Basic Capital Management Inc, et al. – ‘SC 13D/A’ on 5/2/03 re: American Realty Investors Inc

On:  Friday, 5/2/03, at 6:55pm ET   ·   As of:  5/5/03   ·   Accession #:  950134-3-7068   ·   File #:  5-59491

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Amendment to General Statement of Beneficial Ownership   —   Schedule 13D
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Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D/A    Amendment No. 3 to Schedule 13D                       10     41K 

Document Table of Contents

SC 13D/A
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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

 Under the Securities Exchange Act of 1934

 (Amendment No. 3)

 AMERICAN REALTY INVESTORS, INC.
--------------------------------------------------------------------------------
(Name of Issuer)

 Common Stock, $0.01 par value
--------------------------------------------------------------------------------
(Title of Class of Securities)

 029174-10-9
--------------------------------------------------------------------------------
(CUSIP Number)

 Robert A. Waldman
1800 Valley View Lane, Suite 300
 Dallas, Texas 75234
(469) 522-4366
(469) 522-4360 (Facsimile)
--------------------------------------------------------------------------------
 (Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications) 

 May 1, 2003
--------------------------------------------------------------------------------
 (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 Rules 13d-1(b)(3) or (4), check the following box [ ]. 

         NOTE: Six copies of this statement, including all exhibits, should be
 filed with the Commission. See Rule 13d- 1(a) 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).                                                                     

SC 13D/A
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CUSIP No. 029174-10-9                                                           
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1    NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS     
(ENTITIES ONLY)                                                       

BASIC CAPITAL MANAGEMENT, INC., FEI NO. 75-2261065
--------------------------------------------------------------------------------
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)        
                                                                         (a) [ ]
                                                                         (b) [ ]
--------------------------------------------------------------------------------
3    SEC USE ONLY                                                               

--------------------------------------------------------------------------------
4    SOURCE OF FUNDS (See Instructions)                                         

WC                                                                    
--------------------------------------------------------------------------------
5    CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)                                                               
                                                                             [ ]
--------------------------------------------------------------------------------
6    CITIZENSHIP OR PLACE OF ORGANIZATION                                       

NEVADA                                                                
--------------------------------------------------------------------------------
7    SOLE VOTING POWER                      
NUMBER OF                                                                   
8,103,953                         
    SHARES        --------------------------------------------------------------
8    SHARED VOTING POWER                    
BENEFICIALLY                                                                  
-0-                               
OWNED BY EACH     --------------------------------------------------------------
9    SOLE DISPOSITIVE POWER                 
REPORTING                                                                   
8,103,953                         
   PERSON         --------------------------------------------------------------
10   SHARED DISPOSITIVE POWER               
WITH                                                                    
-0-                               
--------------------------------------------------------------------------------
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON               

8,103,953                                                             
--------------------------------------------------------------------------------
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See     
Instructions)                                                         
                                                                             [ ]
--------------------------------------------------------------------------------
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)                         

71.24%                                                                
--------------------------------------------------------------------------------
14   TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)                                

CO                                                                    
--------------------------------------------------------------------------------

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CUSIP NO. 029174-10-9                                                 
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1    NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS     
(ENTITIES ONLY)                                                       

THE GENE E. PHILLIPS CHILDREN'S TRUST, I.D. NO. 13-6599759            
--------------------------------------------------------------------------------
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)        
                                                                         (a) [ ]
                                                                         (b) [ ]
--------------------------------------------------------------------------------
3    SEC USE ONLY                                                               

--------------------------------------------------------------------------------
4    SOURCE OF FUNDS (See Instructions)                                         

OO                                                                    
--------------------------------------------------------------------------------
5    CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)                                                               

--------------------------------------------------------------------------------
6    CITIZENSHIP OR PLACE OF ORGANIZATION                                       

TEXAS                                                                 
--------------------------------------------------------------------------------
7    SOLE VOTING POWER                      
NUMBER OF                                                                   
27,602                            
    SHARES        --------------------------------------------------------------
8    SHARED VOTING POWER                    
BENEFICIALLY                                                                  
-0-                               
OWNED BY EACH     --------------------------------------------------------------
9    SOLE DISPOSITIVE POWER                 
REPORTING                                                                   
27,602                            
   PERSON         --------------------------------------------------------------
10   SHARED DISPOSITIVE POWER               
WITH                                                                    
-0-                               
--------------------------------------------------------------------------------
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON               

