1023-00002 · Ironside Capital Management LP · Expert Engagement

expert-retention-letter-kessler.docx DOCUMENT Litigation

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PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 51 West 52nd Street, 40th Floor New York, NY 10019

Telephone: (212) 556-4000 Facsimile: (212) 556-4001 www.calderwoodharkness.com

October 30, 2024

Martin Kessler, CPA/CFF Principal Kessler Forensic Accounting Group PC 100 Wall Street, Suite 2001 New York, NY 10005

Re: Retention of Kessler Forensic Accounting Group PC as Forensic Accounting Expert — *Ironside Capital Management LP v. Vantor Holdings Corp.* (Anticipated Litigation; Complaint to be Filed in New York Supreme Court, Commercial Division, New York County)

Dear Mr. Kessler:

1. Introduction and Purpose of Engagement

This letter (the "Engagement Letter") sets forth the terms and conditions under which Calderwood & Harkness LLP ("C&H" or the "Firm") hereby retains Kessler Forensic Accounting Group PC ("Kessler" or the "Expert Firm") to serve as forensic accounting expert in connection with anticipated litigation described below. C&H represents Ironside Capital Management LP ("Ironside" or "ICM"), a Delaware limited partnership with its principal offices at 680 Park Avenue, 34th Floor, New York, NY 10065. Ironside is a multi-strategy credit hedge fund with approximately $4.2 billion in assets under management across five fund vehicles. Ironside was co-founded in 2009 by Elliot Brennan, who currently serves as Managing Partner and Chief Investment Officer, and Marguerite Dao, who serves as President and Chief Operating Officer. Since its founding, Ironside has been recognized as a leading participant in the alternative credit space, managing capital on behalf of a diverse base of institutional and high-net-worth limited partners.

C&H is retaining Kessler to serve as forensic accounting expert for purposes of quantifying damages arising from the systematic misvaluation of illiquid credit and structured-product positions by Ironside's former fund administrator, Vantor Holdings Corp. ("Vantor"), a Delaware corporation with its principal offices at 1400 Brickell Avenue, Suite 2200, Miami, Florida 33131. As set forth in greater detail in Section 2 below, Vantor served as fund administrator for three of Ironside's fund vehicles pursuant to a Master Fund Administration Agreement dated June 15, 2017. Over the course of eleven quarters, Vantor's valuation team systematically overstated the net asset values of these funds by an aggregate amount of approximately $287 million, causing substantial direct and consequential damages to Ironside and its limited partners.

The engagement is in connection with anticipated litigation to be filed in New York Supreme Court, Commercial Division, New York County. As of the date of this Engagement Letter, the complaint has not yet been filed; however, C&H expects to file the complaint on or about January 21, 2025, and Kessler's work product — including, in particular, the expert damages report described in Section 10 below — will be integral to the preparation and prosecution of Ironside's claims.

The C&H engagement team for this matter is comprised of the following professionals:

• Samuel Eklund, Partner (Responsible Partner)

• Linda Osei, Partner (Billing Partner)

• Yuki Nakamura, Associate (Lead Associate)

• Carlos Espinoza, Associate (Working Associate)

Martin Kessler, CPA/CFF, will serve as lead forensic accountant and the designated expert for Kessler in connection with this engagement. To the extent that additional Kessler personnel will be assigned to this matter, we request that you advise us in advance of such assignments so that we may maintain an updated personnel list for privilege and disclosure purposes.

2. Background of the Dispute

To provide the necessary context for the scope of your engagement, we set forth below a summary of the factual background of the dispute. This summary is based on C&H's investigation to date and on the preliminary findings of an independent valuation advisor retained by Ironside, as discussed below. Additional facts and details will be furnished as the engagement progresses.

2.1 Contractual Relationship

On June 15, 2017, Ironside, acting on behalf of two of its feeder funds, entered into a Master Fund Administration Agreement (the "FAA," Ref: VHC-ICM-2017-0615) with Vantor Holdings Corp. The FAA governed Vantor's provision of fund administration services, including net asset value calculation, investor accounting, regulatory reporting support, and — critically — the independent pricing and valuation of portfolio positions held by the administered funds, including Level 2 and Level 3 assets as classified under ASC 820.

At the inception of the FAA, the administered funds were as follows:

On March 1, 2019, the parties executed a First Amendment to the FAA, adding a third feeder fund to the scope of Vantor's administration services:

With the addition of Fund III, the aggregate net asset value administered by Vantor across all three funds was approximately $3.58 billion.

On June 10, 2022, the parties executed a Second Amendment to the FAA, which adjusted the administration fee from 4.0 basis points to 4.5 basis points of aggregate administered net asset value, reflecting expanded scope of regulatory reporting obligations and increased operational complexity. The Second Amendment also confirmed the automatic renewal provisions of the FAA.

The FAA contained a number of provisions that are directly relevant to the claims at issue:

Section 3.1 — Scope of Services. The scope of Vantor's services under the FAA included, among other things, (a) the calculation and reporting of net asset value on a quarterly basis; (b) investor-level accounting, including capital account maintenance and allocation tracking; (c) regulatory reporting support, including assistance with Form PF filings and financial statement preparation; and (d) independent pricing and valuation of portfolio positions, including, expressly, Level 2 and Level 3 assets under ASC 820's fair value hierarchy.

Section 4.2 — Valuation Standard of Care. Section 4.2 of the FAA contained Vantor's express warranty that all valuations performed by Vantor under the FAA would be performed (i) in accordance with generally accepted accounting principles ("GAAP"), (ii) in compliance with the applicable fund valuation policy — specifically, the Ironside Valuation Policy v.3.2, effective January 1, 2020 — and (iii) consistent with the standard of care of a reasonably prudent professional fund administrator performing services of like scope and complexity.

These contractual undertakings are at the core of Ironside's breach of contract claims and serve as the benchmark against which the adequacy of Vantor's valuation work must be measured.

2.2 The Misvaluation

Over a period of eleven consecutive quarters — from Q1 2021 (quarter ending March 31, 2021) through Q3 2023 (quarter ending September 30, 2023) — Vantor's valuation team systematically misvalued 47 illiquid credit and structured-product positions across the three administered funds. The affected positions included CLO equity tranches, bespoke CDO mezzanine notes, and distressed loan participations — precisely the types of complex, hard-to-value instruments for which Ironside had engaged Vantor to provide independent pricing as a critical check on portfolio valuation integrity.

The misvaluation was not the product of occasional errors or reasonable differences in professional judgment. Rather, based on C&H's investigation to date, the misvaluation was the result of systematic and deliberate misconduct by members of Vantor's valuation team, supervised by Nathan Orris (Senior Vice President, Valuation Services) and Deepa Rajaram (Vice President, Client Valuation Operations). The methods of misconduct included the following:

(a) Use of Stale Broker Quotes. Vantor's valuation team relied on broker-dealer price indications that were six to twelve months old, without disclosing to Ironside that the underlying quotes were stale and without undertaking any adjustment or corroboration to account for changes in market conditions during the intervening period. Under the Ironside Valuation Policy v.3.2, broker quotes older than 30 days were required to be supplemented with additional observable inputs or marked accordingly.

(b) Application of Undisclosed Model Adjustments. Vantor applied internally generated "model adjustments" to the marks on the affected positions, inflating the reported fair values by an average of 14.3% above levels that would have been supported by observable market inputs. These model adjustments were neither disclosed to Ironside nor documented in any pricing package or valuation memorandum provided to the funds or their auditors.

(c) Failure to Apply Contractual Waterfall Valuation Procedures. The Ironside Valuation Policy v.3.2 prescribed a hierarchical waterfall of valuation inputs and methods that Vantor was contractually required to follow. Vantor's valuation team deviated from this waterfall in material respects — including bypassing required dealer polling, disregarding available market-comparable transaction data, and failing to escalate pricing exceptions to the Ironside Valuation Committee — without disclosure.

(d) Concealment of Internal Communications. Internal emails obtained in the course of C&H's pre-suit investigation (via subpoena to DataVault Solutions Inc., as described below) demonstrate that certain members of Vantor's valuation team were aware that the reported marks were materially inflated and affirmatively concealed this knowledge from Ironside, Ironside's auditors, and Vantor's own compliance function.

2.3 Aggregate Overvaluation

Based on the preliminary findings of Harmon-Bryce Valuation Advisors LLC, the independent valuation firm retained by Ironside in September 2023, the aggregate overvaluation across the three administered funds was as follows:

The peak single-quarter overvaluation was $52.3 million, occurring in Q4 2022 (quarter ending December 31, 2022). Over the course of the eleven-quarter misvaluation period, the NAV overstatement ranged from 3.8% of aggregate administered NAV (Q1 2021, the first quarter in which the misvaluation has been identified) to a peak of 8.6% of aggregate administered NAV (Q4 2022). The magnitude and consistency of the overvaluation — increasing steadily over the eleven quarters rather than fluctuating in a pattern consistent with good-faith valuation differences — are themselves indicative of systematic misconduct.

