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NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.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. […]
State House New Service Weekly Roundup: Exit Strategy
Clouded by sharp rhetoric, fragile egos and fluid whip counts, an endgame to the showdown between Gov. Deval Patrick and legislative leaders over tax increases and transportation began to emerge in which everyone could come out a winner, or at least save face. On this Democrats seem to agree: It’s in everyone interest to find a solution, and quickly, before unresolved questions of new revenue for the MBTA and MassDOT force action on fare hikes and muddy a budget process now fully underway and reliant upon said tax hikes. The Senate’s plan to go slightly higher on new revenue than the House—$ 600 million versus $ 500 million—and direct as much as $ 800 million to transportation spending five years from now triggered a thawing in Gov. Deval Patrick’s adamant opposition to the direction of the debate. “Very hopeful,” Patrick said when asked his thoughts on the Senate plan – a far cry from “pretend fix,” “fiscal shell game” and “meaningless” used to describe the House version. Click here to subscribe to MASSterlist, a free morning newsletter by State House News Service that highlights political news from a wide array of newspapers and journals in Massachusetts and New England When Patrick said he thought it not “likely” that the transportation debate would end without additional revenue, it’s possible he did so because he knew his veto threat was just that—a threat he never really believed he would have to follow through with. Advocates remained skeptical heading into the weekend. Transportation for Massachusetts claimed Senate Ways and Means overstated its revenue plan, particularly with regard to leasing property to utilities, putting the risk of higher fees, fares and tolls on motorists and transit riders. Regardless, the shift from Senate President Therese Murray and Ways and Means Chairman Stephen Brewer appeared to hit its mark leading into the Senate’s rare Saturday debate, leaving previously disenchanted liberal Democrats like Sen. Dan Wolf teetering on the fence. The revised plan came after two “very good, long caucuses,” as described by Murray, where Senate members “talked out” and progressives “got to be very passionate about what they feel should happen going down the road.” So the House claims the mantle of true pocketbook protectors, the Senate plays peacemaker and Patrick cuts his losses, signs the bill and says they moved in my direction? A looming possibility. They may not be talking to the governor, but Murray and Speaker Robert DeLeo are talking to each other. The House on Monday engaged in its first real debate of the year on the tax and transportation bill, carrying on late into the evening hours before approving tax hikes […]