Securities Exchange Act — Rule 14a-8(i)(7)
Tom DeWard Shareholder Proposal (LMP Real Estate Income Fund, Inc.), (March 25, 2015)
March 25, 2015
Sarah E. Cogan
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017-3954
Re: LMP Real Estate Income Fund Inc. ("Fund")
Shareholder Proposal of Thomas C. DeWard
In a letter dated January 9, 2015, on behalf of the Fund, you requested confirmation from the staff of the Securities and Exchange Commission (the "Commission") that we would not recommend enforcement action to the Commission if the Fund omits from the proxy materials for its April 2015 annual meeting a shareholder proposal (the "Proposal") submitted by Thomas C. DeWard (the "Proponent").
The Proposal states:
Stockholder Proposal To Instill Investor Confidence:
In order to instill investor confidence in the actions of the Board of Directors in choosing and retaining the current Fund Manager and sub advisors and to justify decisions to continue the Management Agreement, LMP Real Estate Income Fund Inc. shall provide the following information by year since retention of the current Fund Manager with continual updates on a quarterly basis:
For each investment at the date of the retention of the current Fund Manager, the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital. For each sale, identify the gain or loss at the date of disposition.
For each investment made by the current Fund Manager, the purchase price and the total return broken down between Net Investment Income, Short and Long-Term Capital Gains and Return of Capital.
For each sale of an investment made by the current Fund Manager, the selling price and the gain or loss.
For each investment made by the current Fund Manager, the overall rate of return based on total returns, excluding return of capital, as a percentage of original cost.
The Management fee as a percentage of total investment returns to include Net Investment Income and Short and Long-Term Capital Gains but excluding return of capital.
There appears to be some basis for your view that the Proposal may be omitted from the Fund's proxy materials pursuant to Rule 14a-8(i)(7) under the Securities Exchange Act, as relating to the Fund's ordinary business.
Accordingly, the Division of Investment Management (the "Division") will not recommend enforcement action to the Commission if the Fund omits the Proposal from its proxy materials in reliance on Rule 14a-8(i)(7). In reaching this position, we have not found it necessary to address the alternative bases for omission set forth in your letter.
Attached is a description of the informal procedures the Division follows in responding to shareholder proposals. If you have any questions or comments concerning this matter, please call me at (202) 551-3393.
cc: Thomas C. DeWard
DIVISION OF INVESTMENT MANAGEMENT
INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS
The Division of Investment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by an investment company in support of its intention to exclude the proposals from the investment company's proxy material, as well as any information furnished by the proponent's representative.
The staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff's informal procedures and proxy review into a formal or adversary procedure.
The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule 14a-8 does not and cannot purport to "adjudicate" the merits of an investment company's position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly, a discretionary determination not to recommend or take Commission enforcement actions, does not preclude a proponent, or any shareholder of an investment company, from pursuing any rights he or she may have against the investment company in court, should the management omit the proposal from the investment company's proxy material.
The Incoming Letter is in Acrobat format.