MEMORANDUM
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION AND ATTORNEY WORK PRODUCT DO NOT DISTRIBUTE WITHOUT PRIOR APPROVAL OF COUNSEL
CONFIDENTIALITY NOTICE: This memorandum is a privileged and confidential attorney-client communication and constitutes attorney work product prepared in anticipation of litigation. It is intended solely for the use of the individuals to whom it is addressed. This memorandum and its contents should not be disclosed, distributed, or forwarded to any person without the prior written approval of Calderwood & Harkness LLP. Unauthorized disclosure may result in the waiver of applicable privileges.
I. PURPOSE AND LEGAL OBLIGATION
Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") represents Ironside Capital Management LP ("Ironside" or "ICM"), a Delaware limited partnership with principal offices at 680 Park Avenue, 34th Floor, New York, NY 10065, in connection with anticipated litigation against Vantor Holdings Corp. ("Vantor"), a Delaware corporation with principal offices at 1400 Brickell Avenue, Suite 2200, Miami, FL 33131. The purpose of this memorandum is to impose a litigation hold on all documents, electronically stored information ("ESI"), and tangible materials that may be relevant to Ironside's anticipated claims against Vantor.
Ironside has a legal duty to preserve all documents, ESI, and tangible materials that may be relevant to the anticipated claims against Vantor. Those claims arise from Vantor's systematic misvaluation of illiquid credit and structured-product positions across three Ironside feeder funds during its tenure as fund administrator. The duty to preserve evidence attaches when a party reasonably anticipates litigation, and it is the assessment of this Firm that such a duty has now attached as to Ironside. Accordingly, Ironside must take all reasonable steps to identify, locate, and preserve potentially relevant materials from the date of this notice forward.
This litigation hold is effective immediately as of November 5, 2023. It supersedes any document retention or destruction policies, automatic deletion schedules, or routine data management practices currently in effect at Ironside, to the extent those policies would permit or result in the alteration, destruction, or loss of materials falling within the scope of this hold. No documents, data, or tangible items covered by this hold may be deleted, discarded, overwritten, shredded, erased, or otherwise destroyed or modified, regardless of any prior authorization or routine schedule.
Failure to comply with this litigation hold may result in severe consequences, including but not limited to court-imposed sanctions, adverse inference instructions, monetary penalties, issue preclusion, or other sanctions that a court may deem appropriate in the event that relevant evidence is found to have been destroyed or rendered inaccessible after the date of this notice. The Firm cannot overstate the importance of full and prompt compliance with the obligations described herein.
Calderwood & Harkness is in the process of preparing a demand letter to Vantor, which is anticipated to be transmitted on or about November 15, 2023. Following the expiration of any reasonable cure or response period, this Firm anticipates filing a complaint on behalf of Ironside in the Supreme Court of the State of New York, Commercial Division, New York County. All preservation obligations described in this memorandum should be understood in the context of that anticipated litigation.
II. BACKGROUND SUMMARY OF THE DISPUTE
To assist Ironside personnel in understanding the scope of materials that must be preserved, the following summary of the underlying dispute is provided. This summary is based on information available to the Firm as of the date of this memorandum and is subject to further development as the Firm's investigation continues.
A. The Fund Administration Agreement
The dispute arises from Vantor's role as fund administrator under the Master Fund Administration Agreement, Reference No. VHC-ICM-2017-0615 (the "FAA"), executed on June 15, 2017, between Ironside (acting on behalf of certain feeder fund vehicles) and Vantor. The FAA established Vantor as the third-party administrator responsible for, among other things, the calculation of net asset value ("NAV"), the pricing and valuation of portfolio positions, the preparation of investor capital account statements, and the processing of subscriptions and redemptions for the Ironside fund vehicles.
The FAA was subsequently amended on two occasions:
• First Amendment (dated March 1, 2019): The First Amendment added Ironside Special Situations Fund LP ("Fund III") as a covered fund vehicle under the FAA, extending Vantor's administrative responsibilities to encompass Fund III effective as of that date.
