1023-00002 · Ironside Capital Management LP · Pre-Suit Correspondence

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CALDERWOOD & HARKNESS LLP Attorneys at Law

51 West 52nd Street, 40th Floor New York, New York 10019

Telephone: (212) 506-7000 Facsimile: (212) 506-7001 www.calderwoodharkness.com

January 22, 2024

VIA EMAIL (gdane@whitfielddane.com) AND FIRST CLASS MAIL

Gregory Dane, Esq. Whitfield, Dane & Corcoran LLP 200 South Biscayne Boulevard, Suite 3600 Miami, FL 33131

Re: Ironside Capital Management LP v. Vantor Holdings Corp. — Pre-Suit discovery of Vantor Internal Communications; Master Fund Administration Agreement (Ref. No. VHC-ICM-2017-0615, dated June 15, 2017) (Pre-Litigation Matter)

Dear Mr. Dane:

I. Purpose and Background

We write on behalf of our client, Ironside Capital Management LP ("Ironside" or "ICM"), a Delaware limited partnership with principal offices at 680 Park Avenue, 34th Floor, New York, NY 10065. Calderwood & Harkness LLP represents Ironside in connection with claims arising from the systematic misvaluation of illiquid credit and structured-product positions by Vantor Holdings Corp. ("Vantor") 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.

As you are aware, this firm transmitted a detailed demand letter dated November 15, 2023, addressed to Vantor and copied to your firm, in which Ironside asserted claims of fraud and material breach of the Master Fund Administration Agreement between Vantor and Ironside (Ref. No. VHC-ICM-2017-0615, dated June 15, 2017) (the "FAA"). That demand letter set forth the factual bases for Ironside's claims in substantial detail and demanded compensatory damages in the amount of Two Hundred Eighty-Seven Million Dollars ($287,000,000), together with consequential damages, attorneys' fees, and all other relief available at law and in equity.

On December 20, 2023, your firm responded on behalf of Vantor, denying all allegations of wrongdoing and asserting that the contractual liability cap set forth in Section 9.3 of the FAA limits Vantor's aggregate exposure to Two Million Nine Hundred Eighty Thousand Dollars ($2,980,000). We note that Vantor's response did not address the substantive factual allegations raised in our November 15, 2023 demand letter with any specificity, nor did it include any production of the internal communications and documentation that Ironside had previously requested.

Ironside does not accept Vantor's denial of the allegations set forth in our prior correspondence. Ironside continues to preserve and assert all claims, remedies, and rights against Vantor, and no aspect of this letter should be construed as a limitation or waiver thereof. The purpose of this letter is to provide your client with advance notice of Ironside's intent to pursue pre-suit discovery of Vantor's internal communications and to extend a professional courtesy by inviting voluntary cooperation before court intervention becomes necessary.

II. Notice of Intent to Seek Pre-Suit discovery Under CPLR § 3102(c)

Ironside hereby gives formal notice of its intent to seek pre-suit disclosure pursuant to Section 3102(c) of the New York Civil Practice Law and Rules ("CPLR"), which provides that a court may authorize disclosure before an action is commenced to aid in bringing an action, to preserve information, or to identify the proper parties to a potential litigation. We note that while Ironside has not yet filed a formal complaint in this matter, the preparation of a comprehensive pleading is well advanced and Ironside anticipates commencing litigation in the near term. The pre-suit discovery sought herein is intended both to preserve critical evidence and to aid in the identification of the full scope of Vantor's misconduct and the individuals responsible for it.

Specifically, Ironside intends to petition the New York Supreme Court, New York County, for an order directing pre-suit discovery of Vantor email archives and related electronic communications currently maintained by DataVault Solutions Inc. ("DataVault"), a New Jersey corporation located at 14 Commerce Drive, Cranford, NJ 07016. It is Ironside's understanding that DataVault serves as the third-party email archive and e-discovery vendor retained by Vantor for the purpose of maintaining, storing, and managing Vantor's electronic communications, including those of its valuation services personnel.

