A battle over closed-end activism is now awaiting a Supreme Court decision

Kenneth Burdon, an attorney with Simpson Thacher and Bartlett, discusses the court case between Saba Capital and four closed-end fund sponsors that has wound its way to the U.S. Supreme Court and that is expected to force a change in the tactics of the industry's most prominent activist investor or in the way management companies protect themselves against aggressive shareholder actions. Saba challenged the four companies' actions in adopting a Maryland law that makes it more difficult for outside investors to gain control through a proxy fight. Burdon says Saba is the only company to challenge closed-end fund governance in federal court, and that the company could lose that tactic without significantly reducing its ability to pursue activist actions, just taking more common and traditional tactics used by others. Burdon says, based on precedents, that he expects the decision to come down in favor of the fund sponsors