• Second Amendment (dated June 10, 2022): The Second Amendment adjusted the administration fee from 4.0 basis points to 4.5 basis points of aggregate NAV, confirmed the auto-renewal provisions of the FAA, and made certain ministerial updates to the schedules.
B. The Three Fund Vehicles at Issue
The three Ironside feeder fund vehicles that are the subject of the anticipated litigation are as follows:
All three funds held positions in illiquid credit instruments and structured products that required Vantor to exercise valuation judgment and apply appropriate pricing methodologies consistent with Ironside's Valuation Policy and industry standards.
C. The Misvaluation
Based on the Firm's preliminary investigation and the findings of Harmon-Bryce Valuation Advisors LLC ("Harmon-Bryce"), an independent valuation advisory firm retained by Ironside on September 5, 2023, Vantor systematically misvalued a substantial number of illiquid credit and structured-product positions over an extended period. The key parameters of the misvaluation are as follows:
• Misvaluation Period: Q1 2021 (March 31, 2021) through Q3 2023 (September 30, 2023), encompassing eleven consecutive quarterly reporting periods.
• Positions Affected: Forty-seven (47) illiquid credit and structured-product positions were identified as having been materially overvalued. The affected positions include CLO equity tranches, bespoke CDO mezzanine notes, and distressed loan participations.
• Aggregate Overvaluation: Approximately $287 million in aggregate across the three fund vehicles, broken down as follows:
• Fund I: approximately $156.4 million
• Fund II: approximately $88.7 million
• Fund III: approximately $41.9 million
These findings are set forth in the preliminary report of Harmon-Bryce Valuation Advisors LLC (Ref: HBVA-2023-0922-IRON), delivered to Ironside on September 22, 2023 (the "Harmon-Bryce Report").
D. Key Timeline of Events
The following timeline summarizes the critical events leading to the discovery of the misvaluation and the termination of the Vantor relationship:
• July 2023: Rajiv Subramanian, Chief Financial Officer of Ironside, identified a pricing discrepancy of approximately $12.6 million across seven CLO equity positions held in Fund I during the course of routine internal reconciliation procedures. The discrepancy related to the divergence between Vantor's marks and independent pricing indications obtained from Ironside's prime broker, Northpoint Securities LLC.
• August 4, 2023: Ironside transmitted a written inquiry to Nathan Orris, Senior Vice President, Valuation Services, at Vantor, requesting a detailed explanation of the pricing methodology applied to the seven CLO equity positions and supporting documentation for the marks assigned.
• August 18, 2023: Vantor delivered a response to the August 4 inquiry. Ironside's internal assessment, shared with Calderwood & Harkness, is that Vantor's response was materially incomplete and failed to provide adequate documentation or a satisfactory explanation for the pricing divergence.
• September 5, 2023: Ironside retained Harmon-Bryce Valuation Advisors LLC to conduct an independent review of Vantor's valuation of all illiquid credit and structured-product positions across the three fund vehicles. The engagement was supervised by Dr. Lena Galbraith of Harmon-Bryce.
• September 22, 2023: Harmon-Bryce delivered its preliminary report (Ref: HBVA-2023-0922-IRON), identifying the aggregate overvaluation of approximately $287 million across forty-seven positions over the eleven-quarter period.
• October 3, 2023: Ironside issued a Notice of Termination for Cause to Vantor pursuant to Section 12.2 of the FAA, citing Vantor's material breach of its valuation obligations.
• October 10, 2023: Administration of the three fund vehicles was transitioned to Meridian Investor Services LLC ("Meridian"), the replacement fund administrator. Meridian commenced an independent re-pricing of all portfolio positions.
E. Anticipated Causes of Action
Ironside anticipates asserting the following causes of action against Vantor:
1. Fraud
2. Fraudulent concealment
3. Negligent misrepresentation
4. Breach of contract (under the FAA, as amended)
5. Breach of fiduciary duty
6. Aiding and abetting fraud
7. Unjust enrichment
The foregoing list is preliminary and subject to revision as the Firm's investigation develops. Additional claims may be added, and the list of potential defendants may be expanded to include individual officers or employees of Vantor.
