SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Bulldog Investors General Partnership
Attn: Phillip Goldstein
60 Heritage Drive
Pleasantville, NY 10570
Phone: 914 747-5262
Fax: 914 747-2150
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
Definitive Proxy Statement [x]
Definitive Additional Materials
Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-
12
Insured Municipal Income Fund. Inc.
(Name of Registrant as Specified in Its Charter)
Bulldog Investors General Partnership
Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required [x].
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials [].
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11 (a) (2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing [].
(1) Amount Previously Paid:
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(4) Date Filed:
Bulldog Investors General Partnership,
Park 80 West - Plaza Two, Saddle Brook, NJ 07663
(201) 556-0092 // Fax: (201)556-0097 // info@bulldoginvestors.com
July 1, 2009
Dear Fellow Shareholder of Insured Municipal Income Fund:
Since its launch in 1993 the Fund's common shares have almost always traded at
a discount to their net asset value (NAV). We think it is only fair that
shareholders have an opportunity to realize NAV. In addition, liquidity for
preferred shareholders has dried up as a result of the failure of the weekly
auctions.
To address these problems, one of our affiliates has submitted a proposal to
be presented at the Fund's annual meeting recommending that the Board take
action, subject to market conditions, to afford common and preferred
shareholders an opportunity to realize the net asset value of their shares.
The incumbent directors themselves unanimously support our proposal!
Therefore, we think it is virtually certain to be approved.
The question for you is which slate of nominees will act in good faith to
implement our proposal if it is approved. The incumbents say nothing at all
about what they will actually do to afford shareholders NAV if our proposal
passes. One can only guess what the incumbent directors mean when they say
they are "committed to continuing [their] ongoing efforts to help the Fund's
shareholders realize the intrinsic value of their shares, subject to market
conditions and the best interests of the Fund and all of its shareholders."
As far as we know, they have always opposed any measures to allow an exit at
NAV.
Our nominees, on the other hand, are absolutely committed to deliver NAV to
stockholders that desire liquidity subject only to market conditions.
Essentially, they will advise the Fund's investment advisor to methodically
and opportunistically raise enough cash (but without making any fire sales)
to (1) redeem a sufficient number of the remaining ARP's and (2) conduct a
significant self-tender offer for the common shares at or close to NAV.
If such a tender offer is oversubscribed, our directors will then consider
additional measures, e.g., merging the Fund into an open-end fund.
We are committed to take these actions whether or not the current UBS
investment management team is there - which is far from certain at this point.
Reuters recently reported that half of UBS's municipal bond management team had
resigned. According to UBS, it then "entered into discussions with the
individuals, and they rescinded their resignations." One industry source
quoted by FundFire suggested that the departures may have been driven by
concern about UBS' "longer term stability . . . and commitment from senior
management to make sure the business will continue to thrive."
That concern is understandable. As you probably know, UBS has been under a
cloud of negative publicity for some time. Last year, New York State
Attorney General Andrew Cuomo brought a multi-billion dollar civil lawsuit
against UBS for pushing everyday investors into buying troubled auction-rate
securities. Then, federal prosecutors charged UBS with perpetrating a massive
tax fraud scheme. Hauled before a Senate panel, Mark Branson, chief financial
officer of UBS's global wealth management unit, said: "Misconduct appears to
have occurred [and] it is apparent now that our controls and supervision were
inadequate." And, just a few weeks ago, Bloomberg reported that a top European
regulator had said that UBS had not fulfilled its duty of due diligence by
negligently investing its customer's money in Bernard Madoff's colossal Ponzi
scheme.
In light of these circumstances, the UBS municipal bond portfolio team could
again decide to leave at any time. With that possibility in mind, we have
already had discussions with several other highly qualified municipal bonds
management firms. They have assured us that they would be able to quickly step
in and provide a seamless transition if the UBS team leaves or the investment
advisory agreement with UBS is terminated. The bottom line is that our nominees
are prepared for any contingency. No matter what happens at UBS, our nominees
are committed to oversee an orderly disposition of a sizeable portion of the
Fund's portfolio as a prelude to a self-tender offer at or close to NAV.
