SecProbe.io

CORRESP
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  September 16,
  2005

  WRITER’S
  DIRECT NUMBER: (317) 236-2289

  DIRECT
  FAX: (317) 592-4666

  INTERNET: Stephen.Hackman@icemiller.com

VIA EDGAR AND COURIER

Pamela A. Long, Assistant Director

United States Securities and Exchange
Commission

Division of Corporate Finance

100 F Street, N.E.

Mail Stop 7010

Washington, D.C. 20549-7010

Re:                             Obsidian
Enterprises, Inc.

Schedule 13E-3
Filed by the Filing Persons on July 7, 2005

File No. 5-40250

Dear Ms. Long:

On behalf of our client, Obsidian Enterprises, Inc. (the “Company”),
this letter responds to the Staff’s comments on the above-referenced filing
(the “Schedule 13E-3”) provided to Timothy S. Durham by letter dated August 4,
2005.  For your convenience, the
subheadings and order of responses set forth below correspond with the
subheadings and order set forth in the Staff’s comment letter.  The Staff’s comments are in bold.  Also enclosed is a copy of Amendment No. 1
to the Schedule 13E-3 (“Amendment No. 1”).  Unless otherwise noted below, the Staff’s
comments have been addressed in Amendment No. 1.  The page numbers in this letter refer to
the respective pages of Amendment No. 1.

Form 13E-3 filed July 7, 2005

General

1.                                      We
note that the Filing Persons intend to approach Obsidian security holders in an
effort to purchase an additional 12.71% of Obsidian shares so that they may
affect a short form merger.  The
consideration for these purchases would be at $1.85 per share in cash or Black
Rock shares in an equivalent amount.  It
is unclear how you have determined that these actions would not be a tender
offer.  Note that a tender offer, among
other things, would have to be made to all holders of the Obsidian shares,
would have to be held open for at least 20 days and would otherwise have to
comply with Regulations 14D and 14E.
Please supplementally provide your legal analysis why this does not
constitute a tender offer, or revise the terms of Black Rock’s proposed
acquisition of additional shares to comply with the tender offer rules and
to provide all of the information required by Item 1004(a)(1) of
Regulation M-A and the remainder of Schedule TO.  Note as well the requirement

to file a Schedule TO upon the first public announcement of the
offer.  See Rule l4d-2
and General Instruction D.3 to Schedule 13E-3.  You may combine your Schedule 13E-3 with
Schedule TO.  See General
Instruction J to Schedule TO.

The Filing Persons supplementally advise the Staff that, for the
reasons stated herein, the solicitation of shares by the Filing Persons as
described in the Schedule 13E-3 is not a tender offer.  The term “tender offer” is not defined in
either Rule 13E-4 or the Securities Exchange Act of 1934 (the “Exchange Act”).
In Wellman v. Dickinson,(1)
the court listed seven(2)
elements suggested by the Staff as being characteristic of a “tender offer.”  These factors apply to the transaction being
proposed by the Filing Persons as follows:

1.               There is active and widespread solicitation of
public stockholders for the shares of an issuer.

There is not active and widespread solicitation of public stockholders,
as the Filing Persons intend to cause Black Rock Acquisition to offer to
purchase only the shares of Obsidian common stock held by a total of seven
predetermined stockholders.  These seven stockholders
were selected based on either the size of their holdings of Obsidian common
stock, on their insider relationship with Obsidian or a long-standing business
relationship with Tim Durham.

2.               The solicitation is made for a substantial
percentage of the issuer’s stock.

The solicitation is not being made for a substantial percentage of
Obsidian common stock.  The Filing
Persons are seeking to acquire 12.71% of the outstanding shares of Obsidian
common stock.  No case considering this
factor has concluded that such a low percentage is “substantial.”  Rather, seeking at least 20% of the
outstanding shares of a target appears to be the lowest threshold for purposes
of a tender offer.(3)

3.               The offer to purchase is made at a premium over the
prevailing market price.

The solicitation made by the Filing Persons in connection with the transaction
does offer a premium over the prevailing market price.

4.               The terms of the offer are firm rather than
negotiable.

(1)  Wellman  v. Dickinson, 475 F. Supp. 783
(S.D.N.Y. 1979), aff'd 682 F.2d 355 (2d Cir. 1982), cert. denied, 460 U.S. 1069
(1983).

(2) An eight factor not enumerated
by the court in Wellman, but often applied by
courts in making a determination about whether or not a transaction is a tender
offer is whether a public announcement of a purchasing program concerning the
target company preceded or accompanied the rapid accumulation of large amounts
of the target company's securities.  See Hanson Trust PLC v. SCM Corp., 774 F.2d 47 (2d Cir. 1985).  This factor will also be addressed by our
analysis.