The pre-suit subpoena that Ironside intends to serve upon DataVault will seek the production of Vantor internal emails and electronic communications for the period spanning the first quarter of 2021 through October 2023 — a period encompassing the entirety of the identified misvaluation period through the effective termination of the FAA. The categories of communications sought include, but are not limited to, the following:

(a) Communications among Nathan Orris (Senior Vice President, Valuation Services), Deepa Rajaram (Vice President, Client Valuation Operations), and other Vantor personnel involved in the valuation of Ironside portfolio positions, including any members of Vantor's Pricing Committee, valuation analysts, and quality assurance staff assigned to the Ironside account;

(b) Communications referencing, discussing, or otherwise relating to the forty-seven (47) illiquid credit and structured-product positions at issue, including without limitation CLO equity tranches, bespoke CDO mezzanine notes, and distressed loan participations held by Fund I, Fund II, and Fund III;

(c) Communications discussing, referencing, or relating to broker quotes, pricing methodologies, model adjustments, valuation inputs, mark-to-model procedures, override approvals, and any identified or acknowledged valuation discrepancies with respect to Ironside positions;

(d) Communications between Vantor valuation personnel and Vantor senior management, including Raymond Kettler (Chief Executive Officer and Chairman), Susan Hargrove (President and Chief Operating Officer), and Timothy Falk (Chief Financial Officer), to the extent such communications relate to the valuation of Ironside portfolio positions, the Ironside client relationship, or the matters raised in Ironside's August 4, 2023 inquiry and subsequent correspondence; and

(e) Communications referencing, discussing, or otherwise relating to Ironside's August 4, 2023 written inquiry to Nathan Orris, in which Ironside requested supporting documentation for twenty-three (23) positions, and Vantor's August 18, 2023 response — a response that was materially incomplete, providing pricing packages for only nine (9) of the twenty-three (23) requested positions and failing entirely to produce any internal model documentation, override approvals, or pricing methodology memoranda.

The foregoing categories are illustrative and not exhaustive. Ironside reserves the right to expand the scope of the pre-suit subpoena as additional information becomes available.

III. Basis for Pre-Suit discovery

Ironside has substantial grounds to believe that Vantor's internal communications will establish the following:

(a) Vantor's valuation team routinely used stale broker quotes — in many cases six to twelve months old — as the purported basis for marks on illiquid positions held by the Ironside funds, without disclosing the age or provenance of such quotes to Ironside or noting their staleness in any valuation reporting provided to the funds;

(b) Vantor applied internally generated "model adjustments" to the marks on Ironside positions that had the effect of inflating those marks by an average of 14.3% above observable market inputs, including dealer indications, comparable transaction data, and index-derived pricing, and that such adjustments were neither disclosed to Ironside nor authorized under the applicable valuation framework;

(c) Vantor failed to apply the contractually required waterfall valuation procedures mandated by the Ironside Valuation Policy (Version 3.2, effective January 1, 2020) and Section 4.2 of the FAA, which together require a hierarchical approach to valuation beginning with binding dealer quotes, followed by indicative quotes from at least two independent sources, followed by model-based valuation only where market inputs are genuinely unavailable, and with each step requiring contemporaneous documentation and client notification; and

(d) Vantor personnel, including but not limited to Nathan Orris and Deepa Rajaram, were aware that the marks assigned to Ironside positions were inflated relative to available market data and internal quality control benchmarks, and that such personnel actively concealed internal communications documenting this awareness from Ironside and from Ironside's subsequent inquiries.

