-----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, GrruZRVNAjC3pl3EzoIhrgqWWzvMGpahmvo4mO2YT8dXlXSErNtqnM8V6Zw4e/kV 5SeNIsRz+QugrYXfW+6MzQ== 0001048703-02-000060.txt : 20020415 0001048703-02-000060.hdr.sgml : 20020415 ACCESSION NUMBER: 0001048703-02-000060 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020408 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CORNERSTONE STRATEGIC VALUE FUND INC/ NEW CENTRAL INDEX KEY: 0000814083 IRS NUMBER: 133407699 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-39655 FILM NUMBER: 02604190 BUSINESS ADDRESS: STREET 1: BEAR STEARNS FUNDS MANAGEMENT INC. STREET 2: 383 MADISON AVENUE - 23RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10179 BUSINESS PHONE: 2122722093 MAIL ADDRESS: STREET 1: BEAR STEARNS FUNDS MANAGEMENT INC. STREET 2: 383 MADISON AVENUE - 23RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10179 FORMER COMPANY: FORMER CONFORMED NAME: CLEMENTE GLOBAL GROWTH FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CLEMENTE STRATEGIC VALUE FUND INC DATE OF NAME CHANGE: 19990622 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KARPUS MANAGEMENT INC CENTRAL INDEX KEY: 0001048703 IRS NUMBER: 161290550 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 14 TOBEY VILLAGE OFFICE PARK CITY: PITTSFORD STATE: NY ZIP: 14534 BUSINESS PHONE: 7165864680 SC 13D/A 1 clm04-02.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities and Exchange Act of 1934 (Amendment No. 31) Cornerstone Strategic Value Fund Common Stock (Title of Class of Securities) 21924B104 (CUSIP Number) George W. Karpus, President Karpus Management, Inc. d/b/a Karpus Investment Management 183 Sullys Trail Pittsford, New York 14534 (716) 586-4680 (Name, Address, and Telephone Number of Person Authorized to Receive Notices and Communications) April 5, 2002 (Date of Event which Requires Filing of this Statement) If the person has previously filed a statement on Schedule 13G to report the Acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1 (b) (3) or (4), check the following box. [ ] (Page 1 of 7 pages) Exhibit 1 attached. ITEM 1 Security and Issuer Common Stock Cornerstone Strategic Value Fund Cornerstone Advisors, Inc. 575 Lexington Avenue New York, NY 10022 ITEM 2 Identity and Background a) Karpus Management, Inc. d/b/a Karpus Investment Management (?KIM?) George W. Karpus, President, Director and Controlling Stockholder JoAnn VanDegriff, Vice President and Director Sophie Karpus, Director b) 183 Sullys Trail Pittsford, New York 14534 c) Principal business and occupation - Investment Management for individuals, pension and profit sharing plans, corporations, endowments, trust and others, specializing in conservative asset management (i.e. fixed income investments). d) None of George W. Karpus, JoAnn VanDegriff, or Sophie Karpus (?the Principals?) or KIM has been convicted in the past five years of any criminal proceeding (excluding traffic violations). e) During the last five years none of the principals or KIM has been a party to a civil proceeding as a result of which any of them is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. f) Each of the Principals is a United States citizen. KIM is a New York corporation. ITEM 3 Source and Amount of Funds or Other Considerations KIM, an independent investment advisor, has accumulated shares of CLM on behalf of accounts that are managed by KIM (?the Accounts?) under limited powers of attorney. All funds that have been utilized in making such purchases are from such Accounts. ITEM 4 Purpose of Transaction a) KIM has purchased Shares for investment purposes. Being a Closed-End Fund Specialist the profile of CLM fit the investment guidelines for various Accounts. Shares have been acquired since October 23, 1989. b) Although originally purchased for investment purposes only, due to the Fund?s poor performance and the wide discount to net asset value, we intend to influence management with the intent of narrowing or eliminating the discount to net asset value. The attached proposal (Exhibit 1) was sent to the Board on December 17, 2001. It will be included in the proxy materials for the upcoming annual meeting being held May 14, 2002. KIM reserves the right to further accumulate or sell shares. ITEM 5 Interest in Securities of the Issuer a) As of the date of this report KIM owns 535,010 shares, which represents 13.49% of the outstanding Shares. Karpus Investment Management Profit Sharing Plan owns 4,250 shares. 200 purchased on June 24, 1993 at $9.125, 400 purchased on August 26, 1993 at $9.875, 300 purchased on January 29, 1998 at $10.25, 500 purchased on April 29, 1999 at $13.125, December 11, 2000 at $10.65 per share (1000 shares), December 20 at $10.75 per share (500 shares), and September 28, 2001 at $6.40 per share (1500 shares). On March 27, 2000 150 shares were sold at $14.20 per share. None of the other principles of KIM currently owns any shares. b) KIM has the sole power to dispose of and to vote all of such Shares under limited powers of attorney. c) The first open market purchase occurred on October 23, 1989 Open market purchases for the last 60 days for the Accounts. There have been no dispositions and no acquisitions, other than by such open market purchases. DATE SHARES PRICE PER DATE SHARES PRICE PER SHARE SHARE 2/6/2002 - -300 7.62 3/1/2002 1750 7.62 2/7/2002 800 7.61 3/4/2002 - -500 7.74 2/11/2002 500 7.73 3/4/2002 750 7.78 2/11/2002 1000 7.79 3/4/2002 500 7.75 2/12/2002 450 7.67 3/4/2002 2600 7.8 2/12/2002 425 7.66 3/8/2002 1800 7.9 2/14/2002 850 7.65 3/11/2002 1000 7.8 