-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O77/Q6xYEKuvpc0U9S6OAu8IJ58AtKW9oQaU8IQIy5VNsRUYDQeB1/kj8mzACd+H dB+4MpsgeqVz5poqff7JMA== 0001364773-07-000011.txt : 20070614 0001364773-07-000011.hdr.sgml : 20070614 20070613181310 ACCESSION NUMBER: 0001364773-07-000011 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20070614 DATE AS OF CHANGE: 20070613 GROUP MEMBERS: BULLDOG INVESTORS GENERAL PARTNERSHIP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RMR HOSPITALITY & REAL ESTATE FUND CENTRAL INDEX KEY: 0001278038 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-81343 FILM NUMBER: 07918328 BUSINESS ADDRESS: STREET 1: 400 CENTRE STREET CITY: NEWTON STATE: MA ZIP: 02458 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Bulldog Investors General Partnership CENTRAL INDEX KEY: 0001364773 IRS NUMBER: 562585535 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 60 HERITAGE DRIVE CITY: PLEASANTVILLE STATE: NY ZIP: 10570 BUSINESS PHONE: 9147475262 MAIL ADDRESS: STREET 1: 60 HERITAGE DRIVE CITY: PLEASANTVILLE STATE: NY ZIP: 10570 SC 13D/A 1 third.txt DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT 6/13/07 1. NAME OF REPORTING PERSON Bulldog Investors General Partnership 2. CHECK THE BOX IF MEMBER OF A GROUP a[ ] b[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) AND 2(e) [] 6. CITIZENSHIP OR PLACE OF ORGANIZATION USA ________________________________________________________________ 7. SOLE VOTING POWER 243,400 8. SHARED VOTING POWER 0 9. SOLE DISPOSITIVE POWER 243,400 _________________________________________________________ 10. SHARED DISPOSITIVE POWER 0 11. AGGREGATE AMOUNT OWNED BY EACH REPORTING PERSON 243,400 12. CHECK IF THE AGGREGATE AMOUNT EXCLUDES CERTAIN SHARES [] 13. PERCENT OF CLASS REPRESENTED BY ROW 11 9.79% 14. TYPE OF REPORTING PERSON IA ________________________________________________________________ This statement constitutes amendment No.5 to the Schedule 13D filed on June 5, 2006. Except as specifically set forth herein, the Schedule 13D remains unmodified. Item 4 is amended as follows: Item 4. PURPOSE OF TRANSACTION The filing person sent the attached letter (Exhibit 1) to the Chief Compliance Officer of the Issuer. Item 7 is amended as follows: Item 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1. Press Release After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: 6/13/07 By: /s/ Phillip Goldstein Name: Phillip Goldstein President, Kimball and Winthrop, Inc. Managing General Partner, BIGP Exhibit 1. Bulldog Investors General Partnership, Park 80 West, Plaza Two, Saddle Brook, NJ 07663 Phone (914) 747-5262//Fax (201) 556-0097// pgoldstein@bulldoginvestors.com June 13, 2007 Chief Compliance Officer and Director of Internal Audit RMR Hospitality & Real Estate Fund 400 Centre Street Newton, MA 02458 Dear Chief Compliance Officer and Director of Internal Audit: Please provide a copy of this letter to each trustee of RMR Hospitality & Real Estate Fund (the "Fund"). The Fund has recently paid and continues to pay substantial sums to third parties for extraordinary services that cannot reasonably be expected to provide any financial benefit to the Fund. Specifically, in 2006 the Fund incurred $697,661 in legal expenses, primarily from Ropes & Gray, in connection with litigation against us. In 2007 a significant amount of additional legal expenses in connection with this matter has been incurred. In addition, the Fund estimated that it would spend $500,000 (approximately $300 per beneficial shareholder) in proxy solicitation expenses for the 2007 annual meeting "in excess of those normally spent for an annual meeting." Finally, Adrian Overstreet, the "charitable trustee" who was appointed by the Fund's trustees, has advised us that, in addition to compensating him for his "services," the Fund is paying all his legal expenses, primarily to Adler Pollock & Sheehan. Mr. Overstreet's primary duty is to attempt to compel us to pay the profits on our so-called "excess shares" to him. Thus, if Mr. Overstreet is successful, the Fund will obtain no financial benefit from our profits on the "excess shares." Since the Fund's net asset value is only about $62 million, the above mentioned payments to third parties have already had a materially adverse impact on the Fund?s net asset value. Its expense ratio (net of fee waivers) shot up to 3.13% last year from 1.80% in 2005 and can be expected to be even higher this year. Please be advised that Section 37 of the Investment Company Act of 1940 (Larceny and Embezzlement) states: Whoever steals, unlawfully abstracts, unlawfully and willingly converts to his own use or to the use of another, or embezzles any of the moneys, funds, securities, credits, property, or assets of any registered investment company shall be deemed guilty of a crime, and upon conviction thereof shall be subject to the penalties provided in section 49 [15 USCS 80a-48]. A judgment of conviction or acquittal on the merits under the laws of any State shall be a bar to any prosecution under this section for the same act or acts. In addition, I refer you to SEC Litigation Release No. 11717 (April 28, 1988) which involved a registered investment company that paid for the cost of a lawsuit "despite the fact that [it] had no financial stake in the outcome of the litigation." For your convenience, Release No. 11717 is reproduced below. SECURITIES AND EXCHANGE COMMISSION v.FORTY FOUR MANAGEMENT, LTD., 44 SECURITIES, INC., DAVID H. BAKER, JR., RUFFEN H.COTTON, JR., CHARLTON W. DOYLE, and GORDON F. TAYLOR (United States District Court for Southern District New York) (Civ.88-CIV-2959) SECURITIES AND EXCHANGE COMMISSION LITIGATION Release No. 11717 1988 SEC LEXIS 822 APRIL 28, 1988 The New York Regional Office of the Securities and Exchange Commission announced the