27,602                                                                
--------------------------------------------------------------------------------
12   CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See     
Instructions)                                                         
                                                                             [ ]
--------------------------------------------------------------------------------
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)                         

0.2%                                                                  
--------------------------------------------------------------------------------
14   TYPE OF REPORTING PERSON (See Instructions)                                

OO                                                                    
--------------------------------------------------------------------------------

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CUSIP NO. 029174-10-9                                                           
--------------------------------------------------------------------------------
1    NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS     
(ENTITIES ONLY)                                                       

TRANSCONTINENTAL REALTY INVESTORS, INC., FEI NO. 94-656582            
--------------------------------------------------------------------------------
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)        
                                                                         (a) [ ]
                                                                         (b) [ ]
--------------------------------------------------------------------------------
3    SEC USE ONLY                                                               

--------------------------------------------------------------------------------
4    SOURCE OF FUNDS (See Instructions)                                         

--------------------------------------------------------------------------------
5    CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)                                                               
                                                                             [ ]
--------------------------------------------------------------------------------
6    CITIZENSHIP OR PLACE OF ORGANIZATION                                       

NEVADA                                                                
--------------------------------------------------------------------------------
7)   SOLE VOTING POWER                      
NUMBER OF                                                                   
746,972                           
    SHARES        --------------------------------------------------------------
8)   SHARED VOTING POWER                    
BENEFICIALLY                                                                  
-0-                               
OWNED BY EACH     --------------------------------------------------------------
9)  SOLE DISPOSITIVE POWER                
REPORTING                                                                   
746,972                           
   PERSON         --------------------------------------------------------------
10)  SHARED DISPOSITIVE POWER               
WITH                                                                    
-0-                               
--------------------------------------------------------------------------------
11)  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON               

746,972                                                               
--------------------------------------------------------------------------------
12)  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE     
INSTRUCTIONS)                                                         
                                                                             [ ]
--------------------------------------------------------------------------------
13)  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)                         

6.6%                                                                  
--------------------------------------------------------------------------------
14)  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)                                

CO                                                                    
--------------------------------------------------------------------------------

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ITEM 1.  SECURITY AND ISSUER                                                    

        This Amendment No. 3 to Statement on Schedule 13D (this "Amendment No.
3") relates to shares of Common Stock, par value $0.01 per share (the "Shares") 
of American Realty Investors, Inc., a Nevada corporation (the "Issuer" or       
"ARL"), and further amends the original Statement on Schedule 13D as amended by 
Amendment Nos. 1 and 2 thereto (the "Amended Statement") previously filed with  
the Securities and Exchange Commission (the "Commission") by the "Reporting     
Persons" described below. The principal executive offices of the Issuer are     
located at 1800 Valley View Lane, Suite 300, Dallas, Texas 75234. The CUSIP     
number of the Shares is 029174-10-9.                                            

        This Amendment No. 3 to Schedule 13D is being filed due to an increase
by more than one percent (1%) in the percentage ownership by Basic Capital      
Management, Inc. ("BCM") of Shares during the period from June 28, 2002 through 
May 1, 2003, in part as a result in the acquisition as a block of 1,437,209     
Shares from another entity.                                                     

ITEM 2.  IDENTITY AND BACKGROUND                                                

      This Amendment No. 3 is filed on behalf of Basic Capital Management,
Inc., a Nevada corporation ("BCM"), the Gene E. Phillips Children's Trust, a    
trust formed under the laws of the state of Texas (the "GEP Trust"), and        
Transcontinental Realty Investors, Inc., a Nevada corporation ("TCI"), each of  
which has its principal executive offices located at 1800 Valley View Lane,     
Suite 300, Dallas, Texas 75234. All of BCM, GEP Trust and TCI are collectively  
referred to as the "Reporting Persons." The Reporting Persons may be deemed to  
constitute a "person" within the meaning of Section 13(d) of the Securities     
Exchange Act of 1934, as amended, because BCM is beneficially owned by a trust  
established for the benefit of Gene E. Phillips' children and the executive     
officers of TCI are also executive officers of BCM. Mr. Phillips' son, Ryan T.  
Phillips, serves as a director of BCM and is a beneficiary of the GEP Trust. The
executive officers of ARL are also executive officers of BCM and TCI. BCM also  
serves as the contractual advisor to ARL and TCI.                               