(3) See Clearfield Bank and Trust Company v. Omega Financial Corporation,
65 F. Supp. 2d (1999); see also SEC Request for Comments
on Two-Tier Tender Offers, June 29, 1984.

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The terms of Black Rock Acquisition’s offer to purchase shares of
Obsidian common stock are firm and the Filing Persons do not intend to
negotiate with individual sellers.

5.               The offer is contingent on the tender of a fixed
number of shares, and maybe subject to a fixed maximum number to be purchased.

The offer by Black Rock Acquisition to purchase the shares of the seven
stockholders is contingent on the aggregate purchase of 12.71%.  There will not be an escrow or other
independent agent engaged to hold the shares until the closing.  Rather, if and when all of the seven stockholders
holding 12.71% of the outstanding shares of Obsidian common stock who will be
solicited to sell their shares to Black Rock Acquisition have agreed to sell
such shares, there will be a single closing date on which all shares held by
the Filing Persons and the other selling stockholders will be transferred to
Black Rock.

6.               The offer is open only for a limited period of time.

There is no express time limitation on the offer, rather, it will
remain open for as long as is necessary for Black Rock Acquisition to acquire
the desired 12.71%.  Due to the fact that
contacting these stockholders would be the first step in a 13E-3 transaction,
the Filing Persons have not contacted these stockholders specifically with
respect to making an offer to purchase shares of Obsidian common stock to Black
Rock Acquisition.  In the event that each
of these seven stockholders does not agree to sell its shares to Black Rock
Acquisition, the Filing Persons will not be able to go forward with the
transaction in its present form.
Although the Filing Persons believe that a going private transaction is
in the best interests of the Company, no decision has been made with respect to
whether or how they would proceed with pursuing such a transaction in the event
that Black Rock Acquisition is unable to
obtain 90% of the outstanding shares of Obsidian common stock.

7.               The offeree is subjected to pressure to sell his
stock.

The offerees are not subjected to any particular pressure to sell their
stock in connection with this transaction.
In fact, as the disclosure document makes clear, should the offerees
determine that the transaction does not offer a fair value for their shares or
that they do not want to be stockholders in a private company, they can choose
to withhold the sale of their shares and cause Black Rock Acquisition to be
unable to obtain the 12.71% necessary for Black Rock Acquisition to become the
90% parent of Obsidian.

8.               Public announcements of a purchasing program
concerning the target company precede or accompany a rapid accumulation of
large amounts of the target company’s securities.

The Filing Persons already owns a vast majority of the outstanding
shares of Obsidian common stock.  Any
announcement that has been made (including the previously filed

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Schedule 13D) did not precede or accompany a rapid accumulation of
large amounts of Obsidian stock.  In
addition, as discussed above, the Filing Persons only seek to purchase 12.71%
of the outstanding shares of Obsidian common stock, a percentage generally
treated by courts and the staff alike as too small to cause the solicitation to
be treated as a tender offer.

In response to cases such as the current situation, where application
of the Wellman factors to the facts at hand
does not dispositvely determine whether or not a transaction is a tender offer,
courts have modified the Wellman test.(4)  In Hanson Trust PLC v. SCM
Corp.,(5)
the court wrote:

Although many
of the above-listed factors [referring to the Wellman
factors] are relevant for purposes of determining whether a given solicitation
amounts to a tender offer, the elevation of such a list to a mandatory “litmus
test” appears to be both unwise and unnecessary. . . We prefer to be guided by
the principle followed by the Supreme Court in deciding what transactions fall
within the private offering exemption provided by §4(1) of the Securities
Act of 1933, and by ourselves in Kennecott Copper
in determining whether the Williams Act applies to private transactions.  That principle is simply to look to the
statutory purpose.  In SEC v. Ralston Purina Co., 346 U.S. 199 (1953), the Court
stated, ‘the applicability of §4(1) should turn on whether the particular
class of persons affected need the protection of the Act.  An offering to those who
are shown to be able to fend for themselves is a transaction ‘not involving any
public offer.’ Id., at 125, 73 S.Ct. at 984.
Similarly, since the purpose of §4(1) is to protect the
ill-informed solicitee, the question of whether a solicitation constitutes a “tender
offer” within the meaning of §14(d) turns on whether, viewing the
transaction in the light of the totality of circumstances, there appears to be
a likelihood that unless the pre-acquisition filing strictures of that statute
are followed there will be a substantial risk that solicitees will lack
information needed to make a carefully considered appraisal of the proposal put
before them.” (emphasis added)(6)

The thrust of the Hanson Trust
reasoning is that a court will, based on the totality of the circumstances
surrounding a proposed transaction, determine whether the stockholders affected
by that transaction need the
protection of the Act.  In doing so, the
court noted

(4) See Clearfield
Bank & Trust Company v. Omega Financial Corporation, 65 F.Supp.
2d 325 (D.Pa. 1999).

