Schedule 13D
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Blueknight Energy Partners, L.P.
(Name of Issuer)
(Title of Class of Securities)
(CUSIP Number)
Cushing MLP Asset Management, L.P.
8117 Preston Road, Suite 440
Dallas, Texas 75225
(Name, Address and Telephone Number of Person Authorized
to
Receive Notices and Communications)
- with copies to -
Eliot D. Raffkind
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201-4618
(214) 969-2800
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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NAMES OF REPORTING PERSONS
Swank Capital, L.L.C. |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF
A GROUP (SEE INSTRUCTIONS)
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(a) o |
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(b) þ |
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SEC USE ONLY |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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AF |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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Texas
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7 |
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SOLE VOTING POWER |
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| NUMBER OF |
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0 |
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| SHARES |
8 |
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SHARED VOTING POWER |
| BENEFICIALLY |
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| OWNED BY |
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3,280,444 |
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| EACH |
9 |
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SOLE DISPOSITIVE POWER |
| REPORTING |
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| PERSON |
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0 |
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| WITH |
10 |
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SHARED DISPOSITIVE POWER |
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3,280,444 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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3,280,444 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.8% |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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OO, HC |
Page 2 of 10
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NAMES OF REPORTING PERSONS
Cushing MLP Asset Management, LP |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) o |
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(b) þ |
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SEC USE ONLY |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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AF |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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Texas
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7 |
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SOLE VOTING POWER |
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| NUMBER OF |
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0 |
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| SHARES |
8 |
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SHARED VOTING POWER |
| BENEFICIALLY |
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| OWNED BY |
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3,280,444 |
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| EACH |
9 |
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SOLE DISPOSITIVE POWER |
| REPORTING |
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| PERSON |
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0 |
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| WITH |
10 |
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SHARED DISPOSITIVE POWER |
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3,280,444 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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3,280,444 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.8% |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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PN, IA |
Page 3 of 10
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NAMES OF REPORTING PERSONS
Jerry V. Swank |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) o |
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(b) þ |
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SEC USE ONLY |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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AF |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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o |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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USA
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SOLE VOTING POWER |
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| NUMBER OF |
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0 |
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| SHARES |
8 |
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SHARED VOTING POWER |
| BENEFICIALLY |
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| OWNED BY |
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3,280,444 |
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| EACH |
9 |
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SOLE DISPOSITIVE POWER |
| REPORTING |
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| PERSON |
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0 |
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| WITH |
10 |
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SHARED DISPOSITIVE POWER |
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3,280,444 |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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3,280,444 |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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o
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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9.8% |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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IN |
Page 4 of 10
SCHEDULE 13D
This Schedule 13D (this “Schedule 13D”) is being filed on behalf of Swank Capital, L.L.C., a
Texas limited liability company (“Swank Capital”), Cushing MLP Asset Management, LP, a Texas
limited partnership (“MLP Advisors”), and Mr. Jerry V. Swank, the managing member of Swank Capital,
relating to Series A Preferred Units (the “Preferred Units”) of Blueknight Energy Partners, L.P., a
Delaware limited partnership (the “Issuer”).
This Schedule 13D relates to Preferred Units of the Issuer purchased by MLP Advisors through
the accounts of investment funds managed by MLP Advisors (the “Advised Funds”). MLP Advisors serves
as the investment adviser to the Advised Funds and may direct the vote and disposition of the
3,280,444 Preferred Units held by the Advised Funds. Swank Capital serves as the general partner of
MLP Advisors and may direct MLP Advisors to direct the vote and disposition of the 3,280,444
Preferred Units held by the Advised Funds. As the principal of Swank Capital, Mr. Swank may direct
the vote and disposition of the 3,280,444 Preferred Units held by the Advised Funds.
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| Item 1. |
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Security and Issuer |
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Securities acquired:
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Series A Preferred Units (the “Preferred Units”). |
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Issuer:
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Blueknight Energy Partners, L.P. |
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Two Warran Place |
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6120 South Yale Avenue, Suite 500 |
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Tulsa, Oklahoma 74136 |
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| Item 2. |
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Identity and Background |
(a) This Schedule 13D is jointly filed by Swank Capital, MLP Advisors and Mr. Swank. Because
Mr. Swank is the principal of Swank Capital, which is the general partner of MLP Advisors (with Mr.
