SCHEDULE 14A (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT 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/ 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 Under Rule 14a-12 REAL ESTATE INCOME FUND INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) WESTERN INVESTMENT LLC WESTERN INVESTMENT HEDGED PARTNERS L.P. WESTERN INVESTMENT INSTITUTIONAL PARTNERS LLC WESTERN INVESTMENT ACTIVISM PARTNERS LLC ARTHUR D. LIPSON KARPUS MANAGEMENT, INC. D/B/A KARPUS INVESTMENT MANAGEMENT - -------------------------------------------------------------------------------- (Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): /X/ No fee required. /_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: - -------------------------------------------------------------------------------- (5) Total fee paid: - -------------------------------------------------------------------------------- /_/ 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: - -------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: - -------------------------------------------------------------------------------- (3) Filing Party: - -------------------------------------------------------------------------------- (4) Date Filed October 21, 2005 Mr. Dwight B. Crane Mr. Paolo M. Cucchi Mr. Robert A. Frankel Dr. Paul Hardin Mr. William R. Hutchinson Mr. George Pavia Mr. R. Jay Gerken TO THE DIRECTORS OF THE REAL ESTATE INCOME FUND, INC (RIT) Gentlemen: As stockholders of RIT, we find the escalating levels of rhetoric and warnings which are being included in your recent public filings increasingly disturbing. Specifically, your October 13, 2005, letter to stockholders says: "If the new management agreement is not approved by shareholders of the Fund, the Fund will face considerable uncertainty and its ability to pursue its investment objectives may be disrupted for an indefinite period following consummation of the Transaction." What exactly do you mean by "considerable uncertainty" and "disrupted for an indefinite period"? If these are truly significant issues, why was no mention of any of this in your proxy materials dated September 2, 2005. Stockholders are required to vote on major transactions. You purportedly represent the interests of all stockholders. This means you are responsible for adequate management in all circumstances. Your responsibilities do not include warnings of dire consequences and abdication of responsibility if stockholders exercise their lawful rights to not approve an unadvisable transaction. It is, in fact, your legal duty to prevent the sort of disruptions and uncertainties which you describe. We believe that it is imperative that immediate actions be taken to address the wide discount to net asset value at which the Fund trades. There is an obvious solution which would in my opinion gain the immediate acceptance of a majority of the stockholders: MERGE THIS CLOSED END FUND INTO AN OPEN END FUND WITH SIMILAR OBJECTIVES. We believe that this merger is obviously in the best interest of the vast majority of stockholders. It would permit those investors now trapped below fair value the opportunity to redeem at net asset value, while permitting other investors to continue investing in a very similar strategy. We don't understand why the board has not described to stockholders this simple alternative? And now, the board is recommending that Citigroup reap a windfall profit of $3.7 billion while stockholders continue to suffer below-market values. The issue of a persistent and significant discount to net asset value is not a "side-show", as you call it, but rather a crucial issue for all stockholders. Immediate action must be taken to eliminate the wide historical discount of RIT to its net asset value. Immediate action must be taken to insure competent management under any scenario. We intend to pursue all available legal remedies to ensure that you meet your fiduciary responsibilities, individually and together. These include, but are not limited to, submission of nominations for new directors if you continue to ignore these critical issues. We were not surprised that the special stockholders' meeting was adjourned until November 15, 2005. We call on the board to merge the Fund into an open end fund with similar objectives and recognize the legitimate interests of all stockholders. We will support the Board in such a proposal. Absent your favorable response, we will continue to urge RIT stockholders to vote against the new management and subadvisory agreements. Very truly yours, /s/ Arthur D. Lipson Arthur D. Lipson Managing Member of Western Investment LLC
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DFAN14A Filing
Western Investment Inactive DFAN14AAdditional proxy materials by non-management
Filed: 21 Oct 05, 12:00am