Saba Capital Comments on Court’s Decision to Uphold the Investment Company Act, A Win for Closed-End Fund Shareholders
Saba Capital Management, L.P. and certain associated parties (collectively “Saba” or “we”) today commented on the outcome of the lawsuit brought in the Suffolk County Superior Court in Massachusetts (the “Court”) by four closed-end funds advised by Eaton Vance – the Eaton Vance Senior Income Trust (NYSE: EVF), Eaton Vance Senior Floating-Rate Trust (NYSE: EFR), Eaton Vance Floating-Rate Income Trust (NYSE: EFT) and Eaton Vance Limited-Duration Fund (NYSE: EVV) (the “Funds”) – and the following fund trustees: Thomas E. Faust, Jr., Mark R. Fetting, Cynthia E. Frost, George J. Gorman, Valerie A. Mosley, William H. Park, Helen F. Peters, Keith Quinton, Marcus L. Smith, Susan J. Sutherland and Scott E. Wennerholm.
On July 15, 2020, Eaton Vance sued for declaratory judgement on the validity of its actions to strip away voting rights from closed-end fund shareholders through the adoption of a Control Share Amendment to its bylaws. On January 21, 2023, the Court issued a summary judgement ruling in favor of Saba and invalidating Eaton Vance’s control share provision as a violation of the Investment Company Act. In its ruling, the Court agreed with the 2022 ruling by the United States District Court for the Southern District of New York in a prior lawsuit Saba brought against Nuveen that found the restrictive use of control share bylaws to violate federal law.
Michael D’Angelo, Partner and General Counsel of Saba, commented:
“The Court’s ruling is an important win for closed-end fund shareholders as it upholds the Investment Company Act and the protection it provides for the voting rights of every shareholder. Not only does the ruling rescind Eaton Vance’s control share provision, but it puts all closed-end funds on notice that any attempts to entrench trustees and investment advisors that violate the law will not be tolerated. Eaton Vance used this illegal amendment to strip voting rights in order to facilitate the approval of new investment advisory agreements needed in connection with the sale of Eaton Vance to Morgan Stanley. Had the law not been broken, we believe the significant losses suffered by shareholders could have been mitigated.”
About Saba Capital
Saba Capital Management, L.P. is a global alternative asset management firm that seeks to deliver superior risk-adjusted returns for a diverse group of clients. Founded in 2009 by Boaz Weinstein, the Firm is a pioneer of credit relative value strategies and capital structure arbitrage. The Firm is headquartered in New York City. Learn more at www.sabacapital.com.