27116 Federal Register / Vol. 61, No. 105 / Thursday, May 30, 1996 / Notices

the Reorganization would deprive

Stagecoach and its shareholders of the

services of skilled individuals

possessing considerable experience and

financial and business acumen at a time

when their experience may be most

needed. Adding a substantial number of

disinterested directors to the Board

would require a lengthy interview and

selection process, which could delay

and increase the cost of the

Reorganization, and could make the

Board unwieldy. Further, applicants

state that the three interested directors

remaining after the Reorganization will

continue to be treated as interested

persons of Stagecoach and of Wells

Fargo Bank for all purposes other than

section 15(f)(1)(A).

8. Applicants also believe that the

requested exemption is consistent with

the purposes fairly intended by the

policies and provisions of the Act.

Applicants submit that section 15(f) is

intended to permit the SEC to deal

flexibly with situations where the

imposition of the 75% requirement

might pose an unnecessary obstacle or

burden on a fund. Further, applicants

state that section 15(f) was intended to

ensure that, where there is a change in

control of an investment adviser, the

interests of the investment company

shareholders will be protected and they

will not be subject to any unfair burden

as a result of such transaction.

Applicants argue that the proposed

Reorganization is structured to protect

the interests of the shareholders of the

Pacifica Funds Trust and Stagecoach

and that shareholders will benefit from

the requested exemption.

Applicants’ Condition

Applicants agree as conditions to the

issuance of the requested exemptive

order that:

If within three years of the

consummation of the Holding Company

Merger (assuming the Reorganization is

also consummated), it becomes

necessary to replace any director, that

director will be replaced by a director

who is not an ‘‘interested person’’ of

Wells Fargo Bank or FICM within the

meaning of section 2(a)(19)(B) of the

Act, unless at least 75% of the directors

at that time are not interested persons of

Wells Fargo Bank or FICM.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–13545 Filed 5–29–96; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21980; 812–10104]

THC Partners; Notice of Application

May 23, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: THC Partners.

RELEVANT ACT SECTIONS: Order requested

under section 6(c) of the Act for an

exemption from all provisions of the

Act.

SUMMARY OF APPLICATION: Applicant

requests an exemption from all

provisions of the Act. Applicant is a

private family-controlled special

purpose investment vehicle whose

interests are owned by the family and

certain other persons.

FILING DATES: The application was filed

on April 23, 1996 and amended on May

23, 1996.

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 applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

June 17, 1996, 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 SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicant: 4200 Texas Commerce

Tower, 600 Travis, Houston, Texas

77002.

FOR FURTHER INFORMATION CONTACT:

Marianne H. Khawly, Staff Attorney, at

(202) 942–0562, or Alison E. Baur,

Branch Chief, at (202) 942–0564 (Office

of Investment Company Regulation,

Division of Investment Management).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is a Texas general

partnership organized in 1977.

Applicant’s partners consist of the

maternal heirs of Howard R. Hughes, Jr.

(‘‘Howard Hughes’’), including trusts

established for family members of

maternal heirs and estates of deceased

maternal heirs (collectively, the

‘‘Hughes Maternal Heirs’’) and partners

and former partners of Andrews &

Kurth, L.L.P. (‘‘Andrews & Kurth’’), a

Houston law firm, including trusts

established for Andrews & Kurth family

members and heirs of deceased

Andrews & Kurth partners (collectively,

‘‘A&K’’). Applicant’s assets presently

consist of common stock of The Hughes

Corporation (‘‘THC’’) and limited

partnership interests in Howard Hughes

Properties, L.P. (‘‘HHPLP’’) (collectively,

‘‘Hughes’’). Hughes was formed to hold,

manage, and develop the assets of the

estate of Howard Hughes (the ‘‘Hughes

Estate’’) including casinos, a large

military aircraft manufacturer, and

widespread real estate holdings.

2. Howard Hughes dies in April 1976

unmarried and childless. A complex

estate battle began when 32 wills were

offered for probate, and California,

Nevada, and Texas each claimed

domicile for purposes of subjecting

Howard Hughes’ assets to death taxes.

Andrews & Kurth represented Howard

Hughes and various of his companies

for over 50 years. William R. Lummis,

son of Annette Gano Lummis, Howard

Hughes’ aunt, and a senior partner at

Andrews & Kurth, left the firm shortly

after Howard Hughes’ death to

undertake management of the Hughes

Estate and serve as executive officer of

Hughes.

