Saba Capital Files Motion with U.S. District Court for the Southern District of New York to Invalidate ASA Gold and Precious Metals’ Latest Unlawful Poison Pill
Saba Capital Management, ASA Gold and Precious Metals 's (NYSE: ASA) largest shareholder, has filed a motion with the U.S. District Court for the Southern District of New York to invalidate ASA's latest poison pill issued on March 31, 2025.
This follows the Court's March 28, 2025 ruling that ASA's previous poison pill violated the Investment Company Act of 1940. The Court found that ASA and directors William Donovan, Bruce Hanson, Mary Joan Hoene, and Axel Merk broke federal law, citing entrenchment as a plausible motivation.
Despite the Court's decision to rescind the poison pill, ASA issued an extension the next business day. Saba's founder Boaz Weinstein is calling for the directors to return millions in shareholder capital spent defending the poison pill and their board compensation from the past two years.
Saba Capital Management, il maggiore azionista di ASA Gold and Precious Metals (NYSE: ASA), ha presentato una mozione presso il Tribunale Distrettuale degli Stati Uniti per il Distretto Meridionale di New York per invalidare l'ultima pillola avvelenata emessa da ASA il 31 marzo 2025.
Questo segue la sentenza del Tribunale del 28 marzo 2025, secondo cui la precedente pillola avvelenata di ASA violava l'Investment Company Act del 1940. Il Tribunale ha stabilito che ASA e i direttori William Donovan, Bruce Hanson, Mary Joan Hoene e Axel Merk hanno violato la legge federale, citando come motivazione plausibile l'intrusione nel controllo.
Nonostante la decisione del Tribunale di annullare la pillola avvelenata, ASA ha emesso un'estensione il giorno lavorativo successivo. Il fondatore di Saba, Boaz Weinstein, chiede ai direttori di restituire milioni di capitale degli azionisti spesi per difendere la pillola avvelenata e la loro compensazione del consiglio negli ultimi due anni.
Saba Capital Management, el mayor accionista de ASA Gold and Precious Metals (NYSE: ASA), ha presentado una moción ante el Tribunal de Distrito de EE. UU. para el Distrito Sur de Nueva York para invalidar la última píldora envenenada emitida por ASA el 31 de marzo de 2025.
Esto sigue a la decisión del Tribunal del 28 de marzo de 2025, que dictaminó que la anterior píldora envenenada de ASA violaba la Ley de Compañías de Inversión de 1940. El Tribunal encontró que ASA y los directores William Donovan, Bruce Hanson, Mary Joan Hoene y Axel Merk habían violado la ley federal, citando la consolidación de poder como una posible motivación.
A pesar de la decisión del Tribunal de anular la píldora envenenada, ASA emitió una extensión al día siguiente. El fundador de Saba, Boaz Weinstein, está pidiendo a los directores que devuelvan millones de capital de los accionistas gastados en la defensa de la píldora envenenada y su compensación del consejo durante los últimos dos años.
사바 캐피탈 매니지먼트는 ASA 골드 앤 프레셔스 메탈즈(NYSE: ASA)의 최대 주주로서 2025년 3월 31일에 발행된 ASA의 최신 독소 알약을 무효화하기 위해 미국 뉴욕 남부 지방법원에 소송을 제기했습니다.
이는 2025년 3월 28일 법원이 ASA의 이전 독소 알약이 1940년 투자회사법을 위반했다고 판결한 데 따른 것입니다. 법원은 ASA와 이사인 윌리엄 도노반, 브루스 핸슨, 메리 조안 호에네, 악셀 메르크가 연방 법률을 위반했다고 판단하며, 이는 권력 유지를 위한 그럴듯한 동기로 인용되었습니다.
법원이 독소 알약을 취소하기로 결정했음에도 불구하고, ASA는 다음 영업일에 연장을 발표했습니다. 사바의 창립자인 보아즈 와인스타인은 이사들이 독소 알약 방어와 지난 2년간의 이사회 보수로 지출된 수백만 달러를 주주 자본으로 반환할 것을 촉구하고 있습니다.
