SEC Division of Investment Management staff letter: Berthel Growth & Income Trust I

May 5, 2009
Our Ref. No. 20094151123
Berthel Growth & Income
Trust I
Berthel SBIC, LLC
RESPONSE OF THE OFFICE OF CHIEF COUNSEL File Nos. 033-89506 and DIVISION OF INVESTMENT MANAGEMENT 811-08451 Your letter, dated March 30, 2009, requests our assurance that we would not recommend enforcement action to the Securities and Exchange Commission (the “Commission”) under Sections 13(a) and 15(d) of the Securities Exchange Act of 1934 (the “1934 Act”) and the rules thereunder, if, under the circumstances described below, Berthel Growth & Income Trust I (the “Trust”), on its own behalf and on behalf of Berthel SBIC, LLC (the “SBIC”), ceases filing annual and quarterly reports under Sections 13(a) and 15(d) of the 1934 Act with the Commission, commencing with relief from having to file Form 10-K for the period ended December 31, 2008. Background You state the following:
The Trust is a Delaware statutory trust organized on February 10, 1995. The Trust filed a registration statement on Form N-2 on February 14, 1995 to register the sale of its beneficial interests (the “Beneficial Interests”) under the Securities Act of 1933 (the “1933 Act”). The registration statement was declared effective on June 21, 1995, and the Trust commenced its initial public offering at that time. The Beneficial Interests are registered with the Commission under Section 12(g) of the 1934 Act. The declaration of trust for the Trust (the “Declaration”) provides that the Trust was to have dissolved on June 21, 2007, unless the independent trustees of the Trust acted to extend the term of the Trust. Pursuant to the Declaration, the independent trustees extended the term of the Trust to June 21, 2009 (the “Dissolution Date”). The Declaration permits the Trust to dissolve prior to the Dissolution Date upon the resignation of the Trust’s adviser (currently Berthel Fischer & Company Planning, Inc., or the “Trust Advisor”) or the affirmative vote of a majority of the holders of Beneficial Interests. You represent that the Trust currently is not financially capable of calling and conducting a meeting of the holders of Beneficial Interests or otherwise obtaining their consent. You further represent that the Beneficial Interests have never been listed for trading on any national securities exchange or quoted on any quotation system, that no

active secondary trading market has ever developed for the Beneficial Interests and that it is not anticipated that a public market for Beneficial Interests will develop.1 The Trust has 10,541 Beneficial Interests outstanding that are held by 882 holders of record. You represent that, as of the date of your letter, the Trust was current in its 1934 Act reporting obligations on behalf of itself and the SBIC. The Trust formed the SBIC under the laws of the State of Delaware on May 13, 1997 as a wholly-owned subsidiary of the Trust within the meaning of Section 2(a)(43) of the Investment Company Act of 1940 (the “Investment Company Act”), funding the SBIC with capital contributions totaling $5,700,000.2 On May 4, 1998, the SBIC received a license to operate as a small business investment company from the United States Small Business Administration (“SBA”). On October 17, 1997, the SBIC filed with the Commission: (i) a Registration Statement on Form N-5 to register its securities under the 1933 Act and Section 8(b) of the Investment Company Act; and (ii) a Notification of Registration on Form N-8A pursuant to Section 8(a) of the Investment Company Act. On October 4, 2002, the SBIC filed with the Commission: (i) a Registration Statement on Form 10 to voluntarily register its securities under the 1934 Act in order to be eligible to elect treatment as a business development company (“BDC”); and (ii) a Notification of Election on Form N-54A to notify the Commission that it elects to be regulated as a BDC pursuant to
Section 54(a) of the Investment Company Act.
On October 22, 1997, the SBIC applied for, and on June 8, 1999 the Commission granted, an Order of the Commission under the 1934 Act permitting the Trust to file all information and reports required to be filed with the Commission under the 1934 Act by the Trust and the SBIC on a consolidated basis, with such consolidated reports satisfying the separate reporting obligations of both the Trust and the SBIC, subject to certain

1
You state that the Declaration contains restrictions that are intended to prevent the development of a public market for Beneficial Interests. You further state that, pursuant to the Declaration, Beneficial Interests cannot be transferred unless the holder represents and provides documentation satisfactory in form and substance to the Trust Advisor that such transfer will not be effected through a broker-dealer or matching agent that makes a market in Beneficial Interests or that provides a readily available, regular and ongoing opportunity to holders to sell or exchange their Beneficial Interests through a public means of obtaining or providing information of offers to buy, sell or exchange Beneficial Interests. In the case of the Beneficial Interests, the Trust Advisor must determine that such sale, assignment, or transfer would not, by itself or together with any other sales, transfers or assignments, likely result in the Trust being classified as a publicly traded partnership. 2 Because the SBIC is a wholly-owned subsidiary of the Trust, there is no public market for the securities issued by the SBIC. 2