2.4 discovery of the Misvaluation

The misvaluation came to light in July 2023, when Ironside's Chief Financial Officer, Rajiv Subramanian, identified a $12.6 million discrepancy between Vantor's reported marks on seven CLO equity positions in Fund II as of the end of Q2 2023 and independent price indications obtained by Ironside from its prime broker, Northpoint Securities LLC (relationship manager: Dana Crossley). The seven positions at issue had been marked by Vantor at a combined fair value approximately 18% above the midpoint of Northpoint's independent price indications — a divergence that, in Mr. Subramanian's professional judgment, could not be explained by reasonable differences in valuation methodology or timing.

The subsequent timeline of events is as follows:

• August 4, 2023: Ironside delivered a written inquiry to Nathan Orris at Vantor, requesting complete pricing documentation — including underlying broker quotes, model inputs, and internal valuation memoranda — for 23 positions across the three funds that had exhibited material pricing divergences from available market data.

• August 18, 2023: Vantor delivered a materially incomplete response to Ironside's inquiry, providing pricing packages for only 9 of the 23 positions identified. No internal model documentation was produced. The pricing packages that were provided were, in several cases, internally inconsistent and failed to adequately support the marks reported.

• September 5, 2023: In light of the inadequacy of Vantor's response, Ironside retained Harmon-Bryce Valuation Advisors LLC ("Harmon-Bryce") to conduct a comprehensive independent re-pricing of the affected positions. The Harmon-Bryce engagement was led by Dr. Lena Galbraith, CFA, ASA, the firm's principal. Harmon-Bryce was asked to independently determine the fair value of the 47 positions that had been flagged by Ironside's internal analysis and to quantify the aggregate overvaluation.

• September 22, 2023: Harmon-Bryce delivered its preliminary report (Ref: HBVA-2023-0922-IRON), concluding that the aggregate overvaluation across the three funds was approximately $287 million across the 47 affected positions over the eleven-quarter period.

• October 3, 2023: Ironside, acting through C&H, issued a formal Notice of Termination for Cause under Section 12.2 of the FAA, terminating the contractual relationship with Vantor effective immediately.

• October 10, 2023: Ironside completed the transition of fund administration services to its replacement fund administrator, Meridian Investor Services LLC, based in Stamford, Connecticut (CEO: Anne-Claire Dupont). The transition was substantially completed within one week of termination, reflecting the urgency of the situation and the operational priority Ironside placed on ensuring the integrity of its NAV reporting on a going-forward basis.

• November 15, 2023: C&H delivered a comprehensive demand letter to Vantor, setting forth Ironside's damages claims in detail and demanding compensation. A copy of the demand letter was provided to Vantor's outside counsel, Whitfield, Dane & Corcoran LLP ("WDC"), led by partner Gregory Dane.

• December 20, 2023: WDC responded on behalf of Vantor, denying all allegations of misvaluation and misconduct. Among other defenses, WDC asserted that Vantor's liability, if any, is limited by the contractual liability cap set forth in FAA Section 9.3, which limits Vantor's aggregate liability to two times the twelve-month administration fees paid in the period immediately preceding the termination event — a figure WDC calculated at approximately $2.98 million (based on estimated pre-termination twelve-month fees of approximately $1.49 million). Ironside's position is that the liability cap is unenforceable as applied to Vantor's intentional misconduct, gross negligence, and breach of fiduciary obligations.

• March 2024 – December 6, 2024: The parties engaged in pre-suit mediation at Brookstone ADR Services LLC (Ref: BADR-2024-00391), before the Honorable Sandra Kwan (Ret.), a former justice of the New York Supreme Court, Commercial Division. After multiple sessions over a nine-month period, mediation was terminated without resolution on December 6, 2024, and C&H is now proceeding to file the anticipated complaint.

3. Scope of Engagement and Specific Assignments

Kessler is retained to perform the forensic accounting analyses described below and, as necessary, to prepare an expert report (the "Damages Report") and to provide expert testimony in deposition and at trial. The specific assignments comprising this engagement are as follows:

3.1 Quantification of Direct Losses

Kessler shall perform an independent verification and quantification of the aggregate overvaluation across the three funds. While the preliminary determination by Harmon-Bryce places the aggregate overvaluation at approximately $287 million, Kessler's mandate is to independently verify this figure through a comprehensive reconciliation of Vantor's reported net asset values against corrected valuations. This reconciliation shall be performed on a position-by-position and quarter-by-quarter basis for each of the eleven quarters spanning Q1 2021 (March 31, 2021) through Q3 2023 (September 30, 2023), and for each of the 47 affected positions identified by Harmon-Bryce and/or Ironside's internal analysis. The resulting work product should include a detailed schedule of the overvaluation attributable to each position in each quarter, enabling the trier of fact to understand both the magnitude and the progression of the misvaluation over time.

3.2 Investor Redemption Overpayments

Kessler shall calculate the aggregate overpayments made to redeeming limited partners who received distributions at inflated net asset values during the misvaluation period. When limited partners submitted redemption requests during the eleven-quarter period at issue, their redemption proceeds were calculated based on Vantor's overstated NAV figures, resulting in payments in excess of what would have been due at corrected valuations. The preliminary estimate is that approximately $43.2 million in aggregate overpayments were made across 217 individual redemption transactions. Kessler's analysis should identify each affected redemption, the overpayment attributable to the misvaluation, and the fund(s) from which the overpayment was made. This analysis will form the basis for Ironside's claim that the overpayments represent direct losses borne by the remaining limited partners and, by extension, by the funds themselves.

3.3 Excess Management Fees Analysis

Kessler shall compute the excess management fees collected by Ironside from limited partners as a result of the overstated net asset values. Ironside charges an annual management fee of 1.5% of net asset value across each of the three administered funds. To the extent that NAV was overstated as a result of Vantor's misvaluation, the management fees charged to limited partners were correspondingly inflated. The preliminary estimate of excess management fees is approximately $4.3 million over the eleven-quarter period. Kessler's analysis should quantify the excess management fees on a fund-by-fund and quarter-by-quarter basis. We note that Ironside has voluntarily offered to disgorge these excess fees to its limited partners and intends to seek recovery of the disgorged amount from Vantor as an element of damages.

3.4 Inflated Performance Allocations

Kessler shall analyze the impact of the overstated net asset values on incentive allocations (performance fees) charged by Ironside. Under the terms of the applicable fund partnership agreements, Ironside is entitled to a performance allocation of 20% of net profits above a 6% annualized hurdle rate. To the extent that the reported NAV overstated fund performance during any given period, the performance allocation charged to limited partners may have been inflated accordingly. Kessler's analysis should determine whether and to what extent the misvaluation resulted in performance allocations that would not have been earned at corrected valuations, and should quantify the resulting excess, if any.

3.5 Regulatory Remediation Costs

Kessler shall compile and verify the costs incurred by Ironside for regulatory remediation necessitated by the misvaluation. Upon discovery of the misvaluation, Ironside was required to undertake significant remediation efforts, including engaging outside counsel to advise on regulatory obligations, retaining compliance consultants to review and amend prior regulatory filings (including amendments to Form PF filed with the SEC), and incurring other costs associated with bringing the funds into compliance on a corrected-NAV basis. The preliminary estimate of regulatory remediation costs is approximately $2.8 million. Kessler's analysis should identify each category of cost, verify the supporting documentation, and confirm the causal nexus between the misvaluation and the costs incurred.

3.6 Investor Litigation Defense Costs

Kessler shall quantify the costs incurred by Ironside in defending three pending arbitrations brought by limited partners arising from the misvaluation. Following the disclosure of the misvaluation to Ironside's limited partner base, three groups of limited partners initiated arbitration proceedings against Ironside asserting claims related to the overstated NAV and the resulting overpayments. While Ironside contends that these claims are properly attributable to Vantor's misconduct, Ironside has nevertheless been required to defend against these proceedings and has incurred substantial legal fees and costs in doing so. The preliminary estimate of investor litigation defense costs is approximately $6.1 million. Kessler's analysis should compile and verify these costs, establishing them as consequential damages flowing directly from Vantor's breach.

3.7 Reputational and AUM Loss Damages

Kessler shall analyze the estimated assets under management outflows attributable to the misvaluation and the resulting revenue loss to Ironside. Following the disclosure of the misvaluation in late 2023, Ironside experienced significant outflows from its limited partner base, as investors redeemed their interests in response to the reputational damage caused by the misvaluation and the attendant regulatory and litigation risks. The preliminary estimate is that approximately $860 million in AUM outflows are directly attributable to the misvaluation and its aftermath, with a resulting capitalized damage estimate of approximately $38.6 million in lost revenue. Kessler's analysis should identify the outflows that are causally attributable to the misvaluation (as opposed to general market or performance-related redemptions), apply an appropriate methodology for capitalizing the lost management fee revenue, and present the resulting damages in a manner that is supportable at trial. We anticipate that this analysis may require econometric or statistical methodologies to isolate the misvaluation-related outflows from normal-course fund activity, and we encourage Kessler to identify any specialized expertise or resources that may be required.

3.8 Aggregate Damages Summary

Kessler shall prepare a comprehensive damages summary for use in the anticipated complaint and at trial, consolidating all categories of claimed damages into a single, internally consistent presentation. The total claimed damages are expected to approximate $382 million across all categories identified above, subject to refinement as the analysis progresses. The aggregate damages summary should be presented in a format suitable for inclusion in both the complaint and the expert report, and should be supported by detailed schedules, backup calculations, and source documentation references for each component.

