The Gabelli Equity Trust Inc., et al.; Notice of Application, 25344-25346 [E7-8504]
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25344
Federal Register / Vol. 72, No. 86 / Friday, May 4, 2007 / Notices
ROUTINE USES OF RECORDS MAINTAINED IN THE
SYSTEM:
Peace Corps general routine uses A, B,
C, D, E, F, G, H, I, J, K and L apply to
this system. Records may also be
disclosed to:
1. The Department of Treasury for
disbursements to vendors and travelers;
or
2. The Department of State for
disbursements to vendors and travelers.
3. The Department of Treasury for
debt collection and to conduct a
computer matching program in order to
collect debts.
4. The Internal Revenue Service for
tax reporting and submission of W–2
and 1099 information.
5. General Services Administration for
Federal Procurement Data System
(FPDS) reporting on contracts awarded.
6. Other Federal agencies with whom
PC has established Interagency/
Reimbursable Agreements.
POLICIES AND PRACTICES FOR STORING,
RETRIEVING, ACCESSING, RETAINING, AND
DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
In a computerized database with
background documentation or reports
available on paper.
RETRIEVABILITY:
By name, Volunteer ID number, SSN,
contract or purchase order number,
invoice number, payment batch number,
customer number or vendor number,
DUNS number. Paper records are
retrieved according to Volunteer name,
country location code, purchase order
number, contract number, project
number, vendor name, and SF1166
Schedule of Payments number.
retained for a minimum of 8 years. The
paper records of vouchers, contracts
(with award amounts greater than
$25,000), procurement files, and
schedules of payments are retained for
up to 6 years and 3 months after the
fiscal year of the award or after the final
payment has been issued; Volunteers/
Trainees records are retained up to 7
years and 3 months after the Volunteer/
Trainee has terminated or closed
service; and records of donors are held
for up to 7 years unless they are no
longer needed.
SYSTEM MANAGER:
Chief Financial Officer, Office of the
Chief Financial Officer, U.S. Peace
Corps, 1111 20th St., NW., Washington,
DC 20526–0001.
PROCEDURES FOR NOTIFICATION, ACCESS, AND
CONTESTING:
Any individual who wants to know
whether this system of records contains
a record about himself or herself, who
wants access to his or her record, or
who wants to contest the contents of a
record, should make a written request to
the System Manager or Privacy Act
Officer. Requesters will be required to
provide adequate identification, such as
a driver’s license, employee
identification card, or other identifying
document. Additional identification
procedures may be required in some
instances. Requests for correction or
amendment must identify the record to
be changed and the corrective action
sought. Complete Peace Corps Privacy
Act procedures are set out in 22 CFR
part 308.
RECORD SOURCE CATEGORIES:
Record subject and Peace Corps staff.
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SAFEGUARDS:
Computerized records are maintained
in a secure, password-protected
computer system. These records are
available to Peace Corps employees and
contractors with assigned duties
requiring work with the records on a
day-to-day basis. The office supervisors
authorize the appropriate level of FMS
record access for each user. FMS
databases are backed up nightly. The
domestic back-up media is stored in a
data center until delivered to GSA/DODapproved facilities for offsite storage.
Back-up media in overseas PC offices is
stored on site in fire-proof containers.
Paper records are maintained in
lockable file cabinets. The paper records
and computer media are maintained in
secure, access-controlled areas or
buildings.
RETENTION AND DISPOSAL:
Computerized records are stored
within the FMS database and are being
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EXEMPTIONS CLAIMED FOR THE SYSTEM:
None.
Dated: May 1, 2007.
Wilbert Bryant,
Associate Director—Management.
[FR Doc. 07–2211 Filed 5–3–07; 8:45 am]
BILLING CODE 6015–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
27808; 812–13373]
The Gabelli Equity Trust Inc., et al.;
Notice of Application
April 30, 2007.
AGENCY: Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application under
section 17(b) of the Investment
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Company Act of 1940 (the ‘‘Act’’) for an
exemption from section 17(a) of the Act
and for an order under section 17(d) of
the Act and rule 17d–1 thereunder.
The Gabelli Equity Trust
Inc. (the ‘‘Trust’’), The Gabelli
Healthcare & WellnessRX Trust (the
‘‘Healthcare Trust’’), and Gabelli Funds,
LLC (‘‘Gabelli’’).
