Two shareholders in the Davis New York Venture Fund filed an excessive fee lawsuit in June 2014, alleging that Davis charged advisory fees to the Fund that were as much as 96% higher than the advisory fees it was charging mutual funds where it serves as a subadviser. The suit was filed in U.S. District Court for the Southern District of New York.
Under Section 36(b) of the Investment Company Act, the defendants owe a fiduciary duty to the Fund regarding the advisory fees paid by the Fund. The plaintiffs allege that this fiduciary duty has been breached by the receipt of excessive investment advisory fees that "could not have been the product of arm's length bargaining." The plaintiffs seek to recover for the Fund any excessive advisory fees charged in violation of Section 36(b).
On September 19, 2014, this case was consolidated with Chill v. Davis Selected Advisers, LP. At the Court's request, the plaintiffs filed an amended complaint on December 19, 2014.
The defendants filed a motion to dismiss the case on March 9, 2015. The plaintiffs filed their opposition brief on April 15, 2015, and the Davis reply brief was filed shortly thereafter.
On November, 18, 2015, the Court denied the Davis motion to dismiss. The case is now in discovery.