       Item 2 of the Amended Statement is hereby further amended as follows:

    On September 24, 2002, the Securities and Exchange Commission (the
"SEC") filed a civil complaint, Civil Action No. 1:02CV01872 (D.D.C.), in a     
lawsuit styled Securities and Exchange Commission v. Basic Capital Management,  
Inc. and Gene E. Phillips, and the SEC issued an Order Instituting Proceedings  
Pursuant to Section 21C of the Securities Exchange Act of 1934 (the "Exchange   
Act"), Making Findings and Imposing a Cease-and-Desist Order, In the Matter of  
Basic Capital Management, Inc., Nevada Sea Investments, Inc., International     
Health Products, Inc., One Realco Corporation, TacCO Financial, Inc. and Gene E.
Phillips (Administrative Proceedings File No. 3-10898, Administrative Procedure 
Release No. 46538). In anticipation of the Order, Mr. Gene E. Phillips, BCM and 
four corporations affiliated with International Health Products, Inc., One      
Realco Corporation and TacCO Financial, Inc.) (together, the "Respondents")     
submitted an Offer of Settlement and consented, without                         

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admitting or denying any of the allegations, to the entry of a judgment         
ordering Mr. Phillips and BCM to pay a civil penalty of $850,000.               

    The Order finds, among other things, that the Respondents violated
Section 10(b) and 13(d) of the Exchange Act, as amended, and Rules 10b-5, 13d-1 
and 13d-2 promulgated thereunder, by failing to timely file reports required    
under Section 13(d) with respect to the securities of Greenbriar Corporation.   
Although none of the Respondents purchased more than five percent of            
Greenbriar's outstanding shares, their holdings together with the holdings of   
American Realty Trust, Inc., a Georgia corporation and now a wholly-owned       
subsidiary of ARL ("ART"), amounted to approximately 16.1% by June 1997. Between
May 1996 and June 1997, the Respondents and ART accounted for approximately 54% 
of the total trading volume in Greenbriar stock. On particular days during the  
period, the Respondents bought all the Greenbriar stock traded. The Order       
requires the Respondents to cease and desist from committing or causing any     
violation of Sections 10(b) and 13(d) of the Exchange Act and Rules 10b-5, 13d-1
and 13d-2 promulgated thereunder.                                               

ITEM 3.  SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION                      

The consideration paid by BCM to purchase the 1,437,209 Shares
described in Item 5(c) below (a total of $15,324,415) came from advances under  
two existing revolving lines of credit notes, $9,234,415 was drawn by BCM on an 
$18,000,000 unsecured revolving line of credit note dated May 1, 2001 payable to
the order of One Realco Corporation which bears interest at the Wall Street     
Journal prime rate plus 2% and matures on June 30, 2004. $6,000,000 was drawn by
BCM on a $21,000,000 unsecured revolving line of credit note dated July 1, 2001 
payable to the order of Syntek West, Inc., which bears interest at the Wall     
Street Journal prime rate plus 2% and matures on June 30, 2004.                 

         Each of the Reporting Persons have in the past utilized (and may in the
future utilize) margin accounts with various brokerage firms which accounts may,
from time to time, have debit balances and include certain of the Shares owned  
by each. Since other securities are held in such accounts, it is impracticable  
at any time to determine the amounts, if any, borrowed with respect to any      
specific Shares and interest costs vary with applicable costs and account       
balances.                                                                       

ITEM 5.  INTEREST IN SECURITIES OF ISSUER                                       

The Amended Statement is hereby further amended as follows:   

       (a) According to the latest information available from the Issuer, as
of March 19, 2003, the total number of issued and outstanding Shares was        
11,375,127 Shares. As of May 1, 2003, after giving effect to the transactions   
described in (c) below, the Reporting Persons own and hold directly and         
beneficially the following Shares:                                              

