CAPITAL SOUTHWEST CORP

Major Shareholding Notification • Feb 1, 2008

SC 13D/A 1 sc13da207020002_02012008.htm SCHEDULE 13D AMENDMENT NO. 2 sc13da207020002_02012008.htm Licensed to: Olshan Document Created using EDGARizer 4.0.1.0 Copyright 2007 EDGARfilings, Ltd., an IEC company. All rights reserved EDGARfilings.com

UNITED STATES

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)

(Amendment No. 2) 1

Capital Southwest Corporation

(Name of Issuer)

Common Stock, $1 Par Value

(Title of Class of Securities)

140501107

(CUSIP Number)

STEVEN WOLOSKY, ESQ.

OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

February 1, 2008

(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 x .

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.

---

1 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. 140501107

| 1 | NAME
OF REPORTING PERSON NED SHERWOOD | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION U.S.A. | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER 49,938 |
| | 8 | SHARED
VOTING POWER 198,919 |
| | 9 | SOLE
DISPOSITIVE POWER 73,938 |
| | 10 | SHARED
DISPOSITIVE POWER 198,919 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 272,857 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.0% | |
| 14 | TYPE
OF REPORTING PERSON IN | |

2

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON ZS CROSSOVER II GP, L.L.C. | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 188,697 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 188,697 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 188,697 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.9% | |
| 14 | TYPE
OF REPORTING PERSON PN | |

3

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON ZS CROSSOVER II LP | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS WC | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 106,342 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 106,342 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 106,342 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.7% | |
| 14 | TYPE
OF REPORTING PERSON PN | |

4

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON ZS SPECIAL I L.P. | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS WC | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 82,355 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 82,355 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 82,355 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.1% | |
| 14 | TYPE
OF REPORTING PERSON PN | |

5

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON MRMP TRUST | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION SOUTH
DAKOTA. | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER 49,938 |
| | 8 | SHARED
VOTING POWER -0- |
| | 9 | SOLE
DISPOSITIVE POWER 49,938 |
| | 10 | SHARED
DISPOSITIVE POWER -0- |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 49,938 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.3% | |
| 14 | TYPE
OF REPORTING PERSON OO | |

6

CUSIP NO. 140501107

| 1 | NAME
OF REPORTING PERSON THE NED AND EMILY SHERWOOD FOUNDATION | |
| --- | --- | --- |
| 2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) x |
| 3 | SEC
USE ONLY | |
| 4 | SOURCE
OF FUNDS OO | |
| 5 | CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d)
OR 2(e) | ¨ |
| 6 | CITIZENSHIP
OR PLACE OF ORGANIZATION DELAWARE. | |
| NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE
VOTING POWER -0- |
| | 8 | SHARED
VOTING POWER 10,222 |
| | 9 | SOLE
DISPOSITIVE POWER -0- |
| | 10 | SHARED
DISPOSITIVE POWER 10,222 |
| 11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,222 | |
| 12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES | ¨ |
| 13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS
THAN
1% | |
| 14 | TYPE
OF REPORTING PERSON OO | |

7

CUSIP NO. 140501107

The following constitutes Amendment No. 2 to the Schedule 13D filed by the undersigned (the “Schedule 13D”). This Amendment No. 2 amends the Schedule 13D as specifically set forth.

Item 4 is hereby amended to add the following:

On February 1, 2008, Crossover II delivered a letter to the Corporate Secretary of the Issuer submitting, pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), a proposal requesting that the Board immediately engage a nationally-recognized investment banking firm to evaluate strategic alternatives that would maximize shareholder value, including, but not limited to, the liquidation of certain or all of the Issuer’s underlying portfolio assets with the subsequent distribution of all proceeds to the Issuer’s shareholders. A copy of this letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7 is hereby amended to add the following exhibit:

Item 7. Material to be Filed as Exhibits .

99.1. Letter from Crossover II to the Corporate Secretary of the Issuer, dated January 30, 2008, submitting a 14a-8 proposal for consideration at the 2008 Annual Meeting.

8

CUSIP NO. 140501107

SIGNATURES

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

| Dated: February
1, 2008 | |
| --- | --- |
| By: | ZS
Crossover II GP, L.L.C. |
| Its
General Partner | |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Management Committee Member | |

| ZS
SPECIAL I L.P. | |
| --- | --- |
| By: | ZS
Crossover II GP, L.L.C. |
| Its
General Partner | |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Management Committee Member | |

| ZS
CROSSOVER II GP, L.L.C. | |
| --- | --- |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Management Committee Member | |

| MRMP
TRUST | |
| --- | --- |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Trustee | |

| THE
NED AND EMILY SHERWOOD FOUNDATION | |
| --- | --- |
| By: | /s/
Ned Sherwood |
| Name:
Ned Sherwood | |
| Title:
Director | |

| /s/
Ned Sherwood |
| --- |
| NED
SHERWOOD |

9

CUSIP NO. 140501107

EXHIBIT INDEX

| Exhibit | | Exhibit
Number |
| --- | --- | --- |
| 1 . | Letter
from
Crossover II to the Corporate Secretary of the Issuer, dated January
30,
2008, submitting a 14a-8 proposal for consideration at the 2008
Annual Meeting. | 99.1 |

10