These conclusions are supported by the preliminary expert report of Harmon-Bryce Valuation Advisors LLC, dated September 22, 2023 (Reference No. HBVA-2023-0922-IRON), prepared under the direction of Dr. Lena Galbraith, CFA, ASA. Dr. Galbraith's analysis identified forty-seven (47) mispriced positions across the three Ironside funds and determined an aggregate overvaluation of approximately $287 million, allocated as follows: $156.4 million attributable to Fund I, $88.7 million attributable to Fund II, and $41.9 million attributable to Fund III. The Harmon-Bryce report employed multiple independent valuation methodologies, including discounted cash flow analysis, comparable transaction analysis, and dealer mark reconciliation, and found that Vantor's reported marks consistently and substantially exceeded fair value across all three approaches.

Ironside's concerns regarding Vantor's valuation practices were first identified internally in July 2023, when Ironside's Chief Financial Officer, Rajiv Subramanian, detected a $12.6 million discrepancy between Vantor's marks on seven CLO equity positions for the second quarter of 2023 and independent price indications obtained from Northpoint Securities LLC, Ironside's prime broker. This discrepancy was material in both absolute dollar terms and as a percentage of reported net asset value and prompted Ironside's August 4, 2023 inquiry to Vantor, as described herein.

The Harmon-Bryce report further concluded that the peak single-quarter overvaluation occurred in the fourth quarter of 2022, when the aggregate overvaluation across all three funds reached approximately $52.3 million. During the full period of misvaluation, net asset value per unit was overstated by amounts ranging from approximately 3.8% in the first quarter of 2021 to approximately 8.6% in the fourth quarter of 2022. These are not marginal discrepancies; they represent a pervasive and sustained pattern of material misvaluation that directly impacted investor capital accounts, management fee calculations, incentive fee allocations, and redemption pricing across all three Ironside feeder funds.

The pre-suit discovery sought herein is necessary to preserve evidence that may be at risk of destruction, alteration, or loss, and to identify the full scope of Vantor's misconduct, the individuals involved at each level of the organization, and the nature and extent of any concealment or obstruction. Given the volume of electronic communications likely at issue and the involvement of a third-party custodian, early action to secure and preserve these materials is imperative.

IV. Vantor's Prior Failure to Provide Adequate Documentation

Ironside's efforts to obtain relevant documentation from Vantor through voluntary channels have been met with obstruction and material noncompliance. The chronology of events is as follows:

On August 4, 2023, Ironside, acting through its Chief Financial Officer, Rajiv Subramanian, transmitted a formal written inquiry to Nathan Orris at Vantor requesting complete supporting documentation for twenty-three (23) positions across the three Ironside funds. The request specifically sought broker quote logs, internal valuation models, model adjustment memoranda, override approvals, and all communications between Vantor valuation personnel relating to the pricing of the identified positions.

On August 18, 2023, Vantor responded through Mr. Orris. That response was materially incomplete and inadequate. Vantor provided pricing packages for only nine (9) of the twenty-three (23) positions identified in Ironside's inquiry — fewer than forty percent of the positions at issue — and failed entirely to produce any internal model documentation, model adjustment memoranda, override approval records, or internal communications. No explanation was offered for the omission of the remaining fourteen (14) positions, and no timeline was provided for supplemental production. Ironside made repeated follow-up inquiries in the weeks that followed, none of which yielded any additional documentation.

In light of Vantor's continued failure to provide the requested documentation and the mounting evidence of systematic misvaluation, Ironside terminated the FAA for cause on October 3, 2023, pursuant to Section 12.2 of the FAA, citing material breach and fraud. The termination was effective immediately. Fund administration for all three Ironside feeder funds was transitioned to Meridian Investor Services LLC (Chief Executive Officer: Anne-Claire Dupont) on October 10, 2023, and Meridian has served as the funds' administrator since that date.

Despite the issuance of our November 15, 2023 demand letter, which reiterated Ironside's request for the production of all internal communications and model documentation relating to the Ironside account, and despite your firm's December 20, 2023 response on behalf of Vantor, Vantor has not produced any of the internal communications, model documentation, or other materials previously requested by Ironside. The complete absence of any voluntary production — now more than five months after Ironside's initial inquiry and more than two months after our formal demand — underscores the inadequacy of Vantor's voluntary cooperation and necessitates recourse to compulsory process.