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                                                                [Download Table]

           NO. OF SHARES OWNED  APPROXIMATE PERCENT
NAME            DIRECTLY              OF CLASS     
                                                   
BCM             8,103,953              71.24%      
GEP Trust          27,602               0.2%       
TCI               746,972               6.6%       
                ---------              ------      
                8,878,527              78.05%      
                =========              ======      

         Pursuant to Rule 13d-3 under the Exchange Act, each of the directors of
BCM may be deemed to beneficially own the number of Shares owned by BCM         
described above; each of the directors of TCI may be deemed to beneficially own 
the number of Shares owned by TCI described above; Ryan T. Phillips as a        
beneficiary of the GEP Trust may be deemed to beneficially own the Shares held  
directly by the GEP Trust. Those individuals and the number of Shares deemed    
beneficially owned pursuant to Rule 13d-3, and the approximate percent of the   
class, as well as the relationship, are set forth in the following table:       

                                                                [Download Table]

                                                          NO. OF               
                                                          SHARES               
                                                       BENEFICIALLY  PERCENT OF
       NAME OF DIRECTOR                     ENTITY         OWNED        CLASS  
                                                                               
Ryan T. Phillips                          BCM and GEP    8,131,555      71.49% 
                                             Trust                             
Donald W. Phillips                         GEP Trust        27,602       0.20% 
Mickey Ned Phillips                           BCM        8,103,953      71.24% 
Ted P. Stokely                                TCI          746,972       6.60% 
Henry A. Butler                               TCI          746,972       6.60% 
Martin L. White                               TCI          746,972       6.60% 
Earl D. Cecil                                 TCI          746,972       6.60% 
                                                         ---------      ------ 
         Total Shares beneficially owned                 8,878,527      78.05% 
         by Reporting Persons and                        =========      ====== 
         individuals listed above:                                             

     (b) Each of the directors of BCM share voting and dispositive power
over the 8,103,953 Shares held by BCM. Each of the directors of TCI have shared 
voting and dispositive power over the 746,972 Shares held by TCI. The Trustee of
the GEP Trust has complete voting and dispository power over the 27,602 Shares  
held by the GEP Trust.                                                          

      (c) During the sixty calendar days ended May 1, 2003, except for the
transactions that are described below, the Reporting Persons in any and their   
respective executive officers and directors did not engage in any transaction of
the Shares or any other equity interests derivative thereof. During the period  
from July 11, 2002 (the day after the date of Amendment No. 2), through January 
24, 2003, after giving effect to one correction, BCM acquired a net amount of   
40,800 Shares in 62 open market transactions at prices ranging from $8.00 to    
$10.65 per Share. Such purchases increased BCM's ownership of Shares to         
6,666,744 as of January 23, 2003. During the sixty calendar days ended May 1,   
2003, none of the Reporting Persons effected any transaction in the Shares      
except for BCM's purchase of 1,437,209 Shares described below.                  

     On May 1, 2003, BCM purchased from One Realco Corporation 1,437,209
Shares of ARL at a price of $10.60 per Share in cash (an aggregate of           
$15,234,415), the full amount of which was then paid by One Realco              

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Corporation to BCM to reduce outstanding principal and interest under a         
revolving line of credit promissory note originally dated May 1, 2001 executed  
by One Realco Corporation payable to the order of BCM. After giving effect to   
such sale, One Realco Corporation ceased to own any Shares of ARL, and the      
ownership by BCM of ARL Shares increased by 1,437,209.                          

    (d) No person other than the Reporting Persons or their respective
Board of Directors or Trustees is known to have the right to receive or the     
power to direct receipt of dividends from, or proceeds of sale of, the Shares of
ARL Common Stock held by BCM, TCI and the GEP Trust.                            

