[Federal Register Volume 59, Number 86 (Thursday, May 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10753]


[[Page Unknown]]

[Federal Register: May 5, 1994]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No. 20255; 811-4650]

 

The Scandinavia Fund, Inc.; Notice of Application

April 28, 1994.
AGENCY: Securities and Exchange Commission (``SEC'').

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

-----------------------------------------------------------------------

APPLICANT: The Scandinavia Fund, Inc.

RELEVANT ACT SECTION: Section 8(f).

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

FILING DATE: The application was filed on September 21, 1990, and 
amended on March 15, 1994 and April 26, 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 May 23, 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 such notification by writing to the 
SEC's Secretary.

ADDRESSES: Secretary, SEC 450 Fifth Street NW., Washington, DC 20549. 
Applicant, c/o Allan D. Goodridge, Schnader, Harrison, Segal & Lewis, 
330 Madison Avenue, suite 1400, New York, New York 10017.

FOR FURTHER INFORMATION CONTACT: James E. Anderson, Staff Attorney, at 
(202) 942-0573, or C. David Messman, Branch Chief, at (202) 942-0564 
(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 
SEC's Public Reference Branch.

Applicant's Representations

    1. Applicant is a diversified closed-end management investment 
company organized as a Maryland corporation. On April 25, 1986, 
applicant filed a notification of registration pursuant to section 8(a) 
of the Act and a registration statement pursuant to the Securities Act 
of 1993. The registration statement became effective, and applicant's 
initial public offering commenced, on June 17, 1986.
    2. On July 29, 1988 and October 1, 1988, applicant's board of 
directors approved a plan of liquidation and dissolution whereby 
applicant would be restructured as an operating company by 
reincorporating it as a Cayman Islands corporation that would engage in 
the secured lending business. Preliminary proxy materials soliciting 
shareholder approval of the reorganization were filed with the SEC on 
August 2, 1988. Amended proxy materials were filed on or about October 
11, 1988. A pre-effective amendment was filed on or about November 23, 
1988. Proxy materials were mailed to shareholders on or about December 
8, 1988. The reorganization was approved by applicant's shareholders at 
a meeting held on February 3, 1989.
    3. On February 21, 1989, applicant transferred all of its assets, 
which consisted of cash, to a Cayman Islands corporation, The 
Scandinavia Company, Inc. (the ``Company''), in exchange for all of the 
outstanding shares of the Company's common stock. At the time of the 
exchange, applicant had outstanding 6,415,810 shares of common stock 
with a net asset value per share of $8.41. Applicant's shareholders 
received one share of the Company's common stock for each share of the 
applicant's common stock.
    4. In connection with the liquidation and dissolution of applicant, 
expenses due and payable before the reorganization were paid by the 
applicant, and expenses due and payable after the reorganization were 
paid by the Company. Such expenses were as follows: Legal fees--
$447,397; accounting fees--$39,700; printing--$21,084; mailing--
$13,633; proxy solicitation fees--$10,500; exchange agency fees--
$1,080; and proxy statement filing fee--$8,264; for a total of 
$541,658.
    5. As a result of the liquidation and dissolution, applicant, the 
Company, the applicant's former director, and applicant's majority 
shareholder were named as parties to three class action lawsuits filed 
by applicant's shareholders in the United States District Court for the 
Southern District of New York. The lawsuits alleged, among other 
things, that the proxy materials mailed to shareholders in December 
1988 were false and misleading, that the conversion of applicant's 
assets to cash without shareholder approval violated section 13 of the 
Act, and that the Company violated the Act by adopting a stock option 
plan and by filing periodic reports with the SEC as an operating 
company rather than an investment company.
    6. On May 20, 1991, the parties signed an agreement settling the 
suits. The settlement was approved by the court on July 30, 1991, and 
it became final on August 30, 1991. For purposes of the settlement, all 
persons who owned shares of common stock of the applicant or the 
Company (other than the defendants and their affiliates and those 
persons who submitted valid and timely requests for exclusion) during 
the period February 1, 1988 through June 30, 1990 were deemed 
``Settlement Class 1.'' All persons who owned stock of the Company at 
the time of the public announcement of the settlement were deemed 
``Settlement Class 2'' (the members of Settlement Class 1 and 
Settlement Class 2, collectively the ``Class Members'').
    7. Under the terms of the settlement, the Company paid $.085 for 
each share of applicant's common stock that the members of Settlement 
Class 1 held as of February 1, 1988 and sold at a loss before December 
10, 1988. The Company also paid to Class Members who held shares of 
applicant's common stock as of February 1, 1988 and sold such shares 
for less than $6.00 per share during the period from December 10, 1988 
to September 26, 1989, an amount equal to $.25 per share. Pursuant to 
the foregoing, the Company paid claims aggregating approximately 
$32,500. The Company also agreed to commence an issuer tender offer to 
purchase 952,500 shares of the Company's common stock at a purchase 
price equal to the market price increased by a premium of 16% of the 
market price, but in no event more than $5.25. The offer was commenced 
on May 24, 1991 at a purchase price of $4.07, and was consummated on 
July 22, 1991, resulting in the purchase by the Company of 609,613 
shares of its common stock at an aggregate purchase price of 
$2,481,125. The Company also paid the legal fees of counsel to the 
plaintiffs and certain expenses of settlement in the total amount of 
approximately $280,000.
    8. In consideration of the settlement, the Class Members discharged 
the defendants of any claims arising from conduct relating to the 
management or operations of applicant or the Company, the use and 
investment of their assets, the preparation and dissemination during 
the settlement class period of false or misleading proxy materials and 
annual or periodic reports, and the failure of the applicant or the 
Company to conduct their businesses as investment companies.
    9. As of the date of the amended application, applicant had no 
shareholders, assets, or liabilities. Applicant is not a party to any 
litigation or administrative proceeding. Applicant is not presently 
engaged in, nor does it propose to engage in, any business activities 
other than those necessary for the winding up of its affairs.
    10. As a condition to the application, applicants expressly agree 
that all books and records required to be kept pursuant to rule 31a-1 
under the Act will be preserved for a period of not less than six years 
after the date of applicant's liquidation.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-10753 Filed 5-4-94; 8:45 am]
BILLING CODE 8010-01-M