Like all LICs, ELI is worth more wound up than as a going concern, due to management fees. WAM successfully extracted greenmail from ELI, with ELI management offering a selective cash buyout, hoping to retain unwitting granny investors to continue leeching off in an unlisted vehicle. The 'reorganization' proposed by ELI on 19 July also included a $464,000 fee from shareholders to management as compensation for loss of control.
So everyone wins, except for shareholders that is, but that's the entire point of these schemes; transferring wealth from granny investors to management, from fools to criminals.
WAM executed the same strategy with SGI, buying a stake at sub-NTA and then negotiating a deal with the incumbent criminals. In other cases WAM has not been as successful in extracting greenmail. When it tried to make a move on MEF it was outsmarted, as MEF management performed a series of blocking sham transactions with Aurora. WAM also had a longrunning lovers' tiff with the Contango crew. These disagreements, as well as ELI's disagreement with Solhurst, have their root in the unenforceability of criminal contracts. For example, if a group of rampers secretly agree not to sell a ramped share, such an agreement is only based on the honour of thieves, and there will be an incentive to defect (and to do so first). Repeated interaction among the criminals make cooperation a likelier outcome of this dilemma.