1023-00002 · Ironside Capital Management LP · Pleadings

nakamura-affirmation-in-opposition.docx DOCUMENT Litigation

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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK COMMERCIAL DIVISION

IRONSIDE CAPITAL MANAGEMENT LP,

Plaintiff,

– against –

Index No. 650312/2025

Assigned Justice: Hon. Richard Torrance, J.S.C.

VANTOR HOLDINGS CORP.,

Defendant.

AFFIRMATION OF YUKI NAKAMURA IN SUPPORT OF PLAINTIFF'S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT'S MOTION TO DISMISS

1. I, Yuki Nakamura, an attorney duly admitted to practice law in the courts of the State of New York, hereby affirm the following under the penalties of perjury pursuant to CPLR § 2106. I am an associate at the law firm of Calderwood & Harkness LLP, with offices located at 51 West 52nd Street, 40th Floor, New York, New York 10019. Calderwood & Harkness LLP is counsel of record for the plaintiff in this action, Ironside Capital Management LP ("Ironside" or "ICM"). I make this affirmation based upon my personal knowledge, my review of the files and records of Calderwood & Harkness LLP maintained in the ordinary course of this litigation, and my review of the documentary exhibits attached hereto. I am fully familiar with the facts and circumstances of this matter.

2. I respectfully submit this Affirmation in support of Plaintiff's Memorandum of Law in Opposition to the Motion to Dismiss filed by defendant Vantor Holdings Corp. ("Vantor" or "Defendant") on February 28, 2025, pursuant to CPLR § 3211(a)(1) (defense founded upon documentary evidence) and CPLR § 3211(a)(7) (failure to state a cause of action). This Affirmation attaches fourteen (14) documentary exhibits, labeled Exhibits A through N, each of which is referenced in, and provides support for, the arguments set forth in Plaintiff's accompanying Memorandum of Law in Opposition. All exhibits are true and correct copies of the documents they purport to be, unless otherwise noted as excerpts, in which case they are true and correct copies of the relevant portions of such documents.

3. The statements contained herein are made upon my personal knowledge of the facts stated, upon my review of the files and records of Calderwood & Harkness LLP maintained in the ordinary course of this litigation, and upon my review of documents produced by the plaintiff and documents obtained through pre-suit discovery conducted pursuant to CPLR § 3102(c). Where statements are based upon information and belief, the sources of that information and the grounds for that belief are identified herein.

4. Ironside commenced this action by filing a Verified Complaint on January 21, 2025, asserting seven causes of action against Vantor: (1) fraud; (2) fraudulent concealment; (3) negligent misrepresentation; (4) breach of contract, predicated upon Vantor's material breach of Sections 3.1 and 4.2 of the Master Fund Administration Agreement dated June 15, 2017 (the "FAA"); (5) breach of fiduciary duty; (6) aiding and abetting fraud; and (7) unjust enrichment. As set forth more fully below and in the Verified Complaint, these claims arise from Vantor's systematic misvaluation of illiquid credit and structured-product positions across three Ironside feeder funds — specifically, Ironside Credit Opportunities Fund LP ("Fund I"), Ironside Structured Alpha Fund LP ("Fund II"), and Ironside Special Situations Fund LP ("Fund III") — during the period from the first quarter of 2021 through the third quarter of 2023, resulting in aggregate losses to Ironside and its investors of approximately $287 million.

5. On February 28, 2025, Vantor moved to dismiss the entirety of the Verified Complaint on five principal grounds: (i) that the fraud claims (First, Second, and Sixth Causes of Action) are duplicative of the contract claim and fail to satisfy the heightened particularity requirement of CPLR § 3016(b); (ii) that the fiduciary duty claim (Fifth Cause of Action) fails as a matter of law because Vantor is merely a service provider and owes no fiduciary duty to Ironside; (iii) that the contractual liability cap set forth in FAA § 9.3 limits Vantor's aggregate liability to $2.98 million, thereby rendering the damages allegations in the Complaint legally insufficient; (iv) that the unjust enrichment claim (Seventh Cause of Action) is precluded by the existence of an express contract governing the subject matter of the dispute; and (v) that the economic loss doctrine bars all tort claims asserted herein. Vantor's motion is supported by the affirmation of its lead counsel, Gregory Dane, a partner at Whitfield, Dane & Corcoran LLP, located at 200 South Biscayne Boulevard, Suite 3600, Miami, Florida 33131. For the reasons set forth below and in Plaintiff's accompanying Memorandum of Law, each of Vantor's arguments lacks merit, and the motion should be denied in its entirety.

BACKGROUND FACTS

The Parties

6. Ironside Capital Management LP is a Delaware limited partnership with its principal office at 680 Park Avenue, 34th Floor, New York, New York 10065. Its registered agent in the State of Delaware is Capitol Registered Agents Inc., located at 1209 Orange Street, Wilmington, Delaware 19801. Ironside was founded in 2009 by Elliot Brennan and Marguerite Dao and operates as a multi-strategy credit hedge fund focusing on distressed debt, structured products, and illiquid credit opportunities. As of December 31, 2024, Ironside managed approximately $4.2 billion in assets under management ("AUM") across five investment vehicles. Ironside is registered with the U.S. Securities and Exchange Commission as an investment adviser; its CRD Number is 158742 and its SEC File Number is 801-79534. The three fund vehicles that are the subject of this litigation are: Fund I (Ironside Credit Opportunities Fund LP), which had a net asset value ("NAV") of approximately $1.8 billion during the relevant period; Fund II (Ironside Structured Alpha Fund LP), which had a NAV of approximately $1.1 billion during the relevant period; and Fund III (Ironside Special Situations Fund LP), which had a NAV of approximately $680 million during the relevant period. The aggregate administered NAV across these three funds was approximately $3.58 billion.

7. Vantor Holdings Corp. is a Delaware corporation with its principal office at 1400 Brickell Avenue, Suite 2200, Miami, Florida 33131. Its registered agent in the State of Delaware is Palmetto Corporate Services Inc., located at 850 New Burton Road, Suite 201, Dover, Delaware 19904. Vantor was founded in 2012 and provides fund administration, NAV calculation, investor services, and middle-office outsourcing to hedge fund and private fund clients. As of 2023, Vantor provided administration services to approximately 140 hedge-fund clients representing approximately $62 billion in administered assets. The key Vantor personnel relevant to this action include: Raymond Kettler, CEO and Chairman; Susan Hargrove, President and Chief Operating Officer; Nathan Orris, Senior Vice President of Valuation Services and the lead contact for the Ironside account; and Deepa Rajaram, Vice President of Client Valuation Operations and the day-to-day supervisor responsible for pricing and valuation of the Ironside portfolios. As set forth below, Mr. Orris and Ms. Rajaram are the individuals principally responsible for the systematic misvaluation at issue in this action.

8. In addition to the parties, the following third parties are relevant to this action and referenced in the attached exhibits. Ironside's independent auditor during the relevant period was Claremont & Strauss LLP, with the engagement led by audit partner Howard Stein. Ironside's prime broker was Northpoint Securities LLC, with the client relationship managed by Dana Crossley. Following discovery of the misvaluation, Ironside retained Meridian Investor Services LLC as its replacement fund administrator, effective October 10, 2023; Meridian's Chief Executive Officer is Anne-Claire Dupont, and its offices are located at 2 Stamford Plaza, 281 Tresser Boulevard, Suite 600, Stamford, Connecticut 06901. The lead institutional investor in the three Ironside funds at issue is Ashford Endowment Partners LP, whose managing director, Philip Ashford III, committed capital across all three funds totaling approximately $340 million.

The Master Fund Administration Agreement

9. On June 15, 2017, Ironside, acting on behalf of Fund I and Fund II, and Vantor executed the Master Fund Administration Agreement (the "FAA"), bearing reference number VHC-ICM-2017-0615. The FAA established a five-year initial term commencing on June 15, 2017 and expiring on June 14, 2022, with automatic renewal for successive one-year terms thereafter unless either party provided the other with at least ninety (90) days' prior written notice of termination. The FAA set forth the comprehensive terms under which Vantor would provide fund administration, NAV calculation, investor accounting, and independent pricing and valuation services to the Ironside funds. A true and correct copy of the FAA is attached hereto as Exhibit A.

10. The FAA was amended on two occasions during the relevant period. First, the parties executed the First Amendment to the FAA, dated March 1, 2019, which added Fund III (Ironside Special Situations Fund LP) to the scope of the FAA, thereby extending all of Vantor's service obligations — including its independent pricing and valuation responsibilities — to the assets held by Fund III. A true and correct copy of the First Amendment is attached hereto as Exhibit B. Second, the parties executed the Second Amendment to the FAA, dated June 10, 2022, which confirmed the automatic renewal of the FAA for a successive one-year term and adjusted the administration fee from 4.0 basis points to 4.5 basis points on aggregate administered NAV, reflecting Vantor's expanded service responsibilities following the addition of Fund III and the growth of the administered asset base. A true and correct copy of the Second Amendment is attached hereto as Exhibit C.