(5)  Hanson Trust
PLC v. SCM Corp., 774 F.2d 47 (2d. Cir. 1985).

(6)  Hanson Trust at 57.

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that the eight Wellman factors
are “relevant for purposes of determining whether a given solicitation amounts
to a tender offer.”(7)

The language of Hanson Trust
clearly focuses on the purpose of the Williams Act to protect certain
solicitees who are not sophisticated enough to make an informed decision.  It is important to note that, with one
exception, the Filing Persons reasonably believe, and prior to any purchase
will obtain a representation, that each of the stockholders that will be asked
to sell their shares of Obsidian common stock to Black Rock Acquisition are “accredited
investors” within the meaning of Rule 501(a)(1)(5) or (6) of the
Securities Act of 1933 (the “Securities Act”).
The one stockholders who can not be deemed to be an accredited investor
has served as a director of Obsidian since 2001.  The concept of an “accredited investor” was
created as a safe harbor from certain registration requirements, because it
applies to stockholders that are, by definition, capable of making a carefully
considered appraisal of an offer.  It is
clear by the rationale of courts discussed above that accredited investors are
not the class of stockholders that the Williams Act was designed to
protect.  Therefore, for the reasons
stated herein, the solicitation of shares by the Filing Persons and/or Black
Rock Acquisition in connection with the going private transaction is not believed
to be a tender offer.

2.                                      In
providing your analysis in response to comment 1, please tell us how Black Rock
will seek to obtain additional shares.
For example, how will Black Rock decide who it will purchase shares
from, and when will Black Rock contact these persons?  Will Black Rock have the ability to modify
the terms of the offer, including the offer price and period?  Will there be an escrow or other independent
agent that will hold the shares until the desired amount is obtained?  What will you do if Black Rock is unable to
obtain enough shares to increase its ownership to 90%?  Please note that we may have additional
comments after reviewing your response.

These issues are addressed in
response to comment 1.

3.                                      Note
that these purchases would be the first steps in a Rule 13E-3
transaction.  See Q&A
No. 4 of Exchange Act Release No. 17719 (April 13, 1981).  As such, the Filing Persons must provide the
information in the Schedule 13E-3 to any security holder from whom they
wish to purchase Obsidian shares at least 30 days prior to the purchase.  See General
Instruction D.4 of Schedule 13E-3.
In addition, note that the Filing Persons must amend the 13E-3 to
reflect any material changes and with respect to each step in the series of Rule 13E-3
transactions.  See General
Instruction D.5. of Schedule 13E-3 and Q&A No. 15 in Exchange Act
Release No. 17719.

The Filing Persons
supplementally advise the Staff that they intend to provide the information in
the Schedule 13E-3 to all Obsidian stockholders 30 days prior to any

(7)  Id.

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purchase of shares of Obsidian
common stock as described in the transaction statement.  Additionally, the Filing Persons will amend
the Schedule13E-3 to reflect any material changes and with respect to each step
in the series of Rule 13E-3 transactions.
The Filing Persons supplementally advise the Staff that they anticipate
amending the Schedule 13E-3 only once, because Black Rock Acquisition will
purchase all of the shares of Obsidian common stock on a single day.

4.                                      To
the extent that Black Rock will issue its shares in exchange for shares of
Obsidian, please tell us supplementally what consideration you have given to
registering the shares under the Securities Act.  We may have additional comments upon review
of your response.

The Filing Persons believe that Black Rock Acquisition will not be
required to register its  common stock
under the Securities Act in reliance upon the exemption from registration
provided by Section 4(2) and/or Rule 506 of Regulation D of the
Securities Act.  Offers and sales by an
issuer that satisfy the conditions of Rule 506 are deemed to be
transactions not involving any public offering with the meaning of Section 4(2).  The conditions to be met for such exemption
are that there are no more than 35 purchasers of the securities from the
issuer; all purchasers must be (or the issuer must reasonably believe them to
be immediately prior to making the sale) an accredited investor or must have,
either alone or with his purchaser representative, such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of the prospective investment; and if the issuer sells to
any purchaser that is not an accredited investor, the purchaser must provide
certain information to that investor in accordance with Rule 502(b)(1) and
(2).  In total, and including the Filing
Persons, Black Rock Acquisition will be issuing its stock to a maximum of 14
people, or, calculating this number in accordance with  Rule 501(e), only a maximum of one
possible purchaser due to the fact that there is one non-ac