Document ID: SEC-2010-0519-0001
Agency: sec
Document Type: Notice
Title: Applications: American Vantage Companies
Posted Date: 2010-04-07T04:00Z

[Federal Register: April 7, 2010 (Volume 75, Number 66)]
[Notices]               
[Page 17796-17798]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ap10-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29200; File No. 811-21873]

 
American Vantage Companies; Notice of Application

April 1, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for deregistration under section 8(f) of 
the Investment Company Act of 1940 (the ``Act'').

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    Summary of Application: American Vantage Companies requests an 
order declaring that it has ceased to be an investment company. A 
notice of application was issued on March 11, 2010 (Investment Company 
Act Release No. 29174). Applicant subsequently amended the application 
to state that it had not yet filed its Semi-Annual Report for 
Registered Investment Companies on Form N-SAR (``Form N-SAR'') and its 
Certified Shareholder Report of Registered Management Investment 
Companies on Form N-CSR (``Form N-CSR''), each for the reporting period 
ended December 31, 2009. The amended application states that applicant 
undertakes to make such filings by January 31, 2011, and adds certain 
other conditions. This amended notice incorporates the changes in the 
application made by applicant's amendment.
    Applicant: American Vantage Companies (the ``Company'').
    Filing Dates: The application was filed on November 25, 2008 and 
amended on April 30, 2009, November 12, 2009, February 4, 2010, March 
10, 2010 and March 31, 2010.
    Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicant with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on April 26, 2010 and should be accompanied by proof of 
service on 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 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. Applicant, P.O. Box 81920, Las 
Vegas, Nevada 89180.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202) 
551-6870, or Jennifer L. Sawin, Branch Chief, at (202) 551-6821 (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 via the 
Commission's

[[Page 17797]]

Web site by searching for the file number, or an applicant using the 
Company name box, at http://www.sec.gov/search/search.htm or by calling 
(202) 551-8090.

Applicant's Representations

    1. The Company is a holding company that operates through its 
subsidiaries primarily in the gaming and hospitality and corporate 
staffing businesses. Although the Company was not engaged in the 
business of investing, reinvesting, owning, holding or trading in 
securities, the Company registered as a closed-end investment company 
on June 21, 2006 because it held investment securities that had a value 
exceeding 40% of the Company's total assets on an unconsolidated basis 
from March 2005 through March 2006.\1\ The Company no longer has 
investment securities having a value near or exceeding 40% of its total 
assets nor does it hold itself out as being engaged primarily, nor does 
it propose in the future to engage primarily, in the business of 
investing, reinvesting or trading in securities. On March 27, 2008, the 
Company's board of directors resolved that it would be in the best 
interest of the Company to deregister from the Act. The Company's 
stockholders approved a proposal to deregister the Company from the Act 
on November 14, 2008. The Company seeks an order declaring that it has 
ceased to be an investment company under the Act.
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    \1\ These investment securities principally consisted of 
7,000,000 shares of common stock, and warrants to purchase 1,400,000 
shares of common stock, of Genius Products, Inc. (``Genius'') 
acquired when the Company sold its subsidiary American Vantage Media 
Corporation to Genius, together with a 49% interest in the Border 
Grill Restaurant (``Border Grill''). The Company privately placed 
most of its shares of Genius stock and used the net proceeds for 
working capital and to fund its purchase in September 2007 of 
Candidates on Demand Group, Inc. (``COD''), a temporary placement 
agency and recruitment firm which operates as a wholly-owned 
subsidiary of the Company.
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    2. The Company was incorporated in Nevada in 1979 and since then 
has engaged in the business of recreational and leisure time 
activities, including casino gaming and hospitality. The Company 
currently maintains ongoing business operations through its 
subsidiaries, American Vantage Brownstone, LLC, which focuses on Native 
American tribal gaming and commercial/jurisdictional gaming, and COD. 
Despite its registration under the Act, the Company has never 
represented or stated that it is involved in any business other than 
gaming, media, restaurants and entertainment and has always emphasized 
its operating results rather than investment income as a material 
factor in its business. The Company has never employed an investment 
advisor nor is there an employee who is specifically assigned to manage 
the Company's investments.
    3. As described more fully in the application, the Company's assets 
primarily consist of interests in its wholly-owned and majority-owned 
subsidiaries and a 49% interest in the Border Grill and the Company 
derives substantially all of its revenues from operations. The Company 
currently has investment securities that equal approximately 16.4% of 
its total assets on an unconsolidated basis.\2\ For the six months 
ended June 30, 2009, the Company derived 98.8% of its revenues from its 
operating subsidiaries. The Company derived only 1.2% of its income 
from investment assets for the six months ended June 30, 2009.
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    \2\ The Company's investment assets consist of its 49% interest 
in Border Grill, auction-rate securities, and its remaining Genius 
common stock and warrants.
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    4. The Company is current in all of its required filings under the 
federal securities laws, with the exception of its Form N-SAR and Form 
N-CSR, each for the reporting period ended December 31, 2009, which the 
Company is currently unable to file as a result of a continuing working 
capital shortage. The Company undertakes to make such filings by 
January 31, 2011. After receipt of the requested deregistration order, 
the Company intends to make all filings required by the Securities 
Exchange Act of 1934 (``Exchange Act'').

