SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
SCHEDULE 13G
(Rule 13d-102)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULES 13d-1(b), (c) AND (d) AND AMENDMENTS THERETO FILED
PURSUANT TO 13d-2(b)
(Amendment No. __)*
KapStone Paper and Packaging Corporation
(Name of Issuer)
Common Stock, $0.0001 par value
(Title of Class of Securities)
48562P103
(CUSIP Number)
August 15, 2007
(Date of event which requires filing of this statement)
Check the appropriate box to designate the rule pursuant to which this
Schedule 13G is filed:
[ ] Rule 13d-1(b)
[X] Rule 13d-1(c)
[ ] Rule 13d-1(d)
(Page 1 of 12 Pages)
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*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 the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for purposes 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. 48562P103 13G Page 2 of 12 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
Gruss Asset Management, L.P.
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
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(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
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(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.5%
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(12) TYPE OF REPORTING PERSON **
PN
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 48562P103 13G Page 3 of 12 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
Gruss Co., LLC
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
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(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
-----------------------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.5%
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(12) TYPE OF REPORTING PERSON **
00
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 48562P103 13G Page 4 of 12 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
Pegasus Equity Partners II
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
-----------------------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
-----------------------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.5%
-----------------------------------------------------------------------------
(12) TYPE OF REPORTING PERSON **
PN
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 48562P103 13G Page 5 of 12 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
Trust FBO Martin D. Gruss dated April 25, 1988
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
-----------------------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
-----------------------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.5%
-----------------------------------------------------------------------------
(12) TYPE OF REPORTING PERSON **
OO
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 48562P103 13G Page 6 of 12 Pages
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(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO.
OF ABOVE PERSONS (ENTITIES ONLY)
Martin D. Gruss
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF (5) SOLE VOTING POWER
-0-
SHARES --------------------------------------------------------------
BENEFICIALLY (6) SHARED VOTING POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
OWNED BY --------------------------------------------------------------
EACH (7) SOLE DISPOSITIVE POWER
-0-
REPORTING --------------------------------------------------------------
PERSON WITH (8) SHARED DISPOSITIVE POWER
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
-----------------------------------------------------------------------------
(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
Warrants to purchase 1,442,500 shares of Common Stock
(see Item 4)
-----------------------------------------------------------------------------
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
-----------------------------------------------------------------------------
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.5%
-----------------------------------------------------------------------------
(12) TYPE OF REPORTING PERSON **
IN
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** SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 48562P103 13G Page 7 of 12 Pages
Item 1(a). Name of Issuer:
The name of the issuer is KapStone Paper and Packaging Corporation (the
"Company").
Item 1(b). Address of Issuer's Principal Executive Offices:
The Company's principal executive office is located at One Northfield
Plaza, Suite 480, Northfield, IL 60093
Item 2(a). Name of Person Filing:
This statement is filed by:
(i) Gruss Asset Management, L.P., a Delaware limited partnership
("Gruss L.P.") which serves as the investment manager to, and
has investment discretion over the securities held by, Gruss
Global Investors Master Fund, Ltd., a Cayman Islands
Exempted Company ("GGI") and SR GGI Master MA Ltd., a Cayman
Islands Exempted Company ("GGIMA") with respect to the
warrants convertible into shares of Common Stock within 60
days("Warrants") directly held by GGI and GGIMA;
(ii) Gruss Co., LLC, a Delaware limited liability company,
("Gruss") which serves as the general partner to Gruss L.P.
with respect to the Warrants directly owned by GGI and GGIMA;
(iii) Pegasus Equity Partners II, a New York general partnership
("Pegasus") which is the sole member of Gruss, with respect
to the Warrants directly owned by GGI and GGIMA;
(iv) Trust FBO Martin D. Gruss dated April 25, 1988, a Florida
trust (the "Trust") which is a partner of Pegasus, with
respect to the Warrants directly owned by GGI and GGIMA; and
(v) Mr. Martin D. Gruss ("Mr. Gruss") who is a partner of
Pegasus and who also serves as the trustee of the Trust with
respect to the Warrants directly owned by GGI and GGIMA.
Gruss L.P., Gruss, Pegasus, the Trust and Mr. Gruss are hereinafter
sometimes collectively referred to as the "Reporting Persons." Any disclosures
herein with respect to persons other than the Reporting Persons are made on
information and belief after making inquiry to the appropriate party.
CUSIP No. 48562P103 13G Page 8 of 12 Pages
Item 2(b). Address of Principal Business Office or, if None, Residence:
The address of the business office of each of the Reporting Persons is 667
Madison Avenue, New York, NY 10065.
Item 2(c). Citizenship:
Gruss L.P. and Gruss are organized under the laws of the State of Delaware.
Pegasus is organized under the laws of the State of New York. The Trust is
organized under the laws of the State of Florida. Mr. Gruss is a citizen of the
United States of America.
