SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
Brantley Capital Corp,.
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PROXY STATEMENT IN OPPOSITION TO THE SOLICITATION BY THE BOARD OF
DIRECTORS OF BRANTLEY CAPITAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS (To be held on August 8, 2002)
My name is Phillip Goldstein. I am a director and a large
shareholder of Brantley Capital Corporation ("Brantley"). I am
sending this proxy statement and the enclosed GREEN proxy card to
holders of record on June 28, 2002 (the "Record Date") of
Brantley. I am soliciting a proxy to vote your shares at the
2002 Annual Meeting of Shareholders of Brantley (the "Meeting")
and at any and all adjournments or postponements of the Meeting.
Please refer to Brantley's proxy soliciting material for
additional information concerning the Meeting and a full
description of the matters to be considered by the shareholders
at the Meeting.
This proxy statement and the enclosed GREEN proxy card are
first being sent to shareholders of Brantley on or about July --,
2002.
INTRODUCTION
There are two matters that Brantley has scheduled to be voted
upon at the Meeting:
1. The election of two directors to serve until 2007.
2. To ratify the selection of KPMG LLP as Brantley's
independent accountant.
In addition, I intend to submit two proposals for
a vote by shareholders:
3. To recommend that the board of directors take action to
commence an orderly liquidation of Brantley as soon as
practicable.
4. To terminate the existing investment advisory agreement and
to request that the board negotiate a new advisory
agreement at a reduced fee.
With respect to these matters, I am soliciting a proxy to vote
your shares FOR the election of Gerald Hellerman and Andrew Dakos
as directors of Brantley and FOR each of the other proposals.
How Proxies Will Be Voted
All of the proposals scheduled by Brantley to be voted on at the
Meeting are included on the enclosed GREEN proxy card. If you
wish to vote FOR the election of my nominees to the Board, you
may do so by completing and returning a GREEN proxy card.
If you return a GREEN proxy card to me or to my agent, your
shares will be voted on each matter as you indicate. If you do
not indicate how your shares are to be voted on a matter, they
will be voted FOR the election of the above persons to the Board
and For Proposals 2, 3, and 4.
If you return a GREEN proxy card, you will be granting the
persons named as proxies discretionary authority to vote on any
other matters of which they are not now aware that may come
before the Meeting. These may include, among other things,
matters relating to the conduct of the Meeting.
Voting Requirements
If a quorum is not present at the Meeting, or if a quorum is
present but sufficient votes to approve any of the proposals are
not received, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation
of proxies, consideration of matters of which I am not aware at
this time, or negotiations with the incumbent directors. If an
adjournment of the Meeting is proposed, the persons named as
proxies on the GREEN proxy card will vote for or against such
adjournment in their discretion. Please refer to Brantley's
proxy statement for the voting requirements for Proposals 1 and
2. Proposal 3 requires a majority of votes cast for approval.
Proposal 4 requires a "For" vote by shareholders representing the
lesser of (i) 50% of the shares outstanding or (ii) 67% of the
shares present at the Meeting.
Revocation of Proxies
You may revoke any proxy you give to management or to me prior to
its exercise by (i) delivering a written revocation of your proxy
to Brantley; (ii) executing and delivering a later dated proxy to
me or to Brantley or to our respective agents; 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 prior to the Meeting. Only
the latest dated, properly signed proxy card will be counted.
Information Concerning the Soliciting Shareholder
The shareholder making this solicitation is Phillip Goldstein, 60
Heritage Drive, Pleasantville, NY 10570. I am an investment
manager who presently manages investment portfolios having assets
of approximately $70 million. Since December 1, 1992, I have
been the president and 50% shareholder of a company that serves
as the general partner of a private investment partnership which
is a shareholder in Brantley. Since 1996, I have taken an active
role in urging the management of certain registered closed-end
investment companies to take various actions that I believe would
benefit those companies and their shareholders.
As of June 28, 2002, I am deemed to be the beneficial owner of
253,400 shares of Brantley common stock held in brokerage
accounts by my clients and me, representing approximately 6.65%
of Brantley's outstanding common stock, substantially all of
which are held in margin accounts at brokerage firms by my
clients and me. We purchased --------- shares between June 28,
2000 and December 31, 2000, ---------- shares in 2001and no
shares in 2002. We have not sold any shares.
REASON FOR THE SOLICITATION
There are two primary reasons I am conducting this solicitation:
The shares of Brantley have traded at a very large discount from
net asset value for a long time. Currently the discount is in
excess of 40%. I believe the surest way to close the gap between
net asset value and market price is to commence an orderly
liquidation of Brantley.
I believe the primary goal of Robert Pincas, Brantley's CEO, is
to siphon off as much money from Brantley as possible. Since I
have been on the board, no director other than me has had the
spine to challenge his ill-conceived and self-serving schemes to
increase his own wealth by diluting shareholders through the sale
of additional shares of Brantley at prices below market value.
