Three Nuveen Closed-End Funds Reject New ARPS Demand Letters
Nuveen Investments announced today that the Board of three Nuveen leveraged closed-end funds that in recent weeks each received a demand letter from a law firm on behalf of purported holders of each fund’s common shares has rejected the demands contained in those letters. The demand letters were similar to letters previously received by other Nuveen closed-end funds and alleged that Nuveen Asset Management (the fund’s Adviser) and the fund’s officers and Board of directors breached their fiduciary duties related to the redemption at par of the fund’s auction rate preferred shares (ARPS). Similar to actions taken by the Board of those other Nuveen closed-end funds regarding the previously received demand letters, the Board of each of these three closed-end funds rejected the demands contained in the new demand letters after a review and recommendation by a committee of certain of its disinterested and independent Board members. These three funds are:
Nuveen Municipal Advantage Fund, Inc. (NMA)Nuveen Insured Municipal Opportunity Fund, Inc. (NIO)Nuveen Quality Income Municipal Fund, Inc. (NQU)
As previously announced on July 14, 2010, after an extensive independent review, the Board of several Nuveen closed-end funds rejected the demands contained in similar demand letters received from the same law firm. In response to each of the demand letters, the funds’ Board established a Demand Committee of certain of its disinterested and independent Directors to investigate the claims made in the demand letters and to report to the full Board its findings and recommendation. The Demand Committee retained independent counsel to assist it in conducting an extensive investigation of the claims made in the demand letters. Based upon its investigation, the Demand Committee found that it was not in the best interests of the initial 30 funds or their shareholders to take the actions suggested in the demand letters, and recommended that the full Board reject the demands made in the demand letters. The Demand Committee for the three funds named above, again assisted by independent counsel, investigated the claims and came to the same conclusion regarding the more recent letters received by those funds. After reviewing the findings and recommendation of the Demand Committee, the full Board for each of these three funds unanimously adopted the Committee’s recommendation.
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