11. The scope of services and the valuation standard that Vantor agreed to observe are of central importance to this action. Section 3.1 of the FAA defines the scope of services to include, among other things, NAV calculation, investor accounting, regulatory reporting support, and — critically — independent pricing and valuation of portfolio positions, including assets classified as Level 2 and Level 3 under the fair value hierarchy established by Accounting Standards Codification Topic 820. Section 4.2 of the FAA contains Vantor's express warranty that it would perform all valuations "in accordance with GAAP, the applicable fund's valuation policy, and the standard of care of a reasonably prudent professional fund administrator." The applicable fund valuation policy during the relevant period was the Ironside Valuation Policy, version 3.2, effective January 1, 2020, which was incorporated by reference into the FAA and governed the waterfall procedures for the valuation of Level 3 assets. Those waterfall procedures required, among other things, the use of independent third-party pricing sources, the documentation of all model-based adjustments, and the escalation of material pricing discrepancies to Ironside's valuation committee. Relevant excerpts of the Ironside Valuation Policy, v.3.2, are attached hereto as Exhibit D.

12. Under the FAA, as amended by the Second Amendment, Vantor was entitled to an administration fee of 4.5 basis points (0.045%) on aggregate administered NAV, calculated and paid on a quarterly basis. At the peak administered NAV of approximately $3.59 billion during the second quarter of 2022, the quarterly administration fee was approximately $404,125, which annualized to approximately $1.616 million. Over the entire life of the FAA, from June 2017 through September 2023 when the agreement was terminated, Ironside paid Vantor total administration fees of approximately $9.28 million. Of particular relevance to the contractual liability cap analysis, the aggregate fees paid to Vantor during the twelve-month period immediately preceding termination — that is, from October 2022 through September 2023 — were approximately $1.49 million.

13. The FAA contains both an indemnification provision and a liability cap, which are at the center of the parties' dispute regarding the measure of recoverable damages. Section 9.1 of the FAA provides that Vantor agreed to indemnify Ironside and its affiliates for all losses, damages, costs, and expenses arising from Vantor's "negligence, fraud, willful misconduct, or material breach of this Agreement." Notably, the indemnification provision itself draws an explicit distinction between negligence, on the one hand, and fraud and willful misconduct, on the other, encompassing all of these categories within the scope of Vantor's indemnification obligation. Section 9.3 of the FAA provides a cap on Vantor's aggregate liability, limiting such liability to "two times the aggregate fees paid by Client during the twelve-month period immediately preceding the event giving rise to the claim" — which, applied to the facts here, yields a maximum liability of 2 × $1.49 million = $2.98 million. Ironside contends, as set forth more fully in the accompanying Memorandum of Law, that this liability cap is unenforceable as applied to Ironside's claims for fraud and willful misconduct, both as a matter of public policy and as a matter of contractual construction when read in harmony with the indemnification obligation set forth in Section 9.1. The FAA further provides, in Section 14.2, that it is governed by and construed in accordance with the laws of the State of New York. Section 14.3 provides for exclusive jurisdiction in the Supreme Court of the State of New York, County of New York, and includes a mutual waiver of the right to a jury trial.

The Misvaluation Scheme

14. The misvaluation at issue in this action spanned eleven (11) consecutive quarters, commencing with the valuations dated March 31, 2021 (Q1 2021) and continuing through the valuations dated September 30, 2023 (Q3 2023). During this period, the misvaluation affected a total of forty-seven (47) illiquid credit and structured-product positions held across the three Ironside funds. The affected positions included, among other instruments, CLO equity tranches, bespoke CDO mezzanine notes, and distressed loan participations — precisely the types of complex, illiquid instruments for which Ironside depended upon Vantor's independent pricing and valuation expertise under the FAA.

15. As the documentary evidence attached hereto demonstrates, Vantor's valuation team, under the direct supervision of Nathan Orris (SVP, Valuation Services) and Deepa Rajaram (VP, Client Valuation Operations), engaged in a systematic course of conduct that resulted in the material and persistent overvaluation of the affected positions. Specifically, the evidence shows that the Vantor valuation team:

(a) Used stale broker quotes — in many cases quotes that were six to twelve months old — as the basis for reported valuations, without disclosing to Ironside that the quotes were stale and without undertaking the independent verification required by the Ironside Valuation Policy;

(b) Applied internally generated "model adjustments" that inflated the reported marks by an average of 14.3% above the values that would have been derived from observable market inputs, without documenting the basis for such adjustments and without escalating them to Ironside's valuation committee as required by the Ironside Valuation Policy;

(c) Failed to apply the contractually required waterfall valuation procedures set forth in the Ironside Valuation Policy, v.3.2, which mandated a sequential hierarchy of pricing sources — including independent third-party pricing, dealer consensus marks, and model-based valuations with documented assumptions — before arriving at a final reported value; and

(d) Concealed from Ironside a body of internal email communications in which Vantor personnel, including Mr. Orris and Ms. Rajaram, documented their awareness that the reported marks were inflated and discussed strategies for avoiding detection.

Representative excerpts of the Vantor internal emails described in subparagraph (d) above, obtained through pre-suit discovery pursuant to CPLR § 3102(c), are attached hereto as Exhibit F. These emails are among the most compelling evidence of Vantor's knowledge and intent, and they are discussed in detail in the accompanying Memorandum of Law.

16. The aggregate overvaluation caused by Vantor's misconduct was $287 million, allocated across the three funds as follows:

(a) Fund I (Ironside Credit Opportunities Fund LP): $156.4 million in overvaluation;

(b) Fund II (Ironside Structured Alpha Fund LP): $88.7 million in overvaluation; and

The aggregate overvaluation was $287.0 million. The peak single-quarter overvaluation was $52.3 million, occurring in the fourth quarter of 2022. During the period of the misvaluation, NAV per unit across the three funds was overstated by between 3.8% (in Q1 2021, when the scheme was in its early stages) and 8.6% (in Q4 2022, when the scheme reached its peak). These figures are derived from the independent re-pricing analysis conducted by Harmon-Bryce Valuation Advisors LLC and confirmed by the Kessler Forensic Accounting Group PC damages analysis, both of which are summarized in the exhibits attached hereto.

17. The impact of Vantor's misvaluation on Ironside and its investors has been severe and multifaceted. First, the inflated NAV caused Ironside to collect excess management fees from its limited partners, as Ironside's management fee is calculated at 1.5% of NAV; the excess fees attributable to the inflated NAV are estimated at approximately $4.3 million, and Ironside has offered to disgorge these excess fees to affected investors. Second, the inflated NAV resulted in inflated performance allocations (calculated at 20% of net profits above a 6% hurdle rate), further compounding the financial impact on investors. Third, during the period of the misvaluation, 217 investor redemptions were processed at inflated NAV, resulting in overpayments to redeeming limited partners of approximately $43.2 million — amounts that were paid out of fund assets and that cannot be recovered from the redeeming investors. Fourth, the inflated NAV caused Ironside to file misstated regulatory filings with the SEC, including Form PF and Form ADV, exposing Ironside to potential regulatory sanctions. Fifth, three limited partner arbitrations are currently pending against Ironside, and Ironside has incurred investor litigation defense costs of approximately $6.1 million to date. The totality of these consequences is attributable to Vantor's systematic misconduct and is the subject of the damages analysis prepared by Kessler Forensic Accounting Group PC.

discovery of the Fraud and Termination

18. The discovery of Vantor's misvaluation began in July 2023, when Ironside's Chief Financial Officer, Rajiv Subramanian, identified a discrepancy of $12.6 million between Vantor's marks on seven CLO equity positions as of the second quarter of 2023 and independent price indications obtained from Ironside's prime broker, Northpoint Securities LLC. The Northpoint pricing indications were provided by Dana Crossley, the relationship manager for the Ironside account, in the ordinary course of Northpoint's prime brokerage services. A copy of the relevant Northpoint pricing indications is attached hereto as Exhibit N. Upon identifying this discrepancy, Mr. Subramanian immediately escalated the matter to Ironside's Chief Investment Officer, Elliot Brennan, and to Calderwood & Harkness LLP. On August 4, 2023, Ironside sent a written inquiry to Nathan Orris at Vantor, requesting complete supporting documentation — including broker quotes, model documentation, and internal pricing memoranda — for twenty-three (23) positions across the three funds that had been flagged for further review. A true and correct copy of the August 4, 2023 written inquiry is attached hereto as Exhibit L.