On the other hand, the incumbent board has strong ties to UBS. In 2008 the six
incumbent directors made an average of $220,000 each from serving on the boards
of funds managed by UBS. Since any plan to deliver NAV to shareholders will
likely result in lower fees for UBS, how likely will the incumbent directors be
to bite the hand that feeds them? Moreover, not one director has invested even
a penny of his own money in the Fund. That means none of them has ever been
personally affected no matter how big the Fund's discount was or how long it
persisted. The board's loyalty to UBS combined with a lack of any personal
economic interest in the Fund has led to a classic conflict of interest. That
is why, even though they claim to "support" our proposal to afford stockholders
an opportunity to realize NAV, we question their sincerity.
We and our affiliates, on the other hand, own about $25 million worth of the
Fund's common stock. Therefore, our interest in implementing a plan to
address the persistent discount - without a fire sale -- is completely aligned
with yours. Unlike the incumbent directors who say they "support" our proposal
but are unwilling to make a commitment to implement it, we pledge that if our
nominees are elected and our proposal to afford shareholders NAV passes, they
will immediately take action to achieve that objective.
Please vote your proxy online at WWW.PROXYVOTE.COM or by telephone at
1-800-454-8683 if your shares are held in street name. Alternatively, you can
mail the GREEN proxy card in the enclosed envelope but please do it today.
Very truly yours,
Phillip Goldstein
Principal
PROXY STATEMENT OF BULLDOG INVESTORS GENERAL PARTNERSHIP IN OPPOSITION TO THE
SOLICITATION BY THE BOARD OF DIRECTORS OF INSURED MUNICIPAL INCOME FUND INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS
Bulldog Investors General Partnership ("BIGP") is sending this proxy statement
and the enclosed GREEN proxy card to stockholders of Insured Municipal Income
Fund Inc. (the "Fund") of record as of May 15, 2009. We are soliciting a
proxy to vote your shares at the Annual Meeting of Shareholders(the "Meeting")
which is scheduled for August 12, 2009. Please refer to the Fund's proxy
soliciting material for additional information concerning the Meeting and the
matters to be considered by shareholders including the election of Directors.
This proxy statement and the enclosed GREEN proxy card are first being sent
to shareholders on or about July 1, 2009.
INTRODUCTION
The Fund has announced that five matters will be voted upon at the Meeting:
(1 and 2) the election of six directors, (3) a proposal to approve a new
investment advisory and administration agreement between the Fund and UBS
Global Asset Management (Americas) Inc. ("UBS"); (4) a proposal to change an
investment policy; (5) a shareholder proposal requesting that the board take
action, subject to market conditions, to afford common and preferred
shareholders an opportunity to realize the net asset value of their shares;
and (6) a shareholder proposal that the investment advisory agreement
between the Fund and UBS be terminated. We are soliciting a proxy to vote
your shares (1) FOR the election of the six nominees named below as
directors, (2) AGAINST proposal 3, and (3) FOR proposals 4, 5 and 6.
REASONS FOR THE SOLICITATION
The Fund's common shares have long traded at a discount to net asset value.
In addition, shareholders of the Fund's auction preferred shares ("APS") are
suffering from illiquidity as a result of the breakdown of the auction
mechanism. We believe both classes of shareholders deserve an opportunity
to realize the full value of their investment. Consequently, we are seeking
to elect directors that will take action, subject to market conditions, to
afford common and preferred shareholders an opportunity to realize the
intrinsic value of their shares.
HOW PROXIES WILL BE VOTED
If you complete and return a GREEN proxy card to us and, unless you direct
otherwise, your shares will be voted FOR the election of the nominees named
below, AGAINST proposal 3, and FOR proposals 4, 5 and 6. In addition, you
will be granting the proxy holders discretionary authority to vote on any
other matters that may come before the Meeting.
VOTING REQUIREMENTS
A quorum is a majority of the total shares outstanding. In addition, for
the election of the two directors to be elected solely by the Fund's APS,
a quorum is a majority of the APS outstanding. A plurality of the votes
cast is sufficient to elect a director. The common and APS shareholders
voting together will elect four directors and the APS shareholders voting
separately will elect two directors. Approval of proposals 3, 4, and 6
require the affirmative vote of shareholders owning the lesser of
(a) 67 percent or more of the shares present at the Meeting, or
(b) more than 50 percent of the Fund's outstanding shares. Approval of
proposal 5 requires the affirmative vote of a majority of the votes cast
by all shareholders represented at the Meeting. An abstention or a broker
non-vote will have the same effect as a vote against proposals 3, 4 and 6
and will be ignored in determining the votes cast for or against proposal 5.