Applicant's Legal Analysis

    1. Section 8(f) of the Act provides that whenever the Commission, 
upon application or its own motion, finds that a registered investment 
company has ceased to be an investment company, the Commission shall so 
declare by order and upon the taking effect of such order, the 
registration of such company shall cease to be in effect.
    2. Section 3(a)(1)(A) of the Act defines an investment company as 
any issuer which is or holds itself out as being engaged primarily, or 
proposes to engage primarily, in the business of investing, 
reinvesting, or trading in securities. Section 3(a)(1)(C) of the Act 
defines an investment company as any issuer which is engaged or 
proposes to engage 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 per centum of the 
value of such issuer's total assets (exclusive of Government securities 
and cash items) on an unconsolidated basis. Section 3(a)(2) of the Act 
defines investment securities as all securities except (A) Government 
securities, (B) securities issued by employees' securities companies, 
and (C) securities issued by majority-owned subsidiaries of the owner 
which (i) are not investment companies, and (ii) are not relying on the 
exception from the definition of investment company in paragraph (1) or 
(7) of section 3(c) of the Act.
    3. The Company states that it is actively engaged in ongoing 
business operations in the placement agency, restaurant, gaming and 
entertainment fields and that it has never been an investment company 
as defined by section 3(a)(1)(A).\3\ Because the Company's investment 
securities are currently only approximately 16.4% of its total assets, 
the Company believes that it no longer meets the definition of 
investment company as defined in section 3(a)(1)(C) of the Act. The 
Company further states that it intends to manage its assets and any 
future cash earnings in a manner that will cause the Company to 
continue to be excluded from the definition of an investment company 
under the Act. The Company states that after entry of the order 
requested by the application, it will continue to be a publicly-held 
company and will continue to be subject to the reporting and other 
requirements of the Exchange Act. Accordingly, the Company states that 
it is qualified for an order of the Commission pursuant to section 8(f) 
of the Act.
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    \3\ The Company also states that none of its subsidiaries can be 
defined as an investment company for purposes of the Act and none of 
its subsidiaries is relying on sections 3(c)(1)or 3(c)(7) of the 
Act.
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Applicant's Conditions

    Applicant agrees that the requested order will be subject to the 
following conditions:
    1. The Company will, by January 31, 2011, file Forms N-SAR, N-CSR 
and any other reports required by the Act for the periods up until it 
is deregistered under the Act.
    2. The Company acknowledges that any order granted pursuant to this 
application shall be without prejudice to, and shall not limit the 
Commission's rights in any manner with respect to, any Commission 
investigation of, or administrative proceedings involving or against 
Applicants, and the Company may not assert this action as defense in 
any proceeding initiated by the Commission or any person under the 
federal securities law of the United States.

[[Page 17798]]

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7847 Filed 4-6-10; 8:45 am]
BILLING CODE 8011-01-P