filing of a Complaint in the United States District Court for the Southern District of New York charging David H. Baker, Jr. ("Baker") and Ruffen H. Cotton, Jr. ("Cotton"), officers of The 44 Wall Street Fund, Inc. ("the Fund"), a registered investment company, and two of the Fund's independent directors, Charlton W. Doyle and Gordon F. Taylor ("the independent directors") with breaches of fiduciary duty. The Complaint also names two entities wholly-owned by Baker, the Fund's adviser and broker/distributor, Forty Four Management, Ltd. ("the Adviser"), and 44 Securities, Inc. ("the Underwriter"), respectively. The Complaint seeks a Court order, pursuant to Section 36(a) of the Investment Company Act of 1940 ("Investment Company Act"), permanently enjoining the defendants from taking part in the operation of any registered investment company. The Complaint also alleges that Baker, Cotton and the independent directors violated the proxy disclosure provisions of the Investment Company Act. Finally, the Complaint alleges that Baker, the Adviser and Cotton violated or aided and abetted violations of one or more of the anti-fraud provisions of the Investment Advisers Act of 1940 ("Advisers Act"), the Securities Act of 1933 ("Securities Act) and the Securities Exchange Act of 1934 ("Exchange Act"). According to the Complaint, on March 1, 1985, a Fund shareholder telephoned an order to purchase $2.4 million worth of the Fund's shares. The purchasing shareholder subsequently refused to pay for the shares he ordered. Agreements then in effect called for Fund shares purchased but not paid for to be cancelled by the Fund. The Underwriter was then obligated to reimburse the Fund for all losses resulting from the cancellation of unpaid shares. The Complaint alleges that the shares ordered on March 1, 1985 were not cancelled until March 25, 1985. Because the Fund's net asset value per share ("NAV") had declined after the shareholder had entered his purchase order, the Fund's cancellation of the shares resulted in a loss of more than $444,000 to the Fund, a loss which the Underwriter was obligated to pay. In cancelling the shares however, the Complaint alleges that Baker, Cotton, the Adviser and the Underwriter deliberately back-dated the March 25th cancellation by using the Fund's NAV as of March 19, 1985, which was higher than the March 25th NAV by 45 cents per share. In so doing, the defendants understated by almost $173,000 the Fund's actual loss resulting from the cancellation. The Complaint alleges that the defendants back-dated the cancellation in order to reduce the amount which the Underwriter was obligated to reimburse the Fund. The Complaint further alleges that these defendants then caused the Fund to pay the costs of the subsequent litigation against the reneging shareholder, including legal fees aggregating over $112,000, of which more than $37,000 was paid to Cotton as the Fund's legal counsel, despite the fact that the Fund had no financial stake in the outcome of the litigation. Because the Underwriter had already reimbursed the Fund for the loss arising from the cancellation of the purchase order (except the $173,000 described above), the litigation sought reimbursement from the reneging shareholder solely for the Underwriter. The Complaint alleges that the litigation against the reneging shareholder eventually resulted in a judgment of over $255,000, which the defendants caused to be paid to the Underwriter. The Complaint also alleges that the independent directors approved the Fund's payment of these litigation expenses, despite knowing that the Fund had been reimbursed by the Underwriter for the loss which was the subject of the litigation. Further, the Complaint alleges that the independent directors relied on Cotton's explanations as to why the Fund was assuming the expenses although such reasons were, on their face, unreasonable and they knew that, in addition to representing the Fund, Cotton was also counsel to Baker, the Adviser and the Underwriter. The Complaint also alleges that the independent directors knew that the Fund had no financial stake in the litigation for which it was bearing the entire cost. The Complaint further alleges that Baker, the Adviser and the Underwriter caused the Fund to pay for the qualification of a Fund employee for her brokerage license. The Complaint alleges that the employee in question eventually was hired by the Underwriter as a securities trader but that her duties as a Fund employee did not require her to have such a license. Finally, the Complaint alleges that the Fund's disclosure documents failed to disclose, or otherwise materially misrepresented, the matters described above. Simultaneous with the filing of the Complaint, each of the defendants consented to the entry of orders of the Court, without admitting or denying the allegations contained in the Complaint, permanently enjoining them from acting as, among other things, an officer, director, adviser, or underwriter for any registered investment company. Defendants Baker, Cotton, Doyle and Taylor also consented to a permanent injunction against further violations of the proxy provisions of the Investment Company Act. In addition, defendants Baker, Cotton, and the Adviser consented to permanent injunctions against further violations of one or more of the anti-fraud provisions of the Advisers Act, the Securities Act, and the Exchange Act. Finally, Baker consented to the Court ordering him to reimburse the Fund the expenses and losses described above. Very truly yours, Phillip Goldstein President Kimball & Winthrop, Inc. Managing General Partner Cc: Adrian Overstreet, "Charitable Trustee for RHR" Philip Y. Brown, Adler Pollock & Sheehan P.C. Jane Willis, Esq., Ropes & Gray LLP -----END PRIVACY-ENHANCED MESSAGE-----