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<TYPE>EX-99.77E
<SEQUENCE>5
<FILENAME>r77e.txt
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77E. Legal Proceedings

On February 17, 2004, the Attorney General of the State of New Jersey ("New
Jersey AG") filed a complaint against Allianz Dresdner Asset Management of
America L.P. ("ADAM"), PA Distributors LLC (formerly known as PIMCO Advisors
Distributors LLC) ("PAD"), PEA Capital LLC (formerly known as PIMCO Equity
Advisors LLC) ("PEA"), and Pacific Investment Management Company LLC
("PIMCO") in connection with its investigation into market timing and late
trading. The complaint contends that inappropriate trading by shareholders
engaged in market timing activity took place in funds in the PIMCO Funds:
Multi-Manager Series ("MMS Funds") and the PIMCO Funds: Pacific Investment
Management Series ("PIMS Funds"). On June 1, 2004, the New Jersey AG dismissed
PIMCO from the lawsuit.

On the same day as the dismissal of PIMCO from the lawsuit, the New Jersey
AG announced that it had reached a settlement agreement with the remaining
defendants ("New Jersey Settlement"). In the New Jersey Settlement, ADAM,
PAD and PEA agreed, while neither admitting nor denying the allegations or
conclusions of law, to: (i) pay New Jersey a civil fine of $15 million and
$3 million for investigative costs and further enforcement initiatives; and
(ii) implement certain changes in corporate governance.

On May 6, 2004, the Securities and Exchange Commission filed a complaint in
the U.S. District Court in the Southern District of New York alleging that
PA Fund Management LLC (formerly known as PIMCO Advisors Fund Management LLC)
("PAFM"), PEA, PAD, Stephen J. Treadway (at the time, the chief executive
officer of PAFM and PAD as well as chairman of the Board of Trustees of the
MMS Funds) and Kenneth W. Corba (the former chief executive officer of PEA
and former portfolio manager of the PEA Growth and PEA Growth & Income Funds)
had, among other things, violated and/or aided and abetted violations of,
various antifraud provisions of the federal securities laws in connection
with alleged "market timing" arrangements that improperly allowed certain
hedge funds to engage in "market timing" in the PEA Growth Fund, the PEA
Opportunity Fund, the PEA Innovation Fund, and the PEA Target Fund. The
complaint seeks injunctive relief, disgorgement plus pre-judgment interest,
monetary penalties, and an order permanently enjoining the defendants from
serving as investment advisers, principal underwriters, officers, directors,
or members of any advisory boards to any registered investment companies.

On February 20, 2004, a putative class action lawsuit was filed in the U.S.
District Court for the District of New Jersey on behalf of certain
shareholders of the PIMCO Funds against ADAM, PAD, PIMCO, PEA, the PIMS Funds,
the MMS Funds, the Trust, PIMCO Commercial Mortgage Securities Trust, Inc. and
certain other defendants, alleging that inappropriate market timing activity
by certain shareholders caused financial injury to the shareholders of those
Funds.

The following additional putative class action lawsuits have been filed
against the PIMS Funds, the MMS Funds and/or their affiliates, each related
to alleged market-timing activity in funds advised by PIMCO or its affiliates:
(1) a lawsuit filed in the U.S. District Court for the District of Connecticut
on February 27, 2004 (naming as defendants ADAM, PAD, PEA, the PIMS Funds,
the MMS Funds, the Trust, PCM and certain other parties); (2) a lawsuit filed
in the U.S. District Court for the Central District of California on March 4,
2004 (naming as defendants PIMCO, ADAM, PEA and PAD); (3) a lawsuit filed in
the U.S. District Court for the Southern District of New York on March 8, 2004
(naming PIMCO, PAD and certain of their affiliates as defendants); (4)
a lawsuit filed in the U.S. District Court for the Southern District of
New York, on March 15, 2004 (naming PIMCO as the defendant); (5) two
separate lawsuits filed in the U.S. District Court for the Central District
of California on March 22, 2004, broughtderivatively on behalf of the PIMCO
High Yield Fund and the PIMCO Money Market Fund, respectively (each naming
ADAM, PAFM and certain otherparties as defendants, and the PIMCO Funds as
the nominal defendant); (6) a lawsuit filed in the U.S. District Court for
the Central District of California, also on March 22, 2004, brought
derivatively on behalf of the PIMS Funds and the MMS Funds (naming ADAM,
PIMCO, PAD and certain other parties as defendants, and the PIMS Funds and
the MMS Funds as nominal defendants); (7) a lawsuit filed in the U.S.
District Court for the District of New Jersey on April 20, 2004 (naming ADAM,
PAD, the PIMS Funds and certain other parties as defendants); and (8) a
lawsuit filed in the U.S. District Court for the Northern District of
California on April 28, 2004 (naming ADAM, PIMCO, PAD, PEA and certain other
parties as defendants, and the "PIMCO Funds" as nominal defendants). Each
complaint for the foregoing putative class actions alleges, among other things,
that inappropriate trading by shareholders engaged in market timing activities
took place in certain of the funds advised by PIMCO, and each complaint seeks
unspecified compensatory damages.

On February 17, 2004, a putative class action lawsuit was filed in the U.S.
District Court for the District of Connecticut on behalf of certain
shareholders of the PIMCO Funds against ADAM, PEA, PIMCO, PIMS Funds, MMS
Funds and certain other defendants, alleging excessive investment advisory
fees and the use of brokerage commissions to pay for distribution of fund
shares. Three similar putative class action lawsuits were subsequently filed,
each in the U.S. District Court for the District of Connecticut on March 1,
2004, April 23, 2004 and May 20, 2004, respectively.

Under Section 9(a) of the 1940 Act, if any of the various lawsuits were to
result in a court injunction against PAFM, PEA, PAD, PIMCO, ADAM and/or Mr.
Treadway, they and their affiliates would, in the absence of exemptive relief
granted by the SEC, be barred from serving as an investment adviser/sub-adviser
or principal underwriter for any registered investment company, including
the Trust. ADAM and certain of its subsidiaries have responded to inquiries
from the SEC concerning the status of the New Jersey Settlement under Section
9(a). If any of PAFM, PEA, PAD, PIMCO or ADAM were subject to an injunction,
each of these entities and their affiliates could in turn seek exemptive
relief from the SEC, as contemplated by the 1940 Act. There is no assurance,
however, that such exemptive relief would be granted. The SEC also has the
power by order to prohibit PAFM, PEA, PAD and PIMCO from serving as investment
advisers and underwriters, if the SEC finds that such entities willfully
violated the federal securities laws in connection with the allegations
discussed above or aided or abetted such violations.

PIMCO, PAD and the Trust believe that these developments will not have a
material adverse effect on the Portfolios or on PIMCO's, or PAD's ability
to perform their respective investment advisory or distribution services on
behalf of the Portfolios.


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