[Federal Register Volume 60, Number 33 (Friday, February 17, 1995)]
[Notices]
[Page 9421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4047]



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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IC-20897; 811-4829]


Treasury First Inc.; Notice of Application

February 13, 1995.
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: Treasury First Inc.

RELEVANT ACT SECTION: Section 8(f).

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

FILING DATE: The application was filed on May 19, 1994 and amended on 
July 27, 1994 and January 30, 1995.

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 10, 1995, 
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 may request 
notification of a hearing by writing to the SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 5th Street, NW., Washington, DC 20549. 
Applicant, c/o Edward S. Gelfand, Special Officer, Friedman & Phillips, 
10920 Wilshire Boulevard, Suite 650, Los Angeles, CA 90024.

FOR FURTHER INFORMATION CONTACT:
Elaine M. Boggs, Staff Attorney, at (202) 942-0572, or Robert A. 
Robertson, 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 at the 
SEC's Public Reference Branch.

Applicant's Representations

    1. Applicant is an open-end management investment company organized 
as a Maryland corporation. On September 4, 1986, applicant registered 
under the Act as an investment company. On May 19, 1987, applicant 
filed a registration statement to register its shares under the 
Securities Act of 1933. The registration statement was declared 
effective on June 1, 1987, and the initial public offering commenced on 
the same day.
    2. On November 1, 1991, the SEC filed a civil suit against 
applicant, applicant's adviser, Cheshire Hall Advisers, Inc., (the 
``Adviser''), and an affiliate of the Adviser, John T. Hall, in the 
United States District Court, Central District of California alleging 
various violations of the federal securities laws. The SEC alleged, 
among other things, the Hall, through the Adviser, misappropriated 
approximately $2.1 million from applicant. This amount represented 
approximately 75% of applicant's assets at the time of the alleged 
misappropriation.
    3. As a result of the above action, applicant and the Adviser 
ceased doing business. On November 14, 1991, the Court issued an order 
(the ``Order'') that authorized the appointment of Edward S. Gelfand as 
Special Officer of applicant and the Adviser for the purpose of 
supervising and directing the liquidation of applicant and the Adviser 
as well as the deregistration of applicant under the Act.\1\

    \1\On the same date, the Court entered an injunction against the 
Adviser and Hall permanently enjoining them from future violations 
of the securities laws.
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    4. In November 1991, the Special Officer had control of 
$2,814.674.78 of applicant's assets. Of this amount, $2,664,674.78 was 
distributed to applicant's five shareholders pro rata in November 1991. 
The remaining $150,000 was placed in an account (the ``Account'') 
maintained by the Special Officer to be used for expenses incurred on 
applicant's behalf in connection with the winding up of applicant's 
affairs. From the Account, expenses for applicant totalling $91,623.55 
were paid which included compensation and expenses of applicant's 
accountant.
    5. On December 7, 1995, the Court issued a modification of the 
Order to approve the final report of the Special Officer and to relieve 
the Special Officer of this responsibility to dissolve and liquidate 
applicant. This order also authorized the final distribution of cash to 
applicant's shareholders. Accordingly, on December 30, 1994, the 
Special Officer distributed $60,165.47, representing the remaining 
amount in the Account plus interest, pro rata among applicant's 
shareholders.
    6. The Special Officer had submitted a claim against a bond issued 
by Reliance Insurance Company to applicant. In the event of a recovery, 
the proceeds will be distributed to applicant's shareholders pro 
rata.\2\

    \2\The Special Officer submitted the claim to the insurance 
company on March 24, 1992. The bond had been issued in the amount of 
$300,000 to cover losses resulting from, among other things, 
dishonest or fraudulent acts committed by an employee of applicant. 
By letter dated December 9, 1992, the insurance company denied the 
claim but, nonetheless, requested additional information to evaluate 
the claim. According to a motion filed by the Special Officer with 
the Court on November 1, 1994, the Special Officer has retained 
Robert E. Goldman of Frydrych & Webster to prosecute the Claim. The 
motion further states that Mr. Goldman serves as counsel to a 
shareholder of applicant that owns approximately 86% of applicant 
but that he has agreed to prosecute the claim for the benefit of all 
shareholders.
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    7. The Special Officer is not aware of any liabilities other than 
those set forth in an audited financial statement prepared in 1991 by 
applicant's accountants.
    8. Applicant is not now engaged, nor does it propose to engage, in 
any business activities other than those necessary for the winding up 
of its affairs. If the shareholders decide to dissolve applicant under 
state law after the claim is resolved, the shareholders would bear the 
cost associated with such dissolution.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-4047 Filed 2-16-95; 8:45 am]
BILLING CODE 8010-01-M