Files Lawsuit Against BlackRock ESG Capital
Allocation Term Trust for Adopting an Illegal “Entrenchment Bylaw”
that Strips Shareholders of the Opportunity to Elect New
Directors
Intends to Hold BlackRock and Its
Hand-Picked Board Members Accountable for Destroying Billions in
Shareholder Value
Names Incumbent Board Members Cynthia Egan, Frank
Fabozzi, Robert Fairbairn,
Lorenzo Flores, Stayce Harris, R. Glenn
Hubbard, J. Phillip Holloman,
W. Carl Kester, Catherine Lynch and John
Perlowski as Defendants in the Lawsuit
Nominates Seven Board Candidates with
Experience in Corporate Governance, Credit Markets, Financial
Services and Other Areas Required to Help Close the Funds’ Large
Discounts to NAV
Saba Capital Management, L.P. (together with its affiliates,
“Saba” or “we”) today announced that it has nominated seven highly
qualified and independent candidates for election to the Boards of
Trustees (the “Boards”) of 10 BlackRock closed-end funds
(collectively, the “BlackRock Funds” or the “CEFs”) at their
respective 2024 Annual Meetings of Shareholders (the “2024 Annual
Meetings”).
Additionally, Saba filed a lawsuit today in the United States
District Court for the Southern District of New York (the “Court”)
against the BlackRock ESG Capital Allocation Term Trust (NYSE:
ECAT), and all 10 incumbents to hold them accountable for adopting
an illegal “Entrenchment Bylaw” that deprives shareholders of their
right to elect directors annually. It is notable that these
directors were already found to have violated the Investment
Company Act by enacting a separate bylaw targeted at entrenching
themselves in order to protect BlackRock from being held
accountable by shareholders.
Boaz Weinstein, Founder and Chief Investment Officer of Saba,
commented:
“BlackRock holds itself up as a leader in corporate governance
despite the fact that many of its funds, including the CEFs,
entrench compromised trustees, hinder shareholders’ rights and put
up roadblocks when attempts are made to narrow persistent discounts
to Net Asset Value (‘NAV’). Last year, a leading independent proxy
advisory firm chastised BlackRock for its ‘abusive’ governance.
Saba also won a lawsuit against BlackRock that should have ended
its illegal efforts to deprive shareholders of their right to vote
all of their shares. Instead of following the Court’s order,
BlackRock is pursuing a baseless appeal. Clearly, our work is not
done.
BlackRock acts as if federal law does not apply to its CEFs by
blatantly ignoring the Investment Company Act. Shareholders are
repeatedly deprived of their lawful voting rights, while directors
avoid accountability for their own governance and performance
failures.
Under the Entrenchment Bylaw, any share not voted in a contested
election is counted as a vote for BlackRock. Dear reader, your eyes
do not deceive you – yes, that’s how BlackRock believes elections
ought to be decided when their directors are challenged.
The case for immediate change at the BlackRock Funds is clear.
This is why we have filed a lawsuit to protect shareholder rights
and nominated slates of highly qualified and independent candidates
for election to the BlackRock Funds’ Boards at the 2024 Annual
Meetings. Our nominees have a plan to enact changes that will
return the funds to their full NAV – just like we have successfully
done in dozens of prior campaigns. We believe that executing on our
plan will deliver a staggering $1.3 billion gain from current
prices across 10 CEFs for shareholders. Last year, I made a similar
comment about the value trapped within two of the 10 CEFs at an
industry conference where BlackRock executives were in the
audience. From the dais, I challenged BlackRock to show me how the
math wasn’t 100% accurate. I followed up with a similar offer on
Twitter/X but BlackRock remains silent, because they know it’s
true.
BlackRock must not stand in the way of shareholders recouping
their financial losses. All BlackRock has to do is put aside its
greed and self-interest and offer shareholders an exit at NAV, just
as it offers daily for the trillions of dollars it holds in the
same investments across BlackRock mutual funds and ETFs.”
The BlackRock Funds for which Saba has nominated Board
candidates include: the BlackRock California Municipal Income Trust
(NYSE: BFZ), BlackRock Capital Allocation Term Trust (NYSE: BCAT),
BlackRock ESG Capital Allocation Term Trust (NYSE: ECAT), BlackRock
Health Sciences Term Trust (NYSE: BMEZ), BlackRock Innovation and
Growth Term Trust (NYSE: BIGZ), BlackRock MuniHoldings New York
Quality Fund (NYSE: MHN), BlackRock MuniYield New York Quality Fund
(NYSE: MYN), BlackRock MuniYield Pennsylvania Quality Fund (NYSE:
MPA), BlackRock New York Municipal Income Trust (NYSE: BNY) and
BlackRock Science and Technology Term Trust (NYSE: BSTZ).
