Kelley A. Howes
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.
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