conditions.3
The Trust and the SBIC began filing consolidated disclosures with the filing of the Form 10-K for the period ended December 31, 2002, which was filed with the Commission on March 27, 2003. Until the formation of the SBIC, the Trust acquired investments in its own name, all of which have been liquidated. You represent that, since the formation of the SBIC, the Trust has made no additional direct investments, and all further investments have been made directly by the SBIC. You represent that, as of September 30, 2008, the Trust (through the SBIC) owned investments in six portfolio companies with an aggregate value of $5,489,969.4 The SBIC’s investments did not perform as expected, and distributions from the SBIC to the Trust and from the Trust to its investors did not meet expectations. During the year 2002, the Trust had a deficiency in net assets and net losses and a negative cash flow from operations, and the SBIC was in violation of the maximum capital impairment percentage permitted by the SBA. On August 22, 2002, the SBA notified the SBIC that the SBIC was in default, and that all debentures, accrued interest and fees were immediately due and payable. The SBIC and the SBA subsequently agreed to a plan of debt and interest repayment, and on September 1, 2003, the SBIC signed a loan agreement (the “Agreement”), whereby the SBIC borrowed $8,100,000 from the SBA at an interest rate of 7.49% for a term of 48 months commencing September 1, 2003. The term of the Agreement was subsequently extended to September 1, 2008. You represent that the total outstanding indebtedness of the SBIC to the SBA under the Agreement as of September 30, 2008 was $2,776,217, and that there has been no change in the principal amount of this indebtedness since that date. You represent that the SBIC has been unable to liquidate the remaining six investments. Due to the SBIC’s failure to repay its debt to the SBA in full, on January 7, 2009, the United States District Court for the Northern District of Iowa entered an order appointing the SBA receiver for the purpose of marshalling and liquidating the SBIC’s assets and satisfying the claims of creditors (the “Receivership Order”). The court entered an order in favor of the SBA in the amount of $2,773,841.50, plus accrued interest of $17,598.79 through November 17, 2008, plus accrued interest of $566.15 per day up to the date of the order, together with post-judgment interest. The SBA judgment is secured by all the assets of the SBIC. You represent that, through relevant periodic reports and reports on Form 8-K, the holders of Beneficial Interests have been informed fully of the commencement of the receivership and the circumstances giving rise to the receivership, including, but not limited to, the SBIC’s default, the execution of the Agreement, and the SBIC’s failure to

3
See Berthel Growth & Income Trust I, et al.; Notice of Application, Investment Company Act Release No. 23835 (May 12, 1999); Berthel Growth & Income Trust I, et al., Commission Order, Investment Company Act Release No. 23864 (June 8, 1999). 4 You represent that this valuation was performed in accordance with SBA regulations. 3

repay its debt to the SBA. You also represent that, if the requested relief is granted, the Trust will disclose in a current report on Form 8-K, within four business days after the date such relief is granted, the Trust’s plans for dissolution, winding up, and liquidation, and the fact that the Trust will cease filing on its own behalf and on behalf of the SBIC annual and quarterly reports under Sections 13(a) and 15(d) of the 1934 Act. The Trust’s assets consist of its interest in the SBIC, which is now in receivership, and cash in an amount less than $1,000. You contend that these assets require no active management by the Trust Advisor because the SBA, as receiver, will liquidate the SBIC’s assets. You represent that the Trust and the SBIC have no employees and have never had any employees, and that, other than potential distributions from the SBIC and advances from the Trust Advisor, the Trust has no source of funds. You represent that, in the event the SBA liquidates the SBIC’s investments in amounts that exceed the aggregate of the amount due to the SBA, the claims of other creditors of the SBICand the costs of the receivership, the SBA will distribute the excess to the Trust.5 You represent that, if the Trust receives any such distribution, it will, as soon as practicable, use the proceeds to satisfy its obligations and make a final distribution to the holders of Beneficial Interests. You represent that the Trust will not engage in future business operations; the only future activities in which the Trust will engage will be paying creditors and making distributions to holders of Beneficial Interests if the SBA distributes cash to the Trust following liquidation of the SBIC’s assets. You represent that the Trust’s sole purpose is to continue in existence until the SBA liquidates the assets of the SBIC and, if the SBA makes any distributions to the Trust, satisfy its liabilities and distribute cash (as soon as practicable after receiving distributions from the SBIC) to the holders of Beneficial Interests. You represent that any advances from the Trust Advisor will be used primarily to pay professional fees and filing expenses associated with filings with the Commission and the State of Delaware, and that any material advances will be reported on a current report on Form 8-K. Pursuant to Delaware law and the terms of the Declaration, the Trust will continue for up to three years after the Dissolution Date for the sole purposes of prosecuting and defending legal actions, settling and closing its business, disposing of and conveying property, discharging its liabilities, and distributing to the holders of Beneficial Interests any remaining assets. You represent that from and after the Dissolution Date, the Trust Advisor will act without compensation as liquidating Trust Advisor. You represent that when the liquidating Trust Advisor has completed the winding up of the Trust, the Trust

5
You represent that the SBA has informed you that, as of the date of your letter, it is not aware of any such claims. You state that pursuant to the Receivership Order, the SBA, as receiver, will give notice to potential creditors, and the court will determine the validity and priority of all claims filed with the court in accordance with the procedures set forth in such notice. 4

then will file with the Secretary of State for the State of Delaware a certificate of cancellation and file with the Commission a current report on Form 8-K.6

You note that, because the Trust has in excess of 500 holders of Beneficial Interests, it is currently not eligible under Rule 12g-4(a) under the 1934 Act to file on Form 15 to terminate the registration of the Beneficial Interests under Section 12(g) of the 1934 Act pursuant to Rule 12g-4(b), which would automatically suspend the Trust’s periodic reporting requirements. You request on behalf of the Trust and the SBIC that the staff grant relief from filing annual and quarterly reports under Section 13(a) and
Section 15(d) of the 1934 Act. In connection with your request, you represent that if the
requested relief is granted: (i) the Trust will disclose in a current report on Form 8-K, within four business days after the date such relief is granted, the Trust’s plans for dissolution, winding up, and liquidation, and the fact that the Trust will cease filing on its own behalf and on behalf of the SBIC annual and quarterly reports under Sections 13(a) and 15(d) of the 1934 Act; (ii) the Trust, on its own behalf and on behalf of the SBIC, will disclose in a current report on Form 8-K any material developments relating to the Trust and the SBIC, including, but not limited to, any advancement of funds to the Trust by the Trust Advisor, the termination, liquidation, dissolution, and cancellation of the Trust and the SBIC, and all material developments relating to the SBIC’s receivership (including copies of any reports that the SBIC or the SBA, as receiver, is required to file with the court, or, in the event the Trust files for protection under the United States Bankruptcy Code (the “Bankruptcy Code”), any reports that the Trust is required to submit to the Office of the United States Trustee pursuant to the Bankruptcy Code (collectively, “Court Reports”)); (iii) the Trust will file on Form 15 to terminate the registration of the Beneficial Interests as soon as it is legally permitted to do so; and (iv) the Trust, on behalf of itself and the SBIC, will resume normal reporting under the 1934 Act (or request and obtain further no-action relief from the Commission) if the Trust and/or the SBIC is in existence three years from the date of this letter. You contend that, under the present circumstances, continued compliance with the annual and quarterly reporting requirements of the 1934 Act would pose a substantial financial burden on the Trust with no offsetting benefit to any existing holders of Beneficial Interests, and would provide no meaningful information to holders of Beneficial Interests.

