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

Calamos Dynamic Convertible and 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 Dynamic Convertible and 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 exclusive forum for certain legal actions.
• These actions include derivative actions, breach of fiduciary duty claims, and claims arising under the Delaware Statutory Trust Act, the 1940 Act, the Declaration of Trust, or the By-Laws.
• Shareholders are deemed to have consented to this forum and waived any right to a jury trial in these cases.
• Shareholders who file actions in other courts without the Trust's consent 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 implications for shareholders, it is a standard corporate governance practice.

Positives

• The amendment provides clarity and consistency regarding the jurisdiction for legal disputes.
• The amendment may reduce the risk of costly litigation in multiple jurisdictions.
• The amendment may streamline the legal process for the Trust.

Negatives

• The amendment limits shareholders' options for choosing a legal forum.
• Shareholders may face increased costs if they initiate legal action outside of the designated forum without the Trust's consent.

Risks

• Shareholders may perceive the amendment as limiting their rights.
• The amendment could potentially deter some shareholders from pursuing legitimate claims.
• There is a risk of legal challenges to the validity of the forum selection clause.

Industry Context

Forum selection clauses are increasingly common in corporate by-laws to manage litigation risk and ensure consistency in legal proceedings. This amendment aligns with a broader trend in corporate governance.

Comparison to Industry Standards

• Many publicly traded companies, particularly those incorporated in Delaware, include forum selection clauses in their by-laws.
• The choice of the Delaware Court of Chancery is standard practice due to its expertise in corporate law.
• Companies like Apple, Google, and many others have similar forum selection clauses in their governing documents.
• This amendment is consistent with industry best practices for managing litigation risk.

Corporate Governance

Stakeholder Impact

• Shareholders will be required to pursue certain legal actions in the Delaware Court of Chancery.
• Shareholders may be responsible for the Trust's legal costs if they initiate legal action outside of the designated forum without the Trust's consent.
• The amendment may reduce the risk of costly litigation for the Trust.

Key Dates

Keywords

By-Laws, Forum Selection, Delaware Court of Chancery, Legal Disputes, Shareholder Rights, Calamos Dynamic Convertible and Income Fund, Amendment, Litigation