Since this is a contested solicitation, we do not expect any broker non-votes.
REVOCATION OF PROXIES
You may revoke any proxy prior to its exercise by: (i) delivering a written
revocation to us; (ii) executing and delivering a later dated proxy; or
(iii) voting in person at the Meeting. Attendance at the Meeting will not
in and of itself revoke a proxy. There is no limit on the number of times
you may revoke your proxy before it is exercised. Only your latest dated
proxy will be counted.
PROPOSALS 1 and 2: ELECTION OF DIRECTORS
At the Meeting, our affiliate intends to nominate the six persons named below
for election as Directors. Each nominee has consented to being named in this
proxy statement and to serve as a Director if elected. Messrs. Goodstein and
Samuels are the nominees for the seats to be elected solely by shareholders
of the APS, which is Proposal 1. Proposal 2 is the election of directors to
fill the four remaining seats. There are no arrangements or understandings
between BIGP or any affiliate of BIGP and any nominee in connection with the
nominations nor do we know of any material conflicts of interest that would
prevent any nominee from acting in the best interest of the Fund. Please
refer to the Fund's proxy soliciting material for additional information
concerning the election of Directors.
Phillip Goldstein (born 1945); Park 80 West, Plaza Two, Suite 750,
Saddle Brook, NJ 07663 - Since 1992, Mr. Goldstein has been an investment
advisor and a principal of the general partner of six investment
partnerships in the Bulldog Investors group of funds. He has been a director
of the following closed-end funds: Mexico Equity and Income Fund since 2000,
Brantley Capital Corporation since 2001 and ASA Ltd since 2008.
Gerald Hellerman (born 1937 ); 5431 NW 21st Avenue, Boca Raton, FL 33496 -
Mr. Hellerman is a director of MVC Acquisition Corp., a blank check company
and is a director and Chairman of the Audit Committee of MVC Capital, Inc.,
a closed-end business development company. Mr. Hellerman owns and has
served as Managing Director of Hellerman Associates, a financial and corporate
consulting firm, since the firm's inception in 1993. He currently serves as a
director, chief financial officer and chief compliance officer for the Mexico
Equity and Income Fund, Inc., and is a manager and Chairman of the Audit,
committee of the Old Mutual Absolute Return and Emerging Managers fund complex
which consists of six funds, a director of Brantley Capital Corporation and
was a director and Chairman of the Audit Committee of AirNet Systems, Inc.,
an air transport company, until June 2008.
Rajeev Das (born 1968); Park 80 West, Plaza Two, Suite 750,
Saddle Brook, NJ 07663 -- Managing Member of the general partner of Opportunity
Income Plus L.P., an investment partnership in the Bulldog Investors group of
investment funds; Director of Mexico Equity and Income Fund, Inc. since 2001.
From September 2005 to March 2006, he served as director of Brantley Capital
Corporation.
Andrew Dakos (born 1966); Park 80 West, Plaza Two, Suite 750,
Saddle Brook, NJ 07663 - Mr. Dakos is a self-employed investment advisor and a
principal of the general partner of six investment partnerships in the Bulldog
Investors group of funds. He has been a director of the Mexico Equity and
Income Fund since 2001 and Brantley Capital Corporation intermittently since
2005 and currently.
Glenn Goodstein (born 1963); 2308 Camino Robledo, Carlsbad, CA 92009 -
Mr. Goodstein is a registered investment advisor and managing member of the
general partner of Mercury Partners LP, an investment partnership. He has been
a director of Mexico Equity and Income Fund since 2001.
Steve Samuels (born 1956); Park 80 West, Plaza Two, Suite 750,
Saddle Brook, NJ 07663 -- Mr. Samuels is a principal of the general partner
of six investment partnerships in the Bulldog Investors group of funds.
None of our nominees is an interested person of the Fund nor does any nominee
personally own any shares of the Fund except that (1) Mr. Goldstein and his
wife beneficially own 51,370 common shares and (2) Mr. Das and his wife
beneficially own 1,200 shares. Clients of Mr. Goodstein own 7,611 common
shares. Each nominee other than Mr. Hellerman is a principal of one or more
of the entities that are general partners of BIGP. The nominees collectively
beneficially own approximately two million common shares of the Fund, all of
which were purchased since July 2007.