19. Vantor's response to the August 4, 2023 inquiry was materially incomplete and evasive. On August 18, 2023, Vantor provided pricing packages for only nine (9) of the twenty-three (23) positions for which documentation had been requested. No internal model documentation was produced. No explanation was provided for the failure to produce documentation for the remaining fourteen positions. A true and correct copy of Vantor's August 18, 2023 response is attached hereto as Exhibit M. The inadequacy of Vantor's response heightened Ironside's concern and prompted it to retain an independent valuation firm. On September 5, 2023, Ironside retained Harmon-Bryce Valuation Advisors LLC, led by Dr. Lena Galbraith, CFA, ASA, to conduct a comprehensive independent re-pricing of all Level 3 positions across the three funds for the period Q1 2021 through Q2 2023. On September 22, 2023, Harmon-Bryce delivered its preliminary findings (Reference: HBVA-2023-0922-IRON), which identified an aggregate overvaluation of approximately $287 million across forty-seven (47) positions. A summary of the Harmon-Bryce preliminary report is attached hereto as Exhibit G.

20. Upon receipt of the Harmon-Bryce preliminary findings, Ironside acted promptly to terminate the FAA and transition its fund administration operations. On October 3, 2023, Ironside issued a Notice of Termination for Cause to Vantor under FAA § 12.2, effective immediately, citing material breach of the FAA and fraud as the grounds for termination. A true and correct copy of the Notice of Termination for Cause is attached hereto as Exhibit I. On October 10, 2023, Ironside completed the transition of all fund administration services to Meridian Investor Services LLC, led by CEO Anne-Claire Dupont, at 2 Stamford Plaza, 281 Tresser Boulevard, Suite 600, Stamford, Connecticut 06901. Meridian has served as Ironside's fund administrator since that date.

PRE-SUIT DEMAND AND MEDIATION

21. On November 15, 2023, Calderwood & Harkness LLP, on behalf of Ironside, sent a formal demand letter to Vantor Holdings Corp. at its principal offices, with a copy to Vantor's counsel, Whitfield, Dane & Corcoran LLP (attention: Gregory Dane). The demand letter set forth the basis for Ironside's claims in detail, including the findings of the Harmon-Bryce independent re-pricing analysis, and demanded payment of $287 million in compensatory damages, plus consequential damages, arising from Vantor's fraud and material breach of the FAA. The demand letter reserved all of Ironside's rights and remedies at law and in equity, including the right to seek punitive damages. A true and correct copy of the November 15, 2023 demand letter is attached hereto as Exhibit J.

22. On December 20, 2023, Whitfield, Dane & Corcoran LLP responded on behalf of Vantor, denying all allegations of fraud and misvaluation. The response asserted, among other things, that the contractual liability cap set forth in FAA § 9.3 limited Vantor's aggregate exposure to $2.98 million, and that any claims in excess of that amount were barred by the plain terms of the FAA. The response further asserted that Vantor's valuation methodology had at all times been reasonable and consistent with industry standards. A true and correct copy of the December 20, 2023 response letter from Whitfield, Dane & Corcoran LLP is attached hereto as Exhibit K.

23. Prior to commencing this action, Calderwood & Harkness LLP obtained pre-suit discovery of Vantor internal email archives held by DataVault Solutions Inc., located at 14 Commerce Drive, Cranford, New Jersey 07016, which served as Vantor's third-party email archiving and data retention provider. This pre-suit discovery was obtained pursuant to CPLR § 3102(c), which authorizes pre-action disclosure to aid in bringing an action, to preserve information, and to identify proper parties. The Vantor internal emails obtained through this pre-suit discovery, excerpts of which are attached as Exhibit F, constitute critical evidence of the knowledge and intent of Vantor's valuation personnel, including Nathan Orris and Deepa Rajaram, with respect to the inflated marks.

24. Following the exchange of the demand and response letters, the parties engaged in pre-suit mediation at Brookstone ADR Services LLC, Reference Number BADR-2024-00391, before the Honorable Sandra Kwan (Ret.). Mediation sessions were conducted at various intervals between March 2024 and December 6, 2024. Despite good-faith efforts by Ironside to reach a negotiated resolution, mediation terminated on December 6, 2024, without resolution, at which point Ironside determined to commence this action. The Verified Complaint was filed on January 21, 2025. Excerpts of the Verified Complaint are attached hereto as Exhibit E.

KESSLER DAMAGES ANALYSIS

25. In connection with the preparation of this action, Calderwood & Harkness LLP retained Kessler Forensic Accounting Group PC, led by Martin Kessler, CPA/CFF, with offices at 100 Wall Street, Suite 2001, New York, New York 10005, to quantify the damages sustained by Ironside and its fund investors as a result of Vantor's misvaluation. Mr. Kessler and his team conducted a comprehensive forensic accounting analysis of the overvaluation, its financial consequences, and the resulting damages across all categories of loss. Kessler finalized his damages report on January 10, 2025 (Reference: KF-2025-0110-ICM).

26. The Kessler damages report identifies the following categories and amounts of damages:

(a) Direct losses (aggregate overvaluation of the forty-seven affected positions across the three funds): $287,000,000;

(b) Investor redemption overpayments (217 redemptions processed at inflated NAV during the misvaluation period, resulting in excess distributions to redeeming limited partners from fund assets): $43,200,000;

(c) Excess management fees (management fees collected by Ironside at 1.5% of inflated NAV, subject to disgorgement to affected investors): $4,300,000;

(d) Regulatory remediation costs (costs incurred by Ironside in connection with the correction of misstated regulatory filings, including amended Form PF and Form ADV filings, and related compliance costs): $2,800,000;

(e) Investor litigation defense costs (costs incurred by Ironside in defending three pending limited partner arbitrations arising from the misvaluation): $6,100,000; and

(f) Estimated reputational and AUM loss (approximately $860 million in investor outflows attributable to the reputational harm caused by the disclosure of the misvaluation, capitalized to reflect the lost value of the management fee stream): $38,600,000.

The approximate total claimed damages, across all categories, are approximately $382,000,000. The Verified Complaint conservatively seeks $287 million in compensatory damages and $50 million in consequential damages, in addition to punitive damages in an amount to be determined at trial.

27. A summary of the Kessler Forensic Accounting Group PC damages report (Reference: KF-2025-0110-ICM) is attached hereto as Exhibit H.

THE EXHIBITS WARRANT DENIAL OF THE MOTION

28. The Fraud Claims Are Not Duplicative and Satisfy CPLR § 3016(b). Vantor's contention that Ironside's fraud claims are duplicative of the breach of contract claim and fail to satisfy the heightened particularity requirement of CPLR § 3016(b) is squarely contradicted by the documentary record. The Vantor internal emails attached as Exhibit F demonstrate, in the words of Vantor's own personnel, that Nathan Orris and Deepa Rajaram had actual knowledge that the reported marks on the affected positions were inflated and that they affirmatively concealed this knowledge from Ironside. The emails identify, with unmistakable specificity, the dates on which particular valuations were discussed, the specific positions that were identified as overvalued, the specific dollar amounts by which the marks exceeded supportable values, and the specific personnel who participated in the decision to report inflated marks. This evidence satisfies the "who, what, when, where, and how" requirements that CPLR § 3016(b) imposes on fraud claims. Moreover, the fraud claims are legally and factually distinct from the breach of contract claim. The fraud claims allege intentional deception, active concealment of known misvaluations, and scienter — elements that are wholly independent of, and go far beyond, a mere failure to perform contractual obligations. As this Court is well aware, a breach of contract claim sounds in a party's failure to perform a contractual undertaking, whereas a fraud claim sounds in a party's intentional misrepresentation or concealment that induces reliance and causes injury. These are fundamentally different legal theories, supported by different factual predicates, and both are properly pled.

29. Fiduciary Duty Arises from Vantor's Discretionary Valuation Role. Vantor's argument that it is merely a "service provider" and therefore owes no fiduciary duty to Ironside ignores the nature and scope of the duties it assumed under the FAA. Section 4.2 of the FAA vested Vantor with independent discretion over the pricing and valuation of Level 2 and Level 3 assets — precisely the types of illiquid and hard-to-value instruments that required the exercise of professional judgment, the application of complex valuation methodologies, and the selection among competing pricing inputs. This was not a ministerial role. Vantor was not simply transcribing numbers provided by third parties; it was exercising judgment-based discretionary authority over asset valuations that directly determined the NAV reported to investors, the management fees calculated on the basis of that NAV, the performance allocations assessed against fund assets, and the prices at which redeeming investors were paid. The FAA and the Ironside Valuation Policy, v.3.2 (Exhibit D), together confirm that Vantor was charged with the exercise of independent professional judgment in arriving at fair value determinations. Where a party assumes such discretionary authority over matters of critical financial importance to another, the relationship gives rise to fiduciary obligations as a matter of law, regardless of the label that the parties may have placed on the relationship.