6
You represent that as soon as it is permitted to do so by the terms and provisions of Section 54(c) of the Investment Company Act, the SBIC will file on Form N-54C notifying the Commission of its voluntary withdrawal of election under Section 54(a) of the Investment Company Act. You represent that, subsequent to filing on Form N-54C, the SBIC will not be required to register as an investment company under the Investment Company Act in reliance on the exception provided by Section 7 of the Investment Company Act for “transactions which are merely incidental to the dissolution of an investment company.” See I.C.H. Corporation, SEC Staff No-Action Letter (Feb. 26, 1997). 5

Legal Analysis
Section 15(d) of the 1934 Act requires every issuer that has filed a registration
statement that becomes effective under the 1933 Act to make certain filings with the Commission as required by Section 13 of the 1934 Act. Section 13(a) of the 1934 Act requires every issuer of a security registered under Section 12 of the 1934 Act (a “Registered Issuer”) to make certain filings with the Commission, in accordance with the rules and regulations prescribed by the Commission. Specifically, Rule 13a-1 under the 1934 Act requires that Registered Issuers file annual reports on Form 10-K for each fiscal year. Rule 13a-11 under the 1934 Act requires that Registered Issuers file current reports on Form 8-K, unless substantially the same information as that required by Form 8-K has been reported previously by the Registered Issuer. Rule 13a-13 under the 1934 Act generally requires a Registered Issuer to file quarterly reports on Form 10-Q for each of the first three quarters of its fiscal year. You request relief to permit the Trust, on its own behalf and on behalf of the SBIC, to cease filing annual and quarterly reports as required by the 1934 Act.7

The Commission has indicated that it may be appropriate to modify particular issuers’ reporting requirements under Sections 13 and 15 of the 1934 Act if: (1) such modification is not inconsistent with the protection of investors; and (2) full compliance with the reporting requirements would entail unreasonable effort or expense.8 Applying these principles, the Commission staff has granted no-action relief to several issuers that have ceased or severely curtailed their operations.9 The Commission has noted that where a court-appointed trustee in a bankruptcy proceeding or a receiver or other judicially appointed officer has possession of an issuer’s books and records, it may be

7
You state that the Trust will continue to report on Form 8-K any material developments that affect the Trust and the SBIC. 8 See Application of the Reporting Provisions of the Securities Exchange Act of 1934 to Issuers Which Have Ceased or Severely Curtailed Their Operations, Securities Exchange Act Release No. 9660 (June 30, 1972) (“Release No. 34-9660”). 9 See, e.g., Overseas Partners Ltd., SEC Staff No-Action Letter (Mar. 16, 2007); Global Preferred Holdings, Inc., SEC Staff No-Action Letter (Jul. 18, 2006); ML-Lee Acquisition Fund II, L.P. and ML-Lee Acquisition Fund (Retirement Accounts) II, L.P., SEC Staff No-Action Letter (Mar. 2, 2003); J.G. Industries, Inc., SEC Staff No-Action Letter (Jun. 18, 2001); ML-Lee Acquisition Fund, L.P., SEC Staff No-Action Letter (Feb. 4, 2000); JMB Income Properties, Ltd.-XIII, SEC Staff No-Action Letter (May 13, 1999); PaineWebber R&D Partners, L.P., SEC Staff No-Action Letter (Jul. 31, 1998); Arvida/JMB Partners, L.P.-II, SEC Staff No-Action Letter (Apr. 20, 1998); JMB Income Properties, Ltd.-IX, SEC Staff No-Action Letter (Apr. 24, 1997); JMB Income Properties, Ltd.-VI, SEC Staff No-Action Letter (May 9, 1996); Numerica Financial Corporation, SEC Staff No-Action Letter (Apr. 1, 1996); Chrysler Capital Income Partners, L.P., SEC Staff No-Action Letter (Apr. 24, 1995); Monarch Capital Corporation, SEC Staff No-Action Letter (Sep. 3, 1992). 6

appropriate to accept reports prepared under the supervision of the trustee or other judicially appointed officer, as the case may be, in lieu of periodic reports that conform to the requirements of the 1934 Act.10 You believe that it is consistent with the protection of investors to permit the Trust to cease filing Forms 10-K and l0-Q on its own behalf and on behalf of the SBIC. You assert that Forms 10-K and 10-Q are designed to provide investors with information about the continuing operations and financial status of an issuer, and to assist investors in determining whether or not to hold, buy, or sell a particular security. You argue that the Trust and the SBIC have no material information to impart to investors via Form 10-K or Form 10-Q because there is not now and has never been a public market for the Beneficial Interests, the Trust has no operations and few remaining assets other than the SBIC, and the SBIC is in a liquidating receivership from which it does not expect to emerge as an operating concern.11 You also contend that continued compliance with the quarterly and annual reporting requirements under the 1934 Act would constitute an unreasonable burden on the Trust because the Trust has completely ceased operations, has only minimal funds, and is not generating any additional cash to pay for the expenses of preparing and filing annual and quarterly reports. You argue that requiring the Trust to continue filing annual and quarterly reports conforming to the requirements of the 1934 Act for itself and on behalf of the SBIC would generate substantial expenses to the Trust without providing any corresponding benefit. You further contend that continued compliance with the quarterly and annual reporting requirements under the 1934 Act may detract from the sole focus of the SBIC, which is the orderly disposition of its assets pursuant to the receivership. On the basis of the facts and representations in your letter, we would not recommend enforcement action to the Commission under Sections 13(a) and 15(d) of the 1934 Act and the rules thereunder if the Trust, on its own behalf and on behalf of the SBIC, ceases filing annual and quarterly reports under Sections 13(a) and 15(d) of the 1934 Act with the Commission, commencing with relief from having to file Form 10-K for the period ended December 31, 2008. 12 This conclusion is based in particular on your representations that: (1) within four business days after the date the requested relief is granted, the Trust will disclose in a current report on Form 8-K (among other things) the Trust’s plans for dissolution, winding up, and liquidation, and the fact that the Trust will cease filing on its own behalf and on behalf of the SBIC annual and quarterly reports under Sections 13(a) and 15(d) of the 1934 Act; (2) the Trust, on its own behalf and on behalf of the SBIC, will disclose in a current report on Form 8-K any material

