 2: STE 225 CITY: MINNEAPOLIS STATE: MN ZIP: 55431 MAIL ADDRESS: STREET 1: 3600 WEST 80TH STREET STREET 2: STE 225 CITY: MINNEAPOLIS STATE: MN ZIP: 55431 SC 13D 1 SCHEDULE 13D - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 PRIDE COMPANIES, L.P. (Name of Issuer) COMMON LIMITED PARTNERSHIP UNITS (Title of Class of Securities) 741537302 (CUSIP Number) GEORGE G. HICKS VARDE PARTNERS, INC. 3600 WEST 80TH STREET MINNEAPOLIS, MN 55431 TEL. NO.: (612) 893-1554 WITH A COPY TO: KENNETH M. SCHNEIDER, ESQ. PAUL, WEISS, RIFKIND, WHARTON & GARRISON 1285 AVENUE OF THE AMERICAS NEW YORK, NY 10019-6064 TEL. NO.: (212) 373-3000 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) JANUARY 30, 1998 (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 statement because of Rule 13d-1(b)(3) or (4), check the following box [ ]. - -------------------------------------------------------------------------------- Page 1 of 9 Pages CUSIP NO. 741537302 13D Page 2 of 9 Pages SCHEDULE 13D 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Varde Partners, Inc. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ] (B) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 6 CITIZENSHIP OR PLACE OF ORGANIZATION State of Delaware 7 SOLE VOTING POWER NUMBER OF 2,273,308 Common Units, assuming conversion of all Series B Preferred Units SHARES and Series C Preferred Units. BENEFICIALLY OWNED 8 SHARED VOTING POWER BY EACH REPORTING 0 PERSON 9 SOLE DISPOSITIVE POWER 2,273,308 Common Units, assuming conversion of all Series B Preferred WITH Units and Series C Preferred Units. 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,273,308 Common Units, assuming conversion of all Series B Preferred Units and Series C Preferred Units. 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Approximately 33.6%, based on information contained in the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 15, 1998. 14 TYPE OF REPORTING PERSON CO CUSIP NO. 741537302 13D Page 3 of 9 Pages Item 1. Security and Issuer. This Statement on Schedule 13D (the "Statement") relates to the Common Limited Partnership Units (the "Common Units") of Pride Companies, L.P., a Delaware limited partnership (the "Issuer"). The principal executive offices of the Issuer are located at 1209 North Fourth Street, Abilene, Texas 79601. Item 2. Identity and Background. This Statement is being filed by Varde Partners, Inc., a Delaware corporation ("Varde"). Varde acts as the general partner of the general partner of various investment funds. The address of the principal business and principal office of Varde is 3600 West 80th Street, Minneapolis, MN 55431. During the last five years, Varde has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, Varde has not been 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. The name, business address, present principal occupation or employment (and the name, principal business and address of any corporation or other organization in which such employment is conducted) and the citizenship of each director and executive officer of Varde is set forth on Exhibit 1 hereto and is incorporated herein by reference. CUSIP NO. 741537302 13D Page 4 of 9 Pages Item 3. Source and Amount of Funds or Other Consideration. The Issuer issued, and Varde acquired from the Issuer, Series B Preferred Units, stated value $1,000 per unit, in the total amount of $9,321,851, and Series C Preferred Units, stated value $1,000 per unit, in the total amount of $5,000,000, pursuant to and upon the terms and subject to the conditions set forth in the Restructuring and Override Agreement (a copy of which is attached hereto as Exhibit 2), dated as of December 31, 1997, by and among Varde, the Issuer, the managing general partner of the Issuer and the special general partner of the Issuer. The Series B Preferred Units and the Series C Preferred Units (together, the "Preferred Units") were purchased with the funds of (i) the various domestic investment funds for which Varde acts as the general partner of the general partner thereof and (ii) an investment account and an offshore investment fund managed by affiliates of Varde and with respect to which Varde is serving as the nominee of the investment managers thereof. Under the Restructuring and Override Agreement, Varde also acquired certain other securities and made certain loans to the Company. The total amount invested by Varde in the Issuer was $29,000,000. There was no allocation made among the various securities acquired and loans made by Varde. Each of the Certificates of Designations of the Series B Preferred Units and the Series C Preferred Units (copies of which are attached hereto as Exhibits 3 and 4) provide that on or after March 31,1998, the Preferred Units may be converted into such number of Common Units equal to the product of the number of Preferred Units being converted, multiplied by the quotient of $1,000 divided by the "Conversion Price" (as defined below). The initial Conversion Price for both the Series B Preferred Units and the Series C Preferred Units is $6.30, which Conversion Price remains subject to anti-dilution adjustments described in the Certificates of Designations. CUSIP NO. 741537302 13D Page 5 of 9 Pages Item 4. Purpose of Transaction. The Preferred Units (and the Common Units into which they may be converted) (collectively, the "Units") were acquired for investment purposes. Varde may consider making additional purchases of equity securities of the Issuer in open-market or private transactions, the extent of which purchases would depend upon prevailing market and other conditions. Alternatively, Varde may sell all or a portion of its Units in open-market or private transactions, depending upon prevailing market conditions and other factors. Other than as described in the Restructuring and Override Agreement, the Certificates of Designations, the Amended and Restated Registration Rights Agreement and the Registration Rights Agreement (described below in Item 6), Varde does not have any present plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of 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 of the general partner of 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 of the general partner of the