30. The Liability Cap (§ 9.3) Is Unenforceable as to Claims for Fraud and Willful Misconduct. Vantor's reliance on the contractual liability cap of $2.98 million in FAA § 9.3 as a complete defense to this action is misplaced as a matter of law and as a matter of contract interpretation. Under settled New York law, a contractual limitation of liability cannot insulate a party from the consequences of its own fraud or willful misconduct. Public policy precludes enforcement of such limitations where the wrongdoer's conduct is intentional and where enforcement would effectively immunize fraud. Moreover, the text of the FAA itself requires a different result. Section 9.1 — the indemnification provision — specifically obligates Vantor to indemnify Ironside for losses arising from "negligence, fraud, willful misconduct, or material breach of this Agreement." Section 9.1 does not limit the indemnification for fraud and willful misconduct to the cap set forth in Section 9.3. The two provisions must be read harmoniously. To apply the Section 9.3 cap to claims for fraud and willful misconduct would render the indemnification obligation in Section 9.1 — insofar as it covers fraud and willful misconduct — wholly illusory. Under well-established principles of contract interpretation, a construction that would render a material provision meaningless is to be avoided. Ironside respectfully submits that the liability cap applies, at most, to claims sounding in negligence and ordinary breach, and has no application to the fraud and willful misconduct at issue here.

31. Unjust Enrichment Is Properly Pled in the Alternative. Vantor's argument that the unjust enrichment claim must be dismissed because an express contract exists between the parties disregards the well-established principle that alternative and inconsistent pleading is permitted under CPLR § 3014. Ironside has pled its unjust enrichment claim in the alternative, as it is entitled to do. Vantor's own motion illustrates precisely why alternative pleading is appropriate here: Vantor has argued, on the one hand, that the FAA limits its liability to $2.98 million, and on the other hand, that the existence of the FAA precludes any quasi-contractual recovery. In the event that this Court determines that the contractual claims are in some respect deficient — for example, because of the liability cap — Ironside is entitled to pursue its unjust enrichment claim as an alternative basis for recovery. Dismissal of the unjust enrichment claim at this stage would be premature and would unfairly prejudice Ironside.

32. The Economic Loss Doctrine Does Not Bar Intentional Tort Claims. Vantor's invocation of the economic loss doctrine is equally unavailing. The economic loss doctrine, which precludes recovery in tort for purely economic losses that are the subject of a contractual relationship, is not without exception. New York courts have consistently held that the economic loss doctrine does not bar claims sounding in fraud or intentional tort. The rationale is straightforward: fraud involves a species of wrongdoing that is categorically different from a breach of contract, and the policy interests served by tort law's remediation of fraud — including the availability of punitive damages and the deterrence of intentional misconduct — are not subordinated merely because the parties also happen to have a contractual relationship. In addition, the "special relationship" and "misrepresentation" exceptions to the economic loss doctrine apply with particular force to the relationship between Vantor and Ironside. Vantor was an independent valuation agent charged with the exercise of professional judgment in reporting fair values to Ironside and, through Ironside, to its investors and regulators. The special trust and reliance inherent in that relationship place Ironside squarely within the recognized exceptions to the economic loss doctrine.

33. The correspondence exchanged between the parties further supports the denial of Vantor's motion. The August 4, 2023 written inquiry from Ironside (through CFO Rajiv Subramanian) to Nathan Orris at Vantor (attached as Exhibit L) demonstrates that Ironside made a specific and detailed request for supporting documentation for twenty-three (23) positions upon identifying the initial pricing discrepancies. Vantor's materially incomplete August 18, 2023 response (attached as Exhibit M) — which provided documentation for only nine of the twenty-three positions and offered no explanation for the omission of the remaining fourteen — is itself evidence of Vantor's concealment and evasion. A party with nothing to hide does not respond to a detailed documentation request with a partial and unexplained production. In addition, the Notice of Termination for Cause dated October 3, 2023 (attached as Exhibit I) establishes that Ironside acted promptly and decisively upon discovering the full scope of the misvaluation, terminating the FAA for cause and transitioning to a replacement administrator within one week.

34. Finally, the expert reports further support the plausibility and specificity of the Verified Complaint's allegations and the magnitude of the damages claimed. The Harmon-Bryce Valuation Advisors LLC summary (attached as Exhibit G) provides the independent, third-party valuation analysis that identified the forty-seven mispriced positions and quantified the aggregate overvaluation at approximately $287 million. The Kessler Forensic Accounting Group PC summary (attached as Exhibit H) provides the comprehensive damages analysis, including the identification and quantification of direct losses, redemption overpayments, regulatory remediation costs, investor litigation defense costs, and reputational harm. Together, these expert reports provide the factual and quantitative foundation for the damages claimed in the Verified Complaint and establish that Ironside's allegations are far more than mere conclusory assertions — they are supported by substantial, documented evidence.

35. For the foregoing reasons, and for the reasons more fully set forth in Plaintiff's accompanying Memorandum of Law, the documentary record conclusively establishes that each of Ironside's seven causes of action is well-pled, particularized, and supported by substantial evidence. Vantor's Motion to Dismiss is without merit and should be denied in its entirety.

EXHIBIT LIST

36. The following fourteen (14) exhibits are attached hereto and incorporated by reference into this Affirmation:

PRAYER FOR RELIEF

37. Based upon the foregoing facts and the documents annexed hereto as Exhibits A through N, and for the reasons more fully set forth in Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss, plaintiff Ironside Capital Management LP respectfully requests that this Court enter an order:

(a) Denying Vantor Holdings Corp.'s Motion to Dismiss in its entirety;

(b) Directing Vantor Holdings Corp. to serve and file an answer to the Verified Complaint within twenty (20) days of the date of the Court's order; and

(c) In the alternative, to the extent this Court finds any cause of action deficiently pled, granting Ironside Capital Management LP leave to replead pursuant to CPLR § 3211(e).

Ironside further respectfully requests such other and further relief as this Court deems just and proper.

I affirm under the penalties of perjury that the foregoing is true and correct.

Dated: March 21, 2025 New York, New York

CALDERWOOD & HARKNESS LLP

By: ________

Yuki Nakamura Associate 51 West 52nd Street, 40th Floor New York, New York 10019 Telephone: (212) 558-4000 Facsimile: (212) 558-4001

Email: ynakamura@calderwoodharkness.com

Attorney Affirmation pursuant to CPLR § 2106 — notarization not required for attorneys admitted to practice in the State of New York.

Exhibit	Description	Date
A	Master Fund Administration Agreement (FAA) between Ironside Capital Management LP and Vantor Holdings Corp. (Ref: VHC-ICM-2017-0615)	June 15, 2017
B	First Amendment to FAA (addition of Fund III — Ironside Special Situations Fund LP)	March 1, 2019
C	Second Amendment to FAA (auto-renewal confirmation and fee adjustment from 4.0 bps to 4.5 bps)	June 10, 2022
D	Ironside Valuation Policy, v.3.2 (excerpts relevant to Level 3 asset waterfall procedures)	Effective January 1, 2020
E	Verified Complaint, Ironside Capital Management LP v. Vantor Holdings Corp., Index No. 650312/2025 (excerpts)	January 21, 2025
F	Vantor internal emails — excerpts obtained via pre-suit subpoena to DataVault Solutions Inc. pursuant to CPLR § 3102(c), documenting Nathan Orris and Deepa Rajaram's knowledge of inflated marks	Various dates, Q1 2021 – Q3 2023
G	Summary of Harmon-Bryce Valuation Advisors LLC preliminary report (Ref: HBVA-2023-0922-IRON): identification of 47 mispriced positions, aggregate $287M overvaluation, methodology	September 22, 2023
H	Summary of Kessler Forensic Accounting Group PC damages report (Ref: KF-2025-0110-ICM): direct losses, redemption overpayments, regulatory costs, litigation defense costs, reputational harm	January 10, 2025
I	Notice of Termination for Cause from Ironside Capital Management LP to Vantor Holdings Corp. under FAA § 12.2	October 3, 2023
J	Demand Letter from Calderwood & Harkness LLP to Vantor Holdings Corp. (cc: Whitfield, Dane & Corcoran LLP)	November 15, 2023
K	Response letter from Whitfield, Dane & Corcoran LLP on behalf of Vantor Holdings Corp.	December 20, 2023
L	Written inquiry from Ironside (Rajiv Subramanian, CFO) to Nathan Orris at Vantor requesting supporting documentation for 23 positions	August 4, 2023
M	Vantor's materially incomplete response to Ironside inquiry (providing only 9 of 23 requested pricing packages; no internal model documentation produced)	August 18, 2023
N	Northpoint Securities LLC independent pricing indications for Q2 2023 CLO equity positions (7 positions showing $12.6M discrepancy from Vantor marks)	July 2023