SUMMARY OF APPLICATION: Applicants
seek an order to permit the Trust to
transfer a portion of its assets to the
Healthcare Trust, a newly formed,
wholly-owned subsidiary that is a
registered closed-end investment
company, and to distribute to the
Trust’s shareholders the shares of the
Healthcare Trust.
FILING DATES: The application was filed
on April 2, 2007 and amended on April
16, 2007 and April 26, 2007.
HEARING OR NOTIFICATION OF HEARING: An
order granting the application will be
issued unless the Commission orders a
hearing. Interested persons may request
a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 21, 2007, and
should be accompanied by proof of
service on the applicants, in the form of
an affidavit, or, for lawyers, a certificate
of service. Hearing requests should state
the nature of the writer’s interest, the
reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by writing to the
Commission’s Secretary.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F
Street, NE., Washington, DC, 20549–
1090; Applicants, c/o Rose F.
DiMartino, Esq., Willkie Farr &
Gallagher LLP, 787 Seventh Avenue,
New York, New York 10019–6099.
FOR FURTHER INFORMATION CONTACT:
Shannon Conaty, Senior Counsel, at
(202) 551–6827, or Julia K. Gilmer,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Office of Investment Company
Regulation).
APPLICANTS:
The
following is a summary of the
application. The complete application
may be obtained for a fee at the
Commission’s Public Reference Branch,
100 F Street, NE., Washington, DC,
20549–0102 (tel. (202) 551–8090).
SUPPLEMENTARY INFORMATION:
Applicants’ Representations
1. The Trust is a non-diversified,
closed-end management investment
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Federal Register / Vol. 72, No. 86 / Friday, May 4, 2007 / Notices
company registered under the Act. The
Healthcare Trust was formed on
February 20, 2007, and filed a
notification of registration on Form N–
8A on February 28, 2007 to register
under the Act as a non-diversified,
closed-end management investment
company. The Healthcare Trust will file
a registration statement under the Act
on Form N–2 within 90 days after the
filing of the Form N–8A. Application
will be made to list the Healthcare
Trust’s common shares for trading on
the New York Stock Exchange. Gabelli
is registered as an investment adviser
under the Investment Advisers Act of
1940 and serves as the investment
adviser to the Trust and the Healthcare
Trust.
2. The Trust owns a single share of
the Healthcare Trust’s common shares
of beneficial interest which was issued
in consideration of the Trust’s
contribution to the Healthcare Trust of
the $8 initial net asset value. Five of the
eight persons who currently serve as the
Trust’s directors are also trustees of the
eight-member Healthcare Trust’s board
of directors and four of the Trust’s
principal executive officers hold the
same offices with the Healthcare Trust.
3. The Board of Directors (‘‘Board’’) of
the Trust has approved, subject to the
requested relief and subsequent
shareholder approval, the contribution
of a segment of the Trust’s net assets
having a value of approximately $70
million to the Healthcare Trust in
exchange for additional shares of
common stock of the Healthcare Trust,
which together with the share currently
held by the Trust, will constitute all of
the shares of common stock of the
Healthcare Trust. It is anticipated that
the contributed assets will consist
largely or exclusively of cash and shortterm fixed income instruments. All the
common shares of the Healthcare Trust
then will be distributed by the Trust as
a dividend to its shareholders at a rate
of one share of the Healthcare Trust
common share for every 20 common
shares held of the Trust. The
contribution of the Trust assets to the
Healthcare Trust and the subsequent
distribution of the Healthcare Trust
common shares to the Trust
shareholders are referred to as the
‘‘Transaction.’’
4. The Board, including all of the
directors who are not ‘‘interested
persons’’ as defined by section 2(a)(19)
of the Act (the ‘‘Disinterested
Directors’’), concluded, among other
things, that the Transaction will result
in the following benefits to Trust
shareholders: (a) Shareholders will
receive shares of an investment
company with a different risk-return
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profile than the Trust; (b) shareholders
will acquire the Healthcare Trust
common shares at a much lower
transaction cost than is typically the
case for a newly-organized closed-end
equity fund since there will be no
underwriting discounts or commissions;
and (c) shareholders will be able to seek
capital appreciation opportunities
presented by the Healthcare Trust
market segment.
