Sec Form 13D Filing - Knott David M Jr filing for MIDWEST HOLDING INC. (MDWT) - 2022-05-20

This statement relates to the voting common stock, par value $0.001 per share (the “Shares”) of Midwest Holding Inc. (the “Issuer”). The address of the principal executive offices of the Issuer is 2900 South 70th Street, Suite 400, Lincoln, NE 68506.

David M. Knott, Jr., an individual

Dorset Management Corporation (“DMC”), a New York corporation

Knott Partners, L.P. (“KPLP”), a New Jersey partnership  

David M. Knott, Jr., Dorset Management Corporation, and Knott Partners, L.P.  

485 Underhill Boulevard, Suite 205  

Syosset, New York 11791

Mr. Knott is the executive managing member of Knott Partners Management, LLC, a New York limited liability company (“Knott Management”), that is the general partner of KPLP. KPLP invests in securities that are sold in public markets and in negotiated transactions. KPLP’s principal activity is the acquisition of long and short positions in equity securities of publicly traded and privately offered U.S. and foreign securities. KPLP has the authority to employ various trading and hedging techniques and strategies in connection therewith.

Mr. Knott is also the Director and President of DMC, which provides investment management services to KPLP and a limited number of other domestic individuals and entities. As the result of the death of Mr. Knott’s father (David M. Knott), all of the ownership interest in DMC is currently held within the Estate of David M. Knott, Nassau County Surrogate’s Court, File No. 2021-4292 (the “Estate”). Virginia Commander Knott, mother of Mr. Knott (a Reporting Person herein), was duly appointed and continues to act as fiduciary of the Estate.

During the last five years, no Reporting Person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, no Reporting Person was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is 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.

The source of funds used in making each of the purchases of the Shares purchased indirectly by Mr. Knott through KPLP was the portfolio assets of KPLP, on whose behalf Mr. Knott purchased the Shares. The aggregate amount of consideration used by the Reporting Parties in making such purchases was $9,213,745.37. That aggregate amount of such consideration does not include an additional $3,308.09 aggregate amount of consideration representing Mr. Knott’s interests in Shares purchased for his personal account.

The Reporting Parties effect purchases of securities primarily through margin accounts maintained by Goldman, Sachs & Co., which may extend margin credit as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules, and the firm’s credit policies.  In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.

The Shares beneficially owned by Mr. Knott were acquired by KPLP through open-market purchases and negotiated transactions.

The Reporting Persons originally acquired the Shares for the account of KPLP for investment purposes and such purchases have been made in the Reporting Persons' ordinary course of business.

The Reporting Persons expect to review from time to time their investment in the Issuer and may, depending on legal and regulatory restrictions, including those described herein, and the market and other conditions: (i) purchase additional Shares, options or related derivatives in the open market, in privately negotiated transactions or otherwise; (ii) sell all or a portion of the Shares, options or related derivatives now beneficially owned or hereafter acquired by them; (iii) propose one or more directors for the Issuer’s board of directors; (iv) engage in discussions with the Issuer’s board of directors, management or shareholders regarding potential strategic transactions, including potential business combination transactions, involving the Issuer; and (v) engage in other proposals as the Reporting Persons may deem appropriate under the circumstances, including plans or proposals which may relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to this Item 4 of Schedule 13D.

Also, consistent with their investment intent, the Reporting Persons have engaged, and may further engage, in communications with, without limitation, one or more shareholders of the Issuer, one or more officers of the Issuer, one or more members of the board of directors of the Issuer, financial advisers, counsel, or other interested parties regarding, among other things, the review and evaluation of strategic alternatives, opportunities to increase shareholder value, purchases or sales of securities of the Issuer from the Issuer and/or from securityholders of the Issuer, business combination transactions involving the Issuer, divestures of business lines, Issuer operations, strategy, governance and control, or other matters related to the Issuer. In connection with such communications, the Reporting Persons may seek to enter into a non-disclosure agreement.

Any transaction that the Reporting Persons may pursue will depend on a variety of factors, including, without limitation, the Board’s and/or Issuer’s response to the Reporting Persons’ correspondence, the price and availability of the Issuer’s securities, subsequent developments affecting the Issuer, the Issuer’s business and the Issuer’s prospects, other investment and business opportunities available to the Reporting Persons, general industry and economic conditions, the securities markets in general, tax considerations and other factors deemed relevant by the Reporting Persons.

The Issuer owns all outstanding shares of American Life & Security Corp. (the “Insurance Subsidiary”), a licensed insurer domiciled in the State of Nebraska and commercially domiciled in the State of Texas. Under the insurance laws of each of the States of Nebraska and Texas, an owner of shares of a domestic or commercially domiciled insurer or the ultimate parent company of a domestic or commercially domiciled insurer is required to receive the approval (or non-disapproval) of the relevant Departments of Insurance prior to acquiring the “control” of the company through possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Such control is presumed to exist when a person directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. However, this presumption may be rebutted by a showing that control does not exist in fact through the filing of Disclaimers of Affiliation with the relevant Departments of insurance. The Reporting Persons, in the ordinary course of their business may acquire shares of the Issuer in excess of the ten percent threshold and are therefore filing Disclaimers of Affiliation with the Departments of Insurance in the States of Nebra ska and Texas requesting that the Departments allow that the Reporting Persons may maintain beneficial ownership of up to twenty percent of the common shares of the Issuer without causing subsequent filings or approvals based upon their position that, although the Reporting Persons ownership of voting securities may exceed the 10% statutory presumption of control, such Reporting Persons will not possess actual control of the Issuer under relevant insurance laws. Such filings are currently subject to the approval, or non-disapproval, of the Departments of Insurance of Nebraska and Texas.

(a)-(b) Mr. Knott and DMC See Rows 7 through 11 and 13 on pages 2-3. Mr. Knott individually has the sole power to vote and dispose of 354,065 Shares beneficially owned by Mr. Knott (inclusive of the 353,937 owned directly by KPLP).  

KPLP: See Rows 7 through 11 and 13 on page 4.  KPLP directly beneficially owns 353,937 Shares, and has the sole power to vote and to dispose of the 353,937 Shares held in its account.  

The aggregate number of securities reported by the Reporting Persons in each of Rows 7 through 11 on pages 2-4 of this Schedule 13D do not include Shares owned by certain employees of DMC and held by each for their personal accounts. The Reporting Persons expressly disclaim beneficial ownership of the Shares held by such employees, and the filing of this Statement by the Reporting Persons shall not be construed as an admission by any Reporting Person that it is, for purposes of Section 13(d) of the Exchange Act, the beneficial owner of any of the Shares of the Issuer held by such employees.  

(c) No transactions in the class of securities reported on were effected during the past sixty days, except for the following purchases in the open market, on the following day and at the following per Share price:

(d) The Reporting Persons do not know of any other persons having the right to receive or the power to direct the receipt of dividends from, or the proceeds of sale of, the Shares beneficially owned by the Reporting Persons.

(e) Not applicable.

Except as described in this Schedule 13D, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions described in Item 4 of this Schedule 13D, although, subject to the disclosures herein, the Reporting Persons, at any time and from time to time, may review, reconsider and change their position and/or change their purpose and/or develop such plans and may seek to influence management of the Issuer or the Board with respect to the business and affairs of the Issuer and may from time to time consider, evaluate or discuss pursuing or proposing such matters with advisors, the Issuer or other persons.

DORSET MANAGEMENT CORPORATION

/s/ David M. Knott, Jr.

KNOTT PARTNERS, L. P.

By: Knott Partners Management, LLC

/s/ David M. Knott. Jr.