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK COMMERCIAL DIVISION
IRONSIDE CAPITAL MANAGEMENT LP,
Plaintiff,
– against –
Index No. 650312/2025
Assigned Justice: Hon. Richard Torrance, J.S.C.
VANTOR HOLDINGS CORP.,
Defendant.
AFFIRMATION OF YUKI NAKAMURA IN SUPPORT OF PLAINTIFF'S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT'S MOTION TO DISMISS
1. I, Yuki Nakamura, an attorney duly admitted to practice law in the courts of the State of New York, hereby affirm the following under the penalties of perjury pursuant to CPLR § 2106. I am an associate at the law firm of Calderwood & Harkness LLP, with offices located at 51 West 52nd Street, 40th Floor, New York, New York 10019. Calderwood & Harkness LLP is counsel of record for the plaintiff in this action, Ironside Capital Management LP ("Ironside" or "ICM"). I make this affirmation based upon my personal knowledge, my review of the files and records of Calderwood & Harkness LLP maintained in the ordinary course of this litigation, and my review of the documentary exhibits attached hereto. I am fully familiar with the facts and circumstances of this matter.
2. I respectfully submit this Affirmation in support of Plaintiff's Memorandum of Law in Opposition to the Motion to Dismiss filed by defendant Vantor Holdings Corp. ("Vantor" or "Defendant") on February 28, 2025, pursuant to CPLR § 3211(a)(1) (defense founded upon documentary evidence) and CPLR § 3211(a)(7) (failure to state a cause of action). This Affirmation attaches fourteen (14) documentary exhibits, labeled Exhibits A through N, each of which is referenced in, and provides support for, the arguments set forth in Plaintiff's accompanying Memorandum of Law in Opposition. All exhibits are true and correct copies of the documents they purport to be, unless otherwise noted as excerpts, in which case they are true and correct copies of the relevant portions of such documents.
3. The statements contained herein are made upon my personal knowledge of the facts stated, upon my review of the files and records of Calderwood & Harkness LLP maintained in the ordinary course of this litigation, and upon my review of documents produced by the plaintiff and documents obtained through pre-suit discovery conducted pursuant to CPLR § 3102(c). Where statements are based upon information and belief, the sources of that information and the grounds for that belief are identified herein.
4. Ironside commenced this action by filing a Verified Complaint on January 21, 2025, asserting seven causes of action against Vantor: (1) fraud; (2) fraudulent concealment; (3) negligent misrepresentation; (4) breach of contract, predicated upon Vantor's material breach of Sections 3.1 and 4.2 of the Master Fund Administration Agreement dated June 15, 2017 (the "FAA"); (5) breach of fiduciary duty; (6) aiding and abetting fraud; and (7) unjust enrichment. As set forth more fully below and in the Verified Complaint, these claims arise from Vantor's systematic misvaluation of illiquid credit and structured-product positions across three Ironside feeder funds — specifically, Ironside Credit Opportunities Fund LP ("Fund I"), Ironside Structured Alpha Fund LP ("Fund II"), and Ironside Special Situations Fund LP ("Fund III") — during the period from the first quarter of 2021 through the third quarter of 2023, resulting in aggregate losses to Ironside and its investors of approximately $287 million.
5. On February 28, 2025, Vantor moved to dismiss the entirety of the Verified Complaint on five principal grounds: (i) that the fraud claims (First, Second, and Sixth Causes of Action) are duplicative of the contract claim and fail to satisfy the heightened particularity requirement of CPLR § 3016(b); (ii) that the fiduciary duty claim (Fifth Cause of Action) fails as a matter of law because Vantor is merely a service provider and owes no fiduciary duty to Ironside; (iii) that the contractual liability cap set forth in FAA § 9.3 limits Vantor's aggregate liability to $2.98 million, thereby rendering the damages allegations in the Complaint legally insufficient; (iv) that the unjust enrichment claim (Seventh Cause of Action) is precluded by the existence of an express contract governing the subject matter of the dispute; and (v) that the economic loss doctrine bars all tort claims asserted herein. Vantor's motion is supported by the affirmation of its lead counsel, Gregory Dane, a partner at Whitfield, Dane & Corcoran LLP, located at 200 South Biscayne Boulevard, Suite 3600, Miami, Florida 33131. For the reasons set forth below and in Plaintiff's accompanying Memorandum of Law, each of Vantor's arguments lacks merit, and the motion should be denied in its entirety.
BACKGROUND FACTS
The Parties
6. Ironside Capital Management LP is a Delaware limited partnership with its principal office at 680 Park Avenue, 34th Floor, New York, New York 10065. Its registered agent in the State of Delaware is Capitol Registered Agents Inc., located at 1209 Orange Street, Wilmington, Delaware 19801. Ironside was founded in 2009 by Elliot Brennan and Marguerite Dao and operates as a multi-strategy credit hedge fund focusing on distressed debt, structured products, and illiquid credit opportunities. As of December 31, 2024, Ironside managed approximately $4.2 billion in assets under management ("AUM") across five investment vehicles. Ironside is registered with the U.S. Securities and Exchange Commission as an investment adviser; its CRD Number is 158742 and its SEC File Number is 801-79534. The three fund vehicles that are the subject of this litigation are: Fund I (Ironside Credit Opportunities Fund LP), which had a net asset value ("NAV") of approximately $1.8 billion during the relevant period; Fund II (Ironside Structured Alpha Fund LP), which had a NAV of approximately $1.1 billion during the relevant period; and Fund III (Ironside Special Situations Fund LP), which had a NAV of approximately $680 million during the relevant period. The aggregate administered NAV across these three funds was approximately $3.58 billion.
7. Vantor Holdings Corp. is a Delaware corporation with its principal office at 1400 Brickell Avenue, Suite 2200, Miami, Florida 33131. Its registered agent in the State of Delaware is Palmetto Corporate Services Inc., located at 850 New Burton Road, Suite 201, Dover, Delaware 19904. Vantor was founded in 2012 and provides fund administration, NAV calculation, investor services, and middle-office outsourcing to hedge fund and private fund clients. As of 2023, Vantor provided administration services to approximately 140 hedge-fund clients representing approximately $62 billion in administered assets. The key Vantor personnel relevant to this action include: Raymond Kettler, CEO and Chairman; Susan Hargrove, President and Chief Operating Officer; Nathan Orris, Senior Vice President of Valuation Services and the lead contact for the Ironside account; and Deepa Rajaram, Vice President of Client Valuation Operations and the day-to-day supervisor responsible for pricing and valuation of the Ironside portfolios. As set forth below, Mr. Orris and Ms. Rajaram are the individuals principally responsible for the systematic misvaluation at issue in this action.
8. In addition to the parties, the following third parties are relevant to this action and referenced in the attached exhibits. Ironside's independent auditor during the relevant period was Claremont & Strauss LLP, with the engagement led by audit partner Howard Stein. Ironside's prime broker was Northpoint Securities LLC, with the client relationship managed by Dana Crossley. Following discovery of the misvaluation, Ironside retained Meridian Investor Services LLC as its replacement fund administrator, effective October 10, 2023; Meridian's Chief Executive Officer is Anne-Claire Dupont, and its offices are located at 2 Stamford Plaza, 281 Tresser Boulevard, Suite 600, Stamford, Connecticut 06901. The lead institutional investor in the three Ironside funds at issue is Ashford Endowment Partners LP, whose managing director, Philip Ashford III, committed capital across all three funds totaling approximately $340 million.
The Master Fund Administration Agreement
9. On June 15, 2017, Ironside, acting on behalf of Fund I and Fund II, and Vantor executed the Master Fund Administration Agreement (the "FAA"), bearing reference number VHC-ICM-2017-0615. The FAA established a five-year initial term commencing on June 15, 2017 and expiring on June 14, 2022, with automatic renewal for successive one-year terms thereafter unless either party provided the other with at least ninety (90) days' prior written notice of termination. The FAA set forth the comprehensive terms under which Vantor would provide fund administration, NAV calculation, investor accounting, and independent pricing and valuation services to the Ironside funds. A true and correct copy of the FAA is attached hereto as Exhibit A.
10. The FAA was amended on two occasions during the relevant period. First, the parties executed the First Amendment to the FAA, dated March 1, 2019, which added Fund III (Ironside Special Situations Fund LP) to the scope of the FAA, thereby extending all of Vantor's service obligations — including its independent pricing and valuation responsibilities — to the assets held by Fund III. A true and correct copy of the First Amendment is attached hereto as Exhibit B. Second, the parties executed the Second Amendment to the FAA, dated June 10, 2022, which confirmed the automatic renewal of the FAA for a successive one-year term and adjusted the administration fee from 4.0 basis points to 4.5 basis points on aggregate administered NAV, reflecting Vantor's expanded service responsibilities following the addition of Fund III and the growth of the administered asset base. A true and correct copy of the Second Amendment is attached hereto as Exhibit C.
