FORM 3
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
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Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
1. Name and Address of Reporting Person *
BI Holdings, L.P.
2. Date of Event Requiring Statement (MM/DD/YYYY)
10/31/2008
3. Issuer Name and Ticker or Trading Symbol
BELL INDUSTRIES INC /NEW/ [BI]
(Last) (First) (Middle)
200 CRESCENT COURT, SUITE 1400
4. Relationship of Reporting Person(s) to Issuer (Check all applicable)
_____ Director ___ X ___ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Street)
DALLAS, TX 75201
(City) (State) (Zip) 5. If Amendment, Date Original Filed (MM/DD/YYYY)
6. Individual or Joint/Group Filing (Check Applicable Line)
_ X _ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Beneficially Owned
1.Title of Security
(Instr. 4) 2. Amount of Securities Beneficially Owned
(Instr. 4) 3. Ownership Form: Direct (D) or Indirect (I)
(Instr. 5) 4. Nature of Indirect Beneficial Ownership
(Instr. 5)
Table II - Derivative Securities Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security
(Instr. 4) 2. Date Exercisable and Expiration Date
(MM/DD/YYYY) 3. Title and Amount of Securities Underlying Derivative Security
(Instr. 4) 4. Conversion or Exercise Price of Derivative Security 5. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 5) 6. Nature of Indirect Beneficial Ownership
(Instr. 5)
Date Exercisable Expiration Date Title Amount or Number of Shares
4% Convertible Promissory Note Due 2017 (1) 6/13/2008 1/31/2017 Common Stock, $.001 par value per share 25859676 (2) (3) (4) $0.2 D (5)
Explanation of Responses:
( 1) The 4% convertible subordinated pay-in-kind promissory note due January 31, 2017 reported herein (the "Convertible Note") was contributed in its entirety by Newcastle Partners, L.P. ("NP") to BI Holdings, L.P. ("BILP") on October 31, 2008. The Convertible Note was originally issued to NP on January 31, 2007 with an initial principal amount of $10,000,000 and was subsequently amended and restated on March 12, 2007 and on June 13, 2008. On June 13, 2008, the conversion price on the Convertible Note was reduced to $.20 (from $3.81) subject to adjustment, the interest rate was reduced to 4% (from 8%) subject to adjustment, and the principal balance of the Convertible Note was restated at $11,137,321 (consisting of the original principal amount plus paid-in-kind and accrued interest as of June 12, 2008). The accreted value of the Convertible Note as of October 31, 2008 is $11,361,899.
( 2) Represents the number of shares of Common Stock of the Issuer into which the Convertible Note, principal amount $11,361,899 is convertible into subject to the following limitations. The entire principal amount (inclusive of any interest accretion) of the Convertible Note is convertible into shares of Common Stock at the conversion price of $.20 per share, subject to adjustment (the "Conversion Price"); provided that,
( 3) (continuation of Footnote 2) until such time as the Issuer's shareholders approve an increase in the Issuer's authorized shares of Common Stock to permit full conversion of the Convertible Note, BILP cannot convert the Convertible Note into more than a number of shares of Common Stock which, when added together with any other outstanding shares of Common Stock and any shares of Common Stock into which derivative securities of Issuer are then convertible or exercisable, equal the maximum number of authorized shares of Common Stock under Issuer's existing Articles of Incorporation.
( 4) The Issuer is seeking shareholder approval at its 2008 annual meeting of shareholders for an increase in the authorized shares of Common Stock of the Issuer to permit the conversion of the entire principal balance of the Convertible Note into shares of Common Stock upon conversion of the Convertible Note. Upon such approval, it is expected that the Convertible Note shall be convertible into at least 30,949,819 additional shares (as well as any additional shares in respect of paid in kind interest on the Convertible Note). If such approval is not obtained at the Issuer's 2008 annual meeting of shareholders, this Form 4 will be amended accordingly.
( 5) Newcastle Capital Management, L.P. ("NCM") is the general partner of BILP. Newcastle Capital Group, L.L.C. ("NCG") is the general partner of NCM and Mark E. Schwarz is the managing member of NCG. Accordingly, each of NCM, NCG and Mr. Schwarz may be deemed to beneficially own the shares issuable upon conversion of the Convertible Note. Mr. Schwarz, NCM and NCG disclaim beneficial ownership of the shares beneficially owned by BILP, except to the extent of their pecuniary interest therein. Mr. Schwarz is a director of the Issuer.
Reporting Owners
Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
BI Holdings, L.P.
200 CRESCENT COURT
SUITE 1400
DALLAS, TX 75201
X
Signatures
BI Holdings, L.P., By: Newcastle Capital Management, L.P., its general partner, By: Newcastle Capital Group, L.L.C. its general partner, by:/s/ Mark E. Schwarz, its managing member 11/7/2008
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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