III. SCOPE OF THE HOLD — CATEGORIES OF MATERIALS TO BE PRESERVED
The following sets forth the categories of documents, ESI, and tangible materials that must be preserved under this litigation hold. This list is intended to be comprehensive but is not exhaustive. If any Ironside personnel identify categories of materials not listed below that may be relevant to the anticipated litigation, those materials must also be preserved, and the Firm should be contacted for guidance.
All materials described below must be preserved in their original form and format, including all metadata, embedded data, and system-generated information. Materials must not be altered, edited, moved to different storage locations (unless for preservation purposes), or converted to different file formats without prior consultation with Calderwood & Harkness.
A. Documents Relating to the Fund Administration Relationship with Vantor
The following categories of materials relating to Ironside's fund administration relationship with Vantor must be preserved in their entirety:
1. The executed Master Fund Administration Agreement dated June 15, 2017, Reference No. VHC-ICM-2017-0615, and all amendments thereto, including the First Amendment dated March 1, 2019 (adding Fund III) and the Second Amendment dated June 10, 2022 (fee adjustment and auto-renewal confirmation).
2. All schedules, exhibits, side letters, supplements, ancillary agreements, and other documents forming part of or relating to the contractual relationship between Ironside and Vantor, including any service level agreements, confidentiality agreements, or data processing addenda.
3. The Ironside Valuation Policy in all versions, including but not limited to Version 3.2 (effective January 1, 2020), and any prior or subsequent versions that were in effect during any portion of the FAA term. This includes any drafts, redlines, board or committee approvals, and communications concerning revisions to the Valuation Policy.
4. All NAV reports, pricing packages, valuation summaries, and portfolio reconciliation reports received from Vantor for the period Q1 2021 through Q3 2023, as well as any such reports received from Vantor during any prior periods during the FAA term (commencing June 15, 2017). This includes all underlying data files, spreadsheets, PDFs, and electronic deliverables provided by Vantor in connection with these reports.
5. All fee invoices, billing statements, and payment records for administration fees paid to Vantor over the life of the FAA. Based on preliminary calculations, total administration fees paid to Vantor are approximately $9.28 million. All records documenting the calculation, invoicing, review, approval, and payment of these fees must be preserved.
6. All correspondence (whether by email, letter, facsimile, or other medium) between any Ironside personnel and any Vantor personnel, including but not limited to the following Vantor individuals:
• Nathan Orris, Senior Vice President, Valuation Services
• Deepa Rajaram, Vice President, Client Valuation Operations
• Raymond Kettler, Chief Executive Officer
• Susan Hargrove, President & Chief Operating Officer
• Timothy Falk, Chief Financial Officer
This includes all formal correspondence, informal communications, meeting invitations, calendar entries, and any other records of interactions between Ironside and Vantor personnel.
7. The Notice of Termination for Cause dated October 3, 2023, issued by Ironside to Vantor pursuant to FAA Section 12.2, together with all related correspondence, internal deliberations, drafts, and any response received from Vantor.
B. Internal Ironside Communications and Records
The following categories of internal Ironside materials must be preserved:
1. All emails, instant messages, text messages (including SMS and Westmark Software), voicemails, and other electronic communications among Ironside personnel that reference, discuss, or relate to Vantor, the fund administration services provided by Vantor, NAV calculations, position valuations, pricing methodologies, pricing discrepancies, the discovery of the $12.6 million discrepancy, the investigation of Vantor's practices, or the termination of the Vantor relationship.
2. The files and communications of the following key custodians must be preserved in their entirety. These individuals have been identified as having knowledge of, involvement in, or responsibility for matters relevant to the anticipated litigation:
• Elliot Brennan, Co-Founder, Managing Partner & Chief Investment Officer
• Marguerite Dao, Co-Founder, President & Chief Operating Officer
• Rajiv Subramanian, Chief Financial Officer
• Katherine Lim, General Counsel & Chief Compliance Officer
• Derek Holt, Head of Operations
• Priya Venkatesh, Portfolio Manager, Fund I
• Marcus Threadgill, Portfolio Manager, Fund II
The foregoing list of key custodians is not exhaustive. If additional individuals are identified as having potentially relevant materials, they will be added to the custodian list, and separate preservation instructions will be issued.