Swank, MLP Advisors and Swank Capital hereinafter referred to as the “Reporting Persons”), the
Reporting Persons may be deemed, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the “Act”), to be the beneficial owners of all of the Preferred Units held by the Advised
Funds. The Reporting Persons are filing this Schedule 13D jointly, as they may be considered a
“group” under Section 13(d)(3) of the Act. However, neither the fact of this filing nor anything
contained herein shall be deemed to be an admission by the Reporting Persons that such a group
exists.
(b) The principal place of business for each of the Reporting Persons is 8117 Preston Road,
Suite 440, Dallas, Texas 75225.
(c) The principal occupation of Mr. Swank is serving as the managing member of Swank Capital.
The principal business of Swank Capital is acting as the general partner of MLP Advisors. The
principal business of MLP Advisors is investment management.
(d) During the last five years, none of the Reporting Persons have been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
Page 5 of 10
(e) During the last five years, none of the Reporting Persons have been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such
proceeding, were or are subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Swank Capital and MLP Advisors are organized under the laws of the State of Texas. Mr.
Swank is a citizen of the United States of America.
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| Item 3. |
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Source and Amount of Funds |
As of November 11, 2011, the Advised Funds had invested $892,099.01 (inclusive of brokerage
commissions) in Preferred Units of the Issuer. The source of these funds was the working capital
of the Advised Funds.
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| Item 4. |
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Purpose of the Transaction |
The Advised Funds purchased the Preferred Units based on the belief that such securities, when
purchased, were undervalued and represented an attractive investment opportunity. Although the
Reporting Persons have no specific plan or proposal to acquire or dispose of the Preferred Units,
consistent with their investment purpose, the Reporting Persons at any time and from time to time
may acquire additional Preferred Units or dispose of any or all of their Preferred Units depending
upon an ongoing evaluation of the investment in the Preferred Units, prevailing market conditions,
other investment opportunities, liquidity requirements of the Reporting Persons and/or other
investment considerations.
The Issuer conducted a rights offering to the holders of its Common Units, whereby the Issuer
distributed to each holder of record, as of 5:00 p.m., New York City time, on September 27, 2011
(the “Record Date”), 0.5412 subscription rights (the “Rights”) for each Common Unit held of record
as of the Record Date, which entitled such holder to purchase one Preferred Unit at a subscription
price of $6.50 per Preferred Unit (the “Rights Offering”). The Rights expired on October 31, 2011.
Upon exercise of the Rights, the Reporting Persons acquired 3,280,444 Preferred Units for
investment purposes.
The Preferred Units are convertible into Common Units at the holder’s election on a
one-for-one basis at a conversion price of $6.50 per Common Unit. The Preferred Units are
convertible into Common Units at the option of the Issuer in various instances as described in the
Fourth Amended and Restated Agreement of Limited Partnership of the Issuer. The purpose of the
acquisition of the Preferred Units was for investment, and the acquisition of the Preferred Units
was made in the ordinary course of business and was not made for the purpose of acquiring control
of the Issuer.
Also, consistent with the investment purpose, the Reporting Persons may engage in
communications with one or more shareholders of the Issuer, one or more officers of the Issuer
and/or one or more members of the board of directors of the Issuer and/or one or more
representatives or regulators of the Issuer regarding the Issuer, including, but not limited to,
its
operations. The Reporting Persons may discuss ideas that, if effected, may result in any of the
following: the acquisition by persons of additional Preferred Units of the Issuer, an extraordinary
corporate transaction involving the Issuer and/or changes in the board of directors or management
of the Issuer.
Page 6 of 10
Except to the extent the foregoing may be deemed a plan or proposal, the Reporting Persons
have no plans or proposals which relate to, or could result in, any of the matters referred to in
paragraphs (a) through (j), inclusive, of the instructions to Item 4 of the Schedule 13D. The
Reporting Persons may, at any time and from time to time, review or reconsider their position
and/or change their purpose and/or formulate plans or proposals with respect thereto.
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| Item 5. |
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Interest in Securities of the Issuer |
(a) The aggregate percentage of Preferred Units reported to be owned by Swank Capital, MLP
Advisors and Mr. Swank is based upon 33,385,452 Preferred Units outstanding, which is the total
number of Preferred Units outstanding as of November 7, 2011, as calculated from the Issuer’s Form
10-Q filed with the Securities and Exchange Commission on November 9, 2011.