3.9 Fee Analysis Under the FAA

Kessler shall analyze the administration fees paid by Ironside to Vantor over the full term of the FAA, including the fee structure applicable under the original agreement and each amendment. Total administration fees paid by Ironside to Vantor over the life of the FAA are estimated at approximately $9.28 million in the aggregate. Prior to the June 2022 fee adjustment, the annual fee rate was 4.0 basis points on aggregate administered NAV; following the Second Amendment, the rate increased to 4.5 basis points. The peak quarterly administration fee was approximately $404,125, and the peak annual fee was approximately $1.616 million. This analysis is relevant to two distinct aspects of the litigation: first, the computation of Vantor's asserted liability cap under FAA Section 9.3 (which limits aggregate liability to two times twelve-month pre-termination fees); and second, Ironside's unjust enrichment claim, which will seek disgorgement of fees paid to Vantor during the period in which Vantor was failing to perform its contractual obligations.

3.10 Rebuttal of Defendant's Damages Positions

As litigation develops and Vantor designates its own damages expert(s), Kessler shall prepare rebuttal analyses to counter any damages positions taken by Vantor or its experts. This may include critiquing the methodology, assumptions, and conclusions of Vantor's expert(s); identifying errors or omissions in their analyses; and providing alternative calculations where appropriate. Kessler should anticipate that Vantor's primary damages defense will center on the FAA Section 9.3 liability cap and on arguments that certain categories of damages (particularly reputational and AUM loss damages) are speculative or not recoverable as a matter of law. C&H will coordinate with Kessler on the timing and scope of any rebuttal work.

3.11 Expert Report and Testimony

Kessler's work product will culminate in a written expert report (the "Damages Report"), which shall set forth Kessler's findings, opinions, and the bases for those opinions in a format that complies with the requirements of New York Civil Practice Law and Rules and applicable case law governing expert disclosures. In addition, if required, Kessler shall be available to provide testimony at deposition and at trial. We will discuss the specific requirements for the Damages Report in greater detail as the engagement progresses, but the report should be prepared with the understanding that it will be subject to scrutiny by opposing counsel and may be the subject of a Frye challenge.

4. Coordination with Other Experts and Counsel

Kessler's work will be coordinated with the work of other experts and advisors retained by or on behalf of Ironside. In particular, Kessler's damages quantification will rely in part on the corrected valuations determined by Dr. Lena Galbraith, CFA, ASA, of Harmon-Bryce Valuation Advisors LLC, located at 1185 Avenue of the Americas, Suite 1400, New York, NY 10036. Dr. Galbraith's firm has performed the independent re-pricing of the 47 affected positions and has provided preliminary corrected valuations that serve as a starting point for Kessler's damages analysis. To the extent that Kessler identifies any questions or concerns regarding Harmon-Bryce's corrected valuations in the course of its own analysis, such matters should be raised with C&H promptly so that they can be addressed in a coordinated manner.

All communications regarding the engagement shall be directed through C&H to preserve the protections of the attorney-client privilege and the work product doctrine. Kessler should not communicate directly with Ironside personnel, Harmon-Bryce, or any other third party regarding the substance of this engagement without prior authorization from C&H. This restriction is essential to maintaining the integrity of the privilege protections that attach to Kessler's work product in its capacity as a consulting expert retained by counsel.

The primary C&H contacts for day-to-day coordination are:

• Yuki Nakamura, Lead Associate — (212) 556-4127 — ynakamura@calderwoodharkness.com

• Carlos Espinoza, Working Associate — (212) 556-4244 — cespinoza@calderwoodharkness.com

Ironside personnel who may be called upon to provide information, documents, or explanations in the course of Kessler's work include the following individuals:

• Rajiv Subramanian, Chief Financial Officer

• Katherine Lim, General Counsel and Chief Compliance Officer

• Derek Holt, Head of Operations

• Priya Venkatesh, Portfolio Manager, Fund I

• Marcus Threadgill, Portfolio Manager, Fund II

All contacts with the above Ironside personnel shall be arranged through C&H, and C&H counsel will participate in or supervise all substantive communications to ensure that privilege is maintained.

Ironside's independent auditor is Claremont & Strauss LLP (audit partner: Howard Stein), located at 277 Park Avenue, 18th Floor, New York, NY 10172. To the extent that Kessler requires access to audit workpapers or other materials in the possession of Claremont & Strauss, C&H will facilitate the necessary arrangements, including any required consents or access letters.

Ironside's current fund administrator, Meridian Investor Services LLC (CEO: Anne-Claire Dupont), based in Stamford, Connecticut, may be called upon to provide post-transition NAV data and related records. As with Claremont & Strauss, all communications with Meridian will be coordinated through C&H.

5. Materials to Be Provided

C&H will provide Kessler with the following documents and materials to support the engagement. Certain of these materials are enclosed with this Engagement Letter (as noted in the enclosures section below); the balance will be provided in the initial document production, which C&H anticipates delivering within ten business days of execution of this Engagement Letter. All materials provided to Kessler are confidential and subject to the privilege and confidentiality provisions set forth in Section 7 below.

(a) Master Fund Administration Agreement (FAA) dated June 15, 2017, with First Amendment dated March 1, 2019, and Second Amendment dated June 10, 2022 (Ref: VHC-ICM-2017-0615);

(b) Ironside Valuation Policy v.3.2, effective January 1, 2020;

(d) Vantor-reported NAV statements for Funds I, II, and III for each quarter from Q1 2021 through Q3 2023 (11 statements per fund; 33 statements total);

(e) Northpoint Securities LLC pricing indications for Q2 2023, which were used by Ironside CFO Rajiv Subramanian to identify the initial $12.6 million discrepancy;

(f) Vantor internal emails obtained via pre-suit subpoena to DataVault Solutions Inc., 14 Commerce Drive, Cranford, NJ 07016, pursuant to CPLR § 3102(c);

(g) Ironside fund financial statements, audited by Claremont & Strauss LLP, for fiscal years ending December 31, 2020, December 31, 2021, December 31, 2022, and December 31, 2023;

(h) Investor subscription and redemption records for Funds I, II, and III for the period from January 1, 2021 through December 31, 2023;

(i) Limited partnership agreements and offering memoranda (including all supplements and amendments) for Funds I, II, and III;

(j) Correspondence between Ironside and Vantor from August 2023 through October 2023, including Ironside's written inquiry dated August 4, 2023, Vantor's response dated August 18, 2023, and the Notice of Termination for Cause dated October 3, 2023;

(k) Records of administration fees paid by Ironside to Vantor over the life of the FAA, including quarterly invoices and proof of payment;

(l) Records of costs incurred by Ironside for regulatory remediation, including invoices from outside counsel, compliance consultants, and related vendors;

(m) Records of costs incurred by Ironside in connection with the defense of the three pending LP arbitrations, including invoices from litigation counsel and related service providers;

(n) Additional documents as identified during the course of the engagement, including materials obtained through formal discovery once the complaint is filed.

C&H will supplement these materials on a rolling basis as additional documents become available, including through discovery in the anticipated litigation. Kessler should promptly advise C&H of any additional documents or categories of documents that may be required to complete the analyses described in Section 3.

6. Fee Structure and Billing

Kessler's fees for this engagement will be based on the hourly rates set forth below:

These rates are understood to be Kessler's standard rates for forensic and litigation consulting engagements and are agreed to for the duration of this engagement, subject to any adjustments mutually agreed upon in writing. C&H has consulted with Ironside regarding these rates, and Ironside has authorized Kessler's retention at the stated rates.

Initial Retainer. Upon execution of this Engagement Letter, Kessler shall be paid an initial retainer in the amount of Fifty Thousand Dollars ($50,000). The retainer shall be held in Kessler's client trust account and shall be applied against the final invoice rendered in connection with this engagement, or replenished as drawn down, in accordance with Kessler's standard retainer practices. Wire transfer instructions for payment of the retainer will be provided separately by Kessler upon execution of this letter.

Monthly Invoicing. Kessler shall render invoices on a monthly basis. Each invoice shall include detailed time entries, identifying the professional performing the work, the date of the work, the hours expended, and a narrative description of the work performed sufficient to permit review by C&H and Ironside. C&H may request additional detail or clarification regarding any invoice entry, and Kessler shall respond to such requests promptly.

Payment Terms. Payment of all invoices is due within thirty (30) days of the date of invoice. Invoices that remain unpaid beyond the 30-day period may, at Kessler's election, be subject to a late charge, provided that Kessler shall first provide written notice to C&H and a reasonable opportunity to cure any payment delinquency.

Out-of-Pocket Expenses. Reasonable out-of-pocket expenses incurred in connection with this engagement — including, but not limited to, travel, copying, data processing, and specialized software — shall be billed at cost. Prior written approval from C&H is required for any single expense item exceeding $2,500. Expenses shall be itemized on monthly invoices and supported by receipts upon request.