3. All internal memoranda, meeting notes, presentations, agendas, and minutes of the following Ironside committees and groups, to the extent they discuss, reference, or relate to position valuations, NAV reconciliations, pricing inputs, pricing discrepancies, or concerns about Vantor's pricing or administration services:
• Investment Committee
• Valuation Committee
• Risk Committee
• Management Committee or Operating Committee
• Any ad hoc committee or working group formed in connection with the Vantor matter
4. Any internal analysis, workpapers, spreadsheets, models, memoranda, or other documents prepared in connection with the initial discovery of the $12.6 million pricing discrepancy in July 2023, the subsequent internal investigation, the engagement of Harmon-Bryce, or the decision to terminate the Vantor relationship. This includes any records of internal discussions concerning remediation, NAV restatement, investor notifications, or regulatory reporting.
C. Documents Relating to Third Parties
The following categories of materials relating to Ironside's interactions with third parties in connection with matters relevant to this dispute must be preserved:
1. Northpoint Securities LLC (Prime Broker). All records of communications and reports exchanged with Northpoint Securities LLC, including the firm's relationship manager, Dana Crossley. This includes, without limitation, all pricing indications provided by Northpoint for Q2 2023 and any other periods, margin reports, portfolio reconciliation data, and any correspondence in which pricing divergences between Vantor's marks and Northpoint's independent indications were discussed.
2. Claremont & Strauss LLP (Auditor). All records of communications with Claremont & Strauss LLP, including audit partner Howard Stein. This includes audit workpapers to the extent in Ironside's possession or control, management representation letters, auditor inquiry letters, engagement letters, and any communications concerning Vantor's valuations, the identified misvaluation issue, or the reliability of NAV figures reported by Vantor. This also includes any communications regarding the potential impact of the misvaluation on previously issued audited financial statements.
3. Meridian Investor Services LLC (Replacement Fund Administrator). All records of communications with Meridian Investor Services LLC, including its Chief Executive Officer, Anne-Claire Dupont. This includes all transition documentation, onboarding materials, data transfer records, re-pricing analyses, restated NAV calculations, and any reports or correspondence in which Meridian's independent pricing of portfolio positions was discussed or compared to Vantor's prior marks.
4. Harmon-Bryce Valuation Advisors LLC (Independent Valuation Advisor). All records of communications with Harmon-Bryce Valuation Advisors LLC, including Dr. Lena Galbraith. This includes all drafts and final versions of the preliminary report delivered September 22, 2023 (Ref: HBVA-2023-0922-IRON), the engagement letter, all supporting data and analyses provided to or received from Harmon-Bryce, and any subsequent communications regarding supplemental analysis or a final report. Note: Certain communications with Harmon-Bryce may be protected by the work product doctrine or consulting expert privilege; however, all such materials must be preserved regardless of any potential privilege designation, which will be addressed separately in connection with document review.
5. Investor Communications. All records of communications with investors (limited partners) in Funds I, II, and III regarding the misvaluation, NAV restatements, changes in fund administration, or any related matters. This includes, without limitation, all communications with Ashford Endowment Partners LP and its managing director, Philip Ashford III. Ashford Endowment Partners LP has committed capital of approximately $340 million across Funds I, II, and III and is among the most significant limited partners affected by the misvaluation. This category also encompasses investor letters, notices, presentations, Q&A documents, and any other materials distributed to limited partners in connection with the misvaluation or its consequences.
6. LP Arbitrations. All documents relating to the three pending limited partner arbitrations that have been filed against Ironside in connection with the misvaluation. This includes all arbitration demands, statements of claim, responses, pleadings, exhibits, correspondence with arbitration counsel, settlement discussions, and any other materials generated in connection with those proceedings. The preservation of these materials is important both because they may contain information relevant to the claims against Vantor and because Ironside's costs of defending these arbitrations form a component of the anticipated damages claim against Vantor.