The directors of Brantley are supposed to be "watchdogs" for the
shareholders. However, it seems the only trick these "watchdogs"
know is to roll over and play dead whenever Mr. Pincas gives the
command. None of the directors other than me showed any backbone
to stand up to Mr. Pincas' after he proposed his self-dealing
schemes to dilute shareholders and increase his management fees.
Therefore, this solicitation is intended to afford shareholders
an opportunity to vote (1) for directors that will provide an
independent check on Mr. Pincas' self-dealing tendencies, (2)
for a proposal to maximize shareholder value by recommending that
an orderly liquidation of Brantley be commenced as soon as
practicable, and (3) for a proposal to terminate the advisory
agreement and reduce the management fee, which in my view, is
currently exorbitant in light of Brantley's poor long-term stock
performance.
CERTAIN CONSIDERATIONS
In deciding whether to give me your proxy, you should consider
the following:
If elected, my nominees will constitute a minority of the board
and will not be able to cause Brantley to take any action without
the support of other directors, which is not assured. Also,
implementation of certain Board actions may require shareholder
approval, and no assurance can be given that such approval will
be obtained. In addition, various costs, which would be borne
indirectly by shareholders, may be associated with certain
actions, including but not limited to those associated with
holding a special meeting of shareholders. I believe that such
costs are far outweighed by the benefits to most shareholders of
these actions. In addition, certain actions may have adverse tax
consequences for some shareholders that cannot be quantified at
this time.
I believe that all shareholders of Brantley will benefit if any
actions taken to reduce or eliminate the discount from NAV are
successful. However, my clients who hold shares of Brantley pay
me fees. These fees are based upon a share of the profits the
client earns and will be greater if the value of Brantley's
shares increases.
ELECTION OF DIRECTORS
At the Meeting, I will nominate the following persons for
election as directors for a term expiring in 2007. Each nominee
has consented to serve if elected and to being named in this
proxy statement.
Andrew Dakos (Age 36), 14 Mill Street, Lodi, NJ 07644
Private investor. President and CEO of UVitec Printing Ink, Inc.
since 1997. Mr. Dakos was a director of the Dresdner RCM
Strategic Global Income Fund from 2000 to 2002 and he has been a
director of The Mexico Equity and Income Fund since 2000.
Gerald Hellerman (Age 64), 10965 Eight Bells Lane, Columbia, MD
21044
Managing Director of Hellerman Associates, a financial and
corporate consulting firm; Trustee of Third Avenue Value Trust
since 1993; Trustee of the Third Avenue Variable Series Trust
since 1999; director of Clemente Strategic Value Fund from 1998
to 2000; director of The Mexico Equity and Income Fund since
2000.
As of June 28, 2002, Mr. Dakos beneficially owned ------- shares
of Brantley. Mr. Hellerman does not own any shares. Other than
fees that may be payable by Brantley to its directors, none of my
nominees has any arrangement or understanding with any person
with respect to any future employment by Brantley or by any
affiliate of Brantley.
The persons named as proxies on the enclosed GREEN proxy card
intend, in the absence of contrary instructions, to vote all
proxies they are entitled to vote FOR the election of the above
persons, each of whom have consented to stand for election and to
serve if elected. If any nominee is unable to serve, an event
not now anticipated, the proxies will be voted for such other
person (who shall be disinterested), if any, as is designated by
the persons named as proxies.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANT
Unless instructed otherwise, the persons named as proxies will
vote FOR the selection of KPMG LLP as Brantley's independent
accountant for the year ending December 31, 2002.
PROPOSAL 3: TO RECOMMEND THAT THE BOARD OF DIRECTORS TAKE ACTION
TO COMMENCE AN ORDERLY LIQUIDATION OF BRANTLEY AS SOON AS
POSSIBLE
I believe the surest way to close the gap between net asset value
and market price is to commence an orderly liquidation of
Brantley. An orderly liquidation means that (1) no new
investments will be made and (2) when a liquidity event occurs,
e.g., a sale of a portfolio holding for cash or stock or an
initial public offering of a portfolio company, a distribution of
cash and/or securities in the portfolio company will be made to
Brantley shareholders. This process, which has no definite
timetable, will insure that all of the net assets of Brantley
will be distributed to shareholders over time, thereby
eliminating the discount to net asset value.
Please note that even if this proposal is approved, it will not
be binding on the board of directors. Also, Robert Pincas, the
CEO of Brantley, has taken the self-serving position that
shareholders may not vote on this proposal and the rest of the
directors and Sutherland Asbil & Brennan, the counsel to Brantley
have sided with Mr. Pincas and against the shareholders in this
matter. I believe that there is no legal basis for their
position.
