Brigade Leverage Capital Structures Fund Ltd., et al. v. PIMCO Income Strategy Fund, et al. (Lawyers Weekly No. 10-167-13)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us SJC‑11289 BRIGADE LEVERAGED CAPITAL STRUCTURES FUND LTD. & another[1] vs. PIMCO INCOME STRATEGY FUND & another.[2] Suffolk. May 6, 2013. ‑ September 11, 2013. Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ. Business Trust. Trust, Business trust. Corporation, By‑laws, Stockholder, Board of directors. Contract. Words, “On at least an annual basis.” Civil action commenced in the Superior Court Department on December 1, 2011. The case was heard by Peter M. Lauriat, J., on motions for summary judgment. The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court. John C. Ertman, of New York (C. Thomas Brown with him) for the defendants. Joseph S. Allerhand, of New York (Patrick J. O’Toole, Jr., with him) for the plaintiffs. The following submitted briefs for amici curiae: Peter H. Mixon, of California, for California Public Employees’ Retirement System. Jeff Mahoney, of the District of Columbia, for Council of Institutional Investors. Jesse M. Fried, pro se. GANTS, J. Under Section 10.2 of the bylaws of the defendants, PIMCO Income Strategy Fund and PIMCO Income Strategy Fund II (collectively, “Funds” or “defendants”), “regular meetings of the Shareholders for the election of Trustees . . . shall be held, so long as Common Shares are listed for trading on the New York Stock Exchange, on at least an annual basis.” The issue on appeal is the meaning of “on at least an annual basis.” The plaintiffs, Brigade Leveraged Capital Structures Fund Ltd. and Brigade Capital Management, LLC (collectively, “Brigade” or “plaintiffs”), contend that the bylaws require that an annual meeting of shareholders of each of the Funds be held in or within twelve months of the last annual shareholder meeting. The defendants contend that the bylaws require only that one annual shareholders’ meeting be held each fiscal year for each of the Funds. We conclude that “on at least an annual basis” means that an annual shareholders’ meeting for each of the Funds must be held no later than one year and thirty days (395 days) after the last annual shareholders’ meeting. Background. The defendant Funds are closed-end investment companies registered under the Investment Company Act of 1940, as amended, 15 U.S.C. § 80a-5(a)(1)(2) (2006), that are organized as Massachusetts business trusts under G. L. c. 182. […]