3. The Hughes Maternal Heirs,

claiming through Annette Gano

Lummis, the beneficiary holding the

largest single interest in the Hughes

Estate, did not possess the resources to

finance the long, complicated, multijurisdictional legal defense of their

claim. The Hughes Maternal Heirs and

A&K formed applicant to prosecute and

defend the claims of the Hughes

Maternal Heirs. In return for the

contribution of their interests in the

Hughes Estate, the Hughes Maternal

Heirs collectively received 662⁄3% of the

interests in applicant. In return for

undertaking to defend, or cause to be

defended, and otherwise to provide the

financial resources to further applicant’s

purposes, A&K received a 331⁄3%

interest in applicant. In 1983, the last of

the final, non-appealable orders

establishing ownership of the Hughes

Estate was issued that decreed that

applicant was the beneficiary of

approximately 71% of the Hughes

Estate’s assets. Other than through gifts

and testamentary dispositions, applicant

has not changed composition since its

inception. As of the date of the filing of

this application, the Hughes Maternal

Heirs owned 67.279% of the interests in
Federal Register / Vol. 61, No. 105 / Thursday, May 30, 1996 / Notices 27117

1The method chosen by Andrews & Kurth to

determine the relative interests of each of its

partners in the firm’s interest in the Partnership

resulted in an allocation to every person who was

a partner of the firm from 1976 to 1983.

2The Partnership is contractually restricted from

selling more than 50% of such shares for a period

of one year after consummation of the Rouse

Transaction.

3See Maritime Corporation, 9 SEC 906, 909

(1941).

4See, e.g., Pitcairn Group L.P, Investment

Company Act Release Nos. 21525 (Nov. 20, 1995)

(notice) and 21616 (Dec. 20, 1995) (order); Heber J.

Grant & Company, Investment Company Act

Release Nos. 20040 (Jan. 27, 1994) (notice) and

20091 (Feb. 23, 1994) (order); and Bessemer

Securities Corporation, Investment Company Act

Release Nos. 18529 (Feb. 5, 1992) (notice) and

18594 (Mar. 3, 1992) (order).

applicant and A&K owned 32.721%.

Currently, there are 86 Maternal Heirs

and 124 members of A&K.1

4. Applicant is internally managed by

three of the general partners (the

‘‘Managing Partners’’) who receive no

compensation. The current Managing

Partners are Platt W. Davis, III (‘‘Davis’’),

Frederick R. Lummis, Jr. (‘‘Frederick

Lummis’’), and Milton H. West, Jr.

(‘‘West’’). Davis holds interests in

applicant both as a donee of his mother,

an original Hughes Maternal Heir, and

as a legatee under the will of Annette

Gano Lummis. Frederick Lummis is

William Lummis’ brother. West has

been a partner of Andrews & Kurth for

over 50 years and was the partner in

charge of the firm’s representation of

Howard Hughes. The Managing Partners

originally were selected through

informal discussions among the Hughes

Maternal Heirs and A&K. The Managing

Partners are elected at large from among

applicant’s partners every three years

and were most recently elected in 1995.

A committee nominates proposed

Managing Partners for election but

partners holding interests aggregating

10% or more may propose competing

slates. Election is by secret written

ballot. Currently, the Managing Partners

receive no compensation for their

services.

5. Hughes has entered into a merger

agreement with The Rouse Company

(‘‘Rouse’’) that will result in Rouse

acquiring all of Hughes (the ‘‘Rouse

Transaction’’). After consummation of

the Rouse Transaction, applicant’s

assets will consist of: (a) Cash

consideration of approximately $85

million; (b) approximately 9 million

shares of Rouse (approximately 20% of

the outstanding Rouse shares); and (c)

contingent rights to receive additional

Rouse shares based on the future cash

flow generated from, and appraised

value of, certain properties acquired by

Rouse in the mergers (the ‘‘Earn-Out

Rights’’). The properties subject to the

Earn-Out Rights consist of undeveloped

land, rental properties, and interests

therein held in four discrete business

units in Las Vegas and Los Angeles. The

earn-out periods range from 5 to 14

years.

6. Applicant proposes to incur

administrative expenses in an amount

not to exceed 1⁄4 of 1% of assets

following consummation of the Rouse

Transaction (the ‘‘Administrative

Expense Cap’’). Any compensation paid

to the Managing Partners will be within

the Administrative Expense Cap.

