SunLink Health Systems, Inc.
UNITED STATES
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 TO RULE 13d-2(a)
(Amendment No. 4)*
SunLink Health Systems, Inc.
Common Stock, without par value
(Title of Class of Securities)
86737U102
Jared S. Bluestein
Berggruen Holdings North America Ltd.
1114 Avenue of the Americas, 41st Floor
New York, New York 10036
(212) 380-2235
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
-with a copy to-
Clifford E. Neimeth, Esq.
Greenberg Traurig, LLP
The MetLife Building
200 Park Avenue
New York, NY 10166
(212) 801-9200
February 1, 2008
(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 § 240.13d-1(e),
240.13d-1(f) or 240.13d-1(g) check the following box .þ
Note: Schedules filed in paper format shall include a signed original and five copies of the
schedule, including all exhibits. See § 240.13d-7(b) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting persons 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
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1 |
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NAME OF REPORTING PERSONS
Berggruen Holdings North America Ltd. |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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British Virgin Islands
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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-0- (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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704,039 (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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-0- (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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704,039 (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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CO |
2
SCHEDULE 13D
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1 |
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NAME OF REPORTING PERSONS
Medici I Investments Corp. |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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5 |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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British Virgin Islands
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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-0- (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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704,039 (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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-0- (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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704,039 (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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CO |
3
SCHEDULE 13D
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1 |
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NAME OF REPORTING PERSONS
Berggruen Holdings Ltd. |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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5 |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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British Virgin Islands
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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-0- (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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704,039 (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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-0- (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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704,039 (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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CO |
4
SCHEDULE 13D
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1 |
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NAME OF REPORTING PERSONS
Tarragona Trust |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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5 |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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British Virgin Islands
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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-0- (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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704,039 (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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-0- (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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704,039 (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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OO |
5
SCHEDULE 13D
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1 |
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NAME OF REPORTING PERSONS
Nicolas Berggruen |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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5 |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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United States
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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-0- (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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704,039 (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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-0- (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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704,039 (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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IN |
6
SCHEDULE 13D
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1 |
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NAME OF REPORTING PERSONS
Resurgence Health Group, LLC |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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5 |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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Georgia, United States
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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-0- (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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-0- (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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-0- (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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-0- (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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OO |
7
SCHEDULE 13D
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1 |
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NAME OF REPORTING PERSONS
Philip H. Eastman, III |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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5 |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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United States
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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100 (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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-0- (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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100 (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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-0- (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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IN |
8
SCHEDULE 13D
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1 |
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NAME OF REPORTING PERSONS
Anne S. Thompson |
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2 |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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3 |
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SEC USE ONLY |
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4 |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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OO |
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5 |
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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6 |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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United States
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7 |
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SOLE VOTING POWER |
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NUMBER OF |
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-0- (See Item 5) |
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SHARES |
8 |
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SHARED VOTING POWER |
BENEFICIALLY |
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OWNED BY |
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-0- (See Item 5) |
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EACH |
9 |
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SOLE DISPOSITIVE POWER |
REPORTING |
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PERSON |
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-0- (See Item 5) |
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WITH |
10 |
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SHARED DISPOSITIVE POWER |
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|
-0- (See Item 5) |
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11 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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|
704,139 (See Item 5) |
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12 |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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13 |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.4% |
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14 |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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IN |
9
Explanatory Note: This Amendment No. 4 relates to and amends the Statement of Beneficial
Ownership on Schedule 13D of Berggruen Holdings North America Ltd., a British Virgin Islands
(BVI) business company (Berggruen), Medici I Investments Corp., a BVI business
company, Berggruen Holdings Ltd., a BVI business company, Tarragona Trust, a BVI trust, Nicolas
Berggruen, a United States citizen, Resurgence Health Group, LLC, a Georgia limited liability
company, Philip H. Eastman, III, a United States citizen, and Anne S. Thompson, a United States
citizen (each, a Reporting Person and collectively, the Reporting Persons),
initially filed jointly by the Reporting Persons with the Securities and Exchange Commission (the
SEC) on November 7, 2007 and as amended by Amendment Nos. 1, 2 and 3 thereto filed
jointly by the Reporting Persons with the SEC on December 10, 2007, January 14, 2008 and January
22, 2008, respectively (as amended, the Statement), with respect to the Common Stock,
without par value (the Common Stock), of SunLink Health Systems, Inc., an Ohio
corporation (the Issuer).
Items 4 and 7 of the Statement are hereby amended to the extent hereinafter expressly set
forth. All capitalized terms used and not expressly defined herein have the respective meanings
ascribed to such terms in the Statement.
Item 4. Purpose of Transaction.
Item 4 of the Statement is hereby amended to add the following:
On
February 1, 2008, Berggruen submitted to the Board a letter
dated February 1, 2008, a copy
of which is filed herewith as Exhibit 4 and is incorporated herein in its entirety by
reference.
The Reporting Persons intend to review their investment in the Common Stock on a continuing
basis and, from time to time, may engage in further discussions with the Issuers senior executives
and members of the Board concerning the foregoing. The Reporting Persons also intend to
communicate with other shareholders of the Issuer, industry analysts and other constituents
concerning the foregoing and to express their views of the Issuer, its management and the Board.
