UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
BELLAVISTA CAPITAL, INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i (1) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
PROPOSED SPECIAL MEETING OF SHAREHOLDERS
OF
BELLAVISTA CAPITAL, INC.
PROXY STATEMENT
OF
BELLAVISTA CAPITAL, INC. (the "Company")
THIS SOLICITATION IS BEING MADE ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY.
The Board of Directors of BellaVista Capital, Inc. (the "Company") is seeking
proxies from its shareholders to oppose the takeover of the Company by MacKenzie
Patterson Fuller, LP and its officers (collectively "MPF"). MPF is seeking to
call a special meeting to hold a shareholder vote to take complete control of
the Company by amending the bylaws to increase the size of the board of
directors to nine members, installing its officers as the nominees for positions
constituting a majority of the new board, and approving an arrangement by which
MPF will assume control of all asset management and administration of the
Company, award itself an annual management fee equal to 2% of the asset value
and award itself a stock option equal to 15% of the shares outstanding.
The Company's current Board of Directors is hereby soliciting your proxy to
OPPOSE MPF's attempt to take over complete control of the Company and its Board
of Directors, pay itself a 2% annual fee and award itself a 15% stock option. We
are urging you to vote to (i) against the expansion of the Board to permit MPF
to secure majority control; (iii\) against the election of the five MPF officers
(four of the five are Patterson family members) to these newly created Board
positions; and (iii) against appointment of MPF as the Company's exclusive asset
manager and administrator.
If MPF should secure and submit valid proxies from shareholders who own a
majority of the Company's outstanding common stock directing that the Company
call a Special Meeting of the shareholders (the "Special Meeting"), then
pursuant to its Bylaws, the Company's Secretary will call the Special Meeting
for a date that is no earlier than 10 days and no later than 90 days after the
date of the notice of the Special Meeting. The Special Meeting will be held at
the principal office of BellaVista, which is located at 15700 Winchester Blvd,
Los Gatos, California 95030.
You may execute and return the enclosed proxy, even if you have already executed
and submitted a proxy to MPF. The later dated proxy will cancel and invalidate
any earlier dated proxy. See "Voting of Shares - Voting Procedures" and
"Revocability of Proxy" below.
THE BOARD IS SOLICITING YOUR PROXY IN THE EVENT THE PROPOSALS ARE MADE AT A
SHAREHOLDER MEETING, TO VOTE AGAINST (I) AMENDMENT TO THE BYLAWS TO EXPAND THE
BOARD OF DIRECTORS TO NINE MEMBERS, (II) APPOINTMENT OF FIVE MPF OFFICERSAS
NOMINEES TO FILL THE NEW BOARD POSITIONS, AND (III) THE ENGAGEMENT OF MPF AS THE
COMPANY'S SOLE ASSET MANAGER AND ADMINISTRATOR. IF A SPECIAL MEETING OF
SHAREHOLDERS IS CALLED AND A QUORUM IS PRESENT AT THE MEETING, A MAJORITY OF THE
SHARES REPRESENTED AT THE MEETING VOTING IN FAVOR OF THESE PROPOSALS WILL BE
NECESSARY TO ADOPT THE PROPOSALS.
If MPF does not obtain sufficient votes to call a Special Meeting, or if the
meeting is called and the proposals are defeated by shareholder vote, the
current Board of Directors and management will continue to direct the Company's
operations. If no Special Meeting is called and MPF takes the necessary steps to
including its proposals on the agenda of the next Annual Meeting of
shareholders, the Board of Directors will vote the proxies solicited hereby as
directed at the Annual Meeting.
We are mailing each registered shareholder a copy of this Proxy Statement on or
about ______, 2009, and you can obtain the Proxy Statement, and any other
relevant documents, for free at the SEC's web site or from the Company by
calling Patti Wolf at (480) 563-3351.
MPF PROPOSALS
The Special Meeting
The proposed Special Meeting of shareholders is being sought by MPF for the sole
purpose of a vote on its takeover proposals. The MPF takeover efforts have
already caused the Company to expend substantial amounts of management time and
to incur substantial costs (in excess of $70,000 prior to the publication of
this proxy), and will continue to cause the expenditure of additional time and
cost to oppose the MPF takeover. If the Special Meeting is held, the cost to the
Company of holding the meeting is expected to exceed $5,000.
