Local investors, who have reached the legal age, are caught in a dispute over control of mutual funds – NotiCel – La verdad como es – Noticias de Puerto Rico – NOTICEL

UBS’ closed-end mutual funds, which have saddled their mostly retired clients with their losses, are now running in elections to choose new managers.

The closed-end mutual funds that investment bank UBS markets only to Puerto Ricans (the tax-exempt fixed-income fund chain) and that have been in a decade-long disaster associated with deleveraging and government bankruptcies continue to cause grief to their clients, mostly retired seniors who They depend on the return on this investment in their usual income.

The latest bid was made between fund managers, the same ones who’ve been in their positions all these years, and a new investor, Ocean Capital LLC (OC), according to documents in the United States District Court for the District of Puerto Rico. Rico.

As this happens, the money returning customers get continues to deteriorate from the money they keep, according to the OC. lower chain It is made up of nine separate legal entities under UBS and Popular Securities. Over the past fiscal year, the original eight (funds) have, on average, reduced their dividends by 26%. While not all funds experienced a decrease in their net asset value, seven of the eight saw a decrease in their net asset value.

OC leads an effort with other fund shareholders to renew the Board of Directors and develop new investment strategies that increase shareholder returns. But the existing directors understand that the only thing the OC is looking for is control of the funds in order to liquidate them, in such a way that the OC holders, some of whom are, in their individual capacity, beneficiaries of resident investor incentives, have the opportunity to receive these payments without tax penalty, while the resident shareholders have to On the island pay taxes for those liquidation.

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The case was referred to newly appointed District Judge Gina Mendez Miro. On a legal level, the rationale used by the current board members is that the OC provided false or misleading information to shareholders. in your promotional materials and press releases. Meanwhile, the OC alleges that existing directors used entrenchment schemes, improperly postponing annual director elections and refusing to accept the results of three elections held, which were all won by the new directors proposed by the OC.

Looking at the election results, the current directors are only saying they will not appoint new directors because there is a pending legal challenge, but they are pointing to this case they brought themselves when they found themselves losing the election.

According to information recently submitted by OC to the court, in the three closed boxes in which elections for directors were held, OC candidates won by ratios of 37 to 1, 7 to 2 and 3 to 1. As a result of stalling tactics, they added, the celebration of the annual meeting was postponed for funds mandated by law Three times in one case, nine times in another and five times in another. By March 2023, there are funds that have not held their annual meeting in 15 months, 26 months, and 22 months, respectively. The OC is asking the court to order the fund managers to allow the three OC managers who were chosen by the shareholders at various elections to sit in office. The OOO also reveals that the current directors have not followed through on an attempt at out-of-court talks that was initiated to avoid litigation.

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Last Friday, the OC filed a lawsuit against funding newly elected directors to sit on its boards.


Myrtle Frost

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