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Fund Directions Quotes Adam Finerman on Dryden Capital’s Preferred Share Activist Campaign at PIMCO

November 8, 2019

Fund Directions (subscription required) recently quoted Olshan Corporate partner Adam Finerman on the continuing dispute between hedge fund Dryden Capital Fund and global investment management firm PIMCO over Dryden’s nomination of a director to the boards of eight of PIMCO’s closed-end funds, its second director nomination in the past year. Dryden’s nominations arose from its disagreement with PIMCO over the redemption of auction-rate preferred shares (ARPS), placing PIMCO in the dilemma of staving off a board insurgency while balancing the divergent interests of their common and preferred shareholders. Dryden’s is the first campaign in which an activist has used a proxy contest to seek better terms on an ARPS tender offer. In reaction to the election of Dryden’s director nominee last year, PIMCO expanded all eight of its boards, re-appointing the director who lost his seat. “If you think about it,” Mr. Finerman commented on the tactic, “it is outrageous. It’s actually the ultimate affront to corporate governance and shareholder rights to say, ‘Even if you vote this guy off, we’re going to put him back.’”

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