Saba Capital Files Lawsuit Against Voya Prime Rate Trust
May 04 2020 - 8:00AM
Business Wire
PPR Board’s By-Law Amendment Directly
Targeting Saba Creates Vote Threshold Designed to Entrench Board
and Disenfranchise Shareholders
An investment fund managed by Saba Capital Management, L.P.
(“Saba”) filed suit on Friday, May 1, 2020 in Arizona Superior
Court against the Board of Trustees (the “Board”) and the
investment adviser of Voya Prime Rate Trust (NYSE: PPR), seeking to
invalidate a recent By-Law amendment that changes the voting
standard for the election of a nominee to the Board from a
plurality of shares voted to 60% of outstanding shares eligible to
vote.
Pierre Weinstein, Partner of Saba, said, “The Voya Board’s
recent action, which directly targets Saba and was expressly
designed to prevent Saba’s Trustee nominees from being elected to
the Board, is a blatant act of entrenchment and an affront to
shareholder democracy. If permitted to stand, the By-Law amendment
would allow PPR’s Board to ignore the will of shareholders, who, as
the true owners of PPR, are entitled to determine the Board’s
composition. Saba takes this action to protect its most basic right
as a shareholder—the right to vote its shares, and to have those
votes count.
“An investment company's board serves the essential role of
evaluating and approving the investment advisor. In the case of
Voya, their performance has been abysmal. PPR has unperformed its
benchmark year-to-date, as well as over 1-year, 3-year and 5-year
periods. Not surprisingly, Morningstar ranked PPR in its lowest
performance category for 1-year, 3-year and 5-year periods.
“Voya has attempted to justify this persistent underperformance
in PPR’s preliminary proxy by stating that the fund has ‘managed to
outperform in periods of increased risk.’ But we are in a period of
increased risk right now, and, as PPR’s management admitted in its
April performance webinar, PPR has underperformed this year by 7.5%
based on NAV and 12% based on price. The Board, as currently
constructed, seems willing to say and do whatever Voya tells them
to, without adequate concern for facts, the rule of law, or
shareholders.”
Susman Godfrey L.L.P. and Osborn Maledon P.A. filed the lawsuit
on behalf of Saba.
About Saba Capital
Saba Capital Management, L.P. is an Investment Adviser based in
New York. Launched in 2009, Saba currently manages assets across
three core strategies: Credit Relative Value, Tail Hedge, and
Closed-End Funds.
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Investors Leah Jordan Investor Relations
Leah.Jordan@sabacapital.com
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