5. The Trust does not expect that it
will recognize significant taxable gain
on its contribution of cash and
securities to the Healthcare Trust in
exchange for shares of the Healthcare
Trust. The Healthcare Trust has been
advised by counsel that the distribution
of shares of the Healthcare Trust to
Trust shareholders likely will be a
taxable event for Trust shareholders
and, under certain circumstances, will
be a taxable event for the Trust.
However, the Transaction is not
expected to increase significantly the
total amount of taxable distributions
received by the Trust’s common
shareholders for the year in which the
Transaction is consummated and is not
expected to result in the recognition of
significant taxable gain by the Trust.
The Board, including all of the
Disinterested Directors, considered the
tax consequences of the Transaction and
believes that the benefits of the
Transaction outweigh any adverse tax
consequences to the Trust and its
shareholders.
6. The costs of organizing the
Healthcare Trust and effecting the
distribution of the Healthcare Trust’s
shares to the Trust’s shareholders,
including the fees and expense of
counsel and accountants and printing,
listing, and registration fees, are
estimated to be approximately $700,000
and will be borne by the Trust. The
Trust will bear the costs of soliciting its
shareholders’ approval of the
Transaction and the costs incurred in
connection with this application for
exemptive relief. In addition, the
Healthcare Trust will incur operating
expenses on an ongoing basis, including
legal, auditing, transfer agency, and
custodian expenses that, when
aggregated with the fees payable by the
Trust for similar services after the
distribution, will likely exceed the fees
currently payable by the Trust for those
services. The Board, including the
Disinterested Directors, concluded that
it is appropriate for the Trust to bear the
Transaction’s cost inasmuch as the
benefits of the Transaction will be for
the Trust’s common shareholders and
because absorption of such expenses
will eliminate any decrease in the net
asset value of the Healthcare Trust’s
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25345
shares in comparison to the amount of
the distribution, which may support the
pricing of the Healthcare Trust shares
on the New York Stock Exchange. It is
not expected that the Transaction will
have significant effect on the annual
expenses of the Trust as a percentage of
its assets.
Applicants’ Legal Analysis
1. Section 17(a) of the Act generally
prohibits sales or purchases of securities
between a registered investment
company and an affiliated person.
Section 2(a)(3) of the Act defines an
‘‘affiliated person’’ of another person to
include (a) any person directly or
indirectly owning, controlling, or
holding with power to vote 5% or more
of the outstanding voting securities of
the other person, (b) any person 5% or
more of whose voting securities are
directly or indirectly owned controlled
or held with the power to vote by the
other person, and (c) any person directly
or indirectly controlling, controlled by,
or under common control with, the
other person. The Trust may be viewed
as an affiliated person of the Healthcare
Trust under section 2(a)(3) since the
Trust will own 100 percent of the
Healthcare Trust’s voting securities
until the consummation of the
Transaction. The Healthcare Trust may
similarly be considered an affiliated
person of the Trust since 100 percent of
the Healthcare Trust’s voting securities
will be owned by the Trust. The Trust
and the Healthcare Trust also may be
viewed as affiliated persons of each
other to the extent that they may be
deemed to be under the common control
of Gabelli and because five of the same
persons serve as the directors and four
of the same persons serve as officers of
both companies. As a result of the
affiliation between the Trust and the
Healthcare Trust, section 17(a) would
prohibit the Transaction.
2. Applicants request an exemption
pursuant to section 17(b) of the Act from
the provisions of section 17(a) in order
to permit the Trust to effect the
Transaction. Section 17(b) authorizes
the Commission to issue such an
exemptive order if the Commission
finds that the terms of the proposed
transaction are fair and reasonable and
do not involve overreaching on the part
of any persons concerned, and the
proposed transaction is consistent with
the policy of each registered investment
company and the general purposes of
the Act.
3. Applicants assert that the terms of
the Transaction, including the
consideration to be paid or received, are
fair and reasonable and do not involve
overreaching by any person concerned.