7. Applicant contemplates continuing

its existence after the consummation of

the Rouse Transaction for several

reasons. First, applicant believes that it

can coordinate sales of Rouse shares in

the future by arranging block trades and

thereby avoid the disruptive effect of the

uncoordinated sale of a large amount of

stock by various partners acting

independently.2 Second, applicant

believes that significant cost savings can

be achieved through the joint

investment of the cash received in the

Rouse Transaction which would be

invested by the Managing Partners in

shares of a number of registered openend investment companies. Third,

applicant believes that issues involved

in the determination of the amount of

the Earn-Out Rights can be more

effectively managed by applicant than

by its partners individually. Fourth,

applicant, on behalf of its partners, is

presently involved in a controversy with

the Internal Revenue Service and

anticipates that litigation of the matter

will ensue (the ‘‘Federal Tax

Proceedings’’). The Internal Revenue

Service (‘‘IRS’’) has questioned

applicant’s partners’ reporting of their

income relative to applicant’s formation

and operation for its tax year 1987 and

subsequent years. Administrative

proceedings with respect to these

allegations recently have been

concluded without resolution of the

matter. The IRS may issue a notice of

final partnership administrative

adjustments which would be a predicate

to institution of litigation by applicant.

Applicant’s Legal Analysis

1. Section 3(a)(3) of the Act defines

investment company to include any

issuer that is engaged in the business of

investing, reinvesting, owning, holding,

or trading in securities, and owns or

proposes to acquire investment

securities having a value exceeding 40%

of the value of such issuer’s total

unconsolidated assets. Applicant

submits that it has been exempt from

registration under the Act because its

business has primarily consisted of its

interests in THC and HHPLP, both

majority-owned operating companies

engaged in real estate development.

Upon the consummation of the Rouse

Transaction, however, applicant will

become an ‘‘investment company’’ as

that term is defined in section 3(a)(3) of

the Act.

2. Applicant was established as a joint

venture between the Hughes Maternal

Heirs and A&K to pursue the Hughes

Maternal Heirs’ interest in the Hughes

Estate. Applicant contends that since

establishing a 70% interest in the

Hughes Estate, applicant has operated as

a privately owned and family-controlled

special purpose entity to which the Act

was not intended to apply. Applicant

represents that it has not sought, and

will not seek, new public or private

investors. In addition, each of the

partners is related to either the Hughes

Maternal Heirs or A&K.

3. Section 3(c)(1) of the Act excepts

from the definition of investment

company any issuer whose outstanding

securities are beneficially owned by not

more than 100 persons and which is not

making, and does not presently propose

to make, a public offering of its

securities. Applicant asserts that the

SEC may exempt private investment

companies that have more than 100

beneficial owners under section 6(c) of

the Act.3 Applicant contends that its

request for a conditional order under

section 6(c) of the Act is consistent with

relief granted to other private

investment companies substantially

owned and controlled by a single

family.4 Applicant asserts that it will

continue to operate as a private

investment vehicle not intended to be

within the scope of the Act.

4. Section 6(c) of the Act provides that

the SEC may exempt any person,

security, or transaction from any

provision of the Act, if and to the extent

that such exemption is necessary or

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act. Applicant believes that the

requested exemption meets these

standards.

Applicant’s Conditions

Applicant agrees that the order

granting the requested relief shall be

subject to the following conditions:

1. Applicant will provide each partner

annual financial statements audited by

an accounting firm of recognized

national standing.

2. The Partnership shall not issue

interests to a new investor who is not
27118 Federal Register / Vol. 61, No. 105 / Thursday, May 30, 1996 / Notices

1Other existing open-end management

investment companies for which Advisory Corp. or

VKACAM serves as investment adviser or

subadviser do not currently intend to rely on the

requested relief and therefore are not named as

applicants. These investment companies may rely

on the requested relief in the future under the terms

and conditions set forth in the application.

a member of the Hughes’ Maternal Heirs

or A&K and will not permit the

assignment or transfer of any interest

therein except by bequest, gift, or

operation of law, and in the case of gifts,

only to persons who are members of the

donor’s family.

3. Applicant will have a ten-year

duration from the date of the granting of

the order unless earlier terminated

pursuant to the terms of the restated

partnership agreement or unless it: (a)

ceases to be an investment company as

such term is defined in the Act; (b)

qualifies for a statutory exception from

such definition under the Act; (c)

obtains an amended exemptive order

permitting it to continue as an exempt

entity; or (d) registers as an investment

company under the Act.

4. Applicant shall not have elected

any new Managing Partner without the

approval of a majority in interest of the

partners, and such new Managing

Partner must be a partner of applicant.

