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Client Alerts

Recent Court Rulings Shape Strategies for Closed-End Funds in Shareholder Activism Context

January 04, 2024

By Sean Donahue,Eduardo Gallardo,& David A. Hearth

Recent decisions from the U.S. Court of Appeals for the Second Circuit and the U.S. District Court for the Southern District of New York have brought attention to anti-takeover strategies employed by registered closed-end investment companies amidst shareholder activism campaigns. The cases emphasize that any attempt to alter the foundational principle of “one share, one vote” under Section 18(i) of the Investment Company Act of 1940 is impermissible, and consequently, investment companies are urged to explore alternative defensive measures in response to potential hostile shareholder actions.

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Contributors

Image: Sean Donahue
Sean Donahue

Partner, Corporate Department


Image: Eduardo Gallardo
Eduardo Gallardo

Partner, Corporate Department


Image: David A. Hearth
David A. Hearth

Partner, Corporate Department


Practice Areas

Shareholder Activism & Takeover Defense

Litigation


For More Information

Image: Sean Donahue
Sean Donahue

Partner, Corporate Department

Image: Eduardo Gallardo
Eduardo Gallardo

Partner, Corporate Department

Image: David A. Hearth
David A. Hearth

Partner, Corporate Department

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