10 See Release No. 34-9660.
11 You represent that in the event that the Trust and the SBIC possess such material information in the future, the Trust will disclose such information on Form 8-K. 12 This letter confirms no-action relief orally provided by Kyle R. Ahlgren, Attorney-Adviser, Office of Chief Counsel, Division of Investment Management, to Michael K. Denney of Bradley & Riley PC, counsel for the Trust and the SBIC, on March 31, 2009. 7

8

developments relating to the Trust and the SBIC, including, but not limited to, any advancement of funds to the Trust by the Trust Advisor, the termination, liquidation, dissolution, and cancellation of the Trust and the SBIC, and all material developments relating to the SBIC’s receivership (including copies of any Court Reports); (3) in the event the SBA liquidates the SBIC’s assets in amounts that exceed the aggregate of the amount due to the SBA and the costs of the receivership, and the SBA distributes the excess to the Trust, the Trust will, as soon as practicable, use the proceeds to satisfy its obligations and make a final distribution to the holders of Beneficial Interests; (4) the Trust, on behalf of itself and the SBIC, will resume reporting under the 1934 Act (or request and obtain further no-action relief from the Commission) if the Trust and/or the SBIC is in existence three years from the date of this letter; and (5) the Trust will file on Form 15 to terminate the registration of the Beneficial Interests as soon as it is legally permitted to do so. This letter expresses our position on enforcement action only, and does not purport to express any legal conclusions on the issues presented.13 Because our position is based on the facts and representations in your letter, you should note that any different facts or representations may require a different conclusion.

Kyle R. Ahlgren
Attorney-Adviser
13 You have not requested, and we do not take, any position with respect to the obligations of the Trust and the SBIC under Section 14(a) of the 1934 Act and the rules thereunder relating to the filing of proxies in connection with shareholder votes.

F. James Bradley
Byron G. Riley
Michael K. Denney
Patrick M. Courtney
Donald G. Thompson
Kelly R. Baier
Gregory J. Seyfer
Dean A. Spina
Joseph E. Schmall
Bradley G. Hart
William J. Neppl
William T. McCartan
Maureen G. Kenney
Vernon P. Squires
Timothy J. Hill
Paul D. Burns
Michael J. Pugh
Janice J. Kerkove
Nancy A. Wood
Shannon P. Thompson
BRADLEY & RILEY PC
ATTORNEYS AND COUNSELORS
CEDAR RAPIDS - IOWA CITY
2007 FIRST A VENUE SE
CEDAR RAPIDS, IA 52402-6344
MAILING ADDRESS:
PO BOX 2804
CEDAR RAPIDS, IA 52406-2804
TELEPHONE: 319-363-0101
FAX: 319-363-9824
Kevin C. Papp
Laura C. Mueller
Kimberly H. Blankenship
Matthew S. Carstens
Joseph W. Younker
Jessica A. Dora
Jeremy B. P. Hagan
Natalie K. Ditmars
Adam S. Tarr
WEBSITE ADDRESS:
www.bradleyriley.com
E-MAIL ADDRESS:
mdenney@bradleyriley.com
DIRECT DIAL:
319-861-8728
Attention: Douglas 1. Scheidt
ChiefCounsel
Division ofInvestment Management
Securities and Exchange Commission 100 F Street, N.E.
Washington, D.C. 20549
Re: No Action Request Relating to:
Berthel Growth & Income Trust I
Berthel SBIC, LLC
Commission File No. 033-89506
Commission File No. 811-08451
Securities Exchange Act of 1934 / Section 12(g); Sections 13(a); Section 15(d) On behalf ofBerthel Growth & Income Trust I, a Delaware statutory trust (the "Trust"), and Berthe1 SBIC, LLC (the "SBIC"), we hereby request that the Staff ofthe Division of Investment Management advise the Trust and the SBIC that it will not recommend enforcement action to the Securities and Exchange Commission (the "Commission") under Sections 13(a) and 15(d) ofthe Securities Exchange Act of 1934 (the "1934 Act") and the rules thereunder, ifthe Trust, on its own behalf and on behalf ofthe SBIC, ceases filing annual and quarterly reports under Sections 13(a) and 15(d) ofthe 1934 Act with the Commission, commencing with relief from having to file Form lO-K for the period ended December 31, 2008. {00690650.DOC}