Saba Capital Management, le principal actionnaire d'ASA Gold and Precious Metals (NYSE: ASA), a déposé une motion auprès du tribunal de district des États-Unis pour le district sud de New York afin d'invalider la dernière pilule empoisonnée émise par ASA le 31 mars 2025.
Cela fait suite à la décision du tribunal du 28 mars 2025, qui a jugé que l'ancienne pilule empoisonnée d'ASA violait la loi sur les sociétés d'investissement de 1940. Le tribunal a constaté qu'ASA et les directeurs William Donovan, Bruce Hanson, Mary Joan Hoene et Axel Merk avaient enfreint la loi fédérale, citant la consolidation comme une motivation plausible.
Malgré la décision du tribunal d'annuler la pilule empoisonnée, ASA a émis une extension le jour ouvrable suivant. Le fondateur de Saba, Boaz Weinstein, appelle les directeurs à restituer des millions de capitaux des actionnaires dépensés pour défendre la pilule empoisonnée et leur rémunération du conseil d'administration des deux dernières années.
Saba Capital Management, der größte Aktionär von ASA Gold and Precious Metals (NYSE: ASA), hat beim US-Bezirksgericht für den südlichen Bezirk von New York einen Antrag auf Ungültigkeitserklärung der neuesten Giftpille von ASA gestellt, die am 31. März 2025 ausgegeben wurde.
Dies folgt auf das Urteil des Gerichts vom 28. März 2025, das entschied, dass die vorherige Giftpille von ASA gegen das Investment Company Act von 1940 verstieß. Das Gericht stellte fest, dass ASA und die Direktoren William Donovan, Bruce Hanson, Mary Joan Hoene und Axel Merk gegen das Bundesrecht verstoßen haben, wobei die Festigung von Macht als plausibles Motiv angeführt wurde.
Trotz der Entscheidung des Gerichts, die Giftpille aufzuheben, gab ASA am nächsten Werktag eine Verlängerung bekannt. Der Gründer von Saba, Boaz Weinstein, fordert die Direktoren auf, Millionen von Aktionärskapital, die zur Verteidigung der Giftpille ausgegeben wurden, sowie ihre Vorstandsvergütung der letzten zwei Jahre zurückzugeben.
- Saba Capital successfully challenged and won Court ruling against illegal poison pill
- Two Saba-nominated directors were elected to the board in April 2024
- Board spent millions of shareholder capital defending unlawful poison pill
- Directors violated federal law with anti-shareholder actions
- Board defied Court ruling by issuing new poison pill extension
Insights
The legal dispute between Saba Capital and ASA Gold represents a significant governance crisis with material implications for shareholders. The U.S. District Court's March 28th ruling that ASA's poison pill violated the Investment Company Act of 1940 is a substantive legal defeat for the Fund. What makes this situation particularly severe is ASA's decision to effectively defy this ruling by issuing an extension of the poison pill just one business day later.
This defiance of a federal court ruling creates substantial legal risk. Courts typically view such actions unfavorably, potentially exposing ASA to contempt charges, additional legal sanctions, and further shareholder litigation. The specific finding that directors broke federal law and were motivated by entrenchment rather than shareholder interests is legally damaging to their position.
Saba's motion asking the court to enforce its ruling by invalidating the March 31st poison pill will likely receive favorable consideration given the timing and circumstances. More concerning for shareholders is the potential for personal liability against the named directors. While challenging to prove, if Saba succeeds in holding directors personally accountable for
This case follows Saba's established pattern of successful litigation against investment companies using governance mechanisms that violate the '40 Act, suggesting they have both experience and precedent on their side. The legal implications extend beyond this specific ruling, potentially affecting the Fund's broader governance structure and ability to defend against activist pressures in the future.
This corporate governance battle presents material negative implications for ASA's operational stability and shareholder value. The court ruling against ASA's poison pill fundamentally weakens management's ability to maintain control, potentially forcing significant board restructuring beyond the two Saba-nominated directors already elected in 2024.