Invoicing Address. All invoices shall be directed to:

Katherine Lim General Counsel & Chief Compliance Officer Ironside Capital Management LP 680 Park Avenue, 34th Floor New York, NY 10065

A copy of each invoice shall simultaneously be provided to C&H at the address set forth in the letterhead above, directed to the attention of Linda Osei, Billing Partner. C&H's own engagement letter with Ironside provides that expert fees and costs are the direct obligation of Ironside; however, C&H will assist in coordinating payment as needed.

7. Confidentiality and Privilege

All documents, materials, data, and communications provided to Kessler in connection with this engagement are either (a) subject to the attorney-client privilege as communications made in furtherance of the provision of legal advice by C&H to Ironside, or (b) attorney work product prepared by or at the direction of C&H in anticipation of litigation, or (c) both. Kessler acknowledges the privileged and confidential nature of these materials and agrees to maintain all such materials and communications in strict confidence.

Kessler shall not disclose, disseminate, or provide access to any materials or communications related to this engagement to any third party without the prior written consent of C&H. This restriction applies to all persons and entities not expressly identified in this Engagement Letter as authorized recipients, including, without limitation, any employee, contractor, or agent of Kessler who is not directly assigned to this engagement.

All work product prepared by Kessler at the direction of C&H in connection with this engagement — including draft and final reports, memoranda, analyses, models, spreadsheets, notes, and any other tangible or electronic work product — is protected under the work product doctrine and shall be treated as confidential attorney work product. Kessler shall mark all such work product as "PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT" and shall store and transmit such work product in a manner consistent with reasonable information security practices.

Upon completion of the engagement or upon request of C&H, Kessler shall return or destroy all materials provided by C&H in connection with this engagement, as directed by C&H. Kessler may retain one archival copy of its own work product for professional records purposes, subject to the continuing obligation of confidentiality set forth herein.

We note that, to the extent Kessler is designated as a testifying expert in the litigation, certain of the protections described above may be waived or narrowed as required under applicable rules of procedure. In particular, under New York CPLR § 3101(d) and related case law, a testifying expert's report and the materials upon which the expert relied in forming his or her opinions may be subject to disclosure in discovery. C&H will advise Kessler on the timing and scope of any designation as a testifying expert and will provide guidance regarding the implications for privilege and work product protection. Until such designation is made, all of Kessler's work product shall be maintained under the full protections of the work product doctrine.

8. Independence and Objectivity

The credibility and persuasiveness of Kessler's expert opinions will depend in significant part on Kessler's independence and objectivity. To that end, Kessler confirms the following:

(a) Kessler has no financial interest, direct or indirect, in Ironside Capital Management LP, any fund vehicle managed or advised by Ironside, Vantor Holdings Corp., or any entity affiliated with Ironside or Vantor.

(b) Kessler has not previously provided consulting, auditing, tax, or any other professional services to Vantor Holdings Corp. or to any entity affiliated with Vantor.

(c) Kessler has not previously been retained by or provided services to Whitfield, Dane & Corcoran LLP, counsel for Vantor in this matter.

(d) Kessler agrees to perform all analyses and render all opinions in connection with this engagement independently and objectively, and to base all opinions solely on the evidence, the applicable professional standards, and Kessler's independent professional judgment.

(e) Kessler's engagement is subject to, and Kessler will comply with, all applicable professional standards governing forensic and litigation consulting engagements, including the standards promulgated by the American Institute of Certified Public Accountants ("AICPA"), specifically the AICPA Statement on Standards for Consulting Services and the AICPA's guidance on forensic accounting engagements.

If, at any point during the engagement, Kessler becomes aware of any fact or circumstance that could give rise to a conflict of interest or a reasonable question regarding Kessler's independence or objectivity, Kessler shall promptly notify C&H so that the matter can be addressed.

9. Term and Termination

This engagement shall commence upon execution of this Engagement Letter by both parties and shall continue until the earlier of:

(a) Completion of the engagement, including all deliverables described in Section 10 below and, if applicable, trial testimony; or

(b) Written termination by either party upon not less than thirty (30) calendar days' prior written notice to the other party.

In the event of termination, Kessler shall be entitled to compensation for all work performed and expenses incurred through the effective date of termination, and the initial retainer (or any remaining balance thereof) shall be applied against any outstanding invoices. Any excess retainer balance shall be refunded to Ironside within fifteen (15) business days of the effective date of termination. Upon termination, Kessler shall return or destroy all materials as directed in accordance with Section 7.

10. Deliverables and Timeline

The following deliverables and target dates have been established for this engagement. These dates are targets and may be adjusted by mutual agreement as the engagement progresses:

We emphasize that the January 10, 2025 target date for the Final Expert Damages Report is driven by the anticipated filing date of the complaint (on or about January 21, 2025) and the need to have the damages analysis substantially complete before the complaint is finalized. Kessler should plan its work accordingly and advise C&H promptly if there is any concern regarding the feasibility of meeting this deadline.

11. Applicable Law and Dispute Resolution

This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. Any dispute arising out of or in connection with this Engagement Letter or the engagement described herein shall be submitted first to mediation, to be conducted in the Borough of Manhattan, City of New York, in accordance with the mediation rules of a mutually agreed-upon provider. If mediation does not resolve the dispute within sixty (60) days of the initiation of the mediation process, either party may submit the dispute to the courts of the State of New York, New York County, which shall have exclusive jurisdiction over any such proceeding.

12. Acceptance and Execution

If the foregoing terms are acceptable, please indicate your agreement by signing and returning the enclosed copy of this Engagement Letter. Upon receipt of the executed Engagement Letter and the initial retainer of $50,000, C&H will promptly arrange for delivery of the initial document production described in Section 5 above. Wire transfer instructions for payment of the retainer should be provided by Kessler upon execution of this letter; C&H will coordinate payment with Ironside.

We look forward to working with you on this important matter. Please do not hesitate to contact me or any member of the C&H engagement team with any questions regarding this Engagement Letter or the engagement generally.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Samuel Eklund

Title: Partner

Date: ________

51 West 52nd Street, 40th Floor New York, NY 10019 Telephone: (212) 556-4000 seklund@calderwoodharkness.com

AGREED AND ACCEPTED:

KESSLER FORENSIC ACCOUNTING GROUP PC

By: ________

Name: Martin Kessler, CPA/CFF

Title: Principal

Date: ________

100 Wall Street, Suite 2001 New York, NY 10005 Telephone: (212) 809-3600 mkessler@kesslerforensic.com

Enclosures:

(1) Master Fund Administration Agreement dated June 15, 2017 (Ref: VHC-ICM-2017-0615), with First Amendment dated March 1, 2019, and Second Amendment dated June 10, 2022

(2) Harmon-Bryce Valuation Advisors LLC Preliminary Report dated September 22, 2023 (Ref: HBVA-2023-0922-IRON)

(3) Ironside Valuation Policy v.3.2 (effective January 1, 2020)

(4) Summary of Initial Pricing Discrepancy Identified by Rajiv Subramanian, CFO, Ironside Capital Management LP (July 2023)

cc: Katherine Lim, General Counsel & CCO, Ironside Capital Management LP cc: Linda Osei, Partner, Calderwood & Harkness LLP cc: Yuki Nakamura, Associate, Calderwood & Harkness LLP

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This communication and the enclosed materials are protected by the attorney-client privilege and/or the work product doctrine. They are intended solely for the use of the addressee and authorized recipients identified herein. Any unauthorized review, use, disclosure, or distribution is strictly prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.

Fund	Description	Approximate NAV
Ironside Credit Opportunities Fund LP ("Fund I")	Broadly syndicated and middle-market credit	~$1.8 billion
Ironside Structured Alpha Fund LP ("Fund II")	Structured credit, including CLO equity and mezzanine	~$1.1 billion
Fund	Description	Approximate NAV
Ironside Special Situations Fund LP ("Fund III")	Distressed and special situations credit	~$680 million
Fund	Aggregate Overvaluation
Ironside Credit Opportunities Fund LP (Fund I)	$156.4 million
Ironside Structured Alpha Fund LP (Fund II)	$88.7 million
Ironside Special Situations Fund LP (Fund III)	$41.9 million
Total	$287.0 million
Professional	Rate
Martin Kessler, CPA/CFF (Lead Forensic Accountant)	$725 per hour
Staff Accountants and Analysts	$395 per hour
Deliverable	Target Date	Description
Preliminary Damages Memorandum	December 15, 2024	Internal work product for C&H; not for filing or external distribution. This memorandum should present Kessler's preliminary findings and identify any areas requiring further investigation or additional data.
Final Expert Damages Report	January 10, 2025	To be assigned report reference KF-2025-0110-ICM. This report will set forth Kessler's final opinions on damages and will form the basis for damages allegations in the anticipated complaint. The report should be prepared in a format suitable for expert disclosure under CPLR § 3101(d).
Supplemental Reports	As Required	Supplemental or updated reports as may be required based on additional information obtained through discovery or other developments in the litigation.
Deposition Testimony	As Required	Kessler shall make himself available for deposition testimony at a mutually agreed upon time and location; advance notice of at least 14 calendar days is requested.
Trial Testimony	As Required	Kessler shall make himself available for trial testimony; advance notice of at least 14 calendar days is requested. C&H will provide trial preparation support.

