The president of the $105 million closed-end Mentor Income Fund, turned up the heat on a simmering proxy battle
with Karpus Investment Management of Pittsford, N.Y., filing a letter to shareholders with the SEC Sept. 13 alleging Karpus' efforts to become the fund's adviser are motivated by self-interest.
W. Douglas Munn, the fund's president, defends the firm's decision to hire U.S. Bank's First American Asset Management of Minneapolis, Minn., as the fund's new adviser and warns investors about a
separate proxy battle involving Karpus Investment Management.
"You should also be aware that Karpus has engaged in a similar proxy contest to become an adviser to a closed-end fund
at least once before," the letter states. "Ultimately, in that case, however, Karpus abandoned the pretense that it was seeking to advance the interests of all fund shareholders and allowed itself - but not other shareholders - to be bought out at a premium to the market price."
Karpus Investment Management takes issue with the sale of the fund's management contract, which George Karpus, the firm's CEO and president, estimates will be sold to U.S. Bank for $3 million. Further, Karpus, which owns 4.6 percent of the fund's shares, and the fund's other investors have had to tolerate a 10 to 12 percent discount of the fund, said George Karpus, president and CEO of the firm.