Gabelli Capital Asset Fund
Sub-Item 77E: Legal Proceedings
The Registrant has been named a party in the following legal
proceeding which was instituted during the semi-annual period
ended June 30, 2000.
These actions allege that the defendants violated Section 16(b) of
the Securities Exchange Act, 15 U.S.C. Section 78p(b), by realizing
a profit from the purchases and sales of the securities of
Envirosource Inc. ("Envirosource") within a six month period
("short-swing profits"). The complaint alleges that Envirosource was
named as a defendant solely to bring all the necessary parties before
the court. Plaintiff demands that defendants account for, and pay to
Envirosource, the purported short-swing profits made, plus interest
and the costs incurred in defending the lawsuit, and award Plaintiff
his own costs and disbursements, including attorneys' fees.
On May 10, 2000, in lieu of filing an answer to the complaint, GAMCO
Investors, Inc., Gabelli Small Cap Growth Fund and Gabelli Capital Asset
Fund (collectively, the "Gabelli Defendants") filed a motion to dismiss the
complaint for failure to state a claim. Currently, the court has not
decided the Gabelli Defendants' motion to dismiss. Additionally, no party
has conducted any discovery.
. U.S. District Court for the Southern District of New York
Plaintiff: Richard Morales
Defendants: GAMCO Investors, Inc.
Gabelli Small Cap Growth Fund
Gabelli Capital Asset Fund
Envirosource Inc.
John Does Nos. 1 through 20
Date Instituted: February 24, 2000
g:\shared\clients\gabcapas\misc\nsar77e.doc