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 51 West 52nd Street, 40th Floor New York, NY 10019
Telephone: (212) 556-4000 Facsimile: (212) 556-4001 www.calderwoodharkness.com
October 30, 2024
Martin Kessler, CPA/CFF Principal Kessler Forensic Accounting Group PC 100 Wall Street, Suite 2001 New York, NY 10005
Re: Retention of Kessler Forensic Accounting Group PC as Forensic Accounting Expert — *Ironside Capital Management LP v. Vantor Holdings Corp.* (Anticipated Litigation; Complaint to be Filed in New York Supreme Court, Commercial Division, New York County)
Dear Mr. Kessler:
1. Introduction and Purpose of Engagement
This letter (the "Engagement Letter") sets forth the terms and conditions under which Calderwood & Harkness LLP ("C&H" or the "Firm") hereby retains Kessler Forensic Accounting Group PC ("Kessler" or the "Expert Firm") to serve as forensic accounting expert in connection with anticipated litigation described below. C&H represents Ironside Capital Management LP ("Ironside" or "ICM"), a Delaware limited partnership with its principal offices at 680 Park Avenue, 34th Floor, New York, NY 10065. Ironside is a multi-strategy credit hedge fund with approximately $4.2 billion in assets under management across five fund vehicles. Ironside was co-founded in 2009 by Elliot Brennan, who currently serves as Managing Partner and Chief Investment Officer, and Marguerite Dao, who serves as President and Chief Operating Officer. Since its founding, Ironside has been recognized as a leading participant in the alternative credit space, managing capital on behalf of a diverse base of institutional and high-net-worth limited partners.
C&H is retaining Kessler to serve as forensic accounting expert for purposes of quantifying damages arising from the systematic misvaluation of illiquid credit and structured-product positions by Ironside's former fund administrator, Vantor Holdings Corp. ("Vantor"), a Delaware corporation with its principal offices at 1400 Brickell Avenue, Suite 2200, Miami, Florida 33131. As set forth in greater detail in Section 2 below, Vantor served as fund administrator for three of Ironside's fund vehicles pursuant to a Master Fund Administration Agreement dated June 15, 2017. Over the course of eleven quarters, Vantor's valuation team systematically overstated the net asset values of these funds by an aggregate amount of approximately $287 million, causing substantial direct and consequential damages to Ironside and its limited partners.
The engagement is in connection with anticipated litigation to be filed in New York Supreme Court, Commercial Division, New York County. As of the date of this Engagement Letter, the complaint has not yet been filed; however, C&H expects to file the complaint on or about January 21, 2025, and Kessler's work product — including, in particular, the expert damages report described in Section 10 below — will be integral to the preparation and prosecution of Ironside's claims.
The C&H engagement team for this matter is comprised of the following professionals:
•  Samuel Eklund, Partner (Responsible Partner)
•  Linda Osei, Partner (Billing Partner)
•  Yuki Nakamura, Associate (Lead Associate)
•  Carlos Espinoza, Associate (Working Associate)
Martin Kessler, CPA/CFF, will serve as lead forensic accountant and the designated expert for Kessler in connection with this engagement. To the extent that additional Kessler personnel will be assigned to this matter, we request that you advise us in advance of such assignments so that we may maintain an updated personnel list for privilege and disclosure purposes.
2. Background of the Dispute
To provide the necessary context for the scope of your engagement, we set forth below a summary of the factual background of the dispute. This summary is based on C&H's investigation to date and on the preliminary findings of an independent valuation advisor retained by Ironside, as discussed below. Additional facts and details will be furnished as the engagement progresses.
2.1 Contractual Relationship
On June 15, 2017, Ironside, acting on behalf of two of its feeder funds, entered into a Master Fund Administration Agreement (the "FAA," Ref: VHC-ICM-2017-0615) with Vantor Holdings Corp. The FAA governed Vantor's provision of fund administration services, including net asset value calculation, investor accounting, regulatory reporting support, and — critically — the independent pricing and valuation of portfolio positions held by the administered funds, including Level 2 and Level 3 assets as classified under ASC 820.
At the inception of the FAA, the administered funds were as follows:
On March 1, 2019, the parties executed a First Amendment to the FAA, adding a third feeder fund to the scope of Vantor's administration services:
With the addition of Fund III, the aggregate net asset value administered by Vantor across all three funds was approximately $3.58 billion.
On June 10, 2022, the parties executed a Second Amendment to the FAA, which adjusted the administration fee from 4.0 basis points to 4.5 basis points of aggregate administered net asset value, reflecting expanded scope of regulatory reporting obligations and increased operational complexity. The Second Amendment also confirmed the automatic renewal provisions of the FAA.
The FAA contained a number of provisions that are directly relevant to the claims at issue:
Section 3.1 — Scope of Services. The scope of Vantor's services under the FAA included, among other things, (a) the calculation and reporting of net asset value on a quarterly basis; (b) investor-level accounting, including capital account maintenance and allocation tracking; (c) regulatory reporting support, including assistance with Form PF filings and financial statement preparation; and (d) independent pricing and valuation of portfolio positions, including, expressly, Level 2 and Level 3 assets under ASC 820's fair value hierarchy.
Section 4.2 — Valuation Standard of Care. Section 4.2 of the FAA contained Vantor's express warranty that all valuations performed by Vantor under the FAA would be performed (i) in accordance with generally accepted accounting principles ("GAAP"), (ii) in compliance with the applicable fund valuation policy — specifically, the Ironside Valuation Policy v.3.2, effective January 1, 2020 — and (iii) consistent with the standard of care of a reasonably prudent professional fund administrator performing services of like scope and complexity.
These contractual undertakings are at the core of Ironside's breach of contract claims and serve as the benchmark against which the adequacy of Vantor's valuation work must be measured.
2.2 The Misvaluation
Over a period of eleven consecutive quarters — from Q1 2021 (quarter ending March 31, 2021) through Q3 2023 (quarter ending September 30, 2023) — Vantor's valuation team systematically misvalued 47 illiquid credit and structured-product positions across the three administered funds. The affected positions included CLO equity tranches, bespoke CDO mezzanine notes, and distressed loan participations — precisely the types of complex, hard-to-value instruments for which Ironside had engaged Vantor to provide independent pricing as a critical check on portfolio valuation integrity.
The misvaluation was not the product of occasional errors or reasonable differences in professional judgment. Rather, based on C&H's investigation to date, the misvaluation was the result of systematic and deliberate misconduct by members of Vantor's valuation team, supervised by Nathan Orris (Senior Vice President, Valuation Services) and Deepa Rajaram (Vice President, Client Valuation Operations). The methods of misconduct included the following:
(a) Use of Stale Broker Quotes. Vantor's valuation team relied on broker-dealer price indications that were six to twelve months old, without disclosing to Ironside that the underlying quotes were stale and without undertaking any adjustment or corroboration to account for changes in market conditions during the intervening period. Under the Ironside Valuation Policy v.3.2, broker quotes older than 30 days were required to be supplemented with additional observable inputs or marked accordingly.
(b) Application of Undisclosed Model Adjustments. Vantor applied internally generated "model adjustments" to the marks on the affected positions, inflating the reported fair values by an average of 14.3% above levels that would have been supported by observable market inputs. These model adjustments were neither disclosed to Ironside nor documented in any pricing package or valuation memorandum provided to the funds or their auditors.
(c) Failure to Apply Contractual Waterfall Valuation Procedures. The Ironside Valuation Policy v.3.2 prescribed a hierarchical waterfall of valuation inputs and methods that Vantor was contractually required to follow. Vantor's valuation team deviated from this waterfall in material respects — including bypassing required dealer polling, disregarding available market-comparable transaction data, and failing to escalate pricing exceptions to the Ironside Valuation Committee — without disclosure.
(d) Concealment of Internal Communications. Internal emails obtained in the course of C&H's pre-suit investigation (via subpoena to DataVault Solutions Inc., as described below) demonstrate that certain members of Vantor's valuation team were aware that the reported marks were materially inflated and affirmatively concealed this knowledge from Ironside, Ironside's auditors, and Vantor's own compliance function.
2.3 Aggregate Overvaluation
Based on the preliminary findings of Harmon-Bryce Valuation Advisors LLC, the independent valuation firm retained by Ironside in September 2023, the aggregate overvaluation across the three administered funds was as follows:
The peak single-quarter overvaluation was $52.3 million, occurring in Q4 2022 (quarter ending December 31, 2022). Over the course of the eleven-quarter misvaluation period, the NAV overstatement ranged from 3.8% of aggregate administered NAV (Q1 2021, the first quarter in which the misvaluation has been identified) to a peak of 8.6% of aggregate administered NAV (Q4 2022). The magnitude and consistency of the overvaluation — increasing steadily over the eleven quarters rather than fluctuating in a pattern consistent with good-faith valuation differences — are themselves indicative of systematic misconduct.
2.4 discovery of the Misvaluation
The misvaluation came to light in July 2023, when Ironside's Chief Financial Officer, Rajiv Subramanian, identified a $12.6 million discrepancy between Vantor's reported marks on seven CLO equity positions in Fund II as of the end of Q2 2023 and independent price indications obtained by Ironside from its prime broker, Northpoint Securities LLC (relationship manager: Dana Crossley). The seven positions at issue had been marked by Vantor at a combined fair value approximately 18% above the midpoint of Northpoint's independent price indications — a divergence that, in Mr. Subramanian's professional judgment, could not be explained by reasonable differences in valuation methodology or timing.