BRADLEY & RILEY PC
I. BACKGROUND.
The Trust.
The Trust was organized on February 10, 1995. On February 14, 1995, the Trust filed with the Commission a Registration Statement on Form N-2 (File No. 33-89506) to register the sale ofits beneficial interests (the "Beneficial Interests") under the Securities Act of 1933, as amended (the "1933 Act"). The registration statement was declared effective on June 21, 1995, and the Trust commenced its initial public offering at that time. The Beneficial Interests are registered with the Commission under Section 12(g) ofthe 1934 Act. Berthel Fisher & Company Planning, Inc. (the "Trust Advisor") is the trust advisor for the Trust. The Trust Advisor is a corporation organized under the laws ofthe State ofIowa on March 20, 1989. It is a registered investment advisor organized as a wholly owned subsidiary ofBerthel Fisher & Company. The declaration oftrust for the Trust (the "Declaration") provides that the Trust was to have dissolved on June 21,2007, unless independent trustees acted to extend the term ofthe Trust. Pursuant to the declaration oftrust, the independent trustees extended the term ofthe Trust to June 21,2009 (the "Dissolution Date"). The Trust can dissolve earlier upon the resignation ofthe Trust Advisor or the affirmative vote of a majority ofthe holders ofBeneficial Interest. The Trust does not have funds to call and conduct a meeting ofthe holders of Beneficial Interests or otherwise obtain the consent ofholders ofBeneficial Interests. As provided in the Declaration, on the Dissolution Date, the Trust shall dissolve and the Trust Advisor, acting as liquidating Trust Advisor, shall liquidate any remaining investments within three (3) years. The Beneficial Interests have never been listed for trading on any national securities exchange or quoted on any quotation system; no active secondary trading market has ever developed for the Beneficial Interests. The Declaration contains restrictions that are intended to prevent the development of a public market for the Beneficial Interests. Beneficial Interests cannot be transferred unless the holder represents and provides documentation satisfactory in form and substance to the Trust Advisor that such transfer will not be effected through a broker￾dealer or matching agent that makes a market in Beneficial Interests or that provides a readily available, regular and ongoing opportunity to holders to sell or exchange their Beneficial Interests through a public means of obtaining or providing information of offers to buy, sell or exchange Beneficial Interests. In the case ofthe sale ofBeneficial Interests, the Trust Advisor must determine that such sale, assignment, or transfer would not, by itself or together with any other sales, transfers or assignments, likely result in the Trust being classified as a publicly traded partnership. It is not anticipated that a public market for the Beneficial Interests will develop. The Trust Advisor has not received any compensation for its services since August 2003.
The Trust Advisor will not receive any compensation for serving as the liquidating Trust {00690650.DOC}

BRADLEY & RILEY PC
Advisor. The independent trustees ofthe Trust Advisor have not received any compensation for their services since March 2003, although the Trust has continued to accrue fees for the independent trustees. The Trust has 10,541 Beneficial Interests outstanding that are held by 882 holders of record. As ofthe date ofthis letter, the Trust is current in its 1934 Act reporting obligations on behalfofitself and the SBIC. The SBIC. On May 13, 1997, the Trust formed the SBIC under the laws ofthe State of Delaware as a wholly owned subsidiary within the meaning of Section 2(a)(43) ofthe Investment Company Act of 1940 (the "Investment Company Act"). On May 4, 1998, the SBIC received a license to operate as a Small Business Investment Company from the Small Business Administration ("SBA"). The Trust funded the SBIC with capital contributions of $5,700,000. On October 17, 1997, the SBIC filed with the Commission a Registration Statement on Form N-5 (File No. 811-08451) to register its securities under the 1933 Act, and for the registration ofits securities pursuant to Section 8(b) ofthe Investment Company Act. On October 17, 1997, the SBIC filed with the Commission Form N-8A (File No. 811-08451) to register its securities pursuant to the provisions of Section 8(a) ofthe Investment Company Act. On October 4,2002, the SBIC filed with the Commission a Registration Statement on Form 10 (File No. 000-50027) to voluntarily register its securities under the 1934 Act to be eligible to elect treatment as a business development company pursuant to Section 54(a) ofthe 1934 Act. On October 4,2002, the SBIC filed with the Commission Form N-54A (File No. 814-00623) to notify the Commission that it elects to be subject to the provisions of Section 54(a) ofthe Investment Company Act. On October 22, 1997, the SBIC applied for an Order ofthe Commission (the "Exemptive Order") under the 1934 Act permitting the Trust to file all information and reports required to be filed with the Commission under the 1934 Act by the Trust and the SBIC on a consolidated basis, with such consolidated reports satisfying the separate reporting obligations ofboth the Trust and the SBIC, subj ect to certain conditions. The SBIC amended the application for the Exemptive Order on November 10, 1998 and April 12, 1998. In Investment Company Act Release No. 23864, dated June 8, 1999, the Commission found it to be consistent with the public interest to grant the requested exemptive relief. Investment Company Act of 1940 Release No. 23864 (June 8, 1999). Berthel Growth & Income Trust I, et aI., Notice of Application, Investment Company Act Release No. 23835 (May 12, 1999); Berthel Growth & Income Trust I, et aI., Commission Order, Investment Company Act Release No. 23864 (June 8, 1999). After the SBIC voluntarily registered its securities by filing Form 10 on October 4,2002, the Trust and the SBIC began filing consolidated disclosures with the filing ofthe Form 10-K for the period ended December 31,2002,
which was filed with the Commission on March 27,2003. {00690650.DOC}