11. The scope of services and the valuation standard that Vantor agreed to observe are of central importance to this action. Section 3.1 of the FAA defines the scope of services to include, among other things, NAV calculation, investor accounting, regulatory reporting support, and — critically — independent pricing and valuation of portfolio positions, including assets classified as Level 2 and Level 3 under the fair value hierarchy established by Accounting Standards Codification Topic 820. Section 4.2 of the FAA contains Vantor's express warranty that it would perform all valuations "in accordance with GAAP, the applicable fund's valuation policy, and the standard of care of a reasonably prudent professional fund administrator." The applicable fund valuation policy during the relevant period was the Ironside Valuation Policy, version 3.2, effective January 1, 2020, which was incorporated by reference into the FAA and governed the waterfall procedures for the valuation of Level 3 assets. Those waterfall procedures required, among other things, the use of independent third-party pricing sources, the documentation of all model-based adjustments, and the escalation of material pricing discrepancies to Ironside's valuation committee. Relevant excerpts of the Ironside Valuation Policy, v.3.2, are attached hereto as Exhibit D.
12. Under the FAA, as amended by the Second Amendment, Vantor was entitled to an administration fee of 4.5 basis points (0.045%) on aggregate administered NAV, calculated and paid on a quarterly basis. At the peak administered NAV of approximately $3.59 billion during the second quarter of 2022, the quarterly administration fee was approximately $404,125, which annualized to approximately $1.616 million. Over the entire life of the FAA, from June 2017 through September 2023 when the agreement was terminated, Ironside paid Vantor total administration fees of approximately $9.28 million. Of particular relevance to the contractual liability cap analysis, the aggregate fees paid to Vantor during the twelve-month period immediately preceding termination — that is, from October 2022 through September 2023 — were approximately $1.49 million.
13. The FAA contains both an indemnification provision and a liability cap, which are at the center of the parties' dispute regarding the measure of recoverable damages. Section 9.1 of the FAA provides that Vantor agreed to indemnify Ironside and its affiliates for all losses, damages, costs, and expenses arising from Vantor's "negligence, fraud, willful misconduct, or material breach of this Agreement." Notably, the indemnification provision itself draws an explicit distinction between negligence, on the one hand, and fraud and willful misconduct, on the other, encompassing all of these categories within the scope of Vantor's indemnification obligation. Section 9.3 of the FAA provides a cap on Vantor's aggregate liability, limiting such liability to "two times the aggregate fees paid by Client during the twelve-month period immediately preceding the event giving rise to the claim" — which, applied to the facts here, yields a maximum liability of 2 × $1.49 million = $2.98 million. Ironside contends, as set forth more fully in the accompanying Memorandum of Law, that this liability cap is unenforceable as applied to Ironside's claims for fraud and willful misconduct, both as a matter of public policy and as a matter of contractual construction when read in harmony with the indemnification obligation set forth in Section 9.1. The FAA further provides, in Section 14.2, that it is governed by and construed in accordance with the laws of the State of New York. Section 14.3 provides for exclusive jurisdiction in the Supreme Court of the State of New York, County of New York, and includes a mutual waiver of the right to a jury trial.
The Misvaluation Scheme
14. The misvaluation at issue in this action spanned eleven (11) consecutive quarters, commencing with the valuations dated March 31, 2021 (Q1 2021) and continuing through the valuations dated September 30, 2023 (Q3 2023). During this period, the misvaluation affected a total of forty-seven (47) illiquid credit and structured-product positions held across the three Ironside funds. The affected positions included, among other instruments, CLO equity tranches, bespoke CDO mezzanine notes, and distressed loan participations — precisely the types of complex, illiquid instruments for which Ironside depended upon Vantor's independent pricing and valuation expertise under the FAA.
15. As the documentary evidence attached hereto demonstrates, Vantor's valuation team, under the direct supervision of Nathan Orris (SVP, Valuation Services) and Deepa Rajaram (VP, Client Valuation Operations), engaged in a systematic course of conduct that resulted in the material and persistent overvaluation of the affected positions. Specifically, the evidence shows that the Vantor valuation team:
(a) Used stale broker quotes — in many cases quotes that were six to twelve months old — as the basis for reported valuations, without disclosing to Ironside that the quotes were stale and without undertaking the independent verification required by the Ironside Valuation Policy;
(b) Applied internally generated "model adjustments" that inflated the reported marks by an average of 14.3% above the values that would have been derived from observable market inputs, without documenting the basis for such adjustments and without escalating them to Ironside's valuation committee as required by the Ironside Valuation Policy;
(c) Failed to apply the contractually required waterfall valuation procedures set forth in the Ironside Valuation Policy, v.3.2, which mandated a sequential hierarchy of pricing sources — including independent third-party pricing, dealer consensus marks, and model-based valuations with documented assumptions — before arriving at a final reported value; and
(d) Concealed from Ironside a body of internal email communications in which Vantor personnel, including Mr. Orris and Ms. Rajaram, documented their awareness that the reported marks were inflated and discussed strategies for avoiding detection.
Representative excerpts of the Vantor internal emails described in subparagraph (d) above, obtained through pre-suit discovery pursuant to CPLR § 3102(c), are attached hereto as Exhibit F. These emails are among the most compelling evidence of Vantor's knowledge and intent, and they are discussed in detail in the accompanying Memorandum of Law.
16. The aggregate overvaluation caused by Vantor's misconduct was $287 million, allocated across the three funds as follows:
(a) Fund I (Ironside Credit Opportunities Fund LP): $156.4 million in overvaluation;
(b) Fund II (Ironside Structured Alpha Fund LP): $88.7 million in overvaluation; and
(c) Fund III (Ironside Special Situations Fund LP): $41.9 million in overvaluation.
The aggregate overvaluation was $287.0 million. The peak single-quarter overvaluation was $52.3 million, occurring in the fourth quarter of 2022. During the period of the misvaluation, NAV per unit across the three funds was overstated by between 3.8% (in Q1 2021, when the scheme was in its early stages) and 8.6% (in Q4 2022, when the scheme reached its peak). These figures are derived from the independent re-pricing analysis conducted by Harmon-Bryce Valuation Advisors LLC and confirmed by the Kessler Forensic Accounting Group PC damages analysis, both of which are summarized in the exhibits attached hereto.
17. The impact of Vantor's misvaluation on Ironside and its investors has been severe and multifaceted. First, the inflated NAV caused Ironside to collect excess management fees from its limited partners, as Ironside's management fee is calculated at 1.5% of NAV; the excess fees attributable to the inflated NAV are estimated at approximately $4.3 million, and Ironside has offered to disgorge these excess fees to affected investors. Second, the inflated NAV resulted in inflated performance allocations (calculated at 20% of net profits above a 6% hurdle rate), further compounding the financial impact on investors. Third, during the period of the misvaluation, 217 investor redemptions were processed at inflated NAV, resulting in overpayments to redeeming limited partners of approximately $43.2 million — amounts that were paid out of fund assets and that cannot be recovered from the redeeming investors. Fourth, the inflated NAV caused Ironside to file misstated regulatory filings with the SEC, including Form PF and Form ADV, exposing Ironside to potential regulatory sanctions. Fifth, three limited partner arbitrations are currently pending against Ironside, and Ironside has incurred investor litigation defense costs of approximately $6.1 million to date. The totality of these consequences is attributable to Vantor's systematic misconduct and is the subject of the damages analysis prepared by Kessler Forensic Accounting Group PC.
discovery of the Fraud and Termination
18. The discovery of Vantor's misvaluation began in July 2023, when Ironside's Chief Financial Officer, Rajiv Subramanian, identified a discrepancy of $12.6 million between Vantor's marks on seven CLO equity positions as of the second quarter of 2023 and independent price indications obtained from Ironside's prime broker, Northpoint Securities LLC. The Northpoint pricing indications were provided by Dana Crossley, the relationship manager for the Ironside account, in the ordinary course of Northpoint's prime brokerage services. A copy of the relevant Northpoint pricing indications is attached hereto as Exhibit N. Upon identifying this discrepancy, Mr. Subramanian immediately escalated the matter to Ironside's Chief Investment Officer, Elliot Brennan, and to Calderwood & Harkness LLP. On August 4, 2023, Ironside sent a written inquiry to Nathan Orris at Vantor, requesting complete supporting documentation — including broker quotes, model documentation, and internal pricing memoranda — for twenty-three (23) positions across the three funds that had been flagged for further review. A true and correct copy of the August 4, 2023 written inquiry is attached hereto as Exhibit L.