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25346
Federal Register / Vol. 72, No. 86 / Friday, May 4, 2007 / Notices
Applicants state that the proposed sale
by the Trust of a portion of its assets to
the Healthcare Trust in exchange for the
securities of the Healthcare Trust will be
based on the fair value of those assets
computed on the day of the proposed
transfer in the same manner as for
purposes of the daily net asset valuation
for the Trust. Applicants further state
that such assets are anticipated to
consist largely or exclusively of cash
and short-term fixed income
instruments and thus will likely pose
few, if any, issues with respect to
valuation. The Healthcare Trust shares
distributed by the Trust in the
Transaction will be valued based on the
value of the Healthcare Trust’s assets.
‘‘Value’’ for those purposes will be
determined in accordance with the
provisions of section 2(a)(41) of the Act
and rule 2a–4 under the Act.
4. With respect to the Transaction,
each of the Trust’s Board and the
Healthcare Trust’s Board, including a
majority of the Disinterested Directors of
each Board, determined that the
participation in the Transaction is in the
best interests of the Trust or the
Healthcare Trust, as applicable, and that
the interests of the existing shareholders
of the Trust or the Healthcare Trust, as
applicable, will not be diluted as a
result of the Transaction. These
findings, and the basis upon which the
findings were made, will be recorded
fully in the minute book of the Trust or
the Healthcare Trust, as applicable.
5. Applicants state that the
Transaction will be consistent with the
stated investment policies of the Trust
and the Healthcare Trust as disclosed to
shareholders. The distribution of the
Healthcare Trust shares will not initially
change the position of the Trust’s
shareholders with respect to the
underlying investments that they then
own. A proxy statement/prospectus of
the Trust and the Healthcare Trust is
being used to solicit the approval of the
Trust’s shareholders of the Transaction
at a vote to take place following the
issuance of the exemptive order. The
Trust’s shareholders will have the
opportunity to vote on the Transaction
after having received disclosure
concerning the Transaction.
6. Applicants also seek an order under
section 17(d) of the Act and rule 17d–
1 under the Act. Section 17(d) and rule
17d–1 prohibit affiliated persons from
participating in joint arrangements with
a registered investment company unless
authorized by the Commission. In
passing on applications for these orders,
rule 17d–1 provides that the
Commission will consider whether the
participation of the investment
company is consistent with the
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provisions, policies and purposes of the
Act, and the extent to which the
participation is on a basis different from
or less advantageous than that of the
other participants. Applicants request
an order pursuant to rule 17d–1 to the
extent that the participation of the
applicants in the Transaction may be
deemed to constitute a prohibited joint
transaction.
7. Applicants state that the
Transaction will not place any of the
Trust, the Healthcare Trust, or existing
shareholders of the Trust in a position
less advantageous than that of any other
person. As noted, the value of the
Trust’s assets transferred to the
Healthcare Trust (and the common
shares received in return) will be based
on their fair value as computed on the
day of the transfer in accordance with
the requirements of the Act. The shares
of the Healthcare Trust will be
distributed as a dividend to the
shareholders, leaving the shareholders
in the same investment posture
immediately following the Transaction
as before, subject only to changes in
market price of the underlying assets
subsequent to the Transaction.
8. Applicants assert that the
Transaction has been proposed in order
to benefit the shareholders of the Trust
as well as the Healthcare Trust, and
neither Gabelli nor any other affiliated
person of the Trust or the Healthcare
Trust will receive fees solely as a result
of the Transaction. The fee indirectly
payable to Gabelli by the Healthcare
Trust’s shareholders will be the same as
the fee currently indirectly payable to
Gabelli by the Trust’s shareholders. In
addition, by creating the Healthcare
Trust through the Transaction, the Trust
is effectively enabling its shareholders
to receive securities without the costs
associated with a public offering.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–8504 Filed 5–3–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
27807; 812–13286]
Old Westbury Funds, Inc. and
Bessemer Investment Management
LLC; Notice of Application
April 27, 2007.
AGENCY: Securities and Exchange
Commission (‘‘Commission’’).
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ACTION: Notice of application for an
order under section 6(c) of the
Investment Company Act of 1940 (the
‘‘Act’’) for an exemption from section
15(a) of the Act and rule 18f–2 under
the Act, as well as from certain
disclosure requirements.
Old Westbury Funds, Inc.
(the ‘‘Corporation’’) and Bessemer
Investment Management LLC (the
‘‘Adviser’’).
APPLICANTS:
The application was filed
on April 24, 2006, and amended on
April 26, 2007.