V. Professional Courtesy and Invitation to Confer

As a matter of professional courtesy, and consistent with the expectations of practice in this jurisdiction, Ironside is providing your firm with advance notice of its intent to file a petition under CPLR § 3102(c) before seeking court intervention. Ironside recognizes that pre-suit discovery is an extraordinary remedy and believes that the interests of both parties would be better served by a consensual resolution of the discovery issues outlined herein.

Accordingly, Ironside invites Vantor, through Whitfield, Dane & Corcoran LLP, to voluntarily produce the email archives and internal communications described in Section II of this letter. A voluntary production would obviate the need for a court petition and the issuance of a subpoena to DataVault Solutions Inc., and would allow both parties to engage in a structured and efficient exchange of information without the attendant costs and delays of motion practice.

If Vantor is willing to agree to a voluntary production, Ironside proposes that counsel for both parties confer within fourteen (14) calendar days of the date of this letter — that is, on or before February 5, 2024 — to negotiate and agree upon the scope, format, timing, and any reasonable confidentiality protections applicable to such production. Ironside is prepared to enter into a reasonable confidentiality agreement or protective order to govern the treatment of produced materials, and to discuss the use of targeted search terms, date ranges, and custodian lists to minimize the burden of production on Vantor while ensuring the preservation and disclosure of all relevant communications.

Absent an agreement for voluntary production by February 5, 2024, Ironside intends to file its petition under CPLR § 3102(c) promptly thereafter, together with a proposed order and subpoena directed to DataVault Solutions Inc. Ironside will also seek such other and further relief as the court may deem just and appropriate under the circumstances.

VI. Document Preservation Demand

Ironside hereby reiterates and supplements its demand — previously communicated in our November 15, 2023 demand letter — that Vantor immediately take all steps necessary to preserve all documents and electronically stored information ("ESI") relevant to the Ironside account and the matters described herein. This preservation obligation is ongoing and applies to all forms of documents and ESI, whether stored electronically or in hard copy, and regardless of whether such materials are maintained by Vantor directly or by any third-party custodian, vendor, cloud service provider, or data repository.

Without limiting the generality of the foregoing, this preservation obligation extends specifically to all records maintained by DataVault Solutions Inc. and any other custodians, vendors, or repositories holding Vantor communications or data relating to Ironside, including but not limited to backup tapes, archival media, and disaster recovery systems.

Ironside specifically demands the preservation of the following categories of materials:

(a) All emails, instant messages, text messages, chat logs, and other electronic communications of Nathan Orris, Deepa Rajaram, Raymond Kettler, Susan Hargrove, Timothy Falk, and any other Vantor employee or contractor involved in or with knowledge of Ironside portfolio valuations during the period from the first quarter of 2021 through the third quarter of 2023;

(b) All internal valuation models, pricing spreadsheets, mark-to-model templates, broker quote logs, dealer indication records, model adjustment documentation, override approval records, and any other documentation relating to the valuation of positions held by Fund I, Fund II, or Fund III during the relevant period; and

(c) All quality control records, supervisory review logs, exception reports, escalation records, compliance review memoranda, and internal audit materials relating to Ironside positions or the Ironside account during the relevant period.

Ironside expects Vantor to issue immediate litigation hold notices to all relevant custodians and to take affirmative steps to prevent the destruction, alteration, overwriting, or deletion of any potentially relevant materials. This includes, without limitation, the suspension of any automatic deletion policies, data retention schedules, or archival purge routines that might result in the loss of relevant ESI.

Ironside puts Vantor on notice that any spoliation, destruction, alteration, or failure to preserve relevant evidence will be brought to the attention of the court and that Ironside will seek all available sanctions, including adverse inference instructions, monetary sanctions, and such other relief as may be warranted under the circumstances.

