Post by account_disabled on Mar 11, 2024 9:03:54 GMT
Boaz Weinstein's hedge fund sued BlackRock Advisors, saying the world's largest asset manager has prevented outsiders from getting board seats at three of its funds.
Weinstein's Saba Capital Master Fund accused BlackRock and the boards of some of its funds of unilaterally adopting corporate governance rules that favor their board chairs, according to the case filed June 4 in the Delaware Court of Chancery. .
Saba said the funds' statutes make it much France Mobile Number List easier for current directors to be re-elected, while external candidates in elections have a more difficult path to follow. The lawsuit notes that the current statutes allow re-elections with a plurality of votes, while dissident candidates must obtain a majority.
The lawsuits were for the BlackRock Credit Allocation Income Trusty , the BlackRock New York Municipal Bond Trust and the BlackRock Muni New York Intermediate Duration Fund .
BlackRock has implemented other measures that it would not tolerate when investing its own assets, the lawsuit also states. These include holding staggered elections instead of annual board elections, adopting a prohibitive threshold for calling special meetings, and allowing the board to make unilateral changes to the bylaws.
The interesting thing about the case is that Larry Fink , who is undoubtedly the most powerful man in the markets and the head of BlackRock, has written for the last two years, in his annual letter, about corporate social responsibility (CSR).
At the beginning of this year, in his letter , he once again called on companies to have a purpose, practice corporate responsibility and a long-term vision in the midst of a world mired in uncertainty.
The question is... aren't these elections and corporate governance decisions part of CSR? Or is it as the old Mexican adage says, "Thy will be done only on my compadre's mules"?
BlackRock Defense
BlackRock Inc. spokesman Brian Beades said the lawsuit is a move to strengthen Saba's short-term position so it can make a quick profit by selling its stake.
Weinstein founded New York-based Saba Capital in 2009 after co-managing Deutsche Bank AG's lending business. The hedge fund invests in securities including convertible bonds, closed-end funds and stock indices. Activist investors have taken large stakes in at least 100 closed-end funds as of Dec. 31, Bloomberg reported in April.
BlackRock CEO Larry Fink has been a strong advocate for board accountability and shareholder rights. The world's largest asset manager has said that directors or trustees who serve on too many boards spread themselves too thin, limiting their effectiveness.
Why the complaints?
Weinstein's lawsuit accuses BlackRock of improperly disqualifying four candidates nominated by Saba, based on the pretext that they failed to meet a deadline to return their roll call questionnaires. Beades also said Saba knew or should have known about the deadline when he invested.
"It is false for Saba, a sophisticated hedge fund used by a major New York law firm, to claim that it can ignore the funds' longstanding and unambiguous bylaws," Beades said.
Weinstein's Saba Capital Master Fund accused BlackRock and the boards of some of its funds of unilaterally adopting corporate governance rules that favor their board chairs, according to the case filed June 4 in the Delaware Court of Chancery. .
Saba said the funds' statutes make it much France Mobile Number List easier for current directors to be re-elected, while external candidates in elections have a more difficult path to follow. The lawsuit notes that the current statutes allow re-elections with a plurality of votes, while dissident candidates must obtain a majority.
The lawsuits were for the BlackRock Credit Allocation Income Trusty , the BlackRock New York Municipal Bond Trust and the BlackRock Muni New York Intermediate Duration Fund .
BlackRock has implemented other measures that it would not tolerate when investing its own assets, the lawsuit also states. These include holding staggered elections instead of annual board elections, adopting a prohibitive threshold for calling special meetings, and allowing the board to make unilateral changes to the bylaws.
The interesting thing about the case is that Larry Fink , who is undoubtedly the most powerful man in the markets and the head of BlackRock, has written for the last two years, in his annual letter, about corporate social responsibility (CSR).
At the beginning of this year, in his letter , he once again called on companies to have a purpose, practice corporate responsibility and a long-term vision in the midst of a world mired in uncertainty.
The question is... aren't these elections and corporate governance decisions part of CSR? Or is it as the old Mexican adage says, "Thy will be done only on my compadre's mules"?
BlackRock Defense
BlackRock Inc. spokesman Brian Beades said the lawsuit is a move to strengthen Saba's short-term position so it can make a quick profit by selling its stake.
Weinstein founded New York-based Saba Capital in 2009 after co-managing Deutsche Bank AG's lending business. The hedge fund invests in securities including convertible bonds, closed-end funds and stock indices. Activist investors have taken large stakes in at least 100 closed-end funds as of Dec. 31, Bloomberg reported in April.
BlackRock CEO Larry Fink has been a strong advocate for board accountability and shareholder rights. The world's largest asset manager has said that directors or trustees who serve on too many boards spread themselves too thin, limiting their effectiveness.
Why the complaints?
Weinstein's lawsuit accuses BlackRock of improperly disqualifying four candidates nominated by Saba, based on the pretext that they failed to meet a deadline to return their roll call questionnaires. Beades also said Saba knew or should have known about the deadline when he invested.
"It is false for Saba, a sophisticated hedge fund used by a major New York law firm, to claim that it can ignore the funds' longstanding and unambiguous bylaws," Beades said.