SECURITIES AND EXCHANGE COMMISSION

 

 

Washington, D.C. 20549

 

 

 

 

SCHEDULE 13D

 

(Rule 13d-101)

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED

PURSUANT TO § 240.13d-2(a)

 

Under the Securities Exchange Act of 1934
(Amendment No. 2)

 

 

DNB Financial Corporation

(Name of Issuer)

 

Common Stock, par value $1.00 per share

(Title of Class of Securities)

 

233237 10 6

(CUSIP Number)

 

J. Abbott R. Cooper

CT Opportunity Partners I LP

203 Colony Road

Jupiter, FL 33469

917-744-7758

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

February 26, 2019

(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 §§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 §240.13d-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).

 

 

CUSIP No. 233237106

 

 

1

Name of Reporting Person
CT Opportunity Partners I LP

 

 

2

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

  x

 

 

(b)

  o

 

 

3

SEC Use Only

 

 

4

Source of Funds (See Instructions)
WC, OO

 

 

5

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

 

 

6

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7

Sole Voting Power
256,945

 

8

Shared Voting Power
0

 

9

Sole Dispositive Power
256,945

 

10

Shared Dispositive Power
0

 

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person
256,945

 

 

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

 

 

13

Percent of Class Represented by Amount in Row (11)
5.95%*

 

 

14

Type of Reporting Person (See Instructions)
PN

 

*

 

The percentage calculations herein are based upon an aggregate of 4,315,518 shares of common stock, par value $1.00 per share, of DNB Financial Corporation outstanding as of November 5, 2018, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2018.

 

2

 

CUSIP No. 233237106

 

 

1

Name of Reporting Person
CT Opportunity Management LLC

 

 

2

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

  x

 

 

(b)

  o

 

 

3

SEC Use Only

 

 

4

Source of Funds (See Instructions)
Not Applicable

 

 

5

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

 

 

6

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7

Sole Voting Power
256,945*

 

8

Shared Voting Power
0

 

9

Sole Dispositive Power
256,945*

 

10

Shared Dispositive Power
0

 

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person
256,945

 

 

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

 

 

13

Percent of Class Represented by Amount in Row (11)
5.95%**

 

 

14

Type of Reporting Person (See Instructions)
OOO (Limited Liability Company)

 

*

 

Solely in its capacity as general partner of CT Opportunity Partners I LP.  CT Opportunity Management LLC disclaims beneficial ownership except to the extent of its pecuniary interest therein.

**

 

The percentage calculations herein are based upon an aggregate of 4,315,518 shares of common stock, par value $1.00 per share, of DNB Financial Corporation outstanding as of November 5, 2018, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2018.

 

3

 

CUSIP No. 233237106

 

 

1

Name of Reporting Person
Driver Management Company LLC

 

 

2

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

  x

 

 

(b)

  o

 

 

3

SEC Use Only

 

 

4

Source of Funds (See Instructions)
WC, OO

 

 

5

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

 

 

6

Citizenship or Place of Organization
Delaware

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7

Sole Voting Power
23,000

 

8

Shared Voting Power
0

 

9

Sole Dispositive Power
23,000

 

10

Shared Dispositive Power
0

 

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person
23,000

 

 

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

 

 

13

Percent of Class Represented by Amount in Row (11)
0.53%*

 

 

14

Type of Reporting Person (See Instructions)
OOO (Limited Liability Company)

 

*

 

The percentage calculations herein are based upon an aggregate of 4,315,518 shares of common stock, par value $1.00 per share, of DNB Financial Corporation outstanding as of November 5, 2018, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2018.

 

4

 

CUSIP No. 233237106

 

 

1

Name of Reporting Person
J. Abbott R. Cooper

 

 

2

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

  x

 

 

(b)

  o

 

 

3

SEC Use Only

 

 

4

Source of Funds (See Instructions)
Not Applicable

 

 

5

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

 

 

6

Citizenship or Place of Organization
United States

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7

Sole Voting Power
23,000*

 

8

Shared Voting Power
256,945*

 

9

Sole Dispositive Power
23,000*

 

10

Shared Dispositive Power
256,945*

 

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person
279,945

 

 

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

 

 

13

Percent of Class Represented by Amount in Row (11)
6.49%**

 

 

14

Type of Reporting Person (See Instructions)
IN

 

*

Mr. Cooper may be deemed to beneficially own and have shared voting and dispositive power over 256,644 shares as one of the two controlling persons of CT Opportunity Management LLC.  Mr. Cooper may be deemed to beneficially own and have sole voting and dispositive power over 23,000 shares as the controlling person of Driver.  Mr. Cooper disclaims beneficial ownership of any shares held by any of the Reporting Person except to the extent of his pecuniary interest therein.