BRADLEY & RILEY PC
II. CURRENT STATUS OF THE TRUST AND THE SBIC.
The Trust was organized to make investments in portfolio companies to provide capital appreciation potential and current income to its investors. It invested primarily in private placements ofsubordinated debt, preferred stock, and related equity securities in small- to medium-sized privately- and publicly-owned companies. Until the formation ofthe SBIC, the Trust acquired investments in its own name. All ofthose investments have been liquidated. After the formation ofthe SBIC, the SBIC made all investments and the Trust made no further direct investments. As disclosed in its report on Form 10-Q for the period ended September 30, 2008, the Trust, through the SBIC, owns investments in six portfolio companies. Pursuant to SBA regulations, those investments were valued at $5,489,969 on September 30,2008. There have been no changes in valuation since that date. In the early stages of operation, the Trust distributed $1,953,088 to the holders ofits Beneficial Interests, which represents approximately 18.5% of all capital invested in the Trust. However, the Trust has not made distributions to holders ofits Beneficial Interests since November 1999. During the course ofits operations, the SBIC issued debentures payable to the SBA totaling $9,500,000. The original debenture terms required semiannual payments ofinterest at annual interest rates ranging from 6.353% to 7.64%. The SBIC also paid an annual 1% SBA loan fee on the outstanding balance. The SBIC's investments did not perform as expected, and distributions from the SBIC to the Trust and from the Trust to its investors did not meet expectations. The Trust and the SBIC continued to work with their investments to maximize value. During 2002, the Trust had a deficiency in net assets and net losses and negative cash flow from. operations. In addition, the SBIC was in violation ofthe maximum capital impairment percentage permitted by the SBA. By notice dated August 22, 2002, the SBA notified the SBIC that the SBIC was in default and that all debentures, accrued interest and fees were immediately due and payable. Subsequently, the SBIC and the SBA agreed to a plan of debt and interest repayment, and on September 1,2003, the SBIC signed a loan agreement ("Agreement") with the SBA for $8,100,000 (after paying $1,400,000 on the $9,500,000 debt balance), with a term of 48 months at an interest rate of 7.49%. On August 2, 2007, the Agreement was extended one year to September 1,2008. The SBIC was able to liquidate a number ofits investments and reduce its indebtedness to the SBA from $8,100,000 to $2,776,217 as of September 30, 2008. There has been no change in the principal amount ofthis indebtedness since that date. The SBIC has been unable to liquidate the six remaining investments, although it has actively sought purchasers for them. On November 26,2008, when the SBIC was unable to pay the SBA debt in full, the SBIC signed a Consent Order and Judgment consenting to the entry of an order in United States
District Court appointing the SBA as receiver. On January 7,2009, the Federal District Court {00690650.DOC}

BRADLEY & RILEY PC for the Northern District ofIowa entered an order (the "Receivership Order") appointing the SBA the receiver for the purpose ofmarshalling and liquidating in an orderly manner all ofthe SBIC's assets and satisfying the claims of creditors in the order ofpriority as determined by the Court. The Court entered an order in favor ofthe SBA in the amount of $2,773,841.50, plus accrued interest of$17,598.79 through November 17,2008, plus accrued interest of $566.15 per day up to the date ofthe order, together with post-judgment interest. The SBA debt is secured by all assets ofthe SBIC. Through relevant periodic reports and reports on Form 8-K, the holders ofBeneficial Interests have been fully informed ofthe commencement ofthe receivership and the circumstances.giving rise to the receivership, including but not limited to the SBIC's default, the execution ofthe Agreement, and the SBIC's failure to repay its debt to the SBA. Ifthe requested reliefis granted, the Trust will, within four business days after the date such reliefis granted, file on Form 8-K, detailing (among other things) the Trust's plans for dissolution, winding up, and liquidation, and the fact that the Trust will cease filing on its own behalf and on behalf ofthe SBIC annual and quarterly reports under Sections 13(a) and 15(d) ofthe 1934 Act. The Trust's sole assets are its interest in the SBIC, which is now in receivership, and cash ofless than $1,000. These remaining assets require no activernanagement by the Trust Advisor, as the SBA, as receiver, will liquidate the SBIC's assets. The Trust and the SBIC have no employees and have never had employees. Other than potential distributions from the SBIC and advances from the Trust Advisor, the Trust has no source offunds. Ifthe SBA, as receiver, is successful in liquidating the SBIC's investments for amounts exceeding the aggregate ofthe amount due the SBA and other creditors1 ofthe SBIC and the costs ofthe receivership, the SBA will distribute the excess to the Trust. If the Trust receives such a distribution, it will use the proceeds first to satisfy its obligations and next to make a final distribution to the holders ofBeneficial Interests. Ifthe Trust receives distributions from the SBIC sufficient to make distributions to the holders ofBeneficial Interests, the Trust will make distributions to the holders as soon as practicable after receiving distributions from the SBIC. Pursuant to the Delaware statutes and the declaration oftrust, the Trust will continue to exist after the Dissolution Date until the filing of a certificate of cancellation. The declaration of trust provides that the Trust's existence will continue for up to three years after the Dissolution Date for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against it, and enabling the Trust gradually to settle and close its business, to dispose of and convey its property, to discharge its liabilities and to
distribute (as soon as practicable after receiving distributions from the SBIC) to the holders ofBeneficial Interests any 1 The SBA, as receiver, has indicated to the undersigned that, as ofthe date ofthis letter, the receiver is not aware of any claims. Pursuant to the Receivership Order, the receiver will give notice to potential creditors. The Court will determine the validity and priority of all claims filed with the Court in accordance with the procedures set forth in the notice. {00690650.DOC}