Issuer; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material changes in the Issuer's business or partnership structure; (g) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions that may impede the acquisition of control of the Issuer by any 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 Exchange Act of 1934; or (j) any action similar to any of those enumerated above. CUSIP NO. 741537302 13D Page 6 of 9 Pages Item 5. Interest in Securities of the Issuer. (a) As of March 31, 1998, Varde will have the right to acquire up to 2,273,308 Common Units (representing, based on the information contained in the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 15, 1998, approximately 33.6% of the outstanding Common Units). Accordingly, Varde may be deemed to be the beneficial owner of the up to 2,273,308 Common Units (representing approximately 33.6% of the outstanding Common Units). Except as set forth in this Item 5(a), Varde does not beneficially own any Common Units. (b) Varde has sole voting and dispositive power with respect to all the Common Units it acquires. Except as set forth in the preceding sentence, Varde does not have any power to vote or dispose of any Common Units that may be deemed to be beneficially owned by it. (c) Except as described in Item 4 of this Statement, Varde has not effected any transactions relating to the Common Units which are beneficially owned by it in the past sixty days. (d) To the best knowledge of Varde, no person other than Varde, the investment managers for the investment account and the offshore investment funds (each a Delaware corporation), and the Management of the Issuer (as described in Item 6) has the right to receive or the power to direct the receipt of dividends from, and the proceeds from the sale of, the Common Units owned by it. (e) Not applicable. CUSIP NO. 741537302 13D Page 7 of 9 Pages Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Pursuant to the Restructuring and Override Agreement and the Assignment Agreements (a form of which is attached hereto as Exhibit 5), certain designated members of the Issuer's management (the "Management") acquired a one-third economic interest in the Preferred Units held by Varde (and the Common Units into which they may be converted). Payment therefor was made by the issuance of promissory notes (the "Notes") in favor of Varde, and subject to the terms and conditions of the Assignment Agreements and until such time the Notes are paid in full, the Management has no voting, disposition or other rights with respect to the securities held by it other than the right to receive distributions and other payments thereon (which must be applied to the repayment of principal and interest on the Notes). The Restructuring and Override Agreement further provides that, subject to the receipt of required consents, the Preferred Units will be exchanged for new preferred units (the "New Preferreds"), which would give Varde the right to receive a total of up to 52% of the Issuer's Common Units, in which the Management would continue to hold a one-third economic interest. Under certain circumstances, Varde may acquire the right to receive an additional 8% of the Issuer's Common Units upon the conversion of its New Preferreds, in which Management would not hold any interest. In addition, Varde has entered into the Amended and Restated Registration Rights Agreement and the Registration Rights Agreement, each dated as of December 31, 1998, with the Issuer (copies of which are attached hereto as Exhibits 6 and 7), giving Varde, among other things, the right, on the terms and conditions set forth therein, to require the Issuer to register for sale to the public the Common Units acquired by Varde upon conversion or exchange of the Preferred Units and the New Preferreds. Other than as set forth in this Statement, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between Varde and any person with respect CUSIP NO. 741537302 13D Page 8 of 9 Pages to any securities of the Issuer, including, but not limited to, the transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. 1. Information with respect to executive officers and directors of Varde. 2. Restructuring and Override Agreement, dated as of December 31, 1997, by and among Varde, the Issuer, the managing general partner of the Issuer and the special general partner of the Issuer. 3. Certificate of Designations relating to the Series B Preferred Units of the Issuer. 4. Certificate of Designations relating to the Series C Preferred Units of the Issuer. 5. Form of Assignment Agreement, by and between Varde and certain designated members of the Issuer's management. 6. Amended and Restated Registration Rights Agreement, dated as of December 31, 1997, by and between Varde and the Issuer. 7. Restated Registration Rights Agreement, dated as of December 31, 1997, by and between Varde and the Issuer. SIGNATURES After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct. Dated: February 9, 1998 VARDE PARTNERS, INC. By: /s/ George G. Hicks ------------------- Name: George G. Hicks Title: Vice President EXHIBIT INDEX Exhibit Page - ------- ---- 1. Information with respect to executive officers and directors of Varde. 2. Restructuring and Override Agreement, dated as of December 31, 1997, by and among Varde, the Issuer, the managing general partner of the Issuer and the special general partner of the Issuer. 3. Certificates of Designations relating to the Series B Preferred Units of the Issuer. 4. Certificates of Designations relating to the Series C Preferred Units of the Issuer. 5. Form of Assignment Agreement, by and between Varde and certain designated members of the Issuer's management. 6. Amended and Restated Registration Rights Agreement, dated as of December 31, 1997, by and between Varde and the Issuer. 7. Restated Registration Rights Agreement, dated as of December 31, 1997, by and between Varde and the Issuer. IN ACCORDANCE WITH RULE 201 OF REGULATION S-T, THESE EXHIBITS TO SCHEDULE 13D ARE BEING FILED IN PAPER PURSUANT TO A TEMPORARY HARDSHIP EXEMPTION. An electronic format copy of the paper filing shall be submitted to the Commission within six business days of filing the paper format copy. -----END PRIVACY-ENHANCED MESSAGE-----