The Board of Trustees for three closed-end funds from John Hancock announced Wednesday that they have rejected demand letters regarding auction preferred share redemptions, according to a press release.
The letters, addressed to the John Hancock Preferred Income Fund III (HPS), the John Hancock Premium Dividend Fund (PDT), and the John Hancock Tax-Advantaged Dividend Income Fund (HTD), alleged that the company breached fiduciary duties by redeeming APS at their liquidation preference.
The Board of Trustees established a committee to address the demands raised in the letters. After reviewing the committee's findings, independent trustees voted to reject the demands claiming "maintenance of the derivative proceedings is not in the best interests of the Funds," according to the release.
In addition to the letters, complaints were filed in the Superior Court of The Commonwealth of Massachusetts, Suffolk County in August regarding the HPS and HDT funds, according to the release. The complaints named John Hancock, its parent company Manulife Financial Corporation and other individuals.
The release noted that a motion to dismiss the complaints will be filed.