UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
Cellstar Corporation
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
150925204
(CUSIP Number)
Timothy S. Durham
111 Monument Circle
Suite 4800
Indianapolis, Indiana 46204-2415
(317) 237-4122
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 18, 2007
(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 [ ].
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).
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Timothy S. Durham
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 938,401
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 938,401
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
938,401
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.4%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Patrick J. O'Donnell
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 436,900
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 436,900
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
436,900
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.1%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Henri B. Najem, Jr.
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 78,100
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 78,100
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
78,100
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Anthony P. Schlichte
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 242,540
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 242,540
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
242,540
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.1%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
David Tornek
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 127,300
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 127,300
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
127,300
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.6%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Neil E. Lucas
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 176,200
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 176,200
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
176,200
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.8%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Terry G. Whitesell
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 34,000
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 34,000
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
34,000
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON:
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY)
Jonathan B. Swain
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS
PF
--------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES 14,000
-----------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
-----------------------------------
EACH REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 14,000
-----------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,000
--------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
SCHEDULE 13D
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CUSIP No. 150925204
--------------------------------------------------------------------------------
ITEM 1. Security and Issuer
This constitutes Amendment No. 4 to the statement on Schedule 13D, dated
February 23, 2006 (the "Original Filing"), relating to the common shares, $0.01
par value (the "Shares"), of CLST Holdings, Inc., a Delaware corporation (the
"Issuer"), with its principal executive offices at 601 S. Royal Lane,
Carrollton, Texas 75019,as amended by Amendment No. 1 to such filing, dated
March 3, 2006, Amendment No. 2 to such filing, dated December 29, 2006, and
Amendment No. 3 to such filing, dated April 28, 2007.
ITEM 2. Identity and Background
The persons filing this statement are Timothy S. Durham ("Durham"), Patrick J.
O'Donnell ("O'Donnell"), Henri B. Najem, Jr. ("Najem"), Anthony P. Schlichte
("Schlichte"), David Tornek ("Tornek"), Neil E. Lucas ("Lucas"), Terry G.
Whitesell ("Whitesell"), and Jonathan B. Swain ("Swain").
Mr. Durham is a citizen of the United States and his principal address is 111
Monument Circle, Suite 4800, Indianapolis, Indiana 46204. Mr. Durham serves as
the Chairman and Chief Executive Officer of Obsidian Enterprises, Inc. and as
Chairman of Fair Holdings, Inc. The address of the principal offices of Obsidian
Enterprises, Inc. and Fair Holdings, Inc. is 111 Monument Circle, Suite 4800,
Indianapolis, Indiana 46204.
Mr. O'Donnell is a citizen of the United States and his principle address is 200
West Adams Street, Chicago, Illinois, 60606. O'Donnell is retired from the UBS
Investment Bank where he was the CIO and a member of its Management Board.
Mr. Najem is a citizen of the United States and his principal address is 11699
Fall Creek Road, Indianapolis, Indiana 46256. Mr. Najem owns Bella Vita
restaurant. The address of the principal office of Bella Vita is 11699 Fall
Creek Road, Indianapolis, IN 46256.
Mr. Schlichte is a citizen of the United States and his principal address is 111
Monument Circle, Suite 4800, Indianapolis, Indiana 46204. He is Executive Vice
President of Obsidian Enterprises, Inc.
Mr. Tornek is a citizen of the United States and his principal address is 910
Lincoln Rd., Miami Beach, FL 33139. He is Proprietor of Touch Restaurant in
South Beach.
Mr. Whitesell is a citizen of the United States and his principal address is
111 Monument Circle, Suite 4800, Indianapolis, Indiana 46204. He is President
of Obsidian Enterprises, Inc.
Mr. Lucas is a citizen of the United States and his principal address is 111
Monument Circle, Suite 4800, Indianapolis, Indiana 46204. He is an attorney
practicing in Indianapolis.
Mr. Swain is a citizen of the United States and his principal address is 111
Monument Circle, Suite 4800, Indianapolis, Indiana 46204. He is Vice President
of Obsidian Enterprises, Inc.
During the last five years, none of the Reporting Persons (i) has been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (ii) was 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.
