[Federal Register Volume 60, Number 32 (Thursday, February 16, 1995)]
[Notices]
[Pages 9073-9074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3885]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20896; 811-6433]
Smith Breeden Institutional Intermediate Duration U.S. Government
Fund; Notice of Application
February 10, 1995.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of application for deregistration under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANT: Smith Breeden Institutional Intermediate Duration U.S.
Government Fund.
RELEVANT ACT SECTION: Order requested under section 8(f).
SUMMARY OF APPLICATION: Applicant seeks an order declaring it has
ceased to be an investment company.
FILING DATES: The application was filed on November 21, 1994 and
amended on February 6, 1995.
HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the SEC orders a hearing. Interested persons may
request a hearing by writing to the SEC's Secretary and serving
applicant with a copy of the request, personally or by mail. Hearing
requests should be received by the SEC by 5:30 p.m. on March 7, 1995,
and should be accompanied by proof of service on the applicant, 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 may request
notification of a hearing by writing to the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street NW., Washington, D.C.
20549. Applicant, 200 Europa Drive, Suite 200, Chapel Hill, North
Carolina 27514.
FOR FURTHER INFORMATION CONTACT:
Marianne H. Khawly, Staff Attorney, at (202) 942-0562, or C. David
Messman, Branch Chief, at (202) 942-0564 (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 from
the SEC's Public Reference Branch.
Applicant's Representations
1. Applicant is a registered open-end, diversified, management
investment company under the Act and is organized as a business trust
under the laws of the Commonwealth of Massachusetts. On October 8,
1991, applicant filed a Notification of Registration on Form N-8A
pursuant to section 8(a) of the Act and a registration statement on
Form N-1A under section 8(b) of the Act. With respect to the securities
issued by applicant pursuant to the Securities Act of 1933, a
registration statement on Form N-1A was filed on November 29, 1991. The
registration statement became effective on February 24, 1992, and
applicant's initial public offering commenced on March 12, 1992.
2. At a joint meeting held on June 2, 1994, applicant's Board of
Trustee (the ``Trustees'') unanimously determined that applicant's
continuation was no longer in the best interest of applicant or its
shareholders. The Trustees determined that applicant's
[[Page 9074]] shareholders would be better served by a liquidation of
applicant's assets. The Trustees reached this conclusion based upon the
recommendation of Smith Breeden Associates, Inc. (the ``Adviser'') that
applicant's master-feeder structure was no longer the most economically
viable alternative over the long term. The master-feeder structure was
chosen initially to allow for flexibility in distribution. The
Intermediate Series initially had a load and was to be marketed by
brokers to a retail market. This plan was not successful and assets
only grew to $8 million after two years. The Adviser was supporting an
expense cap in both the master and feeder funds creating redundancies
in expenses at small asset levels. After two years, the Adviser
concluded that it could no longer support the expense caps. The
Trustees voted to approve a plan of liquidation whereby the assets of
applicant would be distributed in case or in-kind to applicant's
shareholders in complete liquidation of the applicant.
3. According to applicant's Declaration of Trust, no shareholder
vote was required. Prior to the time of liquidation, applicant was
required to notify shareholders of the plan of liquidation in the form
of a letter signed by a majority of the Trustees. The letter was sent
by overnight courier on July 28, 1994.
4. On August 1, 1994, immediately preceding the liquidation,
applicant had a total of 895,357.904 shares of beneficial interest
outstanding. At such time, applicant's aggregate and per share net
asset value was $8,813,488.2 and $9.843, respectively.
5. All portfolio securities and any other assets of applicant were
distributed to applicant's shareholders in connection with the
liquidation. On August 1, 1994, applicant transferred its assets to its
shareholders at fair market value in cancellation of their shares.
Prior to the liquidating distribution, Smith Breeden Intermediate
Duration U.S. Government Series (``Intermediate Series'') held a
majority of applicant's shares (870,004.56). The Intermediate Series
received all of applicant's investments and remaining cash. The
Intermediate Series assumed all of applicant's liabilities which
consisted of: $7,483,827 for accounts payable for securities purchased;
$3,697 for accrued expenses; and $2,652 for investment advisory fees.
The value of assets and cash received by the Intermediate Series was
$8,563,932.70.
6. On August 1, 1994, applicant transferred cash to its minority
share-holders in the amount of $249,555.50. This payment was equal to
the net asset value of such shareholders' shares on such date. Prior to
the plan of liquidation, minority shareholders held 25,353.344 shares.
7. On July 29, 1994, the balance of unamortized organizational
expenses was $24,256. Initially, these expenses were paid by the
Adviser and applicant established an Account Payable for Organization
Costs (The ``Account'') to the Adviser.
On July 29, 1994, the balance in the Account equalled the balance
of unamortized organizational expenses. In liquidation, the Adviser
forgave the Account and relinquished its right to be reimbursed for the
organization costs it paid.
8. All expenses incurred in connection with applicant's liquidation
were borne by the Intermediate Series. Such expenses, totalling $2,000,
included legal and drafting fees.
9. As of the date of the application, applicant has no assets,
debts, or shareholders. Applicant is not a party to any litigation or
administrative proceeding. Applicant is neither engaged in nor proposes
to engage in any business activities other than those necessary for the
winding-up of its affairs.
10. Applicant will terminate its existence as a business trust
under Massachusetts law.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-3885 Filed 2-15-95; 8:45 am]
BILLING CODE 8010-01-M