(e)      Not applicable.                                      

ITEM 6.  CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH          
RESPECT TO SECURITIES OF THE ISSUER                                             

      Item 6 of the Amended Statement is hereby further amended to read as
follows:                                                                        

   BCM has pledged 250,000 Shares to Jacksonville Bank and 1,772,485
Shares to Consolidated National Corporation pursuant to loan agreements with    
such lenders. The 1,437,209 Shares purchased by BCM from One Realco Corporation 
are also pledged to Consolidated National Corporation as an accommodation pledge
for its loan to BCM.                                                            

     BCM also pledged 100,000 Shares to Beal Bank, and 737,100 Shares to
Preferred Bank as accommodation pledges in connection with loans from such      
lenders to ARL. BCM pledged 355,000 Shares to RMR Investments as an             
accommodation pledge on behalf of ARL in connection with a loan from RMR        
Investments to ARL which is also secured by real property. BCM has also pledged 
249,810 Shares to First Enterprise Bank as an accommodation pledge on behalf of 
Bordeaux Investments Two, LLC for a loan from such bank to Bordeaux Investments 
Two, LLC. BCM also pledged 50,000 Shares to First National Bank of Central Texas
as an accommodation pledge on behalf of One Realco Corporation for a loan from  
such bank to One Realco Corporation.                                            

       Of the balance of the Shares owned by BCM, 3,152,349 are held in bank
and brokerage accounts along with other securities owned by BCM. As such, those 
3,152,349 Shares may be deemed to be "collateral" for any borrowings made from  
time to time pursuant to the customary margin or other account arrangements with
such banks and/or brokers. Such arrangements are standard involving margin      
securities of up to a specified percentage of market value of the Shares, as    
well as other securities in such account, bear interest at varying rates and    
contain only standard default and similar provisions, the operation of which    
should not give any other person immediate voting power or investment power over
the Shares.                                                                     

    Of the Shares owned by the GEP Trust, 10,000 Shares are pledged to
First National Bank of Central Texas as an accommodation pledge on behalf of One
Realco Corporation for a loan from such bank to One Realco Corporation.         

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        Each of the loans pursuant to which Shares have been pledged by BCM or
the GEP Trust bear interest at varying rates and contain only standard default  
and similar provisions, the operation of which should not give any other person 
immediate voting power or investment power over the Shares.                     

      All 746,972 Shares owned by TCI may be deemed to be "collateral" for
borrowings pursuant to margin or other account arrangements with Sinex          
Securities LLC relating to a brokerage account of TCI, which is a stock margin  
account maintained by TCI with such broker pursuant to customary brokerage      
account arrangements. Such standard arrangements involve margin securities of up
to a specified percentage of the market value of the Shares, as well as other   
securities in such account, bear interest at varying rates and contain only     
standard default and similar provisions, the operation of which should not give 
any other person immediate voting power or investment power over the Shares.    

       Except as set forth in the preceding paragraph, the Reporting Persons
do not have 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, transfer or voting of any of the securities,      
finders' fees, joint ventures, loan or option arrangements, puts or calls,      
guaranties of profits, divisions of profits, divisions of profits or loss, or   
the giving or withholding of proxies.                                           

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SIGNATURES

       After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certify that the information set forth in this Amendment No. 3  
to Statement on Schedule 13D is true, complete and correct.                     

Dated: May 1, 2003                                            

            BASIC CAPITAL MANAGEMENT, INC.

          By:  /s/ RONALD E. KIMBROUGH
                                 -------------------------------------------
             Ronald E. Kimbrough
                      Executive Vice President and
                 Chief Financial Officer

                     TRANSCONTINENTAL REALTY INVESTORS, INC.

          By:  /s/ RONALD E. KIMBROUGH
                                 -------------------------------------------
             Ronald E. Kimbrough
                      Executive Vice President and
                 Chief Financial Officer

               GENE E. PHILLIPS CHILDREN'S TRUST

         By:  /s/ DONALD W. PHILLIPS
                                 -------------------------------------------
                           Donald W. Phillips, Trustee

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 13D/A’ Filing		Date		First		Last			Other Filings
		6/30/04		6					10-Q
Filed as of:		5/5/03							SC 13D/A
Filed on:		5/2/03							4,  SC 13D/A
		5/1/03		1		10			4
		3/19/03		6					SC 13E3/A,  SC TO-T/A
		1/24/03		7					4
		1/23/03		7
		9/24/02		5					4,  SC 13D/A
		7/11/02		7
		6/28/02		5
		7/1/01		6
		5/1/01		6		8
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