Contract analysis

I. QUESTION PRESENTED Whether Vantor Holdings Corp. ("Vantor"), as fund administrator to Ironside Credit Opportunities Fund LP ("Fund I"), Ironside Structured Alpha Fund LP ("Fund II"), and Ironside Special Situations Fund LP ("Fund III," and collectively with Fund I and Fund II, the "Funds") under the Master Fund Administration Agreement dated June 15, 2017 (Ref: VHC-ICM-2017-0615) (the "FAA"), owes fiduciary duties

II. SHORT ANSWER Yes, there is a strong basis under New York law to argue that Vantor owed fiduciary duties to Ironside and its feeder funds arising from the nature and scope of Vantor's independent valuation authority under the FAA. New York courts have long recognized that fiduciary relationships are not confined to formal, enumerated categories such as trustee-beneficiary or attorney-client. Rather, fiduciary obli

III. FACTUAL BACKGROUND RELEVANT TO ANALYSIS The following factual summary is drawn from the FAA and its amendments, Ironside's internal valuation policies, communications between the parties, and preliminary findings from our forensic accounting consultants at Kensington Forensic Advisory LLC. The facts set forth below are presented as our client has described them and are subject to refinement as discovery progress

IV. LEGAL ANALYSIS A. General Principles: Fiduciary Duties Under New York Law Under New York law, a fiduciary relationship arises when one party reposes confidence in another and the other party exercises dominion, control, or independent judgment over the confiding party's interests. The New York Court of Appeals has consistently held that "[a] fiduciary relationship exists between two persons when one of them is un

1. Ministerial Agents: No Fiduciary Duty A service provider performing purely ministerial or mechanical tasks — executing pre-determined instructions, processing transactions per settled procedures, or performing mechanical calculations based on inputs supplied by others — does not, by virtue of that role alone, owe fiduciary duties to the party it serves. The rationale is straightforward: where the service provider

2. Discretionary Agents: Potential for Fiduciary Duty The analysis shifts materially where a service provider is entrusted with independent professional judgment that affects the client's financial position. Where the service provider exercises discretion — where it is authorized and expected to make independent decisions or judgments that the client has neither the ability nor the inclination to make for itself — Ne

3. Application to Vantor Vantor's role under FAA §§ 3.1 and 4.2 was not ministerial. Vantor did not simply record prices supplied by Ironside or transcribe values determined by a third party. Rather, Vantor was contractually obligated — and compensated — to independently determine fair values for 47 illiquid Level 2 and Level 3 positions using its own professional judgment, proprietary models, broker inquiries, and a

1. Independent Valuation Authority The single most significant factor is the scope of Vantor's independent valuation authority. Under FAA § 3.1(d), Vantor was given — and accepted — independent authority to determine the fair value of Level 2 and Level 3 portfolio positions. This was not a passive or ministerial function. It required Vantor to make substantive professional judgments about the value of 47 illiquid cre

2. Trust and Reliance Ironside and its limited partners specifically relied on Vantor's independence as a safeguard against misvaluation. The entire purpose of retaining an independent fund administrator with valuation authority — as opposed to having Ironside's own internal team price the portfolio or using a less expensive administrator that would simply accept manager-supplied marks — was to have a disinterested,

3. Informational Asymmetry and Superior Expertise Vantor held itself out — and was retained on the basis of its representation — as possessing specialized expertise in the valuation of complex illiquid credit instruments and structured products. Vantor's marketing materials, provided to Ironside during the RFP process in 2016, touted Vantor's "deep bench of experienced valuation professionals with expertise in CLOs,

4. Contractual Standard of Care The professional standard of care articulated in FAA § 4.2 — "the standard of care of a reasonably prudent professional fund administrator with experience in the valuation of complex credit instruments and structured products" — is significant because it reflects the parties' shared understanding that Vantor occupied a professional role carrying elevated obligations. This is not the la

5. Control Over Financial Outcomes Vantor's valuation determinations directly controlled financial outcomes of enormous significance to Ironside and the Funds' stakeholders. As detailed in Section III.C, Vantor's overvaluations resulted in: • Approximately $4.3 million in excess management fees charged to limited partners over the misvaluation period, calculated as 1.5% of the overstated portion of NAV; • Inflated pe

6. Duration and Exclusivity of the Relationship The FAA ran from June 15, 2017 through Ironside's termination for cause on October 3, 2023 — a period of over six years. During this entire period, Vantor was the exclusive fund administrator for all three Funds, administering aggregate NAV that peaked at approximately $3.59 billion in Q2 2022. There was no other fund administrator; Ironside depended on Vantor alone for

1. Arms-Length Commercial Contract Between Sophisticated Parties Vantor will argue that the FAA is an arms-length commercial agreement between two sophisticated institutional parties — a professional fund manager and a professional fund administrator — and that New York law does not impose fiduciary duties on service providers absent extraordinary circumstances. WDC will likely cite Oddo Asset Mgmt. v. Camberwell Ban

2. The FAA Defines and Limits the Parties' Obligations Vantor will contend that the FAA comprehensively defines the parties' rights and obligations and that breach of contract — not breach of fiduciary duty — is the appropriate claim. WDC will argue that permitting a fiduciary duty claim to proceed alongside the contract claim would effectively allow Ironside to circumvent the contractual allocation of risk, includin

3. Fund Administrators Are Not Fiduciaries as a Matter of Law Vantor may argue that fund administrators, as a categorical matter, do not owe fiduciary duties to the funds they administer — that they are more analogous to ministerial transfer agents or custodians than to investment advisers or discretionary account managers. WDC may point to the absence of any New York appellate decision expressly holding that a fund

4. Contractual Liability Cap (FAA § 9.3) Vantor may argue that, even if fiduciary duties are found to exist, the $2.98 million aggregate liability cap in FAA § 9.3 limits any recovery. Section 9.3 provides: "In no event shall the aggregate liability of the Administrator to the Manager or any Fund under this Agreement, whether arising in contract, tort (including negligence), breach of fiduciary duty, or otherwise, ex