Saba’s slate:
- Athanassios Diplas possesses significant expertise in
credit markets – including swaps, derivatives, risk management and
trading – having served in senior leadership roles at Deutsche Bank
(including Global Head of System Risk Management and Chief Risk
Officer) and Goldman Sachs & Co. over the last decade.
- Ilya Gurevich is a retirement planner with more than 25
years of experience in the financial services industry. He has a
deep understanding of the BlackRock Funds’ shareholder base and
received a recommendation from Institutional Shareholder Services
Inc. for election to the ECAT and BIGZ boards in 2023.
- Shavar Jeffries is the CEO of the KIPP Foundation and is
a corporate governance expert with a 24-year career in law who has
served on boards including Pzena Investment Management, the KIPP
Foundation, New Classrooms and Duke University.
- David Littlewood has more than two decades of experience
in capital markets, asset management and securities trading, as
well as valuable expertise in debt securities (credit product
structuring and distribution) from his time serving as Global Head
of Structured Credit Products at the Royal Bank of Scotland.
- David Locala is a former M&A banker with more than
30 years of experience working in the financial services industry
at Citigroup Global Markets, Deutsche Bank and Lazard, where he
advised companies on M&A across the technology sector.
- Jennifer Raab is an executive of various private and
nonprofit organizations, including as the CEO of the New York Stem
Cell Foundation Research Institute, the former Chairperson of the
New York City Landmarks Preservation Commission and the President
Emerita of Hunter College.
- Alexander Vindman is a former member of the White
House’s National Security Council who has significant experience in
high-ranking roles in political and military affairs. He is
renowned for upholding sound governance principles through ethical
leadership and accountability, including as Political-Military
Affairs Officer for Russia for the Chairman of the Joint Chiefs of
Staff.
About Saba Capital
Saba Capital Management, L.P. is a global alternative asset
management firm that seeks to deliver superior risk-adjusted
returns for a diverse group of clients. Founded in 2009 by Boaz
Weinstein, Saba is a pioneer of credit relative value strategies
and capital structure arbitrage. Saba is headquartered in New York
City. Learn more at www.sabacapital.com.
IMPORTANT INFORMATION
Saba Capital Management, L.P. (“Saba Capital”), Saba Capital
Master Fund, Ltd. (“SCMF”), Boaz R. Weinstein (“Mr. Weinstein,” and
together with Saba Capital and SCMF, “Saba”) and the Nominees (as
defined below, and together with Saba, the “Participants”) intend
to file definitive proxy statements and accompanying forms of proxy
with the Securities and Exchange Commission (the “SEC”) to be used
in conjunction with the solicitation of proxies from the
shareholders of each of BIGZ; BCAT; ECAT; BMEZ; BFZ; BSTZ; MPA;
MYN; BNY; and MHN and together, the “BlackRock Funds”).
Shareholders of any BlackRock Fund are advised to read the
definitive proxy statement and other documents related to the
solicitation of proxies with respect to such Fund by the
Participants as they become available because they will contain
important information. They will be made available at no charge on
the SEC’s website, http://www.sec.gov/.
The “Nominees” refer to (i) with respect to BIGZ, BCAT, ECAT,
BMEZ, BSTZ and MPA, Mr. Gurevich, Mr. Jeffries, Ms. Raab, Mr.
Diplas, Mr. Littlewood, Mr. Locala and Mr. Vindman; (ii) with
respect to BFZ, Mr. Gurevich and Mr. Jeffries; (iii) with respect
to MYN, Ms. Raab and Mr. Vindman; (iv) with respect to BNY, Mr.
Gurevich and Ms. Raab; and (v) with respect to MHN, Mr. Jeffries
and Ms. Raab.
Information about any direct or indirect interests by security
holdings or otherwise of the Participants is contained in Exhibit 1
to the Form DFAN14A filed with respect to each of the BlackRock
Funds by Saba Capital with the SEC on February 21, 2024. This
document is available free of charge from the source indicated
above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240306704314/en/
Longacre Square Partners Greg Marose / Kate Sylvester,
646-386-0091 gmarose@longacresquare.com /
ksylvester@longacresquare.com
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