The aggregate purchase price for the 2,047,441 shares purchased by the
Reporting Entities was $2,509,402. The source of funds for the purchases was
personal funds for Mr. Durham, Mr. O'Donnell, Mr. Najem, Mr. Schlichte, Mr.
Tornek, Mr. Lucas, Mr. Whitesell, and Mr. Swain.
ITEM 4. PURPOSE OF TRANSACTION.
On May 18, 2007, counsel to Mr. Durham, one of the reporting persons, sent a
letter, attached hereto as Exhibit 1, addressed to the Chairman of the board
of directors of the Issuer - Dale V. Kesler - responding to a letter from Mr.
Kesler to Mr. Durham, among others, also dated May 18, 2007. Mr. Durham's
letter is attached hereto as Exhibit 1 and Mr. Kesler's letter is attached
hereto as Exhibit 2.
The Reporting Persons have met and will continue to meet and have conversations
with representatives of the Issuer and third parties, including other
stockholders of the Issuer, to discuss the Reporting Persons' views with
respect to the assets, capital structure, ownership, and control of the Issuer.
At any such meeting, the Reporting Persons may discuss the views expressed in
the above-mentioned letter and may make proposals relating to changes in the
assets, capital structure, ownership or control of the Issuer or discuss their
views with respect to any proposals of others. During the course of
conversations with other stockholders of the Issuer, Mr. Durham has expressed,
and may continue to express, the view that the best interests of the
stockholders of the Issuer would be served by the immediate election of Mr.
Durham and Mr. Brian Ladin to the Board of Directors of the Issuer to fill
vacancies thereon, to serve, along with Mr. Robert Kaiser, a current member
of the board of directors, as the entire board of directors until such time
as a board of directors can be duly elected and qualified at an annual meeting
of stockholders. Also during certain of those conversations and meetings, Mr.
Durham has encouraged, and may continue to encourage, other stockholders to
communicate to the Issuer their views regarding the composition of the board
of directors of the Issuer pending the holding of an annual meeting.
The Reporting Persons reserve the right to (i) dispose of all or part of their
investment in the Stock at any time, (ii) acquire additional shares of Stock
by tender offer, in the open market, in private transactions or otherwise,
(iii) propose a merger or similar business combination with the Issuer or its
affiliates, (iv) seek control of the Issuer by stock ownership or otherwise,
(v) seek to influence the selection by the Issuer of candidates for election
to the Issuer's Board of Directors, (vi) seek to encourage one or more existing
executives or Directors to resign from the Issuer's Board of Directors or not
stand for election, (viii) seek appointment of one or more of the Reporting
Persons to fill vacancies on the Board of Directors or (vii) take any other
action with respect to the Issuer.
The Reporting Persons intend to use their position, including voting power, as
stockholders of the Issuer to encourage changes in the Issuer's assets, capital
structure, ownership or control or any transactions that they believe to be
beneficial to their interests. Among other transactions the Reporting Persons
may encourage are the types of transactions described in clauses (a) through
(j) of Item 4 of the Schedule 13D form. The Reporting Persons may also
consider supporting proposals by third parties to engage in such transactions.
Except as set forth in this Item 4, the Reporting Persons have no present plans
or proposals that relate to or that would result in any of the following
actions:
(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 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 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 Act; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on May 2, 2007, the Reporting Persons
may be deemed to beneficially own, in the aggregate, 2,047,441 shares of
Common Stock, representing approximately 9.7% of the Issuer's outstanding
shares of Common Stock (based on the 21,027,205 shares stated to be
outstanding as of April 2, 2007 in the Issuer's Quarterly Report on
Form 10-Q for the quarterly period ended February 28, 2007, filed with the
Securities and Exchange Commission on April 9, 2007).
(b) Mr. Durham has sole voting and sole dispositive power with respect
to 938,401 shares. Mr. O'Donnell has sole voting and sole dispositive
power with respect to 436,900 shares. Mr. Najem has sole voting and sole
dispositive power with respect to 78,100 shares. Mr. Schlichte has sole
voting and sole dispositive power with respect to 242,540 shares. Mr.