BRADLEY & RILEY PC remaining assets, but not for the purpose of continuing the business for which the Trust was organized. From and after the Dissolution Date, the Trust Advisor will act without compensation as liquidating Trust Advisor. When the liquidating Trust Advisor has completed the winding up ofthe Trust, the Trust will then file a certificate of cancellation with the Delaware Secretary of State and a Current Report on Form 8-K. As soon as legally permissible, the Trust will file on Form 15 to terminate the registration ofthe Beneficial Interests, and the SBIC will file on Form N-54C notifying the Commission of the voluntary withdrawal ofthe SBIC ofits elections under Section 54(a) ofthe Investment Company Act. Subsequent to filing the Form N-54C, the SBIC will not be required to register as an investment company under the Investment Company Act in reliance on the exception provided by Section 7 ofthe Investment Company Act for "transactions which are merely incidental to the dissolution of an investment company." Ifthe requested reliefis granted, the Trust, on its own behalf and on behalf ofthe SBIC, will disclose in a current report on Form 8-K any material developments relating to the Trust and the SBIC, including, but not limited to, all material developments relating to the SBIC's receivership (including copies of any reports that the SBIC or the SBA, as receiver, is required to file with the Court, or, in the event the Trust files for protection under the United States Bankruptcy Code (the "Bankruptcy Code"), any reports that the Trust is required to submit to the Office ofthe United States Trustee pursuant to the Bankruptcy Code (collectively, "Court Reports")), any advancement offunds to the Trust by the Trust Advisor, and the termination, liquidation, dissolution, and cancellation ofthe Trust and the SBIe. Because the Trust has in excess of 500 holders ofBeneficial Interests, it is currently not eligible under Rule 12g-4(a) to file a Form 15 under Section 12(g) ofthe 1934 Act.
III. ANALYSIS
On June 30, 1972, the Commission issued Release No. 34-9660, indicating that it may accept modified periodic reporting from companies in financial difficulty "which have ceased or severely curtailed their operations and, thus, would find it extremely difficult to comply fully with" the reporting requirements. In that Release, the Commission noted that the reports required by Sections 13(a) and 15(d) "are among the more important requirements adopted by the Congress 'to insure the maintenance offair and honest markets in securities transactions... ", Further, the Commission stated in the Release, "In determining whether the modifications ofthe reporting requirements with respect to a particular issuer would be consistent with the protection ofinvestors the Commission will consider the nature and extent ofthe trading in the securities of the issuer." In Release No. 34-9660, the Commission referred to Rule 12b-21 promulgated under the 1934 Act and the instructions to Forms 10-K, 10-Q and 8-K as pertaining to the granting ofrelief from the reporting provisions ofthe 1934 Act upon request by the issuer. Under rule 12b-21, the issuer must provide " ... as much ofthe information as is possible without unreasonable effort or {00690650.DOC}

BRADLEY & RILEY PC expense and to demonstrate that to provide additional information would entail unreasonable effort or expense." The Commission stated further that

• ..in general, an unreasonable effort or expenses would result ifthe benefits
  which might be derived by the shareholders ofthe issuer from the filing ofthe information are outweighed significantly by the cost to the issuer of obtaining the information. For example, where a company has ceased, or severely curtailed is operations it might be unreasonable to require it to undergo the expense of obtaining the opinion of an independent auditor on its financial statements. SEC Release No. 34-9660. As described above, the Beneficial Interests have never been listed for trading on any national securities exchange or quoted on any quotation system and no active secondary trading market has ever developed for the Beneficial Interests. The Declaration contains restrictions and limitations on transfer that are intended to prevent the development of a public market. Due to the restriction on transfer and the lack of a trading market for the Beneficial Interests, there is no need for the general public to have access to the type ofinformation about the Trust required by the 1934 Act. The Trust will continue to file current reports on Form 8-K to disclose all material developments relating to the Trust and the SBIC, including, but not limited to, all material developments relating to the SBIC's receivership (including copies of any Court Reports), any advancement offunds to the Trust by the Trust Advisor, and the termination, liquidation, dissolution, and cancellation ofthe Trust and the SBIC. As set forth above, the Trust's only asset, the SBIC, is in receivership, and the SBA, as receiver, is in the process ofliquidating all ofthe assets ofthe SBIC. The Trust has no operations of any kind and has less than $1,000 cash. The Trust will dissolve by its terms in June, 2009. Although the Trust could dissolve sooner upon the decision ofthe holders of Beneficial Interests, the resignation ofthe Trust Advisor, or the dissolution ofthe Trust Advisor, such a dissolution ofthe Trust would be expensive to undertake. The Trust Advisor cannot resign without the consent ofthe holders ofBeneficial Interests. Ifthe Trust Advisor dissolves (rather than resigns), thereby triggering the dissolution ofthe Trust, the Trust Agreement requires the holders ofBeneficial Interests to elect a Liquidating Trustee to handle the orderly liquidation ofthe Trust. The Trust does not have funds to finance a meeting ofholders of Beneficial Interests to approve the resignation ofthe Trust Advisor or dissolve the trust. Furthermore, the holders ofBeneficial Interests are not organized, and it is unlikely that sufficient holders would undertake to call a meeting ofthe holders to take action, which would mean that the Trust would have no person or entity to handle the liquidation and winding up of the Trust affairs. The Trust Advisor believes it to be both reasonable and beneficial to the holders ofBeneficial Interests to continue to act in that role until the SBIC is fully liquidated and the affairs ofthe Trust wound up. {00690650.DOC}