19. Vantor's response to the August 4, 2023 inquiry was materially incomplete and evasive. On August 18, 2023, Vantor provided pricing packages for only nine (9) of the twenty-three (23) positions for which documentation had been requested. No internal model documentation was produced. No explanation was provided for the failure to produce documentation for the remaining fourteen positions. A true and correct copy of Vantor's August 18, 2023 response is attached hereto as Exhibit M. The inadequacy of Vantor's response heightened Ironside's concern and prompted it to retain an independent valuation firm. On September 5, 2023, Ironside retained Harmon-Bryce Valuation Advisors LLC, led by Dr. Lena Galbraith, CFA, ASA, to conduct a comprehensive independent re-pricing of all Level 3 positions across the three funds for the period Q1 2021 through Q2 2023. On September 22, 2023, Harmon-Bryce delivered its preliminary findings (Reference: HBVA-2023-0922-IRON), which identified an aggregate overvaluation of approximately $287 million across forty-seven (47) positions. A summary of the Harmon-Bryce preliminary report is attached hereto as Exhibit G.
20. Upon receipt of the Harmon-Bryce preliminary findings, Ironside acted promptly to terminate the FAA and transition its fund administration operations. On October 3, 2023, Ironside issued a Notice of Termination for Cause to Vantor under FAA § 12.2, effective immediately, citing material breach of the FAA and fraud as the grounds for termination. A true and correct copy of the Notice of Termination for Cause is attached hereto as Exhibit I. On October 10, 2023, Ironside completed the transition of all fund administration services to Meridian Investor Services LLC, led by CEO Anne-Claire Dupont, at 2 Stamford Plaza, 281 Tresser Boulevard, Suite 600, Stamford, Connecticut 06901. Meridian has served as Ironside's fund administrator since that date.
PRE-SUIT DEMAND AND MEDIATION
21. On November 15, 2023, Calderwood & Harkness LLP, on behalf of Ironside, sent a formal demand letter to Vantor Holdings Corp. at its principal offices, with a copy to Vantor's counsel, Whitfield, Dane & Corcoran LLP (attention: Gregory Dane). The demand letter set forth the basis for Ironside's claims in detail, including the findings of the Harmon-Bryce independent re-pricing analysis, and demanded payment of $287 million in compensatory damages, plus consequential damages, arising from Vantor's fraud and material breach of the FAA. The demand letter reserved all of Ironside's rights and remedies at law and in equity, including the right to seek punitive damages. A true and correct copy of the November 15, 2023 demand letter is attached hereto as Exhibit J.
22. On December 20, 2023, Whitfield, Dane & Corcoran LLP responded on behalf of Vantor, denying all allegations of fraud and misvaluation. The response asserted, among other things, that the contractual liability cap set forth in FAA § 9.3 limited Vantor's aggregate exposure to $2.98 million, and that any claims in excess of that amount were barred by the plain terms of the FAA. The response further asserted that Vantor's valuation methodology had at all times been reasonable and consistent with industry standards. A true and correct copy of the December 20, 2023 response letter from Whitfield, Dane & Corcoran LLP is attached hereto as Exhibit K.
23. Prior to commencing this action, Calderwood & Harkness LLP obtained pre-suit discovery of Vantor internal email archives held by DataVault Solutions Inc., located at 14 Commerce Drive, Cranford, New Jersey 07016, which served as Vantor's third-party email archiving and data retention provider. This pre-suit discovery was obtained pursuant to CPLR § 3102(c), which authorizes pre-action disclosure to aid in bringing an action, to preserve information, and to identify proper parties. The Vantor internal emails obtained through this pre-suit discovery, excerpts of which are attached as Exhibit F, constitute critical evidence of the knowledge and intent of Vantor's valuation personnel, including Nathan Orris and Deepa Rajaram, with respect to the inflated marks.
24. Following the exchange of the demand and response letters, the parties engaged in pre-suit mediation at Brookstone ADR Services LLC, Reference Number BADR-2024-00391, before the Honorable Sandra Kwan (Ret.). Mediation sessions were conducted at various intervals between March 2024 and December 6, 2024. Despite good-faith efforts by Ironside to reach a negotiated resolution, mediation terminated on December 6, 2024, without resolution, at which point Ironside determined to commence this action. The Verified Complaint was filed on January 21, 2025. Excerpts of the Verified Complaint are attached hereto as Exhibit E.
KESSLER DAMAGES ANALYSIS
25. In connection with the preparation of this action, Calderwood & Harkness LLP retained Kessler Forensic Accounting Group PC, led by Martin Kessler, CPA/CFF, with offices at 100 Wall Street, Suite 2001, New York, New York 10005, to quantify the damages sustained by Ironside and its fund investors as a result of Vantor's misvaluation. Mr. Kessler and his team conducted a comprehensive forensic accounting analysis of the overvaluation, its financial consequences, and the resulting damages across all categories of loss. Kessler finalized his damages report on January 10, 2025 (Reference: KF-2025-0110-ICM).
26. The Kessler damages report identifies the following categories and amounts of damages:
(a) Direct losses (aggregate overvaluation of the forty-seven affected positions across the three funds): $287,000,000;
(b) Investor redemption overpayments (217 redemptions processed at inflated NAV during the misvaluation period, resulting in excess distributions to redeeming limited partners from fund assets): $43,200,000;
(c) Excess management fees (management fees collected by Ironside at 1.5% of inflated NAV, subject to disgorgement to affected investors): $4,300,000;
(d) Regulatory remediation costs (costs incurred by Ironside in connection with the correction of misstated regulatory filings, including amended Form PF and Form ADV filings, and related compliance costs): $2,800,000;
(e) Investor litigation defense costs (costs incurred by Ironside in defending three pending limited partner arbitrations arising from the misvaluation): $6,100,000; and
(f) Estimated reputational and AUM loss (approximately $860 million in investor outflows attributable to the reputational harm caused by the disclosure of the misvaluation, capitalized to reflect the lost value of the management fee stream): $38,600,000.
The approximate total claimed damages, across all categories, are approximately $382,000,000. The Verified Complaint conservatively seeks $287 million in compensatory damages and $50 million in consequential damages, in addition to punitive damages in an amount to be determined at trial.
27. A summary of the Kessler Forensic Accounting Group PC damages report (Reference: KF-2025-0110-ICM) is attached hereto as Exhibit H.
THE EXHIBITS WARRANT DENIAL OF THE MOTION
28. The Fraud Claims Are Not Duplicative and Satisfy CPLR § 3016(b). Vantor's contention that Ironside's fraud claims are duplicative of the breach of contract claim and fail to satisfy the heightened particularity requirement of CPLR § 3016(b) is squarely contradicted by the documentary record. The Vantor internal emails attached as Exhibit F demonstrate, in the words of Vantor's own personnel, that Nathan Orris and Deepa Rajaram had actual knowledge that the reported marks on the affected positions were inflated and that they affirmatively concealed this knowledge from Ironside. The emails identify, with unmistakable specificity, the dates on which particular valuations were discussed, the specific positions that were identified as overvalued, the specific dollar amounts by which the marks exceeded supportable values, and the specific personnel who participated in the decision to report inflated marks. This evidence satisfies the "who, what, when, where, and how" requirements that CPLR § 3016(b) imposes on fraud claims. Moreover, the fraud claims are legally and factually distinct from the breach of contract claim. The fraud claims allege intentional deception, active concealment of known misvaluations, and scienter — elements that are wholly independent of, and go far beyond, a mere failure to perform contractual obligations. As this Court is well aware, a breach of contract claim sounds in a party's failure to perform a contractual undertaking, whereas a fraud claim sounds in a party's intentional misrepresentation or concealment that induces reliance and causes injury. These are fundamentally different legal theories, supported by different factual predicates, and both are properly pled.
29. Fiduciary Duty Arises from Vantor's Discretionary Valuation Role. Vantor's argument that it is merely a "service provider" and therefore owes no fiduciary duty to Ironside ignores the nature and scope of the duties it assumed under the FAA. Section 4.2 of the FAA vested Vantor with independent discretion over the pricing and valuation of Level 2 and Level 3 assets — precisely the types of illiquid and hard-to-value instruments that required the exercise of professional judgment, the application of complex valuation methodologies, and the selection among competing pricing inputs. This was not a ministerial role. Vantor was not simply transcribing numbers provided by third parties; it was exercising judgment-based discretionary authority over asset valuations that directly determined the NAV reported to investors, the management fees calculated on the basis of that NAV, the performance allocations assessed against fund assets, and the prices at which redeeming investors were paid. The FAA and the Ironside Valuation Policy, v.3.2 (Exhibit D), together confirm that Vantor was charged with the exercise of independent professional judgment in arriving at fair value determinations. Where a party assumes such discretionary authority over matters of critical financial importance to another, the relationship gives rise to fiduciary obligations as a matter of law, regardless of the label that the parties may have placed on the relationship.