Swank Capital, as the general partner of MLP Advisors, and MLP Advisors, the investment
advisor to the Advised Funds, may be deemed to beneficially own the 3,280,444 Preferred Units held
by the Advised Funds, representing approximately 9.8% of the issued and outstanding Preferred Units
of the Issuer.
In addition, Mr. Swank, as the managing member of Swank Capital, the general partner of MLP
Advisors, may also be deemed to beneficially own the 3,280,444 Preferred Units beneficially owned
by the Advised Funds, representing approximately 9.8% of the issued and outstanding Preferred Units
of the Issuer.
Swank Capital, MLP Advisors and Mr. Swank disclaim beneficial ownership of the Preferred Units
held by the Advised Funds except to the extent of their pecuniary interest therein.
(b) Mr. Swank, as the managing member of Swank Capital, Swank Capital, as the general partner
of MLP Advisors, and MLP Advisors, the investment manager of the Advised Funds, have the shared
power to vote and dispose of the Preferred Units owned by the Advised Funds reported in this
Schedule 13D.
The filing of this Schedule 13D shall not be construed as admission that Swank Capital, MLP
Advisors or Mr. Swank is for the purposes of Section 13(d) or 13(g) of the Act the beneficial owner
of any of the 3,280,444 Preferred Units owned by the Advised Funds. Pursuant to Rule 13d-4, Swank
Capital, MLP Advisors and Mr. Swank disclaim all such beneficial ownership.
(c) The transactions in the Issuer’s securities during the sixty days prior to the date hereof
made the Advised Funds and which may be attributed to the Reporting Persons are listed as Annex A
attached hereto and made a part hereof. These transactions were effected in the open market.
Page 7 of 10
(d) No person other than the Reporting Persons is known to have the right to receive, or the
power to direct the receipt of dividends from, or proceeds from the sale of, the Preferred Units.
(e) Not applicable.
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| Item 6. |
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Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer |
Not Applicable.
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| Item 7. |
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Material to be Filed as Exhibits |
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| Exhibit 99.1
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Joint Filing Agreement by and among the Reporting Persons. |
Page 8 of 10
Signatures
After reasonable inquiry and to the best of their knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true, complete and
correct.
Dated: November 14, 2011
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SWANK CAPITAL, L.L.C.
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By: |
/s/Jerry V. Swank
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Jerry V. Swank |
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Managing Member |
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CUSHING MLP ASSET MANAGEMENT, LP
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By: |
Swank Capital, L.L.C., its general partner
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By: |
/s/Jerry V. Swank
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Jerry V. Swank |
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Managing Member |
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/s/ Jerry V. Swank
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Jerry V. Swank |
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Page 9 of 10
Annex A
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Ticker |
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| Trade Date |
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Symbol |
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Quantity |
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Price/Share |
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10/03/2011 |
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BKEPR |
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100 |
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$ |
0.5000 |
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10/03/2011 |
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BKEPR |
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(100 |
) |
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$ |
0.8800 |
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10/04/2011 |
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BKEPR |
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337 |
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$ |
0.8598 |
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10/05/2011 |
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BKEPR |
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25,000 |
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$ |
0.8426 |
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10/05/2011 |
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BKEPR |
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75,000 |
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$ |
0.8460 |
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10/06/2011 |
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BKEPR |
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133,034 |
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$ |
0.8603 |
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10/06/2011 |
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BKEPR |
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62,066 |
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$ |
0.8603 |
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10/06/2011 |
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BKEPR |
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17,400 |
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$ |
0.8045 |
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10/10/2011 |
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BKEPR |
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77,090 |
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$ |
0.9000 |
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10/10/2011 |
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BKEPR |
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35,975 |
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$ |
0.9000 |
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10/10/2011 |
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BKEPR |
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9,894 |
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$ |
0.9000 |
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10/11/2011 |
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BKEPR |
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62,000 |
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$ |
0.8865 |
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10/11/2011 |
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BKEPR |
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30,000 |
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$ |
0.8865 |
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10/12/2011 |
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BKEPR |
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160,000 |
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$ |
0.9000 |
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10/12/2011 |
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BKEPR |
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300,000 |
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$ |
0.9000 |
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10/20/2011 |
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BKEPR |
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38,094 |
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$ |
0.5035 |
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Page 10 of 10