BRADLEY & RILEY PC
The Trust will not engage in future business operations. The only future activities in which the Trust will engage is paying creditors and making distributions to holders ofBeneficial Interests ifthe SBA distributes cash to the Trust following liquidation ofthe SBIC's assets. There has never been, and there is not now, a market for the Beneficial Interests ofthe Trust. The Trust's sole purpose is to continue in existence until the SBA liquidates the assets ofthe SBIC and, ifthe SBA makes any distributions to the Trust, satisfy its liabilities and distribute cash (as soon as practicable after receiving distributions from the SBIC) to the holders of Beneficial Interests. Because the Trust expects to generate no more income and incur no more liabilities (other than possible limited advances from the Trust Advisor and the continued accrual ofTrustee fees), there will be nothing to report to stockholders other than events relating to the liquidation ofthe SBIC by the SBA. Any advances from the Trust Advisor will be used primarily to pay professional fees and filing expenses associated with filings with the Commission and the state ofDelaware. Any material advances will be reported on a current report on Form 8-K. We believe that the Trust and the SBIC meet all ofthe requirements set forth in Release No. 34-9660 for relief from the reporting requirements ofthe 1934 Act. Further compliance with the reporting requirements of Section 13(a) and 15(d) ofthe 1934 Act would pose a substantial burden on the Trust and the SBIC with no offsetting benefit to any holder ofBeneficial Interests. The purposes ofForms 10-K and 10-Q -- to provide investors with information about the continuing operations and financial status of an issuer, and to assist investors in determining whether or not to hold, buy, or sell a particular security -- are not currently applicable to the Trust or the SBIC. Because there is not now and has never been public trading in the Beneficial Interests and because the Trust has no operations and few remaining assets, other than the SBIC, which is in receivership, there would be no public interest served by requiring the Trust or the SBIC to continue to file periodic reports under the 1934 Act. The Trust proposes that, until liquidation ofthe SBIC and the dissolution and liquidation ofthe Trust are complete, it will continue to file current reports on Form 8-K to disclose any material developments relating to the Trust and the SBIC, including, but not limited to, all material developments relating to the SBIC's receivership (including copies of any Court Reports), any advancement offunds to the Trust by the Trust Advisor, and the termination, liquidation, dissolution, and cancellation ofthe Trust and the SBIC. Such reporting on Form 8-K is fully adequate to inform holders of Beneficial Interests of developments regarding the Trust and the SBIC. Requiring the Trust to continue to file periodic reports complying with the terms of Section 13(a) and
15(d) ofthe 1934 Act would serve no meaningful purpose. Continued compliance with quarterly and annual reporting requirements under the 1934 Act would constitute an unreasonable burden on the Trust because the Trust has completely ceased operations, has only minimal funds, and is not generating any additional cash to pay for the expenses ofpreparing and filing annual and quarterly reports. The Trust's only source of funds comes in the form of advances from the Trust Advisor, and there is no certainty that the Trust Advisor will continue to advance funds. Ifthe Trust Advisor does advance funds, the {00690650.DOC}

BRADLEY & RILEY PC
March 30,2009 repayment ofsuch loans would reduce the amount that might otherwise be available for distribution to the holders ofBeneficial Interests. Furthermore, as the SBIC is in a liquidating receivership from which it does not expect to emerge as an operating concern, continued compliance with the quarterly and annual reporting requirements under the 1934 Act by the SBIC may detract from the sole focus ofthe SBIC, which is the orderly disposition ofits assets pursuant to the receivership. In several no-action letters, the Commission staffhas granted relieffrom the reporting requirements of Sections 13(a) and 15(d). The staff has taken the position that it will not recommend enforcement action against a registrant that (i) has ceased or substantially curtailed its operations, (ii) is otherwise current in its 1934 Act reporting obligations, (iii) undertakes to disclose to public investors on a current report on Form 8-K any material developments relating to the registrant, including its winding up and liquidation, and (iv) has demonstrated that to provide additional information would entail unreasonable effort or expense. See, e.g., Overseas Partners Ltd. (Pub. Avail. March 16, 2007); Global Preferred Holdings, Inc~ (Pub. Avail. July 18, 2006); Cygnus, Inc. (Pub. Avail. March 27,2006); Cambridge Advantaged Properties 11 Limited Partnership (Pub. Avail. Feb. 6,2002); JG Industries, Inc. (Pub. Avail. June 18,2001); Secom General Corp. (Pub. Avail. Mar. 21, 2001), Phoenix Medical Technology, Inc. (Pub. Avail. Nov. 17,2000); Roberds, Inc. (Pub. Avail. Oct. 4,2000); Ross Technology, Inc. (Pub. Avail. Mar. 30, 1999); Luminatt Paints, Inc. (Pub. Avail. Apr. 12,1996).
IV. REQUEST FOR RELIEF
For all ofthe reasons set forth above, the Trust respectfully requests that the Commission staff advise the Trust and the SBIC that it will not recommend enforcement action to the Commission under Sections 13(a) and 15(d) ofthe 1934 Act and the rules thereunder, ifthe Trust, on its own behalf and on behalf ofthe SBIC, ceases filing annual and quarterly reports under Sections 13(a) and 15(d) ofthe 1934 Act with the Commission, commencing with relief from having to file Form 10-K for the period ended December 31, 2008. Ifthe requested reliefis granted: (i) within four business days after the date the requested reliefis granted, the Trust, on its own behalf and on behalf ofthe SBIC, will file on Form 8-K, detailing (among other things) the Trust's plans for dissolution, winding up, and liquidation, and the fact that the Trust will cease filing on its own behalf and on behalf ofthe SBIC annual and quarterly reports under Sections 13(a) and 15(d) ofthe 1934 Act; (ii) the Trust, on its own behalf and on behalf ofthe SBIC, will disclose in a current report on Form 8-K any material developments relating to the Trust and the SBIC, including, but not limited to, all material developments relating to the SBIC's receivership (including copies of any Court Reports), any advancement offunds to the Trust by the Trust Advisor, and the termination, liquidation, dissolution, and cancellation ofthe Trust and the SBIC; (iii) the Trust will file on Form 15 to terminate the registration ofthe Beneficial Interests as soon as it is legally permitted to do so; (iv) the SBIC will file on Form N-54C notifying the Commission ofthe voluntary withdrawal ofits election under Section 54(a) ofthe Investment Company Act, as soon as it is legally permitted to do so; and (v) the Trust and the {00690650.DOC}

BRADLEY & RILEY PC
March 30,2009
SBIC will resume normal 1934 Act reporting (or request and obtain further no-action relief) if the Trust and/or the SBIC is in existence three years from the date such reliefis granted. The requested reliefis consistent with the protection ofholders ofBeneficial Interests. Continued compliance with the reporting requirements ofthe 1934 Act would pose a substantial financial burden on the Trust with no offsetting benefit to any existing holder ofBeneficial Interests. The Trust believes that filing the Form 10-K for the year ended December 31, 2008 and all subsequent quarterly and annual reports under the 1934 Act would provide no meaningful information to holder ofBeneficial Interests. If you have any further questions or require additional information, please call the undersigned or Ronald O. Brendengen, ofthe Trust Advisor, at (319) 447-5700. Very truly yours, BRADLEY & RILEY PC {00690650.DOC}