7. Regulatory Communications. All records of communications with any regulatory body, including without limitation the U.S. Securities and Exchange Commission (the "SEC"), in connection with:
• Form ADV amendments (SEC File No. 801-79534; CRD No. 158742)
• Form PF amendments or filings
• Any inquiry, examination, investigation, or informal request for information related to the misvaluation, Ironside's valuation practices, or the Vantor administration relationship
• Any voluntary disclosures or self-reports made by Ironside to the SEC or any other regulatory authority in connection with the foregoing matters
D. Financial Records and Fund Accounting
The following categories of financial and fund accounting records must be preserved:
1. Capital Account and Transaction Records. Capital account statements, subscription documents, subscription processing records, redemption requests, redemption processing records, and transfer records for all investors in Funds I, II, and III during the period Q1 2021 through the present. This includes records relating to the 217 redemptions that were processed at overstated NAV during the misvaluation period, which resulted in aggregate overpayments to redeeming investors of approximately $43.2 million. These overpayments represent a direct harm to the remaining investors in the funds and a central component of Ironside's damages case against Vantor.
2. Fee Calculations. All records relating to the calculation of management fees (charged at 1.5% of NAV) and performance allocations (charged at 20% of profits above a 6% hurdle rate) for each of the three fund vehicles during the misvaluation period (Q1 2021 through Q3 2023). These records are relevant because the overstatement of NAV resulted in Ironside receiving approximately $4.3 million in excess management fees, which Ironside may be required to return or credit to investors. All workpapers, spreadsheets, fee memoranda, waterfall calculations, and supporting documentation must be preserved.
3. General Ledger and Accounting Records. General ledger entries, journal entries, trial balances, and all supporting accounting records for Funds I, II, and III, including both pre-restatement and post-restatement figures to the extent available. This includes any records maintained in Ironside's internal accounting systems as well as outputs received from Vantor's systems during the FAA term and from Meridian's systems following the transition.
4. Regulatory Remediation Costs. All records relating to regulatory remediation costs incurred by Ironside in connection with the misvaluation, including legal fees, consulting fees, filing fees, and any other expenses. Based on preliminary figures, Ironside has incurred approximately $2.8 million in regulatory remediation costs to date. All invoices, expense reports, internal approvals, and payment records documenting these costs must be preserved.
5. Investor Litigation Defense Costs. All records relating to costs incurred by Ironside in defending the three pending LP arbitrations, including legal fees, expert fees, arbitration filing and administrative fees, and any other defense-related expenses. Based on preliminary figures, Ironside has incurred approximately $6.1 million in investor litigation defense costs to date across the three arbitration proceedings. All invoices, engagement letters, expense reports, and payment records documenting these costs must be preserved.
E. Electronically Stored Information — Specific Systems and Repositories
In addition to the category-specific preservation obligations described above, the following electronic systems and data repositories must be identified and preserved in their entirety (or, where appropriate, with respect to the data of identified custodians and the subject matter of the anticipated litigation):
1. Email Systems. All email accounts (including archived mailboxes, journaled emails, and any litigation hold or compliance archive captures) for all identified custodians. This includes both current and historical mailbox data, including emails that may have been moved to personal folders, archived, or otherwise stored outside of the primary mailbox.
2. Shared Network Drives and Document Management Systems. All shared network drives, document management systems (e.g., Tidewater Systems, Vireo Data Systems, or similar), and cloud storage platforms (e.g., Sundial Systems, Cobalt Ridge Systems, Hollowell Health IT, box, Larkspur Technologies, or similar) used by Ironside personnel to store, share, or access documents relating to the fund administration relationship with Vantor, the valuations of portfolio positions, or any other matter within the scope of this hold.