VII. Reservation of Rights

Nothing in this letter shall be construed as a waiver, limitation, or release of any of Ironside's claims, remedies, or rights against Vantor or any other party, whether arising under the FAA, at common law, or under any applicable statute or regulation. Ironside expressly reserves, and does not waive, all claims and causes of action it may have or hereafter assert, including but not limited to claims for:

(a) Fraud;

(b) Fraudulent concealment;

(d) Breach of contract (including breach of the FAA and the Ironside Valuation Policy incorporated therein);

(e) Breach of fiduciary duty;

(f) Aiding and abetting fraud;

(g) Unjust enrichment; and

(h) Any other claims or causes of action that may arise from the facts and circumstances described herein or that may be revealed through the discovery process.

Ironside further expressly reserves the right to seek compensatory damages, consequential damages, punitive damages, pre-judgment and post-judgment interest, attorneys' fees and costs of litigation pursuant to Section 9.4 of the FAA, and all other relief to which Ironside may be entitled at law or in equity.

As stated in our November 15, 2023 demand letter, Ironside reiterates its position that the contractual liability cap set forth in Section 9.3 of the FAA is unenforceable as applied to claims of fraud and willful misconduct. It is well established under New York law that contractual limitations on liability do not shield a party from the consequences of its own fraud, and Ironside intends to challenge the enforceability of Section 9.3 in any judicial proceeding.

VIII. Request for Response

Ironside requests that Whitfield, Dane & Corcoran LLP provide a written response to this letter on or before February 5, 2024, indicating whether Vantor will agree to voluntary production of the email archives and internal communications described herein, or whether Ironside should proceed with the filing of a petition under CPLR § 3102(c). If Vantor intends to propose any alternative framework for the production or preservation of relevant materials, Ironside requests that such proposal be included in your response.

All correspondence in this matter should be directed to the undersigned at the address below:

Yuki Nakamura, Esq. Calderwood & Harkness LLP 51 West 52nd Street, 40th Floor New York, NY 10019 Telephone: (212) 506-7142

Email: ynakamura@calderwoodharkness.com

We look forward to your prompt response.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Yuki Nakamura Partner Telephone: (212) 506-7142

Email: ynakamura@calderwoodharkness.com

cc (via email):

Samuel Eklund, Esq. (Calderwood & Harkness LLP) Linda Osei, Esq. (Calderwood & Harkness LLP) Katherine Lim, Esq. (General Counsel & Chief Compliance Officer, Ironside Capital Management LP) Elliot Brennan (Managing Partner & Chief Investment Officer, Ironside Capital Management LP)