Unless instructions to the contrary are given, your proxy will be voted in
favor of each of the aforementioned nominees except that only those proxies
given by shareholders of the APS will be voted for Messrs. Goodstein and
Samuels.
PROPOSAL 3: A PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AND ADMINISTRATION
AGREEMENT BETWEEN THE FUND AND UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
We believe the Fund should dissociate itself from any affiliate of UBS, which
has been the subject of much negative publicity. In the event our nominees
are elected, they intend to promptly replace UBS with an investment manager
that is well qualified to manage the Fund's portfolio. Therefore, unless
instructions to the contrary are given, your proxy will be voted against of
this proposal.
PROPOSAL 4: A PROPOSAL TO CHANGE AN INVESTMENT POLICY TO RELAX THE
DEFINITION OF "INSURED MUNICIPAL OBLIGATIONS" (DUE TO THE RECENT DOWNGRADES
OF BOND INSURERS)
Unless instructions to the contrary are given, your proxy will be voted FOR
this proposal.
PROPOSAL 5: THE BOARD IS REQUESTED TO TAKE ACTION, SUBJECT TO MARKET
CONDITIONS, TO AFFORD COMMON AND PREFERRED SHAREHOLDERS AN OPPORTUNITY TO
REALIZE THE NET ASSET VALUE OF THEIR SHARES.
The Fund's common shares have long traded at a sizeable discount to net
asset value. In addition, shareholders of the Fund's APS are suffering from
illiquidity as a result of the breakdown of the auction mechanism. This
proposal, if adopted, is not binding on the board.
Unless instructions to the contrary are given, your proxy will be voted in
favor of this proposal.
PROPOSAL 6: THE INVESTMENT ADVISORY AGREEMENT BETWEEN THE FUND AND UBS
GLOBAL ASSET MANAGEMENT SHALL BE TERMINATED.
We believe the Fund should dissociate itself from any affiliate of UBS,
which has been the subject of much negative publicity. In the event this
proposal is approved and our nominees are elected, they intend to promptly
replace UBS with an investment manager that is well qualified to manage
the Fund's portfolio.
Unless instructions to the contrary are given, your proxy will be voted in
favor of this proposal.
THE SOLICITATION
We intend to solicit proxies via mail, telephone and via the internet.
Our proxy materials are available on the following web site:
http://www.bulldoginvestorstenderoffer.com/. Persons affiliated with
or employed by BIGP or its affiliates may assist us in the solicitation
of proxies. Banks, brokerage houses and other custodians, nominees and
fiduciaries will be requested to forward this proxy statement and the
enclosed GREEN proxy card to the beneficial owners of common and preferred
shares for whom they hold shares of record. We will reimburse these
organizations for their reasonable out-of-pocket expenses.
Initially, we will bear all of the expenses related to this proxy
solicitation. Because we believe that all shareholders will benefit from
this solicitation, we intend to seek, subject to any applicable regulatory
requirements, reimbursement of our expenses as well as last year's expenses
from the Fund. Shareholders will not be asked to vote on the reimbursement
of these expenses, which we estimate will total $100,000.
PARTICIPANTS
BIGP is the soliciting stockholder and owns 100 common shares. In addition,
affiliates of BIGP beneficially own 1,984,634 common shares.
Phillip Goldstein beneficially owns jointly with his wife 51,370 common
shares and Rajeev Das beneficially owns 1,200 common shares. Clients of Glenn
Goodstein beneficially own 7,611 common shares. Each of Messrs. Goldstein
and Das, Dakos and Samuels is a principal of one or more funds in the Bulldog
Investors group of funds, some of which are partners in BIGP. The address of
each of the aforementioned persons and entities is Park 80 West, Plaza Two,
Suite 750, Saddle Brook, NJ 07663. Other clients advised by Messrs.
Goldstein and Dakos own a total of 57,158 common shares. All of the shares
owned by the aforementioned persons and entities were acquired since
July 26, 2007.
The SEC defines a "participant" to include each person and entity named in
this section and each fund in the Bulldog Investors group of private
investment funds. However, only BIGP and Messrs. Goldstein and Dakos are
actively engaged in this solicitation. The SEC's unorthodox definition of a
"participant" may be misleading because it suggests that a person, e.g., a
nominee has a greater role in the solicitation than may be the case.