The subsequent timeline of events is as follows:
•  August 4, 2023: Ironside delivered a written inquiry to Nathan Orris at Vantor, requesting complete pricing documentation — including underlying broker quotes, model inputs, and internal valuation memoranda — for 23 positions across the three funds that had exhibited material pricing divergences from available market data.
•  August 18, 2023: Vantor delivered a materially incomplete response to Ironside's inquiry, providing pricing packages for only 9 of the 23 positions identified. No internal model documentation was produced. The pricing packages that were provided were, in several cases, internally inconsistent and failed to adequately support the marks reported.
•  September 5, 2023: In light of the inadequacy of Vantor's response, Ironside retained Harmon-Bryce Valuation Advisors LLC ("Harmon-Bryce") to conduct a comprehensive independent re-pricing of the affected positions. The Harmon-Bryce engagement was led by Dr. Lena Galbraith, CFA, ASA, the firm's principal. Harmon-Bryce was asked to independently determine the fair value of the 47 positions that had been flagged by Ironside's internal analysis and to quantify the aggregate overvaluation.
•  September 22, 2023: Harmon-Bryce delivered its preliminary report (Ref: HBVA-2023-0922-IRON), concluding that the aggregate overvaluation across the three funds was approximately $287 million across the 47 affected positions over the eleven-quarter period.
•  October 3, 2023: Ironside, acting through C&H, issued a formal Notice of Termination for Cause under Section 12.2 of the FAA, terminating the contractual relationship with Vantor effective immediately.
•  October 10, 2023: Ironside completed the transition of fund administration services to its replacement fund administrator, Meridian Investor Services LLC, based in Stamford, Connecticut (CEO: Anne-Claire Dupont). The transition was substantially completed within one week of termination, reflecting the urgency of the situation and the operational priority Ironside placed on ensuring the integrity of its NAV reporting on a going-forward basis.
•  November 15, 2023: C&H delivered a comprehensive demand letter to Vantor, setting forth Ironside's damages claims in detail and demanding compensation. A copy of the demand letter was provided to Vantor's outside counsel, Whitfield, Dane & Corcoran LLP ("WDC"), led by partner Gregory Dane.
•  December 20, 2023: WDC responded on behalf of Vantor, denying all allegations of misvaluation and misconduct. Among other defenses, WDC asserted that Vantor's liability, if any, is limited by the contractual liability cap set forth in FAA Section 9.3, which limits Vantor's aggregate liability to two times the twelve-month administration fees paid in the period immediately preceding the termination event — a figure WDC calculated at approximately $2.98 million (based on estimated pre-termination twelve-month fees of approximately $1.49 million). Ironside's position is that the liability cap is unenforceable as applied to Vantor's intentional misconduct, gross negligence, and breach of fiduciary obligations.
•  March 2024 – December 6, 2024: The parties engaged in pre-suit mediation at Brookstone ADR Services LLC (Ref: BADR-2024-00391), before the Honorable Sandra Kwan (Ret.), a former justice of the New York Supreme Court, Commercial Division. After multiple sessions over a nine-month period, mediation was terminated without resolution on December 6, 2024, and C&H is now proceeding to file the anticipated complaint.
3. Scope of Engagement and Specific Assignments
Kessler is retained to perform the forensic accounting analyses described below and, as necessary, to prepare an expert report (the "Damages Report") and to provide expert testimony in deposition and at trial. The specific assignments comprising this engagement are as follows:
3.1 Quantification of Direct Losses
Kessler shall perform an independent verification and quantification of the aggregate overvaluation across the three funds. While the preliminary determination by Harmon-Bryce places the aggregate overvaluation at approximately $287 million, Kessler's mandate is to independently verify this figure through a comprehensive reconciliation of Vantor's reported net asset values against corrected valuations. This reconciliation shall be performed on a position-by-position and quarter-by-quarter basis for each of the eleven quarters spanning Q1 2021 (March 31, 2021) through Q3 2023 (September 30, 2023), and for each of the 47 affected positions identified by Harmon-Bryce and/or Ironside's internal analysis. The resulting work product should include a detailed schedule of the overvaluation attributable to each position in each quarter, enabling the trier of fact to understand both the magnitude and the progression of the misvaluation over time.
3.2 Investor Redemption Overpayments
Kessler shall calculate the aggregate overpayments made to redeeming limited partners who received distributions at inflated net asset values during the misvaluation period. When limited partners submitted redemption requests during the eleven-quarter period at issue, their redemption proceeds were calculated based on Vantor's overstated NAV figures, resulting in payments in excess of what would have been due at corrected valuations. The preliminary estimate is that approximately $43.2 million in aggregate overpayments were made across 217 individual redemption transactions. Kessler's analysis should identify each affected redemption, the overpayment attributable to the misvaluation, and the fund(s) from which the overpayment was made. This analysis will form the basis for Ironside's claim that the overpayments represent direct losses borne by the remaining limited partners and, by extension, by the funds themselves.
3.3 Excess Management Fees Analysis
Kessler shall compute the excess management fees collected by Ironside from limited partners as a result of the overstated net asset values. Ironside charges an annual management fee of 1.5% of net asset value across each of the three administered funds. To the extent that NAV was overstated as a result of Vantor's misvaluation, the management fees charged to limited partners were correspondingly inflated. The preliminary estimate of excess management fees is approximately $4.3 million over the eleven-quarter period. Kessler's analysis should quantify the excess management fees on a fund-by-fund and quarter-by-quarter basis. We note that Ironside has voluntarily offered to disgorge these excess fees to its limited partners and intends to seek recovery of the disgorged amount from Vantor as an element of damages.
3.4 Inflated Performance Allocations
Kessler shall analyze the impact of the overstated net asset values on incentive allocations (performance fees) charged by Ironside. Under the terms of the applicable fund partnership agreements, Ironside is entitled to a performance allocation of 20% of net profits above a 6% annualized hurdle rate. To the extent that the reported NAV overstated fund performance during any given period, the performance allocation charged to limited partners may have been inflated accordingly. Kessler's analysis should determine whether and to what extent the misvaluation resulted in performance allocations that would not have been earned at corrected valuations, and should quantify the resulting excess, if any.
3.5 Regulatory Remediation Costs
Kessler shall compile and verify the costs incurred by Ironside for regulatory remediation necessitated by the misvaluation. Upon discovery of the misvaluation, Ironside was required to undertake significant remediation efforts, including engaging outside counsel to advise on regulatory obligations, retaining compliance consultants to review and amend prior regulatory filings (including amendments to Form PF filed with the SEC), and incurring other costs associated with bringing the funds into compliance on a corrected-NAV basis. The preliminary estimate of regulatory remediation costs is approximately $2.8 million. Kessler's analysis should identify each category of cost, verify the supporting documentation, and confirm the causal nexus between the misvaluation and the costs incurred.
3.6 Investor Litigation Defense Costs
Kessler shall quantify the costs incurred by Ironside in defending three pending arbitrations brought by limited partners arising from the misvaluation. Following the disclosure of the misvaluation to Ironside's limited partner base, three groups of limited partners initiated arbitration proceedings against Ironside asserting claims related to the overstated NAV and the resulting overpayments. While Ironside contends that these claims are properly attributable to Vantor's misconduct, Ironside has nevertheless been required to defend against these proceedings and has incurred substantial legal fees and costs in doing so. The preliminary estimate of investor litigation defense costs is approximately $6.1 million. Kessler's analysis should compile and verify these costs, establishing them as consequential damages flowing directly from Vantor's breach.
3.7 Reputational and AUM Loss Damages
Kessler shall analyze the estimated assets under management outflows attributable to the misvaluation and the resulting revenue loss to Ironside. Following the disclosure of the misvaluation in late 2023, Ironside experienced significant outflows from its limited partner base, as investors redeemed their interests in response to the reputational damage caused by the misvaluation and the attendant regulatory and litigation risks. The preliminary estimate is that approximately $860 million in AUM outflows are directly attributable to the misvaluation and its aftermath, with a resulting capitalized damage estimate of approximately $38.6 million in lost revenue. Kessler's analysis should identify the outflows that are causally attributable to the misvaluation (as opposed to general market or performance-related redemptions), apply an appropriate methodology for capitalizing the lost management fee revenue, and present the resulting damages in a manner that is supportable at trial. We anticipate that this analysis may require econometric or statistical methodologies to isolate the misvaluation-related outflows from normal-course fund activity, and we encourage Kessler to identify any specialized expertise or resources that may be required.
3.8 Aggregate Damages Summary
Kessler shall prepare a comprehensive damages summary for use in the anticipated complaint and at trial, consolidating all categories of claimed damages into a single, internally consistent presentation. The total claimed damages are expected to approximate $382 million across all categories identified above, subject to refinement as the analysis progresses. The aggregate damages summary should be presented in a format suitable for inclusion in both the complaint and the expert report, and should be supported by detailed schedules, backup calculations, and source documentation references for each component.