FILING DATES:
An
order granting the application will be
issued unless the Commission orders a
hearing. Interested persons may request
a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 22, 2007, and
should be accompanied by proof of
service on the applicants, in the form of
an affidavit, or, for lawyers, a certificate
of service. Hearing requests should state
the nature of the writer’s interest, the
reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by writing to the
Commission’s Secretary.
HEARING OR NOTIFICATION OF HEARING:
ADDRESSES: Secretary, U.S. Securities &
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090;
Applicants, c/o Robert M. Kurucza,
Morrison & Foerster LLP, 2000
Pennsylvania Avenue, NW., Suite 5500,
Washington, DC 20006.
FOR FURTHER INFORMATION CONTACT:
Bruce R. MacNeil, Senior Counsel, at
(202) 551–6817 or Julia Kim Gilmer,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Office of Investment Company
Regulation).
The
following is a summary of the
application. The complete application
may be obtained for a fee at the
Commission’s Public Reference Branch,
100 F Street, NE., Washington, DC
20549–0102 (telephone (202) 551–5850).
SUPPLEMENTARY INFORMATION:
Applicants’ Representations
1. The Corporation, a Maryland
corporation, is registered under the Act
as an open-end management investment
company. The Corporation currently is
comprised of seven series (each a
‘‘Fund’’ and collectively, the ‘‘Funds’’),
each with separate investment
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]]>Agencies
[Federal Register Volume 72, Number 86 (Friday, May 4, 2007)]
[Notices]
[Pages 25344-25346]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-8504]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 27808; 812-13373]
The Gabelli Equity Trust Inc., et al.; Notice of Application
April 30, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice of an application under section 17(b) of the Investment
Company Act of 1940 (the ``Act'') for an exemption from section 17(a)
of the Act and for an order under section 17(d) of the Act and rule
17d-1 thereunder.
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Applicants: The Gabelli Equity Trust Inc. (the ``Trust''), The Gabelli
Healthcare & WellnessRX Trust (the ``Healthcare Trust''),
and Gabelli Funds, LLC (``Gabelli'').
Summary of Application: Applicants seek an order to permit the Trust to
transfer a portion of its assets to the Healthcare Trust, a newly
formed, wholly-owned subsidiary that is a registered closed-end
investment company, and to distribute to the Trust's shareholders the
shares of the Healthcare Trust.
Filing Dates: The application was filed on April 2, 2007 and amended on
April 16, 2007 and April 26, 2007.
Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on May 21, 2007, and should be accompanied by proof of service on
the applicants, in the form of an affidavit, or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC, 20549-1090; Applicants, c/o Rose F.
DiMartino, Esq., Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New
York, New York 10019-6099.
FOR FURTHER INFORMATION CONTACT: Shannon Conaty, Senior Counsel, at
(202) 551-6827, or Julia K. Gilmer, Branch Chief, at (202) 551-6821
(Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Branch, 100 F Street, NE., Washington,
DC, 20549-0102 (tel. (202) 551-8090).
Applicants' Representations
1. The Trust is a non-diversified, closed-end management investment
[[Page 25345]]
company registered under the Act. The Healthcare Trust was formed on
February 20, 2007, and filed a notification of registration on Form N-
8A on February 28, 2007 to register under the Act as a non-diversified,
closed-end management investment company. The Healthcare Trust will
file a registration statement under the Act on Form N-2 within 90 days
after the filing of the Form N-8A. Application will be made to list the
Healthcare Trust's common shares for trading on the New York Stock
Exchange. Gabelli is registered as an investment adviser under the
Investment Advisers Act of 1940 and serves as the investment adviser to
the Trust and the Healthcare Trust.
2. The Trust owns a single share of the Healthcare Trust's common
shares of beneficial interest which was issued in consideration of the
Trust's contribution to the Healthcare Trust of the $8 initial net
asset value. Five of the eight persons who currently serve as the
Trust's directors are also trustees of the eight-member Healthcare
Trust's board of directors and four of the Trust's principal executive
officers hold the same offices with the Healthcare Trust.