Depending on various factors including, without limitation, the Issuers financial performance
and strategic direction, the outcome of the discussions and actions referenced above, price levels
of the Common Stock, developments affecting the Issuer and its prospects, conditions in the
securities markets and general economic and industry conditions, the Reporting Persons may in the
future consider and take various courses of action with respect to the Issuer, its Board and its
management and their investment in the Issuer, and the Reporting Persons may exercise any and all
of their respective rights as shareholders of the Issuer as they deem appropriate, including,
without limitation, purchasing additional shares of Common Stock or selling some or all of their
shares of Common Stock, engaging in short selling of or any hedging or similar transactions with
respect to the Common Stock, encouraging the Issuer to take action to maximize shareholder value
through one or more strategic transactions and/or otherwise changing its intention with respect to
any and all matters referred to in Item 4 of Schedule 13D.
Except as set forth in the Statement and in this Amendment No. 4, none of the Reporting
Persons has any present plans or proposals that relate to or would result in any of the matters
referred to in clauses (a) through (j) of Item 4 of Schedule 13D.
10
Item 7. Materials to be Filed as Exhibits.
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Exhibit 1
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Joint Filing Agreement among the Reporting Persons, dated November 7, 2007
(incorporated by reference to Exhibit 1 to the Statement filed by the Reporting
Persons with respect to the Issuer on November 7, 2007). |
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Exhibit 2
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Limited Power of Attorney, dated June 23, 2006, given by Maitland Trustees
Limited, as trustee of the Tarragona Trust, to Jared Bluestein (incorporated by
reference to Exhibit 2 to the Statement filed by the Reporting Persons with respect
to the Issuer on November 7, 2007). |
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Exhibit 3
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Limited Power of Attorney, dated August 10, 2007, given by Nicolas Berggruen
to Jared Bluestein (incorporated by reference to Exhibit 3 to the Statement filed
by the Reporting Persons with respect to the Issuer on November 7, 2007). |
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Exhibit 4
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Letter dated February 1, 2008 from Berggruen to the Board of Directors of the
Issuer. |
11
SIGNATURE
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:
February 1, 2008
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Berggruen Holdings North America Ltd. |
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By:
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/s/ Jared S. Bluestein |
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Name:
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Jared S. Bluestein |
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Title:
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Director |
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Medici I Investments Corp. |
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By:
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/s/ Jared S. Bluestein |
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Name:
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Jared S. Bluestein |
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Title:
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Director |
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Berggruen Holdings Ltd. |
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By:
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/s/ Jared S. Bluestein |
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Name:
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Jared S. Bluestein |
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Title:
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Director |
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Tarragona Trust |
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By: Maitland Trustees Limited, as Trustee |
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By:
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/s/ Jared S. Bluestein |
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Name:
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Jared S. Bluestein |
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Title:
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Authorized Signatory |
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* |
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Nicolas Berggruen |
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Resurgence Health Group, LLC |
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By:
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/s/ Philip H. Eastman, III |
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Philip H. Eastman, III |
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Chief Executive Officer |
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/s/ Philip H. Eastman, III |
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Philip H. Eastman, III |
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/s/ Anne S. Thompson |
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Anne S. Thompson |
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12
* The undersigned, by signing his name hereto, does sign and execute this Statement pursuant to
the Limited Power of Attorney executed by Nicolas Berggruen filed as Exhibit 3 to this Statement.
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Dated:
February 1, 2008
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*By:
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/s/ Jared S. Bluestein, Attorney-in-Fact |
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Jared S. Bluestein |
13
EXHIBIT 4
BERGGRUEN HOLDINGS NORTH AMERICA LTD.
1114 Avenue of the Americas, 41st Floor
New York, New York 10036
(212) 380-2235
February 1, 2008
BY FACSIMILE AND OVERNIGHT MAIL
The Board of Directors
SunLink Health Systems, Inc.
900 Circle 75 Parkway, Suite 1120
Atlanta, Georgia 30339
Ladies and Gentlemen:
We received the attached letter dated January 23, 2008 from Robert M. Thornton, Jr.,
purporting to represent the views of the entire Board, and continue to be shocked at the nonchalant
and cavalier approach to our offer by a company that continues to deteriorate financially and
generate negative returns, quarter after quarter.
Mr. Thorntons belief that he is running his own personal candy store, if not so tragic for
shareholders, would be comical. Apparently, he is severely misguided with respect to appropriate
corporate governance practices and/or is receiving questionable advice about the Boards fiduciary
duties to its shareholders.
We do not believe that Mr. Thornton speaks for the entire Board, as he purports to do. We do
not believe that the Board has abrogated its fiduciary duties under the guise of a sham committee
controlled and directed entirely by Mr. Thornton.
Mr. Thorntons letter is quite telling. Despite a significant premium to the current share
price, you (according to Mr. Thornton) have apparently pre-rejected our offer as cheap and
concluded with no legitimate process whatsoever that we are simply acting in our own economic
interest to the potential detriment of other shareholders.