CALDERWOOD & HARKNESS LLP Attorneys at Law
51 West 52nd Street, 40th Floor New York, New York 10019
Telephone: (212) 506-7000 Facsimile: (212) 506-7001 www.calderwoodharkness.com
January 22, 2024
VIA EMAIL (gdane@whitfielddane.com) AND FIRST CLASS MAIL
Gregory Dane, Esq. Whitfield, Dane & Corcoran LLP 200 South Biscayne Boulevard, Suite 3600 Miami, FL 33131
Re: Ironside Capital Management LP v. Vantor Holdings Corp. — Pre-Suit discovery of Vantor Internal Communications; Master Fund Administration Agreement (Ref. No. VHC-ICM-2017-0615, dated June 15, 2017) (Pre-Litigation Matter)
Dear Mr. Dane:
I. Purpose and Background
We write on behalf of our client, Ironside Capital Management LP ("Ironside" or "ICM"), a Delaware limited partnership with principal offices at 680 Park Avenue, 34th Floor, New York, NY 10065. Calderwood & Harkness LLP represents Ironside in connection with claims arising from the systematic misvaluation of illiquid credit and structured-product positions by Vantor Holdings Corp. ("Vantor") 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.
As you are aware, this firm transmitted a detailed demand letter dated November 15, 2023, addressed to Vantor and copied to your firm, in which Ironside asserted claims of fraud and material breach of the Master Fund Administration Agreement between Vantor and Ironside (Ref. No. VHC-ICM-2017-0615, dated June 15, 2017) (the "FAA"). That demand letter set forth the factual bases for Ironside's claims in substantial detail and demanded compensatory damages in the amount of Two Hundred Eighty-Seven Million Dollars ($287,000,000), together with consequential damages, attorneys' fees, and all other relief available at law and in equity.
On December 20, 2023, your firm responded on behalf of Vantor, denying all allegations of wrongdoing and asserting that the contractual liability cap set forth in Section 9.3 of the FAA limits Vantor's aggregate exposure to Two Million Nine Hundred Eighty Thousand Dollars ($2,980,000). We note that Vantor's response did not address the substantive factual allegations raised in our November 15, 2023 demand letter with any specificity, nor did it include any production of the internal communications and documentation that Ironside had previously requested.
Ironside does not accept Vantor's denial of the allegations set forth in our prior correspondence. Ironside continues to preserve and assert all claims, remedies, and rights against Vantor, and no aspect of this letter should be construed as a limitation or waiver thereof. The purpose of this letter is to provide your client with advance notice of Ironside's intent to pursue pre-suit discovery of Vantor's internal communications and to extend a professional courtesy by inviting voluntary cooperation before court intervention becomes necessary.
II. Notice of Intent to Seek Pre-Suit discovery Under CPLR § 3102(c)
Ironside hereby gives formal notice of its intent to seek pre-suit disclosure pursuant to Section 3102(c) of the New York Civil Practice Law and Rules ("CPLR"), which provides that a court may authorize disclosure before an action is commenced to aid in bringing an action, to preserve information, or to identify the proper parties to a potential litigation. We note that while Ironside has not yet filed a formal complaint in this matter, the preparation of a comprehensive pleading is well advanced and Ironside anticipates commencing litigation in the near term. The pre-suit discovery sought herein is intended both to preserve critical evidence and to aid in the identification of the full scope of Vantor's misconduct and the individuals responsible for it.
Specifically, Ironside intends to petition the New York Supreme Court, New York County, for an order directing pre-suit discovery of Vantor email archives and related electronic communications currently maintained by DataVault Solutions Inc. ("DataVault"), a New Jersey corporation located at 14 Commerce Drive, Cranford, NJ 07016. It is Ironside's understanding that DataVault serves as the third-party email archive and e-discovery vendor retained by Vantor for the purpose of maintaining, storing, and managing Vantor's electronic communications, including those of its valuation services personnel.
The pre-suit subpoena that Ironside intends to serve upon DataVault will seek the production of Vantor internal emails and electronic communications for the period spanning the first quarter of 2021 through October 2023 — a period encompassing the entirety of the identified misvaluation period through the effective termination of the FAA. The categories of communications sought include, but are not limited to, the following:
(a) Communications among Nathan Orris (Senior Vice President, Valuation Services), Deepa Rajaram (Vice President, Client Valuation Operations), and other Vantor personnel involved in the valuation of Ironside portfolio positions, including any members of Vantor's Pricing Committee, valuation analysts, and quality assurance staff assigned to the Ironside account;
