June-05  ACM Income Fund

Item 77E

Legal Proceedings

As has been previously reported, the staff of the U.S. Securities and

Exchange Commission (“SEC”) and the Office of the New York Attorney

General (“NYAG”) have been investigating practices in the mutual fund industry

identified as “market timing” and “late trading” of mutual fund shares. Certain

other regulatory authorities have also been conducting investigations into these

practices within the industry and have requested that the Adviser provide information

to them. The Adviser has been cooperating and will continue to cooperate

with all of these authorities. The shares of the Fund are not redeemable by

the Fund, but are traded on an exchange at prices established by the market.

Accordingly, the Fund and its shareholders are not subject to the market timing

and late trading practices that are the subject of the investigations mentioned

above or the lawsuits described below. Please see below for a description of the

agreements reached by the Adviser and the SEC and NYAG in connection with

the investigations mentioned above.

Numerous lawsuits have been filed against the Adviser and certain other defendants

in which plaintiffs make claims purportedly based on or related to the same

practices that are the subject of the SEC and NYAG investigations referred to

above. Some of these lawsuits name the Fund as a party.  The lawsuits are now pending in the United States District Court for the District of Maryland pursuant to a ruling by the Judicial Panel on Multidistrict Litigation transferring and centralizing all of the mutual fund cases involving market and late trading in the District of Maryland.  Management of the Adviser believes that these private lawsuits are not likely to have a material adverse effect on the results of operations or financial condition of the Fund.

On December 18, 2003, the Adviser confirmed that it had reached terms with

the SEC and the NYAG for the resolution of regulatory claims relating to the

practice of “market timing” mutual fund shares in some of the AllianceBernstein

Mutual Funds. The agreement with the SEC is reflected in an Order of the

Commission (“SEC Order”). The agreement with the NYAG is memorialized in

an Assurance of Discontinuance dated September 1, 2004 (“NYAG Order”).

Among the key provisions of these agreements are the following:

(i)   The Adviser agreed to establish a $250 million fund (the “Reimbursement

       Fund”) to compensate mutual fund shareholders for the adverse

       effects of market timing attributable to market timing relationships

       described in the SEC Order. According to the SEC Order, the Reimbursement

       Fund is to be paid, in order of priority, to fund investors based

       on (i) their aliquot share of losses suffered by the fund due to market

       timing, and (ii) a proportionate share of advisory fees paid by such fund

       during the period of such market timing;

(ii)   The Adviser agreed to reduce the advisory fees it receives from some of

        the AllianceBernstein long-term, open-end retail funds, commencing

         January 1, 2004, for a period of at least five years; and

(iii)   The Adviser agreed to implement changes to its governance and compliance

         procedures. Additionally, the SEC Order contemplates that the

         Adviser’s registered investment company clients, including the Fund, will

         introduce governance and compliance changes.

The shares of the Fund are not redeemable by the Fund, but are traded on an

exchange at prices established by the market. Accordingly, the Fund and its

shareholders are not subject to the market timing practices described in the SEC

Order and are not expected to participate in the Reimbursement Fund. Since the

Fund is a closed-end fund, it will not have its advisory fee reduced pursuant to

the terms of the agreements mentioned above.

On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v. Alliance Capital Management L.P., et al. (“Aucoin Complaint”) was filed against the Adviser, Alliance Capital Management Holding L.P., Alliance Capital Management Corporation, AXA Financial, Inc., AllianceBernstein Investment Research & Management, Inc., certain current and former directors of the AllianceBernstein Mutual Funds, and unnamed Doe defendants.  The Aucoin Complaint names certain of the AllianceBernstein mutual funds as nominal defendants.  The Fund was not named as a nominal defendant in the Aucoin Complaint.  The Aucoin Complaint was filed in the United States District Court for the Southern District of New York by an alleged shareholder of an AllianceBernstein mutual fund.  The Aucoin Complaint alleges, among other things, (i) that certain of the defendants improperly authorized the payment of excessive commissions and other fees from fund assets to broker-dealers in exchange for preferential marketing services, (ii) that certain of the defendants misrepresented and omitted from registration statements and other reports material facts concerning such payments, and (iii) that certain defendants caused such conduct as control persons of other defendants. The Aucoin Complaint asserts claims for violation of Sections 34(b), 36(b) and 48(a) of the Investment Company Act, Sections 206 and 215 of the Advisers Act, breach of common law fiduciary duties, and aiding and abetting breaches of common law fiduciary duties.  Plaintiffs seek an unspecified amount of compensatory damages and punitive damages, rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser pursuant to such contracts, an accounting of all fund-related fees, commissions and soft dollar payments, and restitution of all unlawfully or discriminatorily obtained fees and expenses.

Since June 22, 2004, numerous additional lawsuits making factual allegations substantially similar to those in the Aucoin Complaint were filed against the Adviser and certain other defendants, and others may be filed. 

The Adviser believes that these matters are not likely to have a material adverse effect on the Fund or the Adviser’s ability to perform advisory services relating to the Fund.