Expansion of the Board and Appointment of the MPF Nominees
MPF proposes to expand the Board to nine members and to fill the five new
positions on the board of directors with MPF officers (four of the five are
Patterson family members) in order to control a majority of the Board. MPF's
nominees are Pat Patterson, Glen Fuller and Christine Simpson as Class III
directors, Robert Dixon as a Class II director and Chip Patterson as a Class I
director. The Class of each director determines the date of the annual meeting
at which the term of office for that Class expires. Class III directors' terms
will expire at the annual meeting in 2010, Class II at the annual meeting in
2011, and Class I at the annual meeting in 2012.
The Board strongly urges a vote against the expansion of the Board to nine
members and a vote against each of the MPF officer nominees and is soliciting
your proxy to vote AGAINST these proposals.
If no Special Meeting is called, then MPF may seek to vote any executed proxies
they receive in favor of expansion of the board and election of the MPF nominees
at the Company's next annual meeting following its fiscal year ended September
30, 2009, to be held in 2010. Accordingly, the Board is soliciting your proxy to
vote to oppose such proposals at the next meeting of Shareholders, whether
special or annual.
As discussed in the Board's correspondence with shareholders since the date MPF
commenced its takeover efforts, the Board believes that (i) MPF has
significantly misrepresented the potential benefits of granting it complete and
total control over BellaVista's board, assets and operations; and (ii) MPF seeks
to obtain such control for its own benefit and that of its many beneficial
owners, and not for the benefit of the majority of BellaVista's shareholders.
MPF is a private equity company owned and controlled by its five nominees for
the Board, and has acquired Company shares for a number of its investor programs
that have their own separate investment objectives and interests. MPF owns less
than 12.5% of the Company's shares, and purchased those shares for prices
ranging from $1.00 to $2.25 per share.
We believe that MPF's interests are not aligned with those of the vast majority
of BellaVista's shareholders. We believe that MPF's primary interest lies in
satisfying the investment and business objectives of its management and
investors, and not in meeting the objectives of the approximately 88% of
BellaVista's shareholders who purchased their shares at $10 per share. We
believe that the majority of BellaVista's shareholders are best served by having
the Company managed in a manner and with the objectives sought by the current
Board who we believe, as long term fellow shareholders, have objectives and
interests in common with the vast majority of shareholders.
Accordingly, we urge you to grant us your proxy to vote AGAINST the expansion of
the Board and appointment of MPF officers to fill the newly created positions.
Appointment of MPF to Manage the Company's Assets and Operations
MPF's proposals include the proposal to appoint MPF as the sole manager of the
Company's assets and administration. As we have addressed in detail in our
correspondence, we believe MPF has made very misleading statements and
misrepresentations in claiming that this management arrangement will result in
significant cost savings and improved Company performance. We refer you to the
detailed responses in our letters to these and other MPF claims. In their proxy
materials, MPF includes only a one paragraph summary inserted near the end of
the statement, describing the proposed management arrangement.
Set forth below is the substance of this single paragraph, with BellaVista's
comments inserted in brackets, in boldface type and underlined, as [NOTE: with
commentary from BellaVista's Board of Directors]:
MPF says that the management contract (the contents of which, with their
complete control of the Board, would be determined in their sole discretion)
will be "consistent with the following terms: (1) an anticipated commencement
date of September 1, 2009; (2) a 1-year initial term with automatic 1-year
renewals, unless either party [NOTE: "either party" is somewhat misleading, as
MPF will control both parties] provides 90-day advance notice of termination;
(3) a base management fee equal to a fixed percentage fee equal to two percent
(2%) of BellaVista's total assets on an annual basis [NOTE: who will calculate
total assets, and who will determine whether to take actions that might increase
or decrease this basis for the annual fee? MPF, of course] ; (4) reimbursement
of extraordinary and property level expenses incurred on behalf of BellaVista,
but not for typical administrative and overhead expenses [NOTE: based on this
single loophole, MPF's continued representations of cost savings are inherently
misleading; MPF will not absorb the property level expenses that they included
in Company expenses when calculating cost savings, and will have full discretion
to determine what expenses are "extraordinary"]; (5) MPF will provide BellaVista
with all corporate services, including asset management, investment advisory,
accounting, legal, investor relations, investor reporting, printing, mailing,
and all other corporate overhead [NOTE: In other words, complete control of any
and all aspects of the Company, as overseen by the MPF controlled board]; and
(7) BellaVista will grant MPF an option to acquire up to 15% of the stock of
BellaVista at a strike price of $2.73 per Share, which price will be reduced by
the amount of any dividends paid to shareholders (or shares repurchased) from
and after the date of the management agreement." [NOTE: In other words, "we
(MPF) bought at $1 to $2.25 per share, and, as long as we (MPF) do nothing more
than return to you the estimated current value of your shares, we (MPF) will
immediately get 15% of the Company for $0 and immediately and significantly
dilute the value of your shares." Is this in the best interests of nearly 88% of
the shareholders who purchased at $10 a share?]