PROPOSAL 4: TO TERMINATE THE EXISTING INVESTMENT ADVISORY
AGREEMENT AND TO REQUEST THAT THE BOARD NEGOTIATE A NEW ADVISORY
AGREEMENT AT A REDUCED FEE
Robert Pincas, the CEO of Brantley, has taken the self-serving
position that shareholders may not vote on this proposal. The
rest of the directors and Sutherland Asbil & Brennan, the counsel
to Brantley have sided with Mr. Pincas and against the
shareholders in this matter. However, the Investment Company Act
of 1940 permits the shareholders to vote to terminate the
investment advisory agreement at any time. I originally advised
Brantley that submission of this proposal would be contingent on
the approval of Proposal No. 3. However, if Mr. Pincas prevents
shareholders from voting on proposal No. 3, the submission of
this proposal for a vote shall not be subject to any contingency.
If Mr. Pincas attempts to prevent the shareholders from voting to
terminate the advisory agreement, I intend to seek a court order
to enforce the termination.
As stated above, I believe the surest way to maximize shareholder
value is to commence an orderly liquidation as soon as possible.
An orderly liquidation does not require the degree of active
management that currently exists. Thus, the existing contract
providing for an annual fee of 2.85% of NAV should be terminated
and a new contract negotiated at a substantially reduced fee with
an investment advisor that will serve as a "caretaker" for the
orderly liquidation of Brantley.
THE SOLICITATION
I am making this solicitation personally. 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 shares of Common Stock for
whom they hold shares of record. I will reimburse these
organizations for their reasonable out-of-pocket expenses.
Initially, I will personally bear all of the expenses related to
this proxy solicitation. Because I believe that the shareholders
will benefit from this solicitation, I intend to seek
reimbursement of these expenses from Brantley. Shareholders will
not be asked to vote on the reimbursement of my solicitation
expenses, which I estimate to be about $--------. As of July --,
2002, I expect to have incurred approximately $-----expenses. If
I am not reimbursed by Brantley, I may seek partial reimbursement
from one or more of my clients or from the general partner of the
investment partnership that I manage.
I am not and, within the past year, have not been a party to any
contract, arrangement or understanding with any person with
respect to any securities of Brantley. In addition, there is no
arrangement or understanding involving either myself or any
affiliate that relates to future employment by Brantley or any
future transaction with Brantley.
ADDITIONAL PROPOSALS
I know of no business that will be presented for consideration at
the Meeting other than that set forth in this proxy statement and
in Brantley's proxy statement. If any other matters are properly
presented for consideration at the Meeting, it is the intention
of the persons named as proxies in the enclosed GREEN proxy card
to vote in accordance with their own best judgment on such
matters.
DATED: July --, 2002
PROXY SOLICITED IN OPPOSITION TO THE BOARD OF DIRECTORS OF THE
BRANTLEY CAPITAL CORPORATION BY PHILLIP GOLDSTEIN, A DIRECTOR AND
A SHAREHOLDER
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 8,2002
The undersigned hereby appoints Andrew Dakos and Phillip
Goldstein, and each of them, as the undersigned's proxies, with
full power of substitution, to attend the Annual Meeting of
Shareholders of Brantley Capital Corporation ("Brantley") to be
held on August 8, 2002 and any adjournment or postponement
thereof, and to vote on all matters that may come before the
Meeting and any such adjournment or postponement the number of
shares that the undersigned would be entitled to vote, with all
the power the undersigned would possess if present in person, as
specified below. The proxies may vote in their discretion with
respect to such other matter or matters as may come before the
Meeting and with respect to all matters incident to the conduct
of the Meeting.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [
].)
1. ELECTION OF TWO CLASS II DIRECTORS.
FOR all of the nominees listed below [ ]
WITHHOLD AUTHORITY [ ]
(except as indicated to the contrary below)
to vote for all of the nominees listed below
ANDREW DAKOS and GERALD HELLERMAN
To withhold authority to vote for one or more nominees,
enter the name(s) of the nominee(s) below.
____________________________________________________________
2. To ratify the selection of KPMG LLP as Brantley's
independent accountant.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To recommend that the board of directors take action to
commence an orderly liquidation of Brantley as soon as
practicable.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To terminate the existing investment advisory agreement and
to request that the board negotiate a new advisory
agreement at a reduced fee.
FOR [ ] AGAINST [ ] ABSTAIN [
Important - - 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 and will be
voted FOR all other proposals. The undersigned hereby
acknowledges receipt of the proxy statement dated July --, 2002
of Phillip Goldstein and revokes any proxy previously executed.
(Important - Please be sure to enter date.)
Please sign exactly as your name appears hereon. When shares are
held by joint tenants, both should sign. When signing as an
attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full
corporate name by the President or other duly authorized officer.
If a partnership, please sign in partnership name by authorized
person. Please return promptly in the enclosed envelope.
SIGNATURE(S)__________________________ Dated: _______________