8-K: Calamos Convertible and High Income Fund Amends By-Laws Regarding Dispute Adjudication

Calamos Convertible and High Income Fund has amended its by-laws to specify the Court of Chancery of the State of Delaware as the exclusive forum for certain legal disputes.

Summary

• Calamos Convertible and High Income Fund has amended its by-laws effective May 14, 2024.
• The amendment modifies the forum for adjudication of disputes.
• The new by-laws specify that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain legal actions.
• These actions include derivative actions, breach of fiduciary duty claims, and actions arising under the Delaware Statutory Trust Act or the 1940 Act.
• Shareholders are deemed to have consented to this forum and waived any arguments about inconvenience.
• Shareholders also waive their right to a jury trial in these covered actions.
• If a shareholder initiates a lawsuit in another jurisdiction without the Trust's consent, they may be required to reimburse the Trust for legal expenses.

Sentiment

Score: 6

Explanation: The document is neutral in tone, detailing a procedural change. While it may have some negative implications for shareholders, it is a standard practice for risk management.

Positives

• The amendment provides clarity and consistency regarding the jurisdiction for legal disputes.
• The designated forum may offer specialized expertise in relevant legal matters.
• The by-law change may reduce the risk of costly and time-consuming litigation in multiple jurisdictions.

Negatives

• The amendment limits shareholders' options for choosing a legal forum.
• Shareholders may face increased costs if they initiate a lawsuit in a different jurisdiction without the Trust's consent.
• The by-law change may be perceived as limiting shareholder rights.

Risks

• Shareholders may be required to travel to Delaware for legal proceedings.
• The amendment could potentially deter shareholders from pursuing legitimate claims.
• There is a risk that the by-law change could be challenged in court.

Industry Context

The amendment of by-laws to specify a preferred jurisdiction for legal disputes is a common practice among publicly traded companies and investment trusts to manage litigation risks and costs.

Comparison to Industry Standards

• Many investment trusts and publicly traded companies incorporate similar forum selection clauses in their by-laws.
• The choice of Delaware's Court of Chancery is common due to its expertise in corporate law.
• Companies like BlackRock and Vanguard also often specify Delaware as the preferred jurisdiction for legal disputes.
• This practice is generally considered a standard measure for risk management and cost control in the financial industry.

Corporate Governance

Stakeholder Impact

• Shareholders may be impacted by the change in forum for legal disputes.
• The amendment may affect the cost and convenience of pursuing legal claims against the Trust.
• The amendment may reduce the risk of costly litigation for the Trust.

Key Dates

Keywords

By-Laws, Forum, Disputes, Delaware, Court of Chancery, Shareholders, Litigation, Legal, Amendment, Fiduciary Duty