MetWest 36(b) Triumph Affirms Industry Optimism

Fund Board Views

08/07/2019

Kelley A. Howes

Investment Management

In The News

In the Fund Board Views article “MetWest 36(b) Triumph Affirms Industry Optimism,” Morrison & Foerster’s Kelley Howes discusses Metropolitan West Asset Management’s recent court victory. U.S. District Court Judge George Wu dismissed Kennis v. Metro. West Asset Mgmt., LLC, which is one of only five excessive fees cases to go to trial in the past 10 years and is only the second to focus on sub-advisory fees.

Kelley said Judge Wu's ruling demonstrates that a robust board process and level of engagement in the process deserve substantial deference. "It’s important that the process is not static. It is clear that over the years the board’s 15(c) requests changed as the industry changed and to reflect developments arising from other 36(b) decisions. It’s also notable that the board’s consideration of the 15(c) factors does not occur at a single point in time; the court stated that the board gets information relevant to the 15(c) considerations throughout the year," she told FBV. "In short, it is clear that the board (including the independent chairman of the board, whose testimony is referenced throughout the courts’ findings) understood its statutory obligation to seek such information as it deemed reasonably necessary to make the 15(c) decisions, and that it continually refined those requests as the fund and MetWest’s business grew," she said.

Read the full article.

Email Disclaimer

Unsolicited e-mails and information sent to Morrison & Foerster will not be considered confidential, may be disclosed to others pursuant to our Privacy Policy, may not receive a response, and do not create an attorney-client relationship with Morrison & Foerster. If you are not already a client of Morrison & Foerster, do not include any confidential information in this message. Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not properly authorized to do so.

©1996-2019 Morrison & Foerster LLP. All rights reserved.