3.9 Fee Analysis Under the FAA
Kessler shall analyze the administration fees paid by Ironside to Vantor over the full term of the FAA, including the fee structure applicable under the original agreement and each amendment. Total administration fees paid by Ironside to Vantor over the life of the FAA are estimated at approximately $9.28 million in the aggregate. Prior to the June 2022 fee adjustment, the annual fee rate was 4.0 basis points on aggregate administered NAV; following the Second Amendment, the rate increased to 4.5 basis points. The peak quarterly administration fee was approximately $404,125, and the peak annual fee was approximately $1.616 million. This analysis is relevant to two distinct aspects of the litigation: first, the computation of Vantor's asserted liability cap under FAA Section 9.3 (which limits aggregate liability to two times twelve-month pre-termination fees); and second, Ironside's unjust enrichment claim, which will seek disgorgement of fees paid to Vantor during the period in which Vantor was failing to perform its contractual obligations.
3.10 Rebuttal of Defendant's Damages Positions
As litigation develops and Vantor designates its own damages expert(s), Kessler shall prepare rebuttal analyses to counter any damages positions taken by Vantor or its experts. This may include critiquing the methodology, assumptions, and conclusions of Vantor's expert(s); identifying errors or omissions in their analyses; and providing alternative calculations where appropriate. Kessler should anticipate that Vantor's primary damages defense will center on the FAA Section 9.3 liability cap and on arguments that certain categories of damages (particularly reputational and AUM loss damages) are speculative or not recoverable as a matter of law. C&H will coordinate with Kessler on the timing and scope of any rebuttal work.
3.11 Expert Report and Testimony
Kessler's work product will culminate in a written expert report (the "Damages Report"), which shall set forth Kessler's findings, opinions, and the bases for those opinions in a format that complies with the requirements of New York Civil Practice Law and Rules and applicable case law governing expert disclosures. In addition, if required, Kessler shall be available to provide testimony at deposition and at trial. We will discuss the specific requirements for the Damages Report in greater detail as the engagement progresses, but the report should be prepared with the understanding that it will be subject to scrutiny by opposing counsel and may be the subject of a Frye challenge.
4. Coordination with Other Experts and Counsel
Kessler's work will be coordinated with the work of other experts and advisors retained by or on behalf of Ironside. In particular, Kessler's damages quantification will rely in part on the corrected valuations determined by Dr. Lena Galbraith, CFA, ASA, of Harmon-Bryce Valuation Advisors LLC, located at 1185 Avenue of the Americas, Suite 1400, New York, NY 10036. Dr. Galbraith's firm has performed the independent re-pricing of the 47 affected positions and has provided preliminary corrected valuations that serve as a starting point for Kessler's damages analysis. To the extent that Kessler identifies any questions or concerns regarding Harmon-Bryce's corrected valuations in the course of its own analysis, such matters should be raised with C&H promptly so that they can be addressed in a coordinated manner.
All communications regarding the engagement shall be directed through C&H to preserve the protections of the attorney-client privilege and the work product doctrine. Kessler should not communicate directly with Ironside personnel, Harmon-Bryce, or any other third party regarding the substance of this engagement without prior authorization from C&H. This restriction is essential to maintaining the integrity of the privilege protections that attach to Kessler's work product in its capacity as a consulting expert retained by counsel.
The primary C&H contacts for day-to-day coordination are:
•  Yuki Nakamura, Lead Associate — (212) 556-4127 — ynakamura@calderwoodharkness.com
•  Carlos Espinoza, Working Associate — (212) 556-4244 — cespinoza@calderwoodharkness.com
Ironside personnel who may be called upon to provide information, documents, or explanations in the course of Kessler's work include the following individuals:
•  Rajiv Subramanian, Chief Financial Officer
•  Katherine Lim, General Counsel and Chief Compliance Officer
•  Derek Holt, Head of Operations
•  Priya Venkatesh, Portfolio Manager, Fund I
•  Marcus Threadgill, Portfolio Manager, Fund II
All contacts with the above Ironside personnel shall be arranged through C&H, and C&H counsel will participate in or supervise all substantive communications to ensure that privilege is maintained.
Ironside's independent auditor is Claremont & Strauss LLP (audit partner: Howard Stein), located at 277 Park Avenue, 18th Floor, New York, NY 10172. To the extent that Kessler requires access to audit workpapers or other materials in the possession of Claremont & Strauss, C&H will facilitate the necessary arrangements, including any required consents or access letters.
Ironside's current fund administrator, Meridian Investor Services LLC (CEO: Anne-Claire Dupont), based in Stamford, Connecticut, may be called upon to provide post-transition NAV data and related records. As with Claremont & Strauss, all communications with Meridian will be coordinated through C&H.
5. Materials to Be Provided
C&H will provide Kessler with the following documents and materials to support the engagement. Certain of these materials are enclosed with this Engagement Letter (as noted in the enclosures section below); the balance will be provided in the initial document production, which C&H anticipates delivering within ten business days of execution of this Engagement Letter. All materials provided to Kessler are confidential and subject to the privilege and confidentiality provisions set forth in Section 7 below.
(a) Master Fund Administration Agreement (FAA) dated June 15, 2017, with First Amendment dated March 1, 2019, and Second Amendment dated June 10, 2022 (Ref: VHC-ICM-2017-0615);
(b) Ironside Valuation Policy v.3.2, effective January 1, 2020;
(c) Harmon-Bryce Valuation Advisors LLC Preliminary Report dated September 22, 2023 (Ref: HBVA-2023-0922-IRON);
(d) Vantor-reported NAV statements for Funds I, II, and III for each quarter from Q1 2021 through Q3 2023 (11 statements per fund; 33 statements total);
(e) Northpoint Securities LLC pricing indications for Q2 2023, which were used by Ironside CFO Rajiv Subramanian to identify the initial $12.6 million discrepancy;
(f) Vantor internal emails obtained via pre-suit subpoena to DataVault Solutions Inc., 14 Commerce Drive, Cranford, NJ 07016, pursuant to CPLR § 3102(c);
(g) Ironside fund financial statements, audited by Claremont & Strauss LLP, for fiscal years ending December 31, 2020, December 31, 2021, December 31, 2022, and December 31, 2023;
(h) Investor subscription and redemption records for Funds I, II, and III for the period from January 1, 2021 through December 31, 2023;
(i) Limited partnership agreements and offering memoranda (including all supplements and amendments) for Funds I, II, and III;
(j) Correspondence between Ironside and Vantor from August 2023 through October 2023, including Ironside's written inquiry dated August 4, 2023, Vantor's response dated August 18, 2023, and the Notice of Termination for Cause dated October 3, 2023;
(k) Records of administration fees paid by Ironside to Vantor over the life of the FAA, including quarterly invoices and proof of payment;
(l) Records of costs incurred by Ironside for regulatory remediation, including invoices from outside counsel, compliance consultants, and related vendors;
(m) Records of costs incurred by Ironside in connection with the defense of the three pending LP arbitrations, including invoices from litigation counsel and related service providers;
(n) Additional documents as identified during the course of the engagement, including materials obtained through formal discovery once the complaint is filed.
C&H will supplement these materials on a rolling basis as additional documents become available, including through discovery in the anticipated litigation. Kessler should promptly advise C&H of any additional documents or categories of documents that may be required to complete the analyses described in Section 3.
6. Fee Structure and Billing
Kessler's fees for this engagement will be based on the hourly rates set forth below:
These rates are understood to be Kessler's standard rates for forensic and litigation consulting engagements and are agreed to for the duration of this engagement, subject to any adjustments mutually agreed upon in writing. C&H has consulted with Ironside regarding these rates, and Ironside has authorized Kessler's retention at the stated rates.
Initial Retainer. Upon execution of this Engagement Letter, Kessler shall be paid an initial retainer in the amount of Fifty Thousand Dollars ($50,000). The retainer shall be held in Kessler's client trust account and shall be applied against the final invoice rendered in connection with this engagement, or replenished as drawn down, in accordance with Kessler's standard retainer practices. Wire transfer instructions for payment of the retainer will be provided separately by Kessler upon execution of this letter.
Monthly Invoicing. Kessler shall render invoices on a monthly basis. Each invoice shall include detailed time entries, identifying the professional performing the work, the date of the work, the hours expended, and a narrative description of the work performed sufficient to permit review by C&H and Ironside. C&H may request additional detail or clarification regarding any invoice entry, and Kessler shall respond to such requests promptly.
Payment Terms. Payment of all invoices is due within thirty (30) days of the date of invoice. Invoices that remain unpaid beyond the 30-day period may, at Kessler's election, be subject to a late charge, provided that Kessler shall first provide written notice to C&H and a reasonable opportunity to cure any payment delinquency.
Out-of-Pocket Expenses. Reasonable out-of-pocket expenses incurred in connection with this engagement — including, but not limited to, travel, copying, data processing, and specialized software — shall be billed at cost. Prior written approval from C&H is required for any single expense item exceeding $2,500. Expenses shall be itemized on monthly invoices and supported by receipts upon request.
Invoicing Address. All invoices shall be directed to:
Katherine Lim General Counsel & Chief Compliance Officer Ironside Capital Management LP 680 Park Avenue, 34th Floor New York, NY 10065
A copy of each invoice shall simultaneously be provided to C&H at the address set forth in the letterhead above, directed to the attention of Linda Osei, Billing Partner. C&H's own engagement letter with Ironside provides that expert fees and costs are the direct obligation of Ironside; however, C&H will assist in coordinating payment as needed.
