US – Eaton Vance Wins Trial on Fund Governance
As co-counsel, Skadden successfully defended certain Eaton Vance closed-end funds and their board of trustees in a bench trial against Saba Capital Master Fund, Ltd. The case revolved around a 2020 bylaw amendment addressing contested trustee elections, which Saba argued infringed upon the Investment Company Act of 1940 and the funds’ governing documents. The amendment stipulates that in contested elections, a candidate must secure an affirmative vote from 50% of the fund’s outstanding shares to win. Saba alleged that this requirement was practically unattainable and infringed on shareholders’ voting rights. However, Judge Debra Squires-Lee from the Business Litigation Session of the Massachusetts Superior Court concluded that the bylaw neither violated the 1940 Act nor the governing documents, and it appropriately safeguarded long-term shareholder interests against Saba’s short-term arbitrage approach. The Skadden team was led by Eben Colby.
