SCHEDULE 13D
DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT
NA
1. NAME OF REPORTING PERSON
Phillip Goldstein
2. CHECK THE BOX IF MEMBER OF A GROUP a[]
b[]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) AND 2(e) []
6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
________________________________________________________________
7. SOLE VOTING POWER
685,364
8. SHARED VOTING POWER
39,244
9. SOLE DISPOSITIVE POWER
2,183,096_______________________________________________________
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT OWNED BY EACH REPORTING PERSON
2,183,096
12. CHECK IF THE AGGREGATE AMOUNT EXCLUDES CERTAIN SHARES []
________________________________________________________________
13. PERCENT OF CLASS REPRESENTED BY ROW 11
8.73%
14. TYPE OF REPORTING PERSON
IA
________________________________________________________________
This statement constitutes amendment No.5 to the Schedule 13D
filed on October 20, 2004. Except as specifically set forth
herein, the Schedule 13D remains unmodified.
Item 4 is amended as follows:
ITEM 4. PURPOSE OF TRANSACTION
The filing persons have sent the letters attached as Exhibits
below.
Item 7 is amended as follows:
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A. Letter to Board of Directors
Exhibit B. Letter to Board of Directors
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: 7/13/05
By: /s/ Phillip Goldstein
Name: Phillip Goldstein
Exhibit A.
Opportunity Partners L.P.,
60 Heritage Drive, Pleasantville, NY 10570
(914) 747-5262 // Fax: (914) 747-5258//oplp@optonline.net
June 27, 2005
Bruce A. Rosenblum, Corporate Secretary
The Board of Directors
The New Germany Fund, Inc.
345 Park Avenue
New York, NY 10154
Dear Mr. Rosenblum and Board Members:
As you know, we did not attend the annual meeting because the
board declined our request to affirm that it would allow all
proxies presented at the meeting to be voted as instructed and
counted. Our position was - and is - that the board's
determination to enforce its qualifications bylaw is improper.
Just a few weeks ago, in a lawsuit against the Walt Disney
Company, the Chancery Court of Delaware affirmed its long
standing position that "the right of shareholders to participate
in the voting process includes the right to nominate an opposing
slate."
Unfortunately, you may have been misinformed by your legal
counsel that shareholders of The New Germany Fund (the "Fund") do
not have a similar right to nominate an opposing slate because
the Fund is registered in Maryland. You should be aware that in
a recent case brought in the Circuit Court for Baltimore City in
Maryland against Foxby Corp., that court denied a motion to
dismiss, stating: "This Court believes that Maryland law provides
the same protection to shareholder voting rights that obtains in
Delaware, in similar factual contexts, such as the present one
involving a proxy fight over control of the board. Cf. Brown
v.McLanahan, 148 F.2d 703, 708 (4th Cir. 1945)." We are
enclosing a copy of the Foxby opinion for your convenience.
In addition to questionable legal advice, it also appears you may
have received incorrect advice from your proxy solicitor. A
press release the Fund issued late Friday stated: "The Fund has
been advised unofficially that the number of votes received by
management's director nominees exceeded the number of proxies
obtained, and shares beneficially held, by the dissident
stockholder, which could have been voted for the opposing slate."
The press release indicated that between 7,627,593 and 7,661,376
shares were voted for the incumbent directors.
Please be advised that we received proxies that, along with those
representing our shares, had they been presented at 5 p.m. on
June 22, 2005 at the twice adjourned meeting and had we been
permitted to vote them as instructed, would have cast votes
representing between 7,744,533 and 7,744,761 shares for our
nominees. Therefore, each of our nominees would have been
elected by a margin of at least 83,157 shares if not for the
board's refusal to allow our proxies from being voted as
instructed. In addition, those proxies would have voted on our
net asset value proposal as follows: For: 7,818,403 shares,
Against: 32,698 shares, Abstain: 313,739 shares. Therefore, if
these votes were combined with the votes indicated in your press
release, our proposal would have received 71% of the votes cast.
The question is whether the board acted properly in refusing our
request to waive enforcement of its qualifications bylaw. In
Delaware, the standard for a fair corporate election was set
forth in Aprahamian v. HBO & Co., 531 A.2d 1204, 1206-07 (Del.
Ch. 1987):
The corporate election process, if it is to have any
validity, must be conducted with scrupulous fairness and
without any advantage being conferred or denied to any
candidate or slate of candidates. In the interests of
corporate democracy, those in charge of the election
machinery of a corporation must be held to the highest
standards in providing for and conducting corporate
elections.
We believe a Maryland court would apply the Aprahamian standard
to the Fund. We have attempted to contact a representative of
the Fund to try to resolve this matter before we commence
litigation. Please advise us whether the board would like to
pursue such a resolution. Thank you very much.