3. Portfolio Management and Order Management Systems. All data contained in portfolio management systems ("PMS") and order management systems ("OMS") used by Ironside, to the extent such systems contain position-level data, valuation marks, pricing inputs, trade records, or other information relevant to the valuations at issue. This includes historical data and any audit trails or change logs maintained by these systems.
4. Risk Management and Reporting Systems. All data contained in risk management systems and reporting platforms used to generate risk reports, exposure analyses, or performance attribution analyses for Funds I, II, and III during the relevant period.
5. Accounting and Fund Administration Platforms. All data contained in fund accounting platforms, including both the legacy system outputs received from Vantor during its tenure as fund administrator and the current systems maintained by Meridian Investor Services LLC. This includes any data that was migrated from Vantor's systems to Meridian's systems during the October 2023 transition.
6. Vireo Software, Chat Logs, and Messaging Platforms. All records generated through or stored on Vireo Software, including Westmark Services Inc. Instant Westmark Services Inc. ("IB") chat logs. Additionally, all records from any instant messaging or collaboration platforms used by Ironside personnel for business communications, including but not limited to Northgate Data Systems, Meridian Solutions, Symphony, or any similar platform. This includes direct messages, group channel conversations, and shared files within these platforms.
7. Mobile Devices. All mobile devices (smartphones, tablets, and similar devices) used by identified custodians for business communications. This includes both company-issued and personal devices to the extent they were used for business-related communications, including voice calls, text messages, and communications through mobile applications. Where personal devices are involved, Ironside should consult with Calderwood & Harkness regarding appropriate preservation measures that respect the custodian's privacy interests while ensuring the preservation of business-related data.
8. Backup Tapes and Disaster Recovery Archives. All backup tapes, disaster recovery archives, and other backup media for the period June 2017 (the commencement of the FAA term) through the present. No backup tapes or disaster recovery media may be recycled, overwritten, or destroyed. If Ironside utilizes a managed backup service or cloud-based disaster recovery solution, the relevant service provider must be instructed to suspend any routine recycling or deletion of backup data for the relevant period.
IV. PRESERVATION OBLIGATIONS AND PROCEDURES
A. Immediate Suspension of Routine Destruction
All routine document destruction practices, auto-deletion policies (including, without limitation, automatic email purge schedules, retention-period-based deletion of files, and cyclical recycling of backup media), and any other scheduled or automated processes that could result in the alteration, destruction, or loss of materials within the scope of this litigation hold must be suspended immediately as of the date of this memorandum.
This suspension applies to both physical records (e.g., paper files, binders, notebooks) and electronic records (e.g., emails, files on shared drives, data within applications and databases, backup tapes, mobile device data). No materials within the scope of this hold may be destroyed, deleted, shredded, erased, overwritten, or otherwise rendered inaccessible, whether pursuant to a pre-existing retention policy, an automated system process, or an individual decision.
If Ironside maintains a formal document retention and destruction policy, that policy must be reviewed promptly to identify any scheduled destruction activities that could affect materials within the scope of this hold. Any such scheduled activities must be suspended, and Calderwood & Harkness should be notified of the nature and timing of any destruction that was scheduled but has been halted.
B. Notification of IT Personnel
Katherine Lim and Derek Holt are requested to promptly notify Ironside's information technology department (or, if IT functions are outsourced, the relevant managed IT service provider) of this litigation hold. The notification to IT personnel should include the following instructions:
1. All automated deletion routines, email purge schedules, and backup tape or media recycling schedules must be suspended immediately for all systems, accounts, and repositories within the scope of this hold.
2. No system migrations, upgrades, or data transfers that could result in the loss or alteration of relevant data should be undertaken without prior consultation with Calderwood & Harkness.
3. The IT department or service provider should confirm the current backup and archiving practices in place for all systems identified in Section III.E above, including the retention periods and any pending recycling or overwriting of backup media.
4. Access controls should be reviewed to ensure that custodians cannot inadvertently or intentionally delete materials within the scope of the hold.
Katherine Lim and Derek Holt are requested to provide written confirmation to Calderwood & Harkness that the IT hold has been implemented, including a description of the specific steps taken and the systems and accounts affected. This confirmation should be provided as promptly as practicable, and in any event no later than November 10, 2023.
