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After months of battling a well-known, closed-end shareholder activist to keep the Mexico Equity and Income Fund open and then finally acquiescing to his desires, the fund is facing an ironic twist of fate.

Advantage Advisers, the fund's U.S. adviser and a subsidiary of CIBC World Markets Corp., both of New York, is now imploring investors of the 10-year-old, closed-end fund to vote to liquidate the fund - but can't get a quorum.

Advantage finally conceded that in 1999, the fund's shares traded at an average discount of 18.97 percent. Originally, however, Advantage had recommended that investors stay the course and ignore the protestations of shareholder activist Phillip Goldstein, president of Opportunity Partners of Pleasantville, N.Y.

As Goldstein typically recommends of the closed-end funds in which his hedge fund invests, he campaigned vigorously to have the fund realize a higher net asset value by any means possible - including liquidating the fund. Goldstein's fund owns 2.5 percent of the $104 million Mexico Equity and Income Fund, or approximately $1.6 million worth of shares.

After waging a bitter proxy battle with Goldstein for months, Advantage finally gave in and scheduled a shareholder vote for July 14 to liquidate the fund. But that meeting had to be postponed because the fund couldn't amass the two-thirds votes needed to liquidate, according to an Aug. 3 SEC filing.

Advantage then scheduled a second shareholder meeting for Aug. 10, but once again, failed to garner enough votes.

The fund has now scheduled a third proxy vote for Sept. 12, according to an SEC filing.

It is unclear what the fate of the fund will be if, on Sept. 12, shareholders of the Mexico Equity and Income Fund fail to approve the fund's termination a third time.

Jim Dwyer, a director in the legal department of CIBC, declined to say what recourse the board might take if shareholders fail to liquidate the fund a third time.

CIBC issued a press release the day of the Aug. 11 shareholder meeting saying the fund would increase its "efforts to solicit votes from those stockholders who have not yet voted."

Dwyer also declined to say whether Mira, Inc. of New York, an affiliate of Zurich Capital Markets and an institutional investor in the Mexico Equity and Income Fund, had already voted its shares or if it had supported the proposal. According to ownership documents publicly filed last fall, Mira owns about 22.5 percent of the outstanding shares of the fund.

"We do not make public who has voted and who has not," Dwyer said.

A call to Mira was not returned.

Goldstein, who won a seat as an independent director of the fund in February, said getting a simple majority, let alone a two-thirds vote, would be "difficult."

Goldstein won a seat on the board in February in spite of the fact that Advantage complained to the SEC that Goldstein had abused standard proxy regulations by posting comments to an Internet message board frequented by closed-end fund investors.

Not only did Goldstein win a seat on the board, but he got fellow shareholders to vote for a number of measures he condoned, including temporarily withholding compensation for all of the fund's board members until shareholders were allowed to realize net asset value price for their shares.

At that meeting, shareholders also approved a plan requiring the board of directors to decide on a plan of action within 30 days that would allow investors to realize the fund's net asset value.

Continuing discussions led Goldstein and the other board members to recommend on April 5th that shareholders approve full liquidation of the fund.

This is not the fund's first run-in with what appears to be apathetic investors. The fund's annual meeting this past February also had to be adjourned and rescheduled three times to obtain the necessary quorum of votes necessary to transact business.