SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT RULE 13d-2(a)
(Amendment No. )(1)
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Paragon Real Estate Equity and Investment Trust
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(Name of Issuer)
Common Shares
Class A Cumulative Convertible Preferred Shares
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(Title of Class of Securities)
69912Y107 (Common Shares)
69912Y206 (Preferred Shares)
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(CUSIP Number)
Christopher J. Hubbert
Kohrman Jackson & Krantz P.L.L. 1375 East 9th Street, 20th Floor, Cleveland, OH
44114; 216-736-7215
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
June 30, 2003
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: [ ]
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
Page 1 of 8
SCHEDULE 13D
CUSIP Nos. 69912Y107 & 69912Y206 Page 2 of 8
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James C. Mastandrea
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
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(b) [ X ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [__]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF 7 SOLE VOTING POWER
6,116,869 Common Shares
SHARES 80,705 Preferred Shares
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BENEFICIALLY 8 SHARED VOTING POWER
8,155,080 Common Shares*
OWNED BY -------------------------------------
9 SOLE DISPOSITIVE POWER
EACH 6,116,869 Common Shares
80,705 Preferred Shares
REPORTING -------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
None
WITH -------------------------------------
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,271,949 Common Shares
80,705 Preferred Shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.5% (Common Shares); 28.7% (Preferred Shares)
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14 TYPE OF REPORTING PERSON
IN
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*Mr. Mastandrea shares voting power with John J. Dee over the Common Shares
pursuant to a Voting and Stock Restriction Agreement dated as of March 4, 2003.
SCHEDULE 13D
CUSIP Nos. 69912Y107 & 69912Y206 Page 3 of 8
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John J. Dee
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
---
(b) [ X ]
---
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [__]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF 7 SOLE VOTING POWER
6,116,869 Common Shares
SHARES 80,705 Preferred Shares
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BENEFICIALLY 8 SHARED VOTING POWER
8,155,080 Common Shares*
OWNED BY -------------------------------------
9 SOLE DISPOSITIVE POWER
EACH 6,116,869 Common Shares
80,705 Preferred Shares
REPORTING -------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
None
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,271,949 Common Shares
80,705 Preferred Shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [__]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.5% (Common Shares); 28.7% (Preferred Shares)
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14 TYPE OF REPORTING PERSON
IN
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*Mr. Dee shares voting power with Mr. Mastandrea over the Common Shares pursuant
to a Voting and Stock Restriction Agreement dated as of March 4, 2003.
CUSIP Nos. 69912Y107 & 69912Y206 Page 4 of 8
ITEM 1. SECURITY AND ISSUER.
This original Schedule 13D Statement relates to both common shares, par
value $0.01 per share (the "Common Shares"), and Class A cumulative convertible
preferred shares, par value $0.01 per share (the "Preferred Shares"), of Paragon
Real Estate Equity and Investment Trust, formerly Stonehaven Realty Trust, a
Maryland real estate investment trust (the "Company"), which has its principal
executive offices at 1240 Huron Road, Suite 301, Cleveland, Ohio 44115.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Schedule 13D is filed by James C. Mastandrea and John J. Dee for
the purpose of reporting acquisitions of Common Shares and Preferred Shares of
the Company.
(b) The business address of Mr. Mastandrea and Mr. Dee is 1240 Huron
Road, Suite 301, Cleveland, Ohio 44115.
(c) Mr. Mastandrea's present occupation is Chairman of the Board of
Trustees, Chief Executive Officer and President of the Company. Mr. Dee's
present occupation is Chief Financial Officer and Senior Vice President of the
Company. Mr. Mastandrea and Mr. Dee both serve on the Company's Board of
Trustees.
(d) Negative with respect to Mr. Mastandrea and Mr. Dee.
(e) Negative with respect to Mr. Mastandrea and Mr. Dee.
(f) Mr. Mastandrea and Mr. Dee are citizens of the United States of
America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On March 4, 2003, the Company entered into an asset contribution
agreement with Hampton Court Associates, an Illinois limited partnership of
which Mr. Mastandrea is the general partner. In addition to the asset
contribution agreement, the Company hired Mr. Mastandrea as its President and
Chief Executive Officer and Mr. Dee as its Senior Vice President and Chief
Financial Officer, and granted each 348,039 Preferred Shares pursuant to the
terms of restricted share agreements. The grant of Preferred Shares was subject
to shareholder approval, which was obtained on June 30, 2003 at the Company's
annual meeting. Promptly following the annual meeting, both Mr. Mastandrea and
Mr. Dee exercised their right to participate in the Company's exchange offer to
its preferred shareholders, and each converted 267,334 Preferred Shares into
6,116,869 Common Shares.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the transaction, as described in Item 3 and set forth in
the asset contribution agreement, was to contribute the real estate asset and
business of Hampton Court Associates into the Company. In addition, Mr.
Mastandrea and Mr. Dee were hired by the Company to implement a new national
real estate acquisition strategy.