(b) Communications referencing, discussing, or otherwise relating to the forty-seven (47) illiquid credit and structured-product positions at issue, including without limitation CLO equity tranches, bespoke CDO mezzanine notes, and distressed loan participations held by Fund I, Fund II, and Fund III;
(c) Communications discussing, referencing, or relating to broker quotes, pricing methodologies, model adjustments, valuation inputs, mark-to-model procedures, override approvals, and any identified or acknowledged valuation discrepancies with respect to Ironside positions;
(d) Communications between Vantor valuation personnel and Vantor senior management, including Raymond Kettler (Chief Executive Officer and Chairman), Susan Hargrove (President and Chief Operating Officer), and Timothy Falk (Chief Financial Officer), to the extent such communications relate to the valuation of Ironside portfolio positions, the Ironside client relationship, or the matters raised in Ironside's August 4, 2023 inquiry and subsequent correspondence; and
(e) Communications referencing, discussing, or otherwise relating to Ironside's August 4, 2023 written inquiry to Nathan Orris, in which Ironside requested supporting documentation for twenty-three (23) positions, and Vantor's August 18, 2023 response — a response that was materially incomplete, providing pricing packages for only nine (9) of the twenty-three (23) requested positions and failing entirely to produce any internal model documentation, override approvals, or pricing methodology memoranda.
The foregoing categories are illustrative and not exhaustive. Ironside reserves the right to expand the scope of the pre-suit subpoena as additional information becomes available.
III. Basis for Pre-Suit discovery
Ironside has substantial grounds to believe that Vantor's internal communications will establish the following:
(a) Vantor's valuation team routinely used stale broker quotes — in many cases six to twelve months old — as the purported basis for marks on illiquid positions held by the Ironside funds, without disclosing the age or provenance of such quotes to Ironside or noting their staleness in any valuation reporting provided to the funds;
(b) Vantor applied internally generated "model adjustments" to the marks on Ironside positions that had the effect of inflating those marks by an average of 14.3% above observable market inputs, including dealer indications, comparable transaction data, and index-derived pricing, and that such adjustments were neither disclosed to Ironside nor authorized under the applicable valuation framework;
(c) Vantor failed to apply the contractually required waterfall valuation procedures mandated by the Ironside Valuation Policy (Version 3.2, effective January 1, 2020) and Section 4.2 of the FAA, which together require a hierarchical approach to valuation beginning with binding dealer quotes, followed by indicative quotes from at least two independent sources, followed by model-based valuation only where market inputs are genuinely unavailable, and with each step requiring contemporaneous documentation and client notification; and
(d) Vantor personnel, including but not limited to Nathan Orris and Deepa Rajaram, were aware that the marks assigned to Ironside positions were inflated relative to available market data and internal quality control benchmarks, and that such personnel actively concealed internal communications documenting this awareness from Ironside and from Ironside's subsequent inquiries.
These conclusions are supported by the preliminary expert report of Harmon-Bryce Valuation Advisors LLC, dated September 22, 2023 (Reference No. HBVA-2023-0922-IRON), prepared under the direction of Dr. Lena Galbraith, CFA, ASA. Dr. Galbraith's analysis identified forty-seven (47) mispriced positions across the three Ironside funds and determined an aggregate overvaluation of approximately $287 million, allocated as follows: $156.4 million attributable to Fund I, $88.7 million attributable to Fund II, and $41.9 million attributable to Fund III. The Harmon-Bryce report employed multiple independent valuation methodologies, including discounted cash flow analysis, comparable transaction analysis, and dealer mark reconciliation, and found that Vantor's reported marks consistently and substantially exceeded fair value across all three approaches.
Ironside's concerns regarding Vantor's valuation practices were first identified internally in July 2023, when Ironside's Chief Financial Officer, Rajiv Subramanian, detected a $12.6 million discrepancy between Vantor's marks on seven CLO equity positions for the second quarter of 2023 and independent price indications obtained from Northpoint Securities LLC, Ironside's prime broker. This discrepancy was material in both absolute dollar terms and as a percentage of reported net asset value and prompted Ironside's August 4, 2023 inquiry to Vantor, as described herein.