Nevertheless, using the SEC's definition of "participant," no participant
or associate of any participant in this solicitation is or has been a party
to any contract, arrangements or understanding with any person with respect
to any securities of the Fund or has any arrangement or understanding with
any person with respect to future employment by the Fund or any of its
affiliates or to any future transactions to which the Fund or any of its
affiliates will or may be a party.
LITIGATION
On January 31, 2007, the Enforcement Section of the Securities Division of
the Massachusetts Secretary of State (the "Secretary") filed a complaint
with the Acting Director of the Securities Division against Opportunity
Partners L.P., Messrs. Goldstein, Dakos and Das and Samuels and certain
related parties (the "Bulldog Parties") alleging that they violated
Massachusetts law by making information about certain unregistered
securities available on the Bulldog Investors website and by providing
information about such investments to an individual who requested it
without first determining that the individual was eligible to invest in
such securities. The Enforcement Section sought a cease and desist order,
an administrative fine, and other relief. On October 17, 2007, the Acting
Director issued a cease and desist order and imposed a fine of $25,000 on
the Bulldog Parties. On November 15, 2007, the Bulldog Parties appealed
the Secretary's ruling to the Massachusetts Superior Court which upheld the
Secretary's order in an order and opinion dated February 12, 2009.
On February 25, 2009, the Bulldog Parties filed a further appeal with the
Appellate Court of Massachusetts. That appeal may be consolidated with any
appeal of a lawsuit filed on March 23, 2007 by the Bulldog Parties in
Massachusetts Superior Court to enjoin the Secretary's enforcement action.
A trial in the latter case is scheduled for July 31, 2009.
July 1, 2009
PROXY CARD
This proxy is solicited in opposition to the Board of Directors of Insured
Municipal Income Fund Inc. (the "Fund") by Bulldog Investors General
Partnership ("BIGP") for the Fund's 2009 Annual Meeting of Shareholders
(the "Meeting"). The undersigned hereby appoints Phillip Goldstein,
Rajeev Das, and Andrew Dakos and each of them, as the undersigned's
proxies, with full power of substitution, to attend the Meeting and any
adjourned or postponed Meeting, and to vote on all matters that come
before the Meeting the number of shares that the undersigned would be
entitled to vote if present in person, as specified below.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [ ].)
1 and 2. ELECTION OF SIX DIRECTORS (NOTE: ONLY PREFERRED SHAREHOLDERS
MAY VOTE OR WITHHOLD AUTHORITY FOR MR. GOODSTEIN OR MR. SAMUELS)
[ ] FOR ANDREW DAKOS [ ] WITHHOLD AUTHORITY
[ ] FOR PHILLIP GOLDSTEIN [ ] WITHHOLD AUTHORITY
[ ] FOR GERALD HELLERMAN [ ] WITHHOLD AUTHORITY
[ ] FOR RAJEEV DAS [ ] WITHHOLD AUTHORITY
[ ] FOR GLENN GOODSTEIN (Preferred Only) [ ] WITHHOLD AUTHORITY
[ ] FOR STEVE SAMUELS (Preferred Only) [ ] WITHHOLD AUTHORITY
3. TO APPROVE A NEW INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
BETWEEN THE FUND AND UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. TO APPROVE A CHANGE TO THE FUND'S INVESTMENT POLICY
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. TO REQUEST THE BOARD TO TAKE ACTION, SUBJECT TO MARKET CONDITIONS,
TO AFFORD COMMON AND PREFERRED SHAREHOLDERS AN OPPORTUNITY TO REALIZE
THE NET ASSET VALUE OF THEIR SHARES.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. TO TERMINATE THE INVESTMENT ADVISORY AGREEMENT BETWEEN THE FUND AND
UBS GLOBAL ASSET MANAGEMENT.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please sign and date below. Your shares will be voted as directed.
If no direction is made, this proxy will be voted FOR the election of the
nominees named above, AGAINST Proposal 3 and FOR Proposals 4, 5 and 6.
The undersigned hereby acknowledges receipt of the proxy statement dated
July 1, 2009 of BIGP and revokes any proxy previously executed.
Signature(s)___________________________________ Dated: _______________