How can the Board remotely discharge its fiduciary duties to its shareholders and adequately
consider and evaluate our offer and make a determination without at least meeting with us to obtain
from us all pertinent information reasonably available concerning our offer? Do you (as Mr.
Thornton implies) intend to make your decision in a vacuum, without the benefit of all material
facts and circumstances that are readily available to you? If so, you would clearly be in
derogation of your fiduciary duties to your shareholders under applicable law.
Moreover, Mr. Thorntons assertions that questions we have raised regarding the independence
of the members of the Special Committee are not our concern and that the Board has no duty to
respond to us, your second largest shareholder, are
incomprehensible and underscore our concerns. Contrary to Mr. Thorntons apparent confusion
(or denial), the Board is marred with innumerable conflicting business, social and other personal
relationships which demand a wholly independent committee with independent outside advisors not
some makeshift strategic committee misleadingly characterized as a special committee advised by
SunLinks own director-general counsel.
To entrust a sham committee comprised of members who may be motivated to act in their own
self-interests or in a manner beholden to SunLink management (including Mr. Thornton himself) would
be materially detrimental to the interests of all SunLink shareholders, who may be unjustly denied
the opportunity to receive maximum value for their SunLink shares. How can Mr. Thornton
legitimately think that these issues should not concern us or any other SunLink shareholder?
In the past 24 months, management has done nothing to enhance shareholder value and has
impeded multiple transactions offering liquidity to shareholders at a premium to market price,
resulting in a loss of over 40% of SunLinks market capitalization.
Our $7.50 per share substantial premium offer would result in immediate liquidity and maximum
value for all SunLink shareholders. Clearly, every SunLink shareholder has a vested interest in
ensuring that this offer is fully and fairly considered by the Board, without Mr. Thorntons undue
influence.
Be assured we are not going away quite the contrary. Not only are we your second largest
shareholder, we have also been an ear for many of SunLinks other shareholders. You should be
listening to the true owners of your company its public shareholders who have elected each of
you to manage the business, properties and affairs of SunLink for our benefit and in our best
interests.
While we are pleased to have had a preliminary discussion today with Stephens Inc. regarding
the potential initiation of a communication process and look forward to working with them in that
regard, we urge you, the entire Board, to act responsibly and in accordance with your fiduciary
duties to your shareholders and take affirmative steps to arrange a principal-to-principal meeting
with us as soon as possible.
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Very truly yours,
Berggruen Holdings North America Ltd.
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By: |
/s/ Jared S. Bluestein
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Name: |
Jared S. Bluestein |
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Title: |
Chief Operating Officer |
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cc:
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Philip H. Eastman, III, President |
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Resurgence Health Group, LLC |
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Clifford E. Neimeth, Esq. |
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Greenberg Traurig, LLP |
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Clifford A. Roe, Esq. |
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Dinsmore & Shohl, LLP |
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Charles D. Ganz, Esq. |
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Sutherland Asbill & Brennan LLP |
SunLink Health Systems, Inc.
900 Circle 75 Parkway, Suite 1120
Atlanta, Georgia 30339
770-933-7000
770-933-7010 Fax
www.sunlinkhealth.com
January 23, 2008
BY FACSIMILE AND OVERNIGHT MAIL
Berggruen Holdings North America LTD.
1114 Avenue of the Americas, 41st Floor
New York, New York 10036
Attn: Jared Bluestein, Chief Operating Officer
Dear Mr. Bluestein:
On behalf of the Board of Directors of SunLink Health Systems, Inc.,
this will acknowledge receipt of your letters of January 11, and
January
18, 2008.
In your letter of January 18, you complain that your concerns about the members of our
so called Special Committee" being independent and about the legal
representation of that Committee have not been responded to. The Board has no duty to
respond to you, an interested party who is attempting to force a quick, and if
possible cheap, sale of SunLink, concerning such matters. In any event, you
misunderstand the reasons for and the status of that committee. The Special Committee
was formed to assist the Board in its efforts to make an informed decision about how
to take the Company forward. The Board is charged with promoting the best interests
of the Company and all shareholders and will make all decisions in furtherance
of that duty. The Special Committee was not appointed by the Board because any
conflict existed with management, or any member of the Board, and has no need or
reason to be independent of the entire Board or, as you say, to have independent
counsel different from SunLinks general counsel. With due respect, these issues are
simply not your concern in any event.
Regarding your demand for inspection, SunLinks counsel will respond directly to your
counsel as you requested.
Finally, please note that the Board of Directors of SunLink has and will continue to
perform its duties with care and diligence and will not be instructed about how to do
so by third parties pursuing their own economic interests to the potential detriment
of other shareholders. As stated in our recent press release, although the Board has
not foreclosed any option, it will not approve efforts by any potential purchaser who
seeks to acquire SunLink for less than its true value. The Board is evaluating the
offer by Resurgence and SunLink will reply when that evaluation is concluded. No
amount of drum beating, letter writing, inspection demands or other stirring the pot
will change this.
Very truly yours,
Robert M. Thornton, Jr.
Chairman of the Board of Directors
Cc: SunLink Board of Directors