7. Confidentiality and Privilege
All documents, materials, data, and communications provided to Kessler in connection with this engagement are either (a) subject to the attorney-client privilege as communications made in furtherance of the provision of legal advice by C&H to Ironside, or (b) attorney work product prepared by or at the direction of C&H in anticipation of litigation, or (c) both. Kessler acknowledges the privileged and confidential nature of these materials and agrees to maintain all such materials and communications in strict confidence.
Kessler shall not disclose, disseminate, or provide access to any materials or communications related to this engagement to any third party without the prior written consent of C&H. This restriction applies to all persons and entities not expressly identified in this Engagement Letter as authorized recipients, including, without limitation, any employee, contractor, or agent of Kessler who is not directly assigned to this engagement.
All work product prepared by Kessler at the direction of C&H in connection with this engagement — including draft and final reports, memoranda, analyses, models, spreadsheets, notes, and any other tangible or electronic work product — is protected under the work product doctrine and shall be treated as confidential attorney work product. Kessler shall mark all such work product as "PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT" and shall store and transmit such work product in a manner consistent with reasonable information security practices.
Upon completion of the engagement or upon request of C&H, Kessler shall return or destroy all materials provided by C&H in connection with this engagement, as directed by C&H. Kessler may retain one archival copy of its own work product for professional records purposes, subject to the continuing obligation of confidentiality set forth herein.
We note that, to the extent Kessler is designated as a testifying expert in the litigation, certain of the protections described above may be waived or narrowed as required under applicable rules of procedure. In particular, under New York CPLR § 3101(d) and related case law, a testifying expert's report and the materials upon which the expert relied in forming his or her opinions may be subject to disclosure in discovery. C&H will advise Kessler on the timing and scope of any designation as a testifying expert and will provide guidance regarding the implications for privilege and work product protection. Until such designation is made, all of Kessler's work product shall be maintained under the full protections of the work product doctrine.
8. Independence and Objectivity
The credibility and persuasiveness of Kessler's expert opinions will depend in significant part on Kessler's independence and objectivity. To that end, Kessler confirms the following:
(a) Kessler has no financial interest, direct or indirect, in Ironside Capital Management LP, any fund vehicle managed or advised by Ironside, Vantor Holdings Corp., or any entity affiliated with Ironside or Vantor.
(b) Kessler has not previously provided consulting, auditing, tax, or any other professional services to Vantor Holdings Corp. or to any entity affiliated with Vantor.
(c) Kessler has not previously been retained by or provided services to Whitfield, Dane & Corcoran LLP, counsel for Vantor in this matter.
(d) Kessler agrees to perform all analyses and render all opinions in connection with this engagement independently and objectively, and to base all opinions solely on the evidence, the applicable professional standards, and Kessler's independent professional judgment.
(e) Kessler's engagement is subject to, and Kessler will comply with, all applicable professional standards governing forensic and litigation consulting engagements, including the standards promulgated by the American Institute of Certified Public Accountants ("AICPA"), specifically the AICPA Statement on Standards for Consulting Services and the AICPA's guidance on forensic accounting engagements.
If, at any point during the engagement, Kessler becomes aware of any fact or circumstance that could give rise to a conflict of interest or a reasonable question regarding Kessler's independence or objectivity, Kessler shall promptly notify C&H so that the matter can be addressed.
9. Term and Termination
This engagement shall commence upon execution of this Engagement Letter by both parties and shall continue until the earlier of:
(a) Completion of the engagement, including all deliverables described in Section 10 below and, if applicable, trial testimony; or
(b) Written termination by either party upon not less than thirty (30) calendar days' prior written notice to the other party.
In the event of termination, Kessler shall be entitled to compensation for all work performed and expenses incurred through the effective date of termination, and the initial retainer (or any remaining balance thereof) shall be applied against any outstanding invoices. Any excess retainer balance shall be refunded to Ironside within fifteen (15) business days of the effective date of termination. Upon termination, Kessler shall return or destroy all materials as directed in accordance with Section 7.
10. Deliverables and Timeline
The following deliverables and target dates have been established for this engagement. These dates are targets and may be adjusted by mutual agreement as the engagement progresses:
We emphasize that the January 10, 2025 target date for the Final Expert Damages Report is driven by the anticipated filing date of the complaint (on or about January 21, 2025) and the need to have the damages analysis substantially complete before the complaint is finalized. Kessler should plan its work accordingly and advise C&H promptly if there is any concern regarding the feasibility of meeting this deadline.
11. Applicable Law and Dispute Resolution
This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. Any dispute arising out of or in connection with this Engagement Letter or the engagement described herein shall be submitted first to mediation, to be conducted in the Borough of Manhattan, City of New York, in accordance with the mediation rules of a mutually agreed-upon provider. If mediation does not resolve the dispute within sixty (60) days of the initiation of the mediation process, either party may submit the dispute to the courts of the State of New York, New York County, which shall have exclusive jurisdiction over any such proceeding.
12. Acceptance and Execution
If the foregoing terms are acceptable, please indicate your agreement by signing and returning the enclosed copy of this Engagement Letter. Upon receipt of the executed Engagement Letter and the initial retainer of $50,000, C&H will promptly arrange for delivery of the initial document production described in Section 5 above. Wire transfer instructions for payment of the retainer should be provided by Kessler upon execution of this letter; C&H will coordinate payment with Ironside.
We look forward to working with you on this important matter. Please do not hesitate to contact me or any member of the C&H engagement team with any questions regarding this Engagement Letter or the engagement generally.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Samuel Eklund
Title: Partner
Date: ________
51 West 52nd Street, 40th Floor New York, NY 10019 Telephone: (212) 556-4000 seklund@calderwoodharkness.com
AGREED AND ACCEPTED:
KESSLER FORENSIC ACCOUNTING GROUP PC
By: ________
Name: Martin Kessler, CPA/CFF
Title: Principal
Date: ________
100 Wall Street, Suite 2001 New York, NY 10005 Telephone: (212) 809-3600 mkessler@kesslerforensic.com
Enclosures:
(1) Master Fund Administration Agreement dated June 15, 2017 (Ref: VHC-ICM-2017-0615), with First Amendment dated March 1, 2019, and Second Amendment dated June 10, 2022
(2) Harmon-Bryce Valuation Advisors LLC Preliminary Report dated September 22, 2023 (Ref: HBVA-2023-0922-IRON)
(3) Ironside Valuation Policy v.3.2 (effective January 1, 2020)
(4) Summary of Initial Pricing Discrepancy Identified by Rajiv Subramanian, CFO, Ironside Capital Management LP (July 2023)
cc: Katherine Lim, General Counsel & CCO, Ironside Capital Management LP cc: Linda Osei, Partner, Calderwood & Harkness LLP cc: Yuki Nakamura, Associate, Calderwood & Harkness LLP
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This communication and the enclosed materials are protected by the attorney-client privilege and/or the work product doctrine. They are intended solely for the use of the addressee and authorized recipients identified herein. Any unauthorized review, use, disclosure, or distribution is strictly prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.
Fund | Description | Approximate NAV
Ironside Credit Opportunities Fund LP ("Fund I") | Broadly syndicated and middle-market credit | ~$1.8 billion
Ironside Structured Alpha Fund LP ("Fund II") | Structured credit, including CLO equity and mezzanine | ~$1.1 billion
Fund | Description | Approximate NAV
Ironside Special Situations Fund LP ("Fund III") | Distressed and special situations credit | ~$680 million
Fund | Aggregate Overvaluation
Ironside Credit Opportunities Fund LP (Fund I) | $156.4 million
Ironside Structured Alpha Fund LP (Fund II) | $88.7 million
Ironside Special Situations Fund LP (Fund III) | $41.9 million
Total | $287.0 million
Professional | Rate
Martin Kessler, CPA/CFF (Lead Forensic Accountant) | $725 per hour
Staff Accountants and Analysts | $395 per hour
Deliverable | Target Date | Description
Preliminary Damages Memorandum | December 15, 2024 | Internal work product for C&H; not for filing or external distribution. This memorandum should present Kessler's preliminary findings and identify any areas requiring further investigation or additional data.
Final Expert Damages Report | January 10, 2025 | To be assigned report reference KF-2025-0110-ICM. This report will set forth Kessler's final opinions on damages and will form the basis for damages allegations in the anticipated complaint. The report should be prepared in a format suitable for expert disclosure under CPLR § 3101(d).
Supplemental Reports | As Required | Supplemental or updated reports as may be required based on additional information obtained through discovery or other developments in the litigation.
Deposition Testimony | As Required | Kessler shall make himself available for deposition testimony at a mutually agreed upon time and location; advance notice of at least 14 calendar days is requested.
Trial Testimony | As Required | Kessler shall make himself available for trial testimony; advance notice of at least 14 calendar days is requested. C&H will provide trial preparation support.

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

AGREED AND ACCEPTED:

KESSLER FORENSIC ACCOUNTING GROUP PC

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