Tornek has sole voting and sole dispositive power with respect to 127,300
shares. Mr. Lucas has sole voting and sole dispositive power with respect
to 176,200 shares. Mr. Whitesell has sole voting and sole dispositive
power with respect to 34,000 shares. Mr. Swain has sole voting and sole
dispositive power with respect to 14,000 shares.
(c) In the past sixty days, no transactions in the common stock of the
Issuer have been effected by any of the Reporting Persons.
Item 6. Contracts, Arrangements, Understandings or Relationship with Respect to
Securities of the Issuer
Except as described herein, none of the Reporting Persons has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect 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 losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Description
1 Letter dated May 18, 2007, to Dale V. Kesler.
2 Letter dated May 18, 2007, to Timothy S. Durham,
et al.
3 Joint Filing Agreement (incorporated by reference
to Exhibit A of the Original Filing).
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: May 24, 2007
/s/ Timothy S. Durham
--------------------------
Timothy S. Durham
/s/ Patrick J. O'Donnell
--------------------------
Patrick J. O'Donnell
/s/ Henri B. Najem, Jr.
--------------------------
Henri B. Najem, Jr.
/s/ Anthony P. Schlichte
--------------------------
Anthony P. Schlichte
/s/ David Tornek
--------------------------
David Tornek
/s/ Neil E. Lucas
--------------------------
Neil E. Lucas
/s/ Terry G. Whitesell
--------------------------
Terry G. Whitesell
/s/ Jonathan B. Swain
--------------------------
Jonathan B. Swain
SCHEDULE 13D
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CUSIP No. 150925204
--------------------------------------------------------------------------------
EXHIBIT INDEX
Exhibit Description
1 Letter dated May 18, 2007, to Dale V. Kesler.
2 Letter dated May 18, 2007, to Timothy S. Durham,
et al.
3 Joint Filing Agreement (incorporated by reference
to Exhibit A of the Original Filing).
SCHEDULE 13D
--------------------------------------------------------------------------------
CUSIP No. 150925204
--------------------------------------------------------------------------------
EXHIBIT 1
May 18, 2007
Via E-mail and Hand Delivery
Dale V. Kesler
Chairman of the Board of Directors
CLST Holdings, Inc.
601 S. Royal Lane
Coppell, Texas 75019
Dear Mr. Kesler:
As you know, we represent Timothy S. Durham, a substantial stockholder of
CLST Holdings, Inc. We are in receipt of your letter dated May 17, 2007
addressed to our client and others, which was delivered to us by electronic
mail this morning (the "May 17 Letter").
Our client is disappointed that the Board has placed conditions on
stockholder participation in the director nominating process that are not
present in the corporation's Bylaws, Certificate of Incorporation or applicable
law. Effectively, the Board has precluded meaningful participation by
stockholders in the nominating process unless those stockholders can prove to
the Board's satisfaction that, among other things, election results in their
favor are a forgone conclusion. Our client believes that this is unfortunate
and a breach of the fiduciary duties of participating members of the Board of
Directors.
Our client also notes the fourth numbered paragraph of your letter
referring to the views of Grant Thornton, the Company's auditors. Specifically,
that paragraph states as follows:
"4. Grant Thornton, the Company's auditors, have indicated some concern
and uncertainty about continuing as the Company's auditors if a new Board
is elected. The nominees should explain how they would address this
issue, which could conceivably cause a delay in SEC filings."
So that our client may understand and possibly address the concerns of
Grant Thornton, please provide us immediately with copies of all written
communications, and written summaries of all oral communications, between
Grant Thornton and members of the Company's Board of Directors or management
in which Grant Thornton indicates "some concern and uncertainty about
continuing as the Company's auditors if a new Board is elected." Please also
immediately provide us with all written communications, and written summaries
of all oral communications, indicating the persons who Grant Thornton prefers
be members of the Board of Directors of the Company, together with an
explanation of why Grant Thornton believes those persons are suited to be
members of the Board of Directors. Finally, please immediately provide us with
copies of all written communications and written summaries of all oral
communications between the Company or its representatives, including members of
the Board of Directors and officers and employees of the Company, and Grant
Thornton relating to the make up of the Board of Directors or which seek to
influence Grant Thornton's opinion of our client or other prospective nominees
for the Board of Directors.