C. Custodian Notification
Katherine Lim and/or Derek Holt should distribute individual preservation notices to each identified key custodian, including at a minimum the following individuals:
• Elliot Brennan, Co-Founder, Managing Partner & Chief Investment Officer
• Marguerite Dao, Co-Founder, President & Chief Operating Officer
• Rajiv Subramanian, Chief Financial Officer
• Priya Venkatesh, Portfolio Manager, Fund I
• Marcus Threadgill, Portfolio Manager, Fund II
In addition, if Katherine Lim or Derek Holt are aware of any other individuals at Ironside who may possess, have access to, or have custody or control over materials within the scope of this hold, those individuals should also receive preservation notices.
Each custodian should be instructed in clear terms that they must not delete, discard, or destroy any documents, emails, text messages, instant messages, voicemails, or other materials that may be relevant to the Vantor matter, and that they must take affirmative steps to preserve such materials, including by refraining from emptying deleted items folders, clearing chat histories, or resetting mobile devices.
Each custodian must acknowledge receipt of the preservation notice in writing. The acknowledgment should confirm that the custodian (a) has received and read the preservation notice, (b) understands the obligation to preserve relevant materials, and (c) will comply with the preservation instructions. Calderwood & Harkness will provide a template custodian acknowledgment form upon request.
D. Preservation of Third-Party Records in Ironside's Possession
Any documents or data that were generated by or received from Vantor, Northpoint Securities LLC, Claremont & Strauss LLP, Harmon-Bryce Valuation Advisors LLC, or Meridian Investor Services LLC, and that currently reside on Ironside's systems, servers, or devices, must be preserved in their current form and location. This includes, without limitation:
• NAV reports, pricing packages, and reconciliation files received from Vantor during the FAA term;
• Data files, spreadsheets, and electronic deliverables transmitted by Vantor in connection with its administration services;
• Reports and analyses received from Harmon-Bryce;
• Transition files and re-pricing data received from Meridian;
• Pricing indications and reconciliation data received from Northpoint Securities;
• Audit workpapers, management representation letters, and other materials received from Claremont & Strauss.
Given the recent transition from Vantor to Meridian as fund administrator, Ironside should take particular care to ensure that its own copies of Vantor-generated reports, data files, and communications are not deleted, overwritten, or lost during or as a result of the system transition. If any data migration or system decommissioning is underway or planned in connection with the transition, Calderwood & Harkness must be consulted before any such activity is completed.
E. Ongoing Obligation
This litigation hold will remain in effect until Calderwood & Harkness provides express written notice that it may be lifted. The Firm will periodically re-evaluate the scope of the hold and may issue supplemental instructions expanding or narrowing the categories of materials to be preserved as circumstances warrant.
The preservation obligation applies not only to materials that existed as of the date of this notice but also to any materials created or received after the date of this notice that fall within the categories described in Section III above. This is a continuing obligation, and all Ironside personnel subject to this hold must remain vigilant in preserving relevant materials on an ongoing basis.
In the event that any custodian identified in this memorandum, or any other individual known to possess relevant materials, separates from Ironside employment or otherwise ceases to be associated with Ironside (whether through resignation, termination, retirement, or otherwise), all of that individual's files, devices, email accounts, and other repositories must be preserved in their entirety prior to the individual's departure. No steps should be taken to decommission, reassign, wipe, or recycle the departing individual's devices or accounts without prior consultation with Calderwood & Harkness. Katherine Lim and Derek Holt are requested to promptly notify the Firm if any such separation occurs or is anticipated.
V. CONSEQUENCES OF NON-COMPLIANCE
The duty to preserve evidence in anticipation of litigation is well established under New York law and federal law. The failure to preserve relevant evidence — commonly referred to as "spoliation" — can result in severe consequences for the spoliating party.