 

 

**

The percentage calculations herein are based upon an aggregate of 4,315,518 shares of common stock, par value $1.00 per share, of DNB Financial Corporation outstanding as of November 5, 2018, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2018.

 

5

 

CUSIP No. 233237106

 

 

1

Name of Reporting Person
John B. Thompson II

 

 

2

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

  x

 

 

(b)

  o

 

 

3

SEC Use Only

 

 

4

Source of Funds (See Instructions)
Not Applicable

 

 

5

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)      o

 

 

6

Citizenship or Place of Organization
United States

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7

Sole Voting Power
0

 

8

Shared Voting Power
256,945*

 

9

Sole Dispositive Power
0

 

10

Shared Dispositive Power
256,945*

 

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person
256,945

 

 

12

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    o

 

 

13

Percent of Class Represented by Amount in Row (11)
5.95%**

 

 

14

Type of Reporting Person (See Instructions)
IN

 

*

Mr. Thompson may be deemed to beneficially own these shares as one of the two controlling persons of CT Opportunity Management LLC.  Mr. Thompson disclaims beneficial ownership of any shares held by any of the Reporting Person except to the extent of his pecuniary interest therein.

 

 

**

The percentage calculations herein are based upon an aggregate of 4,315,518 shares of common stock, par value $1.00 per share, of DNB Financial Corporation outstanding as of November 5, 2018, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the SEC on November 5, 2018.

 

6

 

This amendment No. 2 to Schedule 13D (this “ Amendment No. 9 ”) relates to the Schedule 13D filed on January 17, 2019 (as amended and supplemented through the date of this Amendment No. 2, the “ Schedule 13D ”) by (a) CT Opportunity Partners I LP, a Delaware limited partnership, (b) CT Opportunity Management LLC, a Delaware limited liability company, (c) Driver Management Company LLC, a Delaware limited liability company, (d) J. Abbott R. Cooper, citizen of the United States of America, and (e) John B. Thompson II, a citizen of the United States of America, relating to the common stock, par value $1.00 per share (the “ Common Stock ”), of DNB Financial Corporation, a Delaware corporation (“ DNB ” or the “ Issuer ”).

 

Capitalized terms used but not defined in this Amendment No. 2 shall have the meanings set forth in the Schedule 13D. Except as specifically amended by this Amendment No. 2, the Schedule 13D is unchanged.

 

Item 4.                                   Purpose of Transaction

 

Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following information:

 

During the month of February, the Reporting Persons have had several discussions with the Issuer regarding the Reporting Persons’ request that the Issuer’s board immediately engage a qualified financial advisor and, with the advice and assistance of such advisor, solicit acquisition proposals for the Issuer.  Those discussions covered, among other items, procedures for sharing information with the Reporting Persons, the advisability of adding shareholder representation to the Issuer’s board in connection with these matters and the qualifications and experience of particular financial advisors.

 

During these discussions, the Reporting Persons have received from the Issuer confidential information that the Reporting Persons believe is material and of interest to all shareholders. The Reporting Persons urge the Issuer to publicly disclose such information for the benefit of all shareholders.

 

The Reporting Persons have also urged the Issuer’s board to engage advisors that are well known for their expertise in advising publicly traded community banking organizations of similar size to the Issuer in sale transactions and that have significant recent experience with such transactions.

 

The Reporting Persons have also sent the Issuer’s board an additional letter (the “February 26 Letter”) asking the Issuer’s board to clarify the reasons for paying Mr. Liuzzi a “change of control” payment when no change of control appeared to occur.  The Issuer has not responded to the February 26 Letter and, to the Reporting Persons’ knowledge, has failed to form a committee of independent directors to investigate this payment and related disclosure.  The February 26 Letter is attached hereto as Exhibit 99.5 and is incorporated herein by reference.