CUSIP Nos. 69912Y107 & 69912Y206 Page 5 of 8
Mr. Mastandrea and Mr. Dee each reserve the right to modify his plans and
proposals described in this Item 4. Further, subject to applicable laws and
regulations, Mr. Mastandrea and Mr. Dee may formulate plans and proposals that
may result in the occurrence of an event set forth in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of July 1, 2003, there were 31,382,566 Common Shares and 280,790
Preferred Shares of the Company outstanding.
Mr. Mastandrea beneficially owns 14,271,949 Common Shares, or
approximately 45.5% of the outstanding Common Shares, and 80,705 Preferred
Shares, or approximately 28.7% of the outstanding Preferred Shares. Mr. Dee owns
14,271,949 Common Shares, or approximately 45.5% of the outstanding Common
Shares and 80,705 Preferred Shares, or approximately 28.7% of the outstanding
Preferred Shares.
(b) Mr. Mastandrea has sole power to vote, or to direct the voting of,
and sole power to dispose or to direct the disposition of, 6,116,869 Common
Shares and 80,705 Preferred Shares owned solely by him. Mr. Dee has sole power
to vote, or to direct the voting of, and sole power to dispose or to direct the
disposition of, 6,116,869 Common Shares and 80,705 Preferred Shares owned solely
by him. Together, Mr. Mastandrea and Mr. Dee share power to vote, or to direct
the voting of, an additional 8,155,080 Common Shares subject to the voting and
restriction agreement described in Item 6.
(c) Except as described in Item 4, none of the reporting persons has
effected any transactions in the Common Shares or Preferred Shares of the
Company in the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to the terms of a voting and stock restriction agreement dated
March 4, 2003, Mr. Mastandrea and Mr. Dee were provided an irrevocable proxy by
Steven B. Hoyt (the Company's former Chairman and Trustee), Duane H. Lund (the
Company's former Chief Executive Officer and Trustee), and Paul T. Lambert (a
current Trustee of the Company) allowing Mr. Mastandrea and Mr. Dee to vote all
of Mr. Hoyt, Mr. Lund and Mr. Lambert's Common and/or Preferred Shares until
July 1, 2005. The irrevocable proxy gives Mr. Mastandrea and Mr. Dee voting
power over an aggregate total of 8,155,080 Common Shares.
The Common Shares and Preferred Shares owned solely by each of Mr.
Mastandrea and Mr. Dee are subject to restriction on vesting pursuant to
separate restricted share agreements. Additionally, pursuant to the restricted
share agreements, these restricted shares may not be transferred other than to
their affiliates prior to March 4, 2005, and may not be transferred thereafter
unless the shares have vested.
CUSIP Nos. 69912Y107 & 69912Y206 Page 5 of 8
Mr. Mastandrea, Mr. Dee and Paragon Real Estate Development, LLC, a
limited liability company owned by Mr. Mastandrea and Mr. Dee, entered into an
additional contribution agreement with the Company dated March 4, 2003. Pursuant
to this agreement, the Company may issue up to $26.0 million in Common Shares to
Paragon Real Estate Development in exchange for Paragon Real Estate Development
procuring future acquisition, development and re-development real estate
transactions for the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 7.1 Asset Contribution Agreement by and among Hampton
Court Associates, L.P., Paragon Real Estate, L.P.,
and Stonehaven Realty Trust, incorporated by
reference to Exhibit 2.1 to the Current Report on
Form 8-K of the Company filed with the Securities
and Exchange Commission on March 5, 2003.
Exhibit 7.2 Voting and Stock Restriction Agreement by and among
Stonehaven Realty Trust, Steven B. Hoyt, Duane H.
Lund, Paul T. Lambert, John J. Dee, James C.
Mastandrea, and Paragon Real Estate Development,
LLC, incorporated by reference to Exhibit 2.2 to the
Current Report on Form 8-K of the Company filed with
the Securities and Exchange Commission on March 5,
2003.
Exhibit 7.3 Restricted Share Agreement of James C. Mastandrea,
incorporated by reference to Exhibit 2.5 to the
Current Report on Form 8-K of the Company filed with
the Securities and Exchange Commission on March 5,
2003.
Exhibit 7.4 Restricted Share Agreement of John J. Dee,
incorporated by reference to Exhibit 2.6 to the
Current Report on Form 8-K of the Company filed with
the Securities and Exchange Commission on March 5,
2003.
Exhibit 7.5 Additional Contribution Agreement between the
Company and Paragon Real Estate Development, LLC,
incorporated by reference to Exhibit 2.7 to the
Current Report on Form 8-K of the Company filed with
the Securities and Exchange Commission on March 5,
2003.
Exhibit 7.6 Joint Filing Agreement.
CUSIP Nos. 69912Y107 & 69912Y206 Page 7 of 8
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 11, 2003
/s/ James C. Mastandrea
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James C. Mastandrea
/s/ John J. Dee
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John J. Dee