We would further point out that, even after numerous requests from the
BellaVista Board of Directors, MPF has never provided any detailed business plan
for its management of the Company to either the Bella Vista Board or to you,
BellaVista's shareholders. This is in great contrast to the current BellaVista
Board who have developed such a detailed business plan and update it annually
for the shareholders. The Company's asset management and administration is
currently provided for under a detailed contract between the Company and
Cupertino Capital. This contract has been publicly disclosed and is available
for all shareholders to review in its entirety. It was negotiated at arm's
length by the Company with Cupertino Capital, an unaffiliated real estate
investment firm, and approved by the independent Board of Directors.
By contrast, MPF proposes that you vote to give MPF control of the Board so that
MPF can itself approve its non-arm's length contract for Company management and
administration. MPF has given you nothing more than a brief outline of an
agreement, copied above, as an indication of the terms and conditions of this
proposed management arrangement. MPF may therefore be free to adopt unilaterally
the terms and conditions it finds most favorable to its interests, once it has
control of the BellaVista Board of Directors.
For the foregoing reasons, we urge you to give us your proxy to vote AGAINST the
MPF proposed arrangement to assume complete control over management of the
Company's assets and administration.
VOTING OF SHARES
Voting Procedures
BellaVista Capital, Inc.'s only class of voting securities is its common stock,
par value $0.01 per share. Holders of its shares of common stock at the close of
business on the record date will be entitled to notice of, and to vote at, the
proposed Special Meeting, if the Special Meeting is called. The Special Meeting
will be called if requests representing a majority of the outstanding shares are
executed, submitted to the Company and not withdrawn before the Special Meeting
is noticed by the Company. The record date would be established at time the
Company delivers notice of the Special Meeting.
As of June 17, 2009, a total of 11,171,433 shares of the Company's common stock
were outstanding. Each share of common stock outstanding on the record date and
the date of the Special Meeting is entitled to one vote on each matter presented
at the meeting.
The presence, in person or by proxy, of shareholders representing 50% or more of
the issued and outstanding stock entitled to vote constitutes a quorum for the
transaction of business at the meeting. If a quorum is present, the affirmative
vote of the majority of the shares present, in person or by proxy, at the
meeting and entitled to vote is required for approval of all matters properly
before the shareholders at the meeting. All shares present at the meeting, in
person or by proxy, will be included to determine the quorum and to determine
whether the required majority of the quorum has voted to approve any proposal.
The accompanying proxy will be voted in accordance with the shareholder's
instructions on such proxy. Each shareholder may approve a vote against or in
favor of the proposals to amend the bylaws to increase the size of the board,
elect the MPF officer nominees, and approve the MPF exclusive management
agreement. We do not anticipate that any other business will be conducted at the
Special Meeting.
THE COMPANY'S BOARD URGES SHAREHOLDERS TO SIGN THE ENCLOSED RED FORM OF PROXY
AND RETURN IT PROMPTLY TO THE COMPANY AS DIRECTED.
If no direction is given on the proxy form, and you return the signed proxy to
us, it will be voted AGAINST each of the proposals to expand the board, elect
the MPF officer nominees, and approve the MPF management agreement.