3. The Board of Directors (``Board'') of the Trust has approved,
subject to the requested relief and subsequent shareholder approval,
the contribution of a segment of the Trust's net assets having a value
of approximately $70 million to the Healthcare Trust in exchange for
additional shares of common stock of the Healthcare Trust, which
together with the share currently held by the Trust, will constitute
all of the shares of common stock of the Healthcare Trust. It is
anticipated that the contributed assets will consist largely or
exclusively of cash and short-term fixed income instruments. All the
common shares of the Healthcare Trust then will be distributed by the
Trust as a dividend to its shareholders at a rate of one share of the
Healthcare Trust common share for every 20 common shares held of the
Trust. The contribution of the Trust assets to the Healthcare Trust and
the subsequent distribution of the Healthcare Trust common shares to
the Trust shareholders are referred to as the ``Transaction.''
4. The Board, including all of the directors who are not
``interested persons'' as defined by section 2(a)(19) of the Act (the
``Disinterested Directors''), concluded, among other things, that the
Transaction will result in the following benefits to Trust
shareholders: (a) Shareholders will receive shares of an investment
company with a different risk-return profile than the Trust; (b)
shareholders will acquire the Healthcare Trust common shares at a much
lower transaction cost than is typically the case for a newly-organized
closed-end equity fund since there will be no underwriting discounts or
commissions; and (c) shareholders will be able to seek capital
appreciation opportunities presented by the Healthcare Trust market
segment.
5. The Trust does not expect that it will recognize significant
taxable gain on its contribution of cash and securities to the
Healthcare Trust in exchange for shares of the Healthcare Trust. The
Healthcare Trust has been advised by counsel that the distribution of
shares of the Healthcare Trust to Trust shareholders likely will be a
taxable event for Trust shareholders and, under certain circumstances,
will be a taxable event for the Trust. However, the Transaction is not
expected to increase significantly the total amount of taxable
distributions received by the Trust's common shareholders for the year
in which the Transaction is consummated and is not expected to result
in the recognition of significant taxable gain by the Trust. The Board,
including all of the Disinterested Directors, considered the tax
consequences of the Transaction and believes that the benefits of the
Transaction outweigh any adverse tax consequences to the Trust and its
shareholders.
6. The costs of organizing the Healthcare Trust and effecting the
distribution of the Healthcare Trust's shares to the Trust's
shareholders, including the fees and expense of counsel and accountants
and printing, listing, and registration fees, are estimated to be
approximately $700,000 and will be borne by the Trust. The Trust will
bear the costs of soliciting its shareholders' approval of the
Transaction and the costs incurred in connection with this application
for exemptive relief. In addition, the Healthcare Trust will incur
operating expenses on an ongoing basis, including legal, auditing,
transfer agency, and custodian expenses that, when aggregated with the
fees payable by the Trust for similar services after the distribution,
will likely exceed the fees currently payable by the Trust for those
services. The Board, including the Disinterested Directors, concluded
that it is appropriate for the Trust to bear the Transaction's cost
inasmuch as the benefits of the Transaction will be for the Trust's
common shareholders and because absorption of such expenses will
eliminate any decrease in the net asset value of the Healthcare Trust's
shares in comparison to the amount of the distribution, which may
support the pricing of the Healthcare Trust shares on the New York
Stock Exchange. It is not expected that the Transaction will have
significant effect on the annual expenses of the Trust as a percentage
of its assets.
Applicants' Legal Analysis
1. Section 17(a) of the Act generally prohibits sales or purchases
of securities between a registered investment company and an affiliated
person. Section 2(a)(3) of the Act defines an ``affiliated person'' of
another person to include (a) any person directly or indirectly owning,
controlling, or holding with power to vote 5% or more of the
outstanding voting securities of the other person, (b) any person 5% or
more of whose voting securities are directly or indirectly owned
controlled or held with the power to vote by the other person, and (c)
any person directly or indirectly controlling, controlled by, or under
common control with, the other person. The Trust may be viewed as an
affiliated person of the Healthcare Trust under section 2(a)(3) since
the Trust will own 100 percent of the Healthcare Trust's voting
securities until the consummation of the Transaction. The Healthcare
Trust may similarly be considered an affiliated person of the Trust
since 100 percent of the Healthcare Trust's voting securities will be
owned by the Trust. The Trust and the Healthcare Trust also may be
viewed as affiliated persons of each other to the extent that they may
be deemed to be under the common control of Gabelli and because five of
the same persons serve as the directors and four of the same persons
serve as officers of both companies. As a result of the affiliation
between the Trust and the Healthcare Trust, section 17(a) would
prohibit the Transaction.