The financial impact operates on multiple levels. First, the litigation itself represents a direct expense drain on company resources that could otherwise benefit shareholders. Second, the mention of
More concerning is the potential governance transition cost. With Saba as the largest shareholder now gaining legal leverage to reshape the board, ASA faces uncertainty regarding its strategic direction and investment approach. This power shift could trigger portfolio realignment, management restructuring, and potential fee structure changes – all creating near-term operational disruption.
The risk profile has increased substantially with management's decision to extend the poison pill despite the court ruling, demonstrating poor judgment that raises questions about fiduciary responsibility. For investors, this represents a material governance risk factor that outweighs any potential benefits from the Fund's underlying precious metals portfolio. The lawsuit's resolution will likely determine whether ASA undergoes fundamental governance reconstruction or faces continued shareholder activism challenges.
Follows Court’s March 28th Ruling that ASA’s Poison Pill Violates the Investment Company Act of 1940
Urges Court to Intervene to Enforce Ruling and Invalidate ASA’s March 31st Poison Pill
Calls for Chair Mary Joan Hoene, Director William Donovan and Former Directors Axel Merk and Bruce Hanson to Return the Millions of Dollars in Shareholders’ Capital They Wasted on Entrenching Themselves
On March 28, 2025, the Court ruled that ASA’s poison pill violated the Investment Company Act of 1940 (the “’40 Act”) and found that ASA and directors William Donovan, Bruce Hanson, Mary Joan Hoene and Axel Merk broke federal law with their poison pill, noting their desire for entrenchment was a plausible motivation for their actions. As a result, the Court rescinded ASA’s poison pill. However, on March 31, 2025, the next business day, ASA issued an extension of the poison pill in direct conflict with the Court’s decision.
Boaz Weinstein, Founder and Chief Investment Officer of Saba, commented:
“The Court’s ruling invalidated ASA’s poison pill and confirmed that the Fund’s legacy directors—Chair Mary Joan Hoene, Director William Donovan and former Directors Axel Merk and Bruce Hanson—broke the law by prioritizing their own entrenchment over shareholder rights. Yet, ASA defied the ruling the very next business day by adopting an unlawful extension of their poison pill.
ASA’s blatant disregard for the law is outrageous. It reinforces the concerning level of comfort the Fund and its legacy directors have with violating federal law and disenfranchising shareholders. These actions, including wasting millions in shareholder capital in attempting to defend the poison pill to protect their paychecks, are unparalleled among closed-end fund boards and exemplify the very anti-shareholder behavior Saba is committed to protecting investors against.
Saba is urging the Court to intervene to invalidate the March 31st poison pill, and we also intend to hold Hoene, Donovan, Merk and Hanson personally accountable for the economic harm they have inflicted on shareholders. We are calling for their return of the millions they spent on this unlawful endeavor, as well as the board compensation they received over the past two years.
The Court’s decision, coupled with shareholders’ election of two Saba-nominated directors in April 2024, signals an end to the era of anti-investor governance under Axel Merk and the prior board. Further board changes are now essential to restore trust, enhance shareholder returns and protect shareholders’ rights.”
The Court’s ruling in support of Saba follows several similar lawsuits that Saba previously brought and won, including against Eaton Vance and Nuveen over the use of control share provisions that were found to violate the ’40 Act.
About Saba Capital
Saba Capital Management, L.P. is a global alternative asset management firm that seeks to deliver superior risk-adjusted returns for a diverse group of clients. Founded in 2009 by Boaz Weinstein, Saba is a pioneer of credit relative value strategies and capital structure arbitrage. Saba is headquartered in
View source version on businesswire.com: https://www.businesswire.com/news/home/20250401302315/en/
Longacre Square Partners
Kate Sylvester, 646-386-0091
ksylvester@longacresquare.com
Source: Saba Capital Management, L.P.
FAQ
What was the Court's ruling on ASA Gold and Precious Metals' poison pill on March 28, 2025?
How did ASA respond to the Court's ruling against their poison pill?
What actions is Saba Capital taking against ASA's directors?
What changes occurred in ASA's board following Saba's involvement?