In order that our client may understand and address the Board's new
requirements for stockholder participation in the process of nominating
candidates for election to the Board of Directors, please immediately provide
us with minutes of the meetings at which the procedures outlined in the May 17
Letter were adopted, together with copies of all management recommendations,
briefing books and other materials received or considered by the Board of
Directors in connection therewith.
The foregoing information is necessary to permit our client to participate
in the nomination and election of directors under applicable law and under the
requirements established by the Board in the May 17 Letter. Please respond
immediately to this letter regarding whether the Company will immediately
cooperate with the foregoing demands. Absent that immediate cooperation, our
client intends to make a demand under Section 220 of the Delaware General
Corporation Law for the same materials.
Finally, we encourage you to carefully consider the Report on Form 8-K
filed by the Company today, attaching a copy of the May 17 Letter. We are
concerned that the May 17 Letter, by itself, is incomplete, and thus materially
misleading as to the Board's discussions with stockholders to date and the
other matters addressed therein. In particular, we are concerned that the
matters addressed by numbered paragraphs 2 and 3, varying as they do from
applicable law and the Company's Certificate of Incorporation and Bylaws
require additional explanation as to the purpose of the Board's determination
that participation by stockholders in the nomination process be subject to
unusual disabilities. As discussed above, we believe that numbered paragraph
4 may indicate the existence of serious issues relating to the Company's
relationship with its auditors and should be addressed fully. Numbered
paragraph 5, expressing the view of an employee and agent of the Company, is
completely unsupported by discussion in your letter, but addresses, along with
numbered paragraph 4, matters of potentially grave concern and should be more
fully addressed. In giving consideration to these matters, we invite your
attention to items 3.01, 3.03, 4.01, 5.02, 5.03 and 8.01 of Form 8-K.
Very truly yours
Jeffrey M. Sone
JMS/rr
cc: John L. Jackson
Robert A. Kaiser
William R. Hays, III
Haynes & Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
SCHEDULE 13D
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CUSIP No. 150925204
--------------------------------------------------------------------------------
EXHIBIT 2
May 18, 2007
Robert Barnard
Stark Investments
3600 South Lake Drive
St. Francis, Wisconsin 53235
Timothy S. Durham
111 Monument Circle, Suite 4800
Indianapolis, Indiana 46204
Raul Marcelo Claure
2010 NW 84 Avenue
Miami, Florida 33122
Brian Ladin
Bonanza Master Fund Ltd.
300 Crescent Court, Suite 250
Dallas, Texas 75201
Richard D. Squires
SPI Holdings, LLC
100 Crescent Court, Suite 450
Dallas, Texas 75201
Manoj Rajegowda
MC Investments Partnership
12625 High Bluff, Suite110G
San Diego, California 92130
Steve Moorehead
Moorehead Communications, Inc.
P.O. Box 1870
Marion, Indiana 46952
Gentlemen:
Members of the Board of Directors and management of CLST Holdings, Inc.
(formerly known as CellStar Corporation) have met and/or spoken with each of
you in an attempt to respond to those of you who communicated with us and to
determine your views on how the Company should proceed with the liquidation
process and the composition of the Board of Directors. You have been advised
that the Company intends to hold an annual stockholders meeting to elect the
entire Board of Directors.
As described in the Company's proxy statement for the special stockholders
meeting held March 28, 2007, the Company's directors intend to make
distributions, including the $1.00 dividend, to stockholders as promptly as
possible. However, the amount and timing of the distributions are subject to
uncertainties and depend on the resolution of contingencies, including the SEC
investigation.
The Board does not intend to make any distribution until the SEC
investigation is resolved for two reasons. First, members of the Board could be
jointly and severally liable if the Company were to make distributions to
stockholders and subsequently there were insufficient assets to pay all
remaining creditors. Since we have no way of knowing what, if any, fine or
penalty the SEC may assess against the Company, we do not know how much cash to
retain to satisfy any such potential liability.
The second reason that the Board intends to wait until the SEC
investigation is resolved before making distributions is the possibility that
stockholders might be liable under fraudulent transfer laws to return the
amount of distributions received if, after making the distributions, the
Company were to have insufficient assets to pay its remaining creditors.