2. Applicants request an exemption pursuant to section 17(b) of the
Act from the provisions of section 17(a) in order to permit the Trust
to effect the Transaction. Section 17(b) authorizes the Commission to
issue such an exemptive order if the Commission finds that the terms of
the proposed transaction are fair and reasonable and do not involve
overreaching on the part of any persons concerned, and the proposed
transaction is consistent with the policy of each registered investment
company and the general purposes of the Act.
3. Applicants assert that the terms of the Transaction, including
the consideration to be paid or received, are fair and reasonable and
do not involve overreaching by any person concerned.
[[Page 25346]]
Applicants state that the proposed sale by the Trust of a portion of
its assets to the Healthcare Trust in exchange for the securities of
the Healthcare Trust will be based on the fair value of those assets
computed on the day of the proposed transfer in the same manner as for
purposes of the daily net asset valuation for the Trust. Applicants
further state that such assets are anticipated to consist largely or
exclusively of cash and short-term fixed income instruments and thus
will likely pose few, if any, issues with respect to valuation. The
Healthcare Trust shares distributed by the Trust in the Transaction
will be valued based on the value of the Healthcare Trust's assets.
``Value'' for those purposes will be determined in accordance with the
provisions of section 2(a)(41) of the Act and rule 2a-4 under the Act.
4. With respect to the Transaction, each of the Trust's Board and
the Healthcare Trust's Board, including a majority of the Disinterested
Directors of each Board, determined that the participation in the
Transaction is in the best interests of the Trust or the Healthcare
Trust, as applicable, and that the interests of the existing
shareholders of the Trust or the Healthcare Trust, as applicable, will
not be diluted as a result of the Transaction. These findings, and the
basis upon which the findings were made, will be recorded fully in the
minute book of the Trust or the Healthcare Trust, as applicable.
5. Applicants state that the Transaction will be consistent with
the stated investment policies of the Trust and the Healthcare Trust as
disclosed to shareholders. The distribution of the Healthcare Trust
shares will not initially change the position of the Trust's
shareholders with respect to the underlying investments that they then
own. A proxy statement/prospectus of the Trust and the Healthcare Trust
is being used to solicit the approval of the Trust's shareholders of
the Transaction at a vote to take place following the issuance of the
exemptive order. The Trust's shareholders will have the opportunity to
vote on the Transaction after having received disclosure concerning the
Transaction.
6. Applicants also seek an order under section 17(d) of the Act and
rule 17d-1 under the Act. Section 17(d) and rule 17d-1 prohibit
affiliated persons from participating in joint arrangements with a
registered investment company unless authorized by the Commission. In
passing on applications for these orders, rule 17d-1 provides that the
Commission will consider whether the participation of the investment
company is consistent with the provisions, policies and purposes of the
Act, and the extent to which the participation is on a basis different
from or less advantageous than that of the other participants.
Applicants request an order pursuant to rule 17d-1 to the extent that
the participation of the applicants in the Transaction may be deemed to
constitute a prohibited joint transaction.
7. Applicants state that the Transaction will not place any of the
Trust, the Healthcare Trust, or existing shareholders of the Trust in a
position less advantageous than that of any other person. As noted, the
value of the Trust's assets transferred to the Healthcare Trust (and
the common shares received in return) will be based on their fair value
as computed on the day of the transfer in accordance with the
requirements of the Act. The shares of the Healthcare Trust will be
distributed as a dividend to the shareholders, leaving the shareholders
in the same investment posture immediately following the Transaction as
before, subject only to changes in market price of the underlying
assets subsequent to the Transaction.
8. Applicants assert that the Transaction has been proposed in
order to benefit the shareholders of the Trust as well as the
Healthcare Trust, and neither Gabelli nor any other affiliated person
of the Trust or the Healthcare Trust will receive fees solely as a
result of the Transaction. The fee indirectly payable to Gabelli by the
Healthcare Trust's shareholders will be the same as the fee currently
indirectly payable to Gabelli by the Trust's shareholders. In addition,
by creating the Healthcare Trust through the Transaction, the Trust is
effectively enabling its shareholders to receive securities without the
costs associated with a public offering.
For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-8504 Filed 5-3-07; 8:45 am]
BILLING CODE 8010-01-P