Very truly yours,
Phillip Goldstein
Portfolio Manager
Exhibit B.
Opportunity Partners L.P.,
60 Heritage Drive, Pleasantville, NY 10570
(914) 747-5262 // Fax: (914) 747-5258//oplp@optonline.net
July 12, 2005
The Board of Directors
The New Germany Fund, Inc.
345 Park Avenue, 27th Floor
New York, NY 10154
Dear Board Members:
Since we have not received a response to our letter dated June
27, 2005 in which we sought to initiate negotiations to resolve
our differences, it appears we have no choice but to pursue
litigation to challenge the validity of the director
qualifications bylaw of The New Germany Fund, Inc. (the "Fund")
and the board's refusal to waive it in the face of a proxy
contest.
Before we file a derivative lawsuit, we hereby demand that the
board of directors conduct a good faith investigation to
determine whether the Fund should take action against Sullivan &
Cromwell LLP, its legal counsel, for malpractice in connection
with its role in advising the board to adopt the director
qualifications bylaw and to refuse our valid request to waive it.
Please advise us whether the board will investigate this matter
and if so, if it believes the natural desire of the incumbent
directors to avoid an ouster is an inherently disabling conflict.
We would strongly suggest that the board consider retaining
independent legal counsel to advise it on this matter for obvious
reasons.
Rule 1.13 of the Maryland Lawyer's Rules of Professional Conduct
requires the Fund's counsel to faithfully represent only the
Fund. Rule 1.13(d) states: "In dealing with an organization's
directors, officers, employees, members, shareholders or other
constituents, a lawyer shall explain the identity of the client
when it is apparent that the organization's interests are adverse
to those of the constituents with whom the lawyer is dealing."
We believe Sullivan & Cromwell improperly aided and abetted the
board of directors to breach their fiduciary duty to the Fund in
(a) adopting and (b) refusing a valid request to waive the Fund's
preclusive director qualifications bylaw because the bylaw's
primary purpose is to impede a shareholder vote to determine the
composition of the board of directors.
In addition, according to Formal Opinion 86 of the American Bar
Association Standing Committee on Ethics and Professional
Responsibility (December 2, 1932)
The client of the general counsel of a corporation is the
corporation itself. As a corporation speaks and acts only
through its officers and directors, its counsel is their
legal advisor in respect to its affairs, but in performing
that duty he is acting as the corporation's attorney only
and not as the attorney of any of its stockholders,
directors or officers as individuals, or any group or
faction thereof.
In acting as the corporation's legal adviser he must refrain
from taking part in any controversies or factional differences
which may exist among stockholders as to its control. (emphasis
added)
In considering this demand, the board should also take note of
Brown v. McLanahan, 148 F.2d 703, 708 (4th Cir. 1945):
Defendants admit in their answer that the action taken was
for the purpose of perpetuating in power those in present
control of the Company. Under the law of Maryland a voting
trust cannot exist for more than ten years, and this action
of the voting trustees was taken shortly before the
expiration of this period. See Barbour v. Weld 201 Mass.
513, 87 N.E. 909; Friedberg v. Schultz, 312 Ill.App. 171, 38
N.E.2d 182, 183; 2 Chicago-Kent Law Rev. 271. Defendants
also set forth their honest belief that their actions were
for the benefit of the Company.
In this connection, the words of the Court in Luther v. C.
J. Luther Co., 118 Wis. 112, 94 N.W. 69, 73, 99 Am.St.Rep. 977,
appear particularly apt. The Court there said:
`Nothing can be more fallacious in corporate or in popular
government than the argument that because they honestly believe
their policy right, and another dangerous, they may rightfully
invade the field of the suffrage upon which policy rests, and
disfranchise, in whole or in part, those who disagree with them.'
Subjective good faith cannot lend validity to the acts
of the trustees which operate to deprive the certificate-holders
of vital rights. Industrial & General Trust v. Tod, 180 N.Y. 215,
73 N.E. 7
If Sullivan & Cromwell counseled the incumbent directors of the
Fund (and those of other closed-end funds), whatever the
intentions of the directors might be, to commit these breaches
because its own position as legal counsel to the Fund would be
less secure if shareholders were free to nominate and elect other
directors in a proxy contest, then it placed its own interest
above that of its client, i.e., the Fund and the Fund should take
action against Sullivan & Cromwell for malpractice.
If we do not receive a response by August 5, 2005, we intend to
file a derivative lawsuit on behalf of the Fund against Sullivan
& Cromwell for malpractice in aiding and abetting the board of
directors to breach its fiduciary duty to the Fund by (a)
adopting and (b) refusing a valid request to waive the Fund's
preclusive director qualifications bylaw.
Please call me if you wish to discuss this matter.
Very truly yours,
Phillip Goldstein
Portfolio Manager