Revocability of Proxy
The giving of the enclosed proxy does not preclude the right to vote in person
should the shareholder giving the proxy so desire. A proxy may be revoked at any
time prior to its exercise by delivering a written statement to the Company's
Secretary that the proxy is revoked, by presenting a later-dated proxy, or by
attending the Special Meeting and voting in person. In this regard, any
shareholder who has executed and delivered a proxy to MPF may revoke such proxy
by delivering a written statement to the Company's Secretary that the MPF proxy
is revoked, by presenting the attached proxy with a later date than the MPF
proxy to the Board, or by attending the Special Meeting and voting in person.
Additional Materials
A Form of Proxy is included with the mailing of this proxy statement. A copy of
the Company's Form 10-KSB Annual Report for its fiscal year ended September 30,
2008, as filed with the Securities Exchange Commission on January 23, 2009,
which includes the Company's audited financial statements for the fiscal year,
as well as copies of the Company's Quarterly Report on Form 10-QSB for the
quarter ended December 31, 2008, will be furnished without charge to beneficial
shareholders or shareholders of record upon request to BellaVista Capital, c/o
Carmen Palenske, 15700 Winchester Boulevard, Los Gatos, CA 95030; or by calling
Patti Wolf at (480) 563-3351.
SOLICITATION OF PROXIES
This solicitation is being made on behalf of the Company's Board of Directors.
The costs of this solicitation by the Board of Directors will be borne by
BellaVista Capital, Inc. Proxy solicitations will be made by mail or electronic
mail. They also may be made by members of Company management by personal
interview, telephone, facsimile transmission, and telegram. BellaVista Capital,
Inc. does not expect to engage an outside firm to solicit votes, but if such a
firm is engaged subsequent to the date of this proxy statement, the cost is
estimated to be less than $5,000, plus reasonable out-of-pocket expenses.
Assuming no such third party solicitation costs are incurred, the total costs to
the Company for this solicitation which will consist primarily of the legal,
printing and mailing costs are expected to be approximately $9,500. Such costs
represent only the costs of soliciting proxies and opposing the solicitation by
MPF. They do not include substantial costs (all of such costs, including proxy
solicitation, have exceeded $70,000 to date) otherwise incurred in responding to
MPF's takeover demands commencing with its demand letter of March 17, 2009.
THE INCUMBENT BOARD OF DIRECTORS; PERSONS MAKING THIS SOLICITATION
The incumbent members of the Board of Directors are identified in the following
table, including the class and expiration of their respective terms. The year of
expiration in each case refers to the annual meeting of shareholders for the
fiscal year ended September 30 of the stated calendar year.
Name Position with the Company Class and Term
- ---- ------------------------- --------------
William Offenberg Chairman of the Board III (term expires at the
and Chief Executive Officer annual meeting of
shareholders for the
fiscal year ended
September 30, 2011)
Jeffrey Black Director and Chief Financial II (term expires at the
Officer annual meeting of
shareholders for the
fiscal year ended
September 30, 2010)
Patricia Wolf Director and Corporate II (term expires at the
Secretary annual meeting of shareholders
for the fiscal year
ended September 30, 2010)
Robert Puette Director I (term expires at the
annual meeting of shareholders
for the fiscal year
ended September 30, 2009)
BENEFICIAL OWNERSHIP OF COMMON SHARES
Beneficial Ownership of Capital Stock by Large Security Holders
The following table presents information regarding the beneficial ownership of
the only known beneficial owners of in excess of 5% of our outstanding common
shares.
Number Percent
Title of Class Name and Address of Beneficial Owner of Shares of Class
------------ ------------
Common Stock MacKenzie Patterson Fuller, LLC
1640 School Street
Moraga, California 94556 1,390,046 12.44
Jay Duncanson
c/o Menlo Advisors
800 Oak Grove Avenue
Menlo Park, CA 94025 658,735 5.90
------------ ------------
Total 2,048,781 18.34
============ ============
Beneficial Ownership of Capital Stock by Directors and Management
The following table presents information regarding the beneficial ownership of
our capital stock as of June 17, 2009 of: (1) each of our directors and
executive officers; and (2) all of our directors and executive officers as a
group. Unless otherwise indicated in the footnotes to the table, the beneficial
owners named have, to our knowledge, sole voting and investment power with
respect to the shares beneficially owned, subject to community property laws
where applicable.