 

7

 

Item 7.    Exhibits

 

Exhibit

 

Description

 

 

 

Exhibit 99.1

 

Joint Filing Agreement by and among the Reporting Persons, dated January 18, 2019

 

 

 

Exhibit 99.2

 

January 22 Letter

 

 

 

Exhibit 99.3

 

January 29 Letter

 

 

 

Exhibit 99.4

 

January 30 Letter

 

 

 

Exhibit 99.5

 

February 26 Letter

 

8

 

SIGNATURE

 

After reasonable inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Dated: February 28, 2019

 

 

CT Opportunity Partners I LP

 

 

 

By:

CT Opportunity Management LLC, its general partner

 

 

 

 

By:

/s/ J. Abbott R. Cooper

 

 

Name:

J. Abbott R. Cooper

 

 

Title:

President

 

 

 

 

CT Opportunity Management LLC

 

 

 

 

By:

/s/ J. Abbott R. Cooper

 

 

Name:

J. Abbott R. Cooper

 

 

Title:

President

 

 

 

 

Driver Management Company LLC

 

 

 

 

By:

/s/ J. Abbott R. Cooper

 

 

Name:

J. Abbott R. Cooper

 

 

Title:

Manager

 

 

 

 

By

/s/ J. Abbott R. Cooper

 

 

J. Abbott R. Cooper

 

 

 

 

 

 

 

By

/s/ John B. Thompson II

 

 

John B. Thompson II

 

9

Exhibit 99.5

 

February 26, 2019

 

Mr. James Thornton
Chairman of the Board
DNB Financial Corporation
4 Brandywine Avenue
Downingtown, PA 19335

 

Via E Mail

 

Jim,

 

Thanks for taking the time to meet with me over the past three weeks.  I just wanted to circle back on one item we discussed in person on February 12; the Change of Control Payment made to Mr. Vincent Liuzzi.  If I understood you correctly, DNBF’s position is that, at some point within the two years prior to May 23, 2018 (the date of Mr. Liuzzi’s termination) a “Change of Control” (as that term is defined in Mr. Liuzzi’s Change of Control Agreement)[1] occurred, which gave rise to the payment obligations set forth in his Change of Control Agreement.  I further understood your position to be that DNBF’s determination that a Change of Control had occurred was based on the advice and recommendation of legal counsel.

 

Having spent considerable time analyzing the definition of Change of Control from Mr. Liuzzi’s Change of Control Agreement, it does not appear to me that any Change of Control had in fact occurred.  In order to clear up this very serious issue, perhaps you could share with all DNBF shareholders the factual basis for DNBF’s claim that a Change of Control occurred between May 23, 2016 and May 23, 2018 as well as any relevant legal analysis.

 

I hope that you understand why this issue is so important to us and likely all DNBF stockholders.  First, it is obvious that “control” of a corporation is a very valuable thing, which is why shareholders expect to receive a premium when the corporation in which they own stock (i.e., that they are part owners of) experiences a change of control.  If DNBF did indeed experience a change of control during the period between May 23, 2016 and May 23, 2018, DNBF shareholders will undoubtedly want to understand whether they received any premium in connection with that change of control and, if not, why not.

 

Second, to the extent DNBF shareholders did not receive any premium with respect to this purported “Change of Control,” it will be important for DNBF to understand not only why Mr. Liuzzi did but who else might be entitled to receive special payments related to this alleged “Change of Control.”  More broadly, DNBF shareholders will want to know why management (and management alone) is receiving valuable benefits from an asset (control) that rightfully belongs to all shareholders.

 

Given the importance of these issues to all DNBF shareholders, both a timely and public reply would be appreciated.

 

/s/ J. Abbott R. Cooper

 

 

 

 

 

J. Abbott R. Cooper

 

 

 

President
CT Opportunity Management LLC

 

Manager
Driver Management Company LLC

 

(e)  Definition of “Change in Control” . For purposes of this Agreement, a “change in control” of Company or Bank shall mean any one or more of the following:

 

(1) a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)(or any successor provision) as it may be amended from time to time;

 

(2) any “persons” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first written above), other than Company or Bank or any “person” who on the date hereof is a director of officer of Company or Bank, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Company or Bank representing 25% or more of the combined voting power of Company’s or Bank’s then outstanding securities; or

 

(3) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of Company or Bank cease for any reason to constitute at least a majority thereof, unless the election of each director who was not a director at the beginning of such period has been approved in advance by directors representing at least two-thirds of the directors then in office who were directors at the beginning of the period.

 

(4) the signing of a letter of intent or a formal acquisition or merger agreement between the Holding Company or Bank, of the one part, and a third party which contemplates a transaction which would result in a “change of control” under paragraphs (1), (2) or (3) of this subsection (f), but, as to any Triggering Event, only if such letter of intent or agreement, or the transaction contemplated thereby, has not been canceled or terminated at the time the occurrence of the Triggering Event in question.

 

[1] I have copied the Change of Control definition to the end of this letter.