5. Applicant shall not knowingly

make available to any broker or dealer

registered under the Securities

Exchange Act of 1934, any financial

information concerning applicant for

the purpose of knowingly enabling such

broker or dealer to initiate any regular

trading market in any units of

partnership interest.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–13547 Filed 5–29–96; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Rel. No. 21977;

812–10042]

Van Kampen American Capital

Comstock Fund, et al.; Notice of

Application

May 23, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under the Investment

Company Act of 1940 (‘‘Act’’).

APPLICANTS: Van Kampen American

Capital Comstock Fund (‘‘Comstock

Fund’’); Van Kampen American Capital

Enterprise Fund (‘‘Enterprise Fund’’);

Van Kampen Capital Equity Income

Fund (‘‘Equity Income Fund’’); Van

Kampen American Capital Growth and

Income Fund (‘‘Growth and Income

Fund’’); Van Kampen American Capital

Life Investment Trust (‘‘Life Investment

Trust’’); Van Kampen American Capital

Pace Fund (‘‘Pace Fund’’); Van Kampen

American Capital Equity Trust (‘‘Equity

Trust’’); Common Sense Trust

(collectively, the ‘‘Van Kampen

Funds’’); Smith Barney/Travelers Series

Fund Inc. (‘‘Smith Barney Fund’’)

(collectively, with the Van Kampen

Funds, the ‘‘Public Funds’’); Van

Kampen American Capital Foreign

Securities Fund (‘‘Foreign Securities

Fund’’); Van Kampen American Capital

Investment Advisory Corp. (‘‘Advisory

Corp.’’); and Van Kampen American

Capital Asset Management, Inc.

(‘‘VKACAM’’) (collectively with

Advisory Corp., the ‘‘Advisers’’), on

behalf of themselves and any future

registered open-end management

investment companies for which either

of the Advisers serves as investment

adviser or subadviser.1

RELEVANT ACT SECTIONS: Order requested

under section 6(c) for an exemption

from section 12(d)(1), and under

sections (c) and 17(b) for an exemption

from section 17(a).

SUMMARY OF APPLICATION: Applicants

seek an order to permit the Foreign

Securities Fund to serve as an

investment vehicle through which the

Public Funds would invest portions of

their assets in a portfolio of foreign

equity securities.

FILING DATES: The application was filed

on March 12, 1996, and amended on

May 10, 1996. Applicants have agreed to

file an additional amendment during the

notice period, the substance of which is

reflected in this notice.

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 applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

June 17, 1996, and should be

accompanied by proof of service on

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 such notification

by writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, N.W., Washington, D.C. 20549.

Applicants: Van Kampen Funds,

Foreign Securities Fund, and the

Advisers, One Parkview Plaza,

Oakbrook Terrace, Illinois 60181; Smith

Barney Fund, 388 Greenwich Street,

New York, New York 10013.

FOR FURTHER INFORMATION CONTACT:

Courtney S. Thornton, Senior Counsel,

at (202) 942–0583, or Alison E. Baur,

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.

Applicants’ Representations

1. The Public Funds are registered

open-end management investment

companies. Each of the Public Funds

invests part or all of its assets in equity

securities as provided in its investment

policies and restrictions. A common

characteristic of the Public Funds is that

limited investment in foreign securities

is an appropriate part of their

investment strategies. While the Public

Funds differ with respect to the portions

of their respective total assets they

might invest in foreign securities, their

investment objectives with respect to

such investments, and their strategies

for making them, are identical.

2. The Foreign Securities Fund is a

newly formed open-end investment

company that will invest primarily in

equity securities of foreign issuers. The

Foreign Securities Fund will invest in

securities of issuers traded on markets

of at least three of the world’s largest

countries by market capitalization, but

securities of issuers traded on quoted

markets of other countries also will be

considered for investment. Although the

Foreign Securities Fund is registered

under the Act, it does not intend to

make a public offering of its shares, and

has not registered under the Securities

Act of 1933. The only investors in the

Foreign Securities Fund will be some or

all of the Public Funds. There will be no

sales load or other charges associated

with distribution of the Foreign

Securities Fund’s shares. Other

expenses incurred by the Foreign

Securities Fund will be borne by it, and

thus indirectly by the Public Funds that

invest in it.

3. The Advisers are wholly owned

subsidiaries of Van Kampen American

Capital, Inc., and are registered as

investment advisers under the

Investment Advisers Act of 1940. The

Advisers serve as investment adviser or

subadviser to each of the Public Funds,

and have investment discretion over the