30. The Liability Cap (§ 9.3) Is Unenforceable as to Claims for Fraud and Willful Misconduct. Vantor's reliance on the contractual liability cap of $2.98 million in FAA § 9.3 as a complete defense to this action is misplaced as a matter of law and as a matter of contract interpretation. Under settled New York law, a contractual limitation of liability cannot insulate a party from the consequences of its own fraud or willful misconduct. Public policy precludes enforcement of such limitations where the wrongdoer's conduct is intentional and where enforcement would effectively immunize fraud. Moreover, the text of the FAA itself requires a different result. Section 9.1 — the indemnification provision — specifically obligates Vantor to indemnify Ironside for losses arising from "negligence, fraud, willful misconduct, or material breach of this Agreement." Section 9.1 does not limit the indemnification for fraud and willful misconduct to the cap set forth in Section 9.3. The two provisions must be read harmoniously. To apply the Section 9.3 cap to claims for fraud and willful misconduct would render the indemnification obligation in Section 9.1 — insofar as it covers fraud and willful misconduct — wholly illusory. Under well-established principles of contract interpretation, a construction that would render a material provision meaningless is to be avoided. Ironside respectfully submits that the liability cap applies, at most, to claims sounding in negligence and ordinary breach, and has no application to the fraud and willful misconduct at issue here.
31. Unjust Enrichment Is Properly Pled in the Alternative. Vantor's argument that the unjust enrichment claim must be dismissed because an express contract exists between the parties disregards the well-established principle that alternative and inconsistent pleading is permitted under CPLR § 3014. Ironside has pled its unjust enrichment claim in the alternative, as it is entitled to do. Vantor's own motion illustrates precisely why alternative pleading is appropriate here: Vantor has argued, on the one hand, that the FAA limits its liability to $2.98 million, and on the other hand, that the existence of the FAA precludes any quasi-contractual recovery. In the event that this Court determines that the contractual claims are in some respect deficient — for example, because of the liability cap — Ironside is entitled to pursue its unjust enrichment claim as an alternative basis for recovery. Dismissal of the unjust enrichment claim at this stage would be premature and would unfairly prejudice Ironside.
32. The Economic Loss Doctrine Does Not Bar Intentional Tort Claims. Vantor's invocation of the economic loss doctrine is equally unavailing. The economic loss doctrine, which precludes recovery in tort for purely economic losses that are the subject of a contractual relationship, is not without exception. New York courts have consistently held that the economic loss doctrine does not bar claims sounding in fraud or intentional tort. The rationale is straightforward: fraud involves a species of wrongdoing that is categorically different from a breach of contract, and the policy interests served by tort law's remediation of fraud — including the availability of punitive damages and the deterrence of intentional misconduct — are not subordinated merely because the parties also happen to have a contractual relationship. In addition, the "special relationship" and "misrepresentation" exceptions to the economic loss doctrine apply with particular force to the relationship between Vantor and Ironside. Vantor was an independent valuation agent charged with the exercise of professional judgment in reporting fair values to Ironside and, through Ironside, to its investors and regulators. The special trust and reliance inherent in that relationship place Ironside squarely within the recognized exceptions to the economic loss doctrine.
33. The correspondence exchanged between the parties further supports the denial of Vantor's motion. The August 4, 2023 written inquiry from Ironside (through CFO Rajiv Subramanian) to Nathan Orris at Vantor (attached as Exhibit L) demonstrates that Ironside made a specific and detailed request for supporting documentation for twenty-three (23) positions upon identifying the initial pricing discrepancies. Vantor's materially incomplete August 18, 2023 response (attached as Exhibit M) — which provided documentation for only nine of the twenty-three positions and offered no explanation for the omission of the remaining fourteen — is itself evidence of Vantor's concealment and evasion. A party with nothing to hide does not respond to a detailed documentation request with a partial and unexplained production. In addition, the Notice of Termination for Cause dated October 3, 2023 (attached as Exhibit I) establishes that Ironside acted promptly and decisively upon discovering the full scope of the misvaluation, terminating the FAA for cause and transitioning to a replacement administrator within one week.
34. Finally, the expert reports further support the plausibility and specificity of the Verified Complaint's allegations and the magnitude of the damages claimed. The Harmon-Bryce Valuation Advisors LLC summary (attached as Exhibit G) provides the independent, third-party valuation analysis that identified the forty-seven mispriced positions and quantified the aggregate overvaluation at approximately $287 million. The Kessler Forensic Accounting Group PC summary (attached as Exhibit H) provides the comprehensive damages analysis, including the identification and quantification of direct losses, redemption overpayments, regulatory remediation costs, investor litigation defense costs, and reputational harm. Together, these expert reports provide the factual and quantitative foundation for the damages claimed in the Verified Complaint and establish that Ironside's allegations are far more than mere conclusory assertions — they are supported by substantial, documented evidence.
35. For the foregoing reasons, and for the reasons more fully set forth in Plaintiff's accompanying Memorandum of Law, the documentary record conclusively establishes that each of Ironside's seven causes of action is well-pled, particularized, and supported by substantial evidence. Vantor's Motion to Dismiss is without merit and should be denied in its entirety.
EXHIBIT LIST
36. The following fourteen (14) exhibits are attached hereto and incorporated by reference into this Affirmation:
PRAYER FOR RELIEF
37. Based upon the foregoing facts and the documents annexed hereto as Exhibits A through N, and for the reasons more fully set forth in Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss, plaintiff Ironside Capital Management LP respectfully requests that this Court enter an order:
(a) Denying Vantor Holdings Corp.'s Motion to Dismiss in its entirety;
(b) Directing Vantor Holdings Corp. to serve and file an answer to the Verified Complaint within twenty (20) days of the date of the Court's order; and
(c) In the alternative, to the extent this Court finds any cause of action deficiently pled, granting Ironside Capital Management LP leave to replead pursuant to CPLR § 3211(e).
Ironside further respectfully requests such other and further relief as this Court deems just and proper.
I affirm under the penalties of perjury that the foregoing is true and correct.
Dated: March 21, 2025 New York, New York
CALDERWOOD & HARKNESS LLP
By: ________
Yuki Nakamura Associate 51 West 52nd Street, 40th Floor New York, New York 10019 Telephone: (212) 558-4000 Facsimile: (212) 558-4001
Email: ynakamura@calderwoodharkness.com
Attorney Affirmation pursuant to CPLR § 2106 — notarization not required for attorneys admitted to practice in the State of New York.
Exhibit | Description | Date
A | Master Fund Administration Agreement (FAA) between Ironside Capital Management LP and Vantor Holdings Corp. (Ref: VHC-ICM-2017-0615) | June 15, 2017
B | First Amendment to FAA (addition of Fund III — Ironside Special Situations Fund LP) | March 1, 2019
C | Second Amendment to FAA (auto-renewal confirmation and fee adjustment from 4.0 bps to 4.5 bps) | June 10, 2022
D | Ironside Valuation Policy, v.3.2 (excerpts relevant to Level 3 asset waterfall procedures) | Effective January 1, 2020
E | Verified Complaint, Ironside Capital Management LP v. Vantor Holdings Corp., Index No. 650312/2025 (excerpts) | January 21, 2025
F | Vantor internal emails — excerpts obtained via pre-suit subpoena to DataVault Solutions Inc. pursuant to CPLR § 3102(c), documenting Nathan Orris and Deepa Rajaram's knowledge of inflated marks | Various dates, Q1 2021 – Q3 2023
G | Summary of Harmon-Bryce Valuation Advisors LLC preliminary report (Ref: HBVA-2023-0922-IRON): identification of 47 mispriced positions, aggregate $287M overvaluation, methodology | September 22, 2023
H | Summary of Kessler Forensic Accounting Group PC damages report (Ref: KF-2025-0110-ICM): direct losses, redemption overpayments, regulatory costs, litigation defense costs, reputational harm | January 10, 2025
I | Notice of Termination for Cause from Ironside Capital Management LP to Vantor Holdings Corp. under FAA § 12.2 | October 3, 2023
J | Demand Letter from Calderwood & Harkness LLP to Vantor Holdings Corp. (cc: Whitfield, Dane & Corcoran LLP) | November 15, 2023
K | Response letter from Whitfield, Dane & Corcoran LLP on behalf of Vantor Holdings Corp. | December 20, 2023
L | Written inquiry from Ironside (Rajiv Subramanian, CFO) to Nathan Orris at Vantor requesting supporting documentation for 23 positions | August 4, 2023
M | Vantor's materially incomplete response to Ironside inquiry (providing only 9 of 23 requested pricing packages; no internal model documentation produced) | August 18, 2023
N | Northpoint Securities LLC independent pricing indications for Q2 2023 CLO equity positions (7 positions showing $12.6M discrepancy from Vantor marks) | July 2023