Eagle Growth and Income Opportunities Fund Announces Additional Liquidation Details

BOSTON, July 13, 2020 (GLOBE NEWSWIRE) -- Eagle Growth and Income Opportunities Fund (the "Fund") (NYSE: EGIF) today announced additional details related to the Fund's liquidation.  

As previously announced on May 27, 2020, pursuant to a Plan of Liquidation (the "Plan") adopted by the Fund's Board of Trustees (the "Board"), the Fund has commenced the process of winding up its affairs.  The Fund has sold all of its portfolio holdings and the proceeds have been invested in a U.S. Treasury money market fund. 

In connection with the Fund's liquidation, the Board is required to discharge or make reasonable provision for the Fund's claims and obligations, including potential claims and obligations.  As part of this process, the Board reviewed certain potential claims (the "Contingent Liabilities") threatened by the Fund's former investment adviser, Four Wood Capital Advisors, LLC ("FWCA"), and its parent, Four Wood Capital Partners, LLC ("FWCP" and, collectively with FWCA, "Four Wood") arising in connection with a decision by a majority of the Fund's Trustees, after months of review, to pursue a strategic alternative for the Fund other than the one for which FWCA would have received compensation.    

Background to Dispute

Over a number of years, the Fund's Independent Trustees took a series of steps to address the Fund's fees and certain performance issues that had arisen under the management of FWCA.¹  These issues included performance that lagged the Fund's peers.  In 2018, the Independent Trustees negotiated a 20-basis point reduction in the advisory fee charged by FWCA.  The Independent Trustees also negotiated a 50% reduction in the investor support services fee FWCP charged the Fund.  During this period, the Independent Trustees also noted that several key personnel of Four Wood had departed, impacting, in the view of the Independent Trustees, the quality of services FWCA and FWCP provided to the Fund. 

In November 2018, without consulting the Independent Trustees, Four Wood obtained a proposal (the "Merger Proposal") to merge the Fund with an unaffiliated closed-end registered investment company, which would have resulted in FWCA's receipt of significant compensation if the merger had been consummated.  FWCA and its principal advocated that the Board approve the Merger Proposal.  The Independent Trustees evaluated the Merger Proposal through the summer of 2019.  The Independent Trustees requested, received and reviewed extensive due diligence information from the proposed acquiring fund and its investment adviser.  In assessing the Merger Proposal, the Independent Trustees considered the differences between the Fund and the acquiring fund in terms of the investment product that shareholders would receive—in particular, (i) the fact that the acquiring fund does not have a limited term, as does the Fund, and therefore the merger would have deprived shareholders of the right to receive their proportionate share of the Fund's net assets at a specified future date, eliminating any discount to net asset value that may have existed at that time and (ii) the fact that the Fund and the acquiring fund had distinct investment strategies and exposures.