2/19/2002 300 7.6 3/11/2002 275 7.72 2/19/2002 375 7.65 3/13/2002 300 7.94 2/21/2002 400 7.6 3/20/2002 - -100 7.94 2/22/2002 1100 7.6 3/20/2002 600 7.95 2/25/2002 300 7.6 3/20/2002 2550 7.94 2/26/2002 2100 7.6 3/22/2002 1500 1500 2/27/2002 350 7.6 3/25/2002 1000 7.94 2/27/2002 2575 7.58 3/25/2002 500 7.93 2/28/2002 1000 7.69 3/26/2002 150 7.85 3/26/2002 375 7.8 3/27/2002 - -500 7.7 The Accounts have the right to receive all dividends from, any proceeds from the sale of the Shares. KIM reserves the right to further accumulate or sell shares. None of the Accounts has an interest in shares constituting more than 5% of the Shares outstanding. ITEM 6 Contracts, Arrangements, Understandings, or Relationships with Respect to Securities of the Issuer. Except as described above, there are no contracts, arrangements, understandings or relationships of any kind among the Principals and KIM and between any of them and any other person with respect to any of CLM Securities. ITEM 7 Materials to be Filed as Exhibits Exhibit 1 attached. Signature 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. Karpus Management, Inc. April 5, 2002 By:________________________ Date Signature George W. Karpus, President Name/Title Exhibit 1 Proposal sent to Board December 17, 2001 December 17, 2001 Mr. Ralph W. Bradshaw, President Cornerstone Strategic Value Fund Cornerstone Advisers Inc. 575 Lexington Avenue New York, NY 10022 Dear Mr. Bradshaw: Karpus Management, Inc. d/b/a Karpus Investment Management (KIM), is the beneficial owner as of November 30, 2001, of 477935 shares of the common stock of Cornerstone Strategic Value Fund, Inc. (CLM) (the Fund) for at least one year or more as attested by Schedule 13D filings with the Securities and Exchange Commission. We have been the beneficial owner of the shares valued at more than $2,000 for more than one year and expect to continue ownership through the date of the Fund's next shareholder meeting. KIM?s first purchase of shares began on October 23, 1989. All such purchases have been made in the open market. Pursuant to Rule 14-28(b) (2) (ii) of the Securities Exchange Act of 1934, we (KIM) are hereby submitting the following proposal and supporting statement for inclusion in any an all proxy materials at the next meeting of shareholders. Attached is our Schedule 13D as electronically filed with the Securities and Exchange Commission. PROPOSAL Karpus Investment Management proposes: Cornerstone Strategic Value Fund, Inc. (CLM) be converted to an open-end fund within 90 days after acceptance by the shareholders. SUPPORTING STATEMENT It is the belief of KIM that current Fund Management of CLM is not making significant strides in closing the discount at which the Fund trades. For the time period from January 5, 2001 through December 7, 2001 the Fund has traded at an average discount of 15.79%. Management claims that the share buy back program can help close this discount over time. It is the opinion of KIM this can not happen simply by the Fund repurchasing shares. KIM believes that drastic steps must occur for the shareholders to recognize the full economic value of their investment. KIM believes the only way for shareholders to reap the full value of their investment is to open-end the Fund. If this would occur, shareholders would immediately increase the value of their investment by 14.46% (based on the net asset value of December 7, 2001)! It is the opinion of KIM that the current Fund Management may not have sufficient experience to be the best choice for managing the Fund. KIM believes that the Fund?s Manager lacks adequate experience in managing individual securities (only funds in a closed-end format). The current manager does not have a track record, known to KIM, to instill our confidence in their abilities. Poor performance in both price and net asset value does not have to be Tolerated by the shareholders. Management will claim that they are doing a good job and they have not been the manager long enough for shareholders to recognize their abilities. KIM believes that the shareholders must act now. Time is not on the side of the shareholders to wait! From January 4, 2001 through December 6, 2001 the net asset value performance of CLM has equaled ?19.4518% (-20.9417% annual equivalent). The price performance of the Fund has been equally dismal. For the same Holding period price performance equaled ?20.80% (-22.3781 annual equivalent). (All calculations by Bloomberg) KIM believes that the shareholders deserve better performance than what has been delivered in 2001. CLM is plagued by low trading volume. Trading volume from January 4, 2001 through December 6, 2001 has averaged a mere 8,706 shares. It is KIM?s opinion that shareholders who wish to liquidate large positions could severely depress the price at which the Fund trades. This could cause economic harm to shareholders remaining in CLM. KIM believes open ending is the only possible method for shareholders to recognize the economic reality of their investment. Open ending would allow shareholders, such as KIM, who do not have confidence in the direction of the Fund?s management, to get out of the Fund. Should CLM be open ended at net asset value, shareholders would recognize an immediate economic benefit of approximately 14.46% (based on price of $7.93 and NAV of $9.27 as of 12/7/01). KIM further believes that any Investment Advisor is not fulfilling their Fiduciary duty to their clients if they do not vote to open end CLM. Sincerely, Scott D. Nasca Corp Vice President -----END PRIVACY-ENHANCED MESSAGE-----