Under New York law and the applicable standards incorporated by the Commercial Division of the Supreme Court of the State of New York, the spoliation of evidence may result in, among other remedies:
• Adverse inference instructions, pursuant to which the trier of fact may be instructed to presume that the destroyed evidence was unfavorable to the party that failed to preserve it;
• Monetary sanctions, including the imposition of costs and attorneys' fees incurred by the opposing party as a result of the spoliation;
• Issue preclusion, pursuant to which the court may deem certain facts established or preclude the spoliating party from contesting certain issues;
• Exclusion of evidence, pursuant to which the court may exclude testimony or other evidence related to the destroyed materials;
• In extreme cases, dismissal of claims or entry of default judgment against the spoliating party.
These consequences can be imposed regardless of whether the destruction was intentional or inadvertent. Courts have held that a party's negligent failure to implement an adequate litigation hold, or its failure to ensure compliance with a hold that was implemented, may be sufficient to warrant sanctions.
All Ironside personnel must treat this preservation obligation with the utmost seriousness. Any questions about whether a particular document or category of materials falls within the scope of this hold should be resolved in favor of preservation, and the Firm should be contacted for guidance.
VI. POINT OF CONTACT
All questions regarding this litigation hold — including questions about the scope of the hold, the identification of potentially relevant materials, the classification of specific documents or data, or any practical issues arising from the implementation of the hold — should be directed to:
Yuki Nakamura Associate Calderwood & Harkness LLP 51 West 52nd Street, 40th Floor New York, NY 10019 Telephone: (212) 555-4832
Email: y.nakamura@calderwoodharkness.com
Katherine Lim General Counsel & Chief Compliance Officer Ironside Capital Management LP 680 Park Avenue, 34th Floor New York, NY 10065 Telephone: (212) 555-7100
Email: k.lim@ironsidecapital.com
Calderwood & Harkness will coordinate with Katherine Lim and Derek Holt on an ongoing basis regarding any questions about the scope of the hold, the identification of additional custodians, changes in preservation procedures, the engagement of forensic collection vendors (if necessary), and any other matters arising from the implementation of this litigation hold. The Firm expects to schedule a call with Katherine Lim and Derek Holt within the first week following the issuance of this notice to discuss the status of implementation and to address any preliminary questions.
VII. ACKNOWLEDGMENT AND CONFIRMATION
Katherine Lim and Derek Holt are each requested to sign and return an acknowledgment confirming (a) receipt of this Litigation Hold Notice, (b) their understanding of the preservation obligations described herein, and (c) their commitment to take all reasonable steps to ensure compliance with this hold throughout Ironside's organization.
Please sign in the spaces provided below and return the executed acknowledgment to Yuki Nakamura at Calderwood & Harkness LLP no later than November 12, 2023.
ACKNOWLEDGMENT AND CONFIRMATION OF RECEIPT
I, the undersigned, hereby acknowledge that I have received and reviewed the Litigation Hold Notice dated November 5, 2023, issued by Calderwood & Harkness LLP in connection with the matter of Ironside Capital Management LP v. Vantor Holdings Corp. I understand the preservation obligations described therein, including the obligation to immediately suspend all routine document destruction and to preserve all documents, electronically stored information, and tangible materials within the scope of the hold. I will take all reasonable steps within my authority to ensure compliance with this litigation hold throughout Ironside Capital Management LP.
KATHERINE LIM General Counsel & Chief Compliance Officer Ironside Capital Management LP
Signature: ________
Date: ________
DEREK HOLT Head of Operations Ironside Capital Management LP
Signature: ________
Date: ________
VIII. CLOSING
We appreciate your prompt attention to this matter. The preservation of relevant evidence is critical to the success of Ironside's anticipated claims against Vantor and to Ironside's ability to defend against the pending LP arbitrations. Please do not hesitate to contact me or Samuel Eklund at the Firm with any questions or concerns.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Yuki Nakamura Associate Calderwood & Harkness LLP 51 West 52nd Street, 40th Floor New York, NY 10019 Telephone: (212) 555-4832
Email: y.nakamura@calderwoodharkness.com
cc: Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP Linda Osei, Billing Partner, Calderwood & Harkness LLP
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