Item 2(d). Title of Class of Securities:
Common Shares, $0.0001 par value (the "Common Stock")
Item 2(e). CUSIP Number:
48562P103
Item 3. If this statement is filed pursuant to Rules 13d-1(b) or 13d-2(b) or
(c), check whether the person filing is a:
(a) [ ] Broker or dealer registered under Section 15 of the
Act,
(b) [ ] Bank as defined in Section 3(a)(6) of the Act,
(c) [ ] Insurance Company as defined in Section 3(a)(19) of
the Act,
(d) [ ] Investment Company registered under Section 8 of the
Investment Company Act of 1940,
(e) [ ] Investment Adviser in accordance with Rule
13d-1(b)(1)(ii)(E),
(f) [ ] Employee Benefit Plan or Endowment Fund in accordance
with Rule 13d-1(b)(1)(ii)(F),
(g) [ ] Parent Holding Company or control person in accordance
with Rule 13d-1(b)(1)(ii)(G),
(h) [ ] Savings Association as defined in Section 3(b) of the
Federal Deposit Insurance Act,
(i) [ ] Church Plan that is excluded from the definition of an
investment company under Section 3(c)(14) of the
Investment Company Act of 1940,
(j) [ ] Group, in accordance with Rule 13d-1(b)(1)(ii)(J).
If this statement is filed pursuant to 13d-1(c), check this box: [x]
CUSIP No. 48562P103 13G Page 9 of 12 Pages
Item 4. Ownership.
A. Gruss, L.P.
(a) Amount beneficially owned:
Warrants to purchase 1,442,500 shares of Common Stock
(b) Percent of class: 5.5%
The percentages used in this Item 4 and elsewhere in this Schedule
13G are calculated based upon (i) 24,968,097 shares of Common
Stock issued and outstanding on August 1, 2007, as reflected in
the Company's Form 10-Q for the quarterly period ended June 30,
2007 filed on August 8, 2007 and (ii) 1,442,500 shares of Common
Stock deemed to be outstanding pursuant to Rule 13d-3(d)(1)(i) of
the Securities Exchange Act of 1934, as amended, because such
shares may be obtained and beneficially owned upon exercise or
conversion within 60 days of derivative securities currently owned
by the Reporting Persons. Pursuant to Rule 13d-3(d)(1)(i), the
number of issued and outstanding shares of Common Stock assumes
that each other holder of derivative securities does not exercise
or convert such derivative securities within 60 days.
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote:
Warrants to purchase 1,442,500 shares of Common Stock
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition:
Warrants to purchase 1,442,500 shares of Common Stock
B. Gruss
(a) Amount beneficially owned:
Warrants to purchase 1,442,500 shares of Common Stock
(b) Percent of class: 5.5%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote:
Warrants to purchase 1,442,500 shares of Common Stock
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition:
Warrants to purchase 1,442,500 shares of Common Stock
C. Pegasus
(a) Amount beneficially owned:
Warrants to purchase 1,442,500 shares of Common Stock
(b) Percent of class: 5.5%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote:
Warrants to purchase 1,442,500 shares of Common Stock
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition:
Warrants to purchase 1,442,500 shares of Common Stock
D. The Trust
(a) Amount beneficially owned:
Warrants to purchase 1,442,500 shares of Common Stock
(b) Percent of class: 5.5%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote:
Warrants to purchase 1,442,500 shares of Common Stock
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition:
Warrants to purchase 1,442,500 shares of Common Stock
CUSIP No. 48562P103 13G Page 10 of 12 Pages
E. Mr. Gruss
(a) Amount beneficially owned:
Warrants to purchase 1,442,500 shares of Common Stock
(b) Percent of class: 5.5%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote:
Warrants to purchase 1,442,500 shares of Common Stock
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition:
Warrants to purchase 1,442,500 shares of Common Stock
Item 5. Ownership of Five Percent or Less of a Class.
Not applicable.
Item 6. Ownership of More than Five Percent on Behalf of Another Person.
GGI and GGIMA, as clients of Gruss L.P., have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the securities reported in this Schedule 13G.
Item 7. Identification and Classification of the Subsidiary Which Acquired
the Security Being Reported on by the Parent Holding Company.
Not applicable.
Item 8. Identification and Classification of Members of the Group.
See Item 2.
Item 9. Notice of Dissolution of Group.
Not applicable.
CUSIP No. 48562P103 13G Page 11 of 12 Pages
Item 10. Certification.
Each of the Reporting Persons hereby makes the following certification:
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were not acquired and are not held for
the purpose of or with the effect of changing or influencing the control of the
issuer of the securities and were not acquired and are not held in connection
with or as a participant in any transaction having that purpose or effect.
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: August 24, 2007
/s/ Martin D. Gruss
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Martin D. Gruss,
Individually, and as trustee of the Trust for
the benefit of Martin D. Gruss dated April 25,
1988, each a partner of Pegasus Equity
Partners II, the sole member of Gruss Co.,
LLC, for itself and as the general partner of
Gruss Asset Management, L.P.
CUSIP No. 48562P103 13G Page 12 of 12 Pages
EXHIBIT 1
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13d-1(k)
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13G, is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13G, shall be filed on
behalf of each of the undersigned without the necessity of filing additional
joint acquisition statements. The undersigned acknowledge that each shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning him or it contained therein, but
shall not be responsible for the completeness and accuracy of the information
concerning the others, except to the extent that he or it knows or has reason to
believe that such information is inaccurate.
DATED: August 24, 2007
/s/ Martin D. Gruss
-------------------------------------
Martin D. Gruss,
Individually, and as trustee of the Trust for
the benefit of Martin D. Gruss dated April 25,
1988, each a partner of Pegasus Equity
Partners II, the sole member of Gruss Co.,
LLC, for itself and as the general partner of
Gruss Asset Management, L.P.