Number Percent
Title of Class Beneficial Owner of Shares of Class
------------------ -------------------
Common Stock Robert Puette 405,241 3.50
Jeffrey Black 250,852 2.16
Patricia Wolf 167,030 1.44
William Offenberg 107,404 *
------------------ -------------------
Total 930,527 8.03
================== ===================
* Less than one percent of our outstanding capital stock.
OTHER BUSINESS
The Board of Directors knows of no other matters, which may be presented for
shareholder action at the meeting. However, if other matters do properly come
before the meeting, it is intended that the persons named in the proxies will
vote upon them in accordance with their best judgment.
BY ORDER OF THE BELLAVISTA BOARD OF DIRECTORS
Los Gatos, California
____________, 2009
Proxy to Vote at a Meeting of Shareholders of BellaVista Capital, Inc.
THIS PROXY IS SOLICITED BY THE BELLAVISTA BOARD OF DIRECTORS
The undersigned appoints Patricia Wolf, corporate Secretary of BellaVista
Capital, Inc., with full powers of substitution, to act as attorney and proxy
for the undersigned to vote, as designated on this proxy, all shares of the
Common Stock of BellaVista Capital, Inc. (the "Company") which the undersigned
is entitled to vote at the next shareholder meeting (special or annual,
whichever occurs first) or at any adjournments, postponements or rescheduling
thereof (please check the desired box for each proposal):
1. Proposal No. 1 - Expansion of board of directors to nine members by amending
bylaws
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|_| AGAINST expansion of the board of |_| In favor of expansion of the board
directors to nine members of directors to nine members
- --------------------------------------------------------------------------------
THE BELLAVISTA BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST
EXPANSION OF THE BOARD OF DIRECTORS.
-----------------------------------
2. Proposal No. 2 - Election of five directors to fill vacancies created by the
expansion of the board
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|_| AGAINST all nominees listed |_| In favor of all nominees listed below
below (you may strike out the name of any
nominee to withhold authority to vote)
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C. E. Patterson, as a Class II Director with a term expiring at the
annual meeting in 2011
Glen Fuller, as a Class III Director with a term expiring at the
annual meeting in 2010
Chip Patterson, as a Class I Director with a term expiring at the
annual meeting in 2012
Robert E. Dixon, as a Class II Director with a term expiring at the
annual meeting in 2011
Christine E. Simpson, as a Class III Director with a term expiring at the
annual meeting in 2010
THE BELLAVISTA BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
NOMINEES NAMED ABOVE.
-----------------------------------
3. Proposal No. 3 - Engagement of MPF for investment management services for an
annual fee equal to 2% of BellaVista's assets
- --------------------------------------------------------------------------------
|_| AGAINST engagement of MPF |_| In favor of engaging MPF
as investment manager as investment manager
- --------------------------------------------------------------------------------
THE BELLAVISTA BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
MPF MANAGEMENT PROPOSAL
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF YOU SIGN WITHOUT OTHERWISE MARKING
THE FORM, THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS,
AGAINST ALL OF THE THREE PROPOSALS SET FORTH ABOVE. THIS PROXY WILL BE VOTED BY
THE INDIVIDUAL NAMED IN THIS PROXY IN HER BEST JUDGMENT WITH RESPECT TO ANY
OTHER MATTER PROPERLY BROUGHT BEFORE THE MEETING. THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING AS OF THE DATE OF THE PROXY
STATEMENT TO WHICH THIS PROXY IS ATTACHED.
The undersigned hereby acknowledges receipt of the Board of Directors' Proxy
Statement dated June __, 2009, relating to the proposed Special Meeting. This
proxy will remain valid for a period not to exceed one year from this date.
Dated: ___________, 2009
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Print Name Signature
- ---------------------------------- ----------------------------------
Print Name Signature
(Please date this proxy and sign exactly as name appears on stock certificate.
Where stock is registered jointly, all owners must sign. Corporate owners should
sign full corporate name by an authorized person. Executors, administrators,
trustees or guardians should indicate their status when signing. Return the
executed proxy in the envelope provided. If you have any questions, please
contact Patti Wolf at (480) 563-3351.