Eagle Growth and Income Opportunities Fund Announces Additional Liquidation Details - Seite 3

Liquidating Distributions; Reserve

In accordance with the Plan and as required by applicable law, the Board has determined that $29 million of the Fund's net assets should be reserved by the Fund and not immediately distributed to the Fund's shareholders (the "Reserve") to provide for these Contingent Liabilities, certain estimated but un-invoiced expenses of the Fund and the estimated expenses of operating a liquidating trust to hold the Reserve and the Contingent Liabilities (the "Liquidating Trust").  The amount of the Reserve is based upon the amount of damages that Four Wood has alleged and not the Independent Trustees' view of the merits of the potential claims.  Amounts related to the threatened litigation comprise the largest single component of the Reserve. 

Upon dissolution of the Fund, Delaware state law focuses on protecting creditors or potential creditors of the Fund.  Under certain limited circumstances, in the event that the Reserve is insufficient to cover the Fund's Contingent Liabilities, it is possible that a creditor may seek payment for claims against the Fund by claiming against the beneficiaries of the Liquidating Trust who received Liquidating Trust distributions.  Under applicable state law, absent misconduct by a beneficial owner, that beneficial owner's liability for such claims should be limited to the amount of any Liquidating Trust distributions received though there is no definitive guidance on this point. 

As previously announced, it is anticipated that the Fund's liquidating distributions will be comprised of one or more cash distributions plus a 1:1 per share interest in the Liquidating Trust.  The liquidating distributions together will represent substantially all of the Fund's net assets at the time of liquidation.  As part of winding up its affairs, the Fund has undertaken to pay known expenses of the Fund incurred in the ordinary course of its business and in connection with its liquidation.  As a result, the value of the Fund's net assets has been, and will continue to be, reduced by an amount equal to those expenses until the date on which the Reserve and the Contingent Liabilities are anticipated to be contributed to the Liquidating Trust (i.e., August 20, 2020).