For these and the other reasons set forth in the proxy statement, the
Board intends to liquidate the Company in the manner described in the proxy
statement. We intend to focus on costs and talent in our recommendations for
directors and management to carry out the plan of dissolution approved at the
special stockholder meeting.
Our discussions with each of you indicate to us a lack of consensus among
you as to how the Board and the Company should proceed. All of you would like
to receive distributions without waiting for the resolution of the SEC
investigation. However, there was no unanimity on the following issues:
whether there should be a new Board of Directors committed to making
distributions without waiting for resolution of the SEC investigation, whether
there should be a new Board to otherwise manage the liquidation of the
Company, the number of directors that should constitute a new Board and who
they should be, and your willingness to participate in a proxy contest to
elect a new Board.
The Board would have no objection to considering the election of a new slate of
directors who we can be assured would represent the interests of all
stockholders. Consequently, the Board proposes the following:
1. You and other stockholders you may choose to contact, submit to the
Board a slate of nominees for director that you would like the Board
to consider nominating in the Company's proxy statement for the annual
meeting.
2. The Board would like the slate to have the written support of holders
of a majority of outstanding shares of the Company's common stock. The
Board will consider a slate having the support of a lesser amount of
common stock if the Board can be satisfied that the number of shares
supporting the slate would, if voted at the annual meeting, be
sufficient to ensure the election of the slate against any other slate
of nominees.
3. The slate would be accompanied by a description of the qualifications
of each nominee, his or her affiliations with any stockholders, his or
her plans for conducting the liquidation of the Company, including a
commitment to the payment of all of the net proceeds to stockholders,
and other information required by Article 9(c) of the Company's
Amended and Restated Certificate of Incorporation or the SEC's proxy
rules.
4. Grant Thornton, the Company's auditors, have indicated some concern and
uncertainty about continuing as the Company's auditors if a new Board is
elected. The nominees should explain how they would address this issue,
which could conceivably cause a delay in SEC filings.
5. Sherri Gunn, the Company's CEO and CFO, has expressed similar concerns.
The nominees should discuss how they would address this issue.
If a slate is submitted under these circumstances, the Board will give
serious consideration to proposing those persons as the only nominees for
election in the Company's proxy statement for the annual meeting.
The Company can provide to you at your request a list of record holders
of the Company's common stock prepared for the special meeting held March 28,
2007.
If you do not desire to submit a slate as described above, the Nominating
Committee of the Board will recommend its proposed slate of directors to the
Board, and the Board will submit to stockholders its nominated slate of
directors for election.
For purposes of keeping all stockholders apprised of these developments,
the Company will file this letter on a Form 8-K.
We look forward to hearing from you by June 1. Although the Company
announced its intention to hold the annual stockholders meeting on or before
June 29, we do not believe it will be feasible to do so. However, we
anticipate that the meeting will be held during July.
If you have any questions, please contact Sherri Gunn at 972-462-3557.
Very truly yours,
/s/ Dale V. Kesler
Dale V. Kesler
Chairman of the Board of Directors
CLST Holdings, Inc.
In connection with the annual meeting, the Company intends to file a proxy
statement and other materials with the SEC. Stockholders of the Company are
advised to read the proxy statement and any other relevant documents filed with
the SEC when they become available because those documents will contain
important information about the proposed transaction. Stockholders may obtain
a free copy of the proxy statement when it becomes available, and other
documents filed with the SEC, at the SEC's web site at http://www.sec.gov.
Free copies of the proxy statement, when it becomes available, and the
Company's other filings with the SEC, may also be obtained from the Company by
directing a request to CLST Holdings, Inc., 601 S. Royal Lane, Coppell, Texas
75019, Attention: Secretary, or by visiting the Company's website at
http://www.clstholdings.com.
The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation
of proxies from the Company's stockholders in connection with the annual
meeting. Information regarding the Company's directors and executive officers
is available in Amendment No. 1 to the Company's Annual Report on Form 10-K
for the fiscal year ended November 30, 2005 filed with the SEC on March 30,
2006 and on Form 8-Ks filed with the SEC on April 13, 2007, and April 16, 2007.
Additional information regarding the interests of such potential participants
will be included in the proxy statement and the other relevant documents filed
with the SEC when they become available.