[Federal Register Volume 59, Number 38 (Friday, February 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4335]


[[Page Unknown]]

[Federal Register: February 25, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20080; 811-5799]

 

College Prepayment Fund, Inc.; Notice of Application

February 17, 1994.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of Application for Deregistration under the Investment 
Company Act of 1940 (the ``Act'').

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APPLICANT: College Prepayment Fund, Inc.

RELEVANT ACT SECTIONS: Section 8(f).

SUMMARY OF APPLICATION: Applicant seeks an order declaring that it has 
ceased to be an investment company under the Act.

FILING DATE: The application was filed on October 21, 1992 and an 
amendment was filed on February 7, 1994.

HEARING OR NOTIFICATION OF HEARING: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
applicant with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on March 14, 1994, 
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 SEC's 
Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549. 
Applicant, c/o The Corporation Trust Incorporated, 32 South Street, 
Baltimore, Maryland 21202.

FOR FURTHER INFORMATION CONTACT: Joseph G. Mari, Senior Special 
Counsel, (202) 272-3030, or Barry D. Miller, Senior Special Counsel, 
(202) 272-3018 (Division of Investment Management, Office of Investment 
Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee from 
the SEC's Public Reference Branch.

APPLICANT'S REPRESENTATIONS:
    1. Applicant, a Maryland corporation, is an open-end, diversified, 
management investment company. On April 14, 1989, applicant registered 
under the Act and filed a registration statement pursuant to section 
8(a) under the Act. On that same date, applicant registered an 
unlimited number of shares under the Securities Act of 1933. The 
registration statement was declared effective on October 3, 1989, and 
applicant's initial public offering of its securities commenced 
thereafter.
    2. Eleven persons, constituting 14 shareholders of record, acquired 
shares of applicant prior to the effective date of applicant's 
registration statement for an aggregate purchase price of $104,500 
(``Initial Shareholders''). Two of the Initial Shareholders, who were 
officers of The National TMO, Inc., applicant's Administrator (the 
``Administrator''), were involved in promoting applicant and were 
elected as officers of applicant, and four of the Initial Shareholders 
were relatives of the promoters of the applicant.
    3. The Initial Shareholders signed purchase agreements with 
applicant representing to applicant that the shares were being acquired 
for investment purposes and not with a view to distribution. The 
agreements also provided that any redemption of the shares prior to the 
fifth anniversary of the date applicant began its investment activities 
would result in a required payment to the applicant by the Initial 
Shareholders of a pro rata portion of any unamortized organizational 
costs.
    4. On February 3, 1992, the board of directors determined that the 
liquidation and dissolution of applicant was advisable, because 
applicant was not able to obtain sufficient investors to become a 
viable entity. It also directed that the proposed dissolution be 
submitted to stockholders for approval at a special meeting to be held 
on or before March 30, 1992.
    5. On February 3, 1992, the board of directors considered the 
different circumstances pertaining to the shareholders who purchased 
during the public offering (''Prospectus Shareholders''), as compared 
with the Initial Shareholders. The Prospectus Shareholders had acquired 
their shares during applicant's abbreviated public offering, did not 
contribute to the initial organizational capital of the applicant, and 
had not executed agreements requiring the reimbursement of 
organizational expenses in the event of redemption within five years. 
The board of directors knew that the net asset value per share of the 
outstanding shares of applicant, including the shares held by the 
Initial Shareholders and the shares held by Prospectus Shareholders, 
was less than cost (cost was approximately $10 per share for all 
shareholders). On March 4, 1992, the board of directors determined that 
the most equitable course of action was that the Prospectus 
Shareholders should be invited to redeem their shares at cost, and it 
is established a reserve in the amount of $25,000 for liquidation 
expenses.
    6. A March 6, 1992 letter inviting such a redemption was sent to 
all shareholders of the applicant. Each of the Prospectus Shareholders 
executed and returned the form of redemption request enclosed with the 
March 6 letter. On or about March 20, 1992, the Prospectus 
Shareholders, who owned 8,154.067 shares, received an aggregate of 
approximately $81,032 in redemption proceeds. The net asset value par 
share was $7.36 as of December 31, 1991, and is not believed to have 
changed materially between that date and March 20, 1992. the Prospectus 
Shareholders would have received an aggregate of $60,013.93 had they 
been paid such net asset value per share, $21,018.07 less than they 
were paid.
    7. On March 20, 1992, a Notice of Special Meeting of Shareholders 
was mailed to the Initial Shareholders, who were the only shareholders 
entitled to vote because the Prospectus Shareholders had redeemed their 
shares.
    8. At a special meeting on March 30, 1992, by a vote of 8,158.254 
shares in favor and none against, applicant's shareholders approved the 
voluntary dissolution of applicant and authorized the board of 
directors to take related action.
    9. On May 22, 1992, the board of directors adopted a Plan of 
Liquidation covering the disbursement of approximately $79,971 to pay 
expenses and resolve claims of creditors; reaffirmed the $25,000 
reserve for liquidation to be applied to the expenses of liquidation 
and dissolution; directed that the balance of assets of applicant be 
paid to the Initial Shareholders upon the consummation of the 
dissolution of applicant' and approved Articles of Voluntary 
Dissolution and authorized that they be filed with the State Department 
of Assessments and Taxation of Maryland.
    10. The organizational costs of applicant ($276,049) exceeded the 
aggregate cost of the shares acquired by the Initial Shareholders. the 
Administrator advanced $219,226 for the organizational costs, which 
applicant did not repay to the Administrator. Accordingly, the 
Administrator, which was the principal organizer of applicant, bore the 
amount of the organizational costs it had advanced. As a result of the 
decision of the board of directors to liquidate and dissolve the 
applicant, the organizational costs were written off on the books of 
applicant as an expense. Applicant bore the organizational costs not 
advanced by the Administrator, $56,823.
    11. As of the date of the application, applicant retained cash in 
the amount of $4,044.06, which will not be invested and will be applied 
to any future filing fees and other costs of dissolution. Any remaining 
assets will be paid pro rata to the Initial Shareholders.
    12. At the time of filing the amended application, applicant had no 
outstanding debts or liabilities. Applicant is not a party to any 
litigation or administrative proceeding. Applicant is not engaged, nor 
does it propose to engage, in any business activities other than those 
necessary for the winding up of its affairs.
    13. Applicant plans to file Articles of Voluntary Dissolution with 
the State of Maryland promptly after the issuance of an order by the 
SEC that applicant has ceased to be an investment company.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-4335 Filed 2-24-94; 8:45 am]
BILLING CODE 8010-01-M