The Harmon-Bryce report further concluded that the peak single-quarter overvaluation occurred in the fourth quarter of 2022, when the aggregate overvaluation across all three funds reached approximately $52.3 million. During the full period of misvaluation, net asset value per unit was overstated by amounts ranging from approximately 3.8% in the first quarter of 2021 to approximately 8.6% in the fourth quarter of 2022. These are not marginal discrepancies; they represent a pervasive and sustained pattern of material misvaluation that directly impacted investor capital accounts, management fee calculations, incentive fee allocations, and redemption pricing across all three Ironside feeder funds.
The pre-suit discovery sought herein is necessary to preserve evidence that may be at risk of destruction, alteration, or loss, and to identify the full scope of Vantor's misconduct, the individuals involved at each level of the organization, and the nature and extent of any concealment or obstruction. Given the volume of electronic communications likely at issue and the involvement of a third-party custodian, early action to secure and preserve these materials is imperative.
IV. Vantor's Prior Failure to Provide Adequate Documentation
Ironside's efforts to obtain relevant documentation from Vantor through voluntary channels have been met with obstruction and material noncompliance. The chronology of events is as follows:
On August 4, 2023, Ironside, acting through its Chief Financial Officer, Rajiv Subramanian, transmitted a formal written inquiry to Nathan Orris at Vantor requesting complete supporting documentation for twenty-three (23) positions across the three Ironside funds. The request specifically sought broker quote logs, internal valuation models, model adjustment memoranda, override approvals, and all communications between Vantor valuation personnel relating to the pricing of the identified positions.
On August 18, 2023, Vantor responded through Mr. Orris. That response was materially incomplete and inadequate. Vantor provided pricing packages for only nine (9) of the twenty-three (23) positions identified in Ironside's inquiry — fewer than forty percent of the positions at issue — and failed entirely to produce any internal model documentation, model adjustment memoranda, override approval records, or internal communications. No explanation was offered for the omission of the remaining fourteen (14) positions, and no timeline was provided for supplemental production. Ironside made repeated follow-up inquiries in the weeks that followed, none of which yielded any additional documentation.
In light of Vantor's continued failure to provide the requested documentation and the mounting evidence of systematic misvaluation, Ironside terminated the FAA for cause on October 3, 2023, pursuant to Section 12.2 of the FAA, citing material breach and fraud. The termination was effective immediately. Fund administration for all three Ironside feeder funds was transitioned to Meridian Investor Services LLC (Chief Executive Officer: Anne-Claire Dupont) on October 10, 2023, and Meridian has served as the funds' administrator since that date.
Despite the issuance of our November 15, 2023 demand letter, which reiterated Ironside's request for the production of all internal communications and model documentation relating to the Ironside account, and despite your firm's December 20, 2023 response on behalf of Vantor, Vantor has not produced any of the internal communications, model documentation, or other materials previously requested by Ironside. The complete absence of any voluntary production — now more than five months after Ironside's initial inquiry and more than two months after our formal demand — underscores the inadequacy of Vantor's voluntary cooperation and necessitates recourse to compulsory process.
V. Professional Courtesy and Invitation to Confer
As a matter of professional courtesy, and consistent with the expectations of practice in this jurisdiction, Ironside is providing your firm with advance notice of its intent to file a petition under CPLR § 3102(c) before seeking court intervention. Ironside recognizes that pre-suit discovery is an extraordinary remedy and believes that the interests of both parties would be better served by a consensual resolution of the discovery issues outlined herein.
Accordingly, Ironside invites Vantor, through Whitfield, Dane & Corcoran LLP, to voluntarily produce the email archives and internal communications described in Section II of this letter. A voluntary production would obviate the need for a court petition and the issuance of a subpoena to DataVault Solutions Inc., and would allow both parties to engage in a structured and efficient exchange of information without the attendant costs and delays of motion practice.
If Vantor is willing to agree to a voluntary production, Ironside proposes that counsel for both parties confer within fourteen (14) calendar days of the date of this letter — that is, on or before February 5, 2024 — to negotiate and agree upon the scope, format, timing, and any reasonable confidentiality protections applicable to such production. Ironside is prepared to enter into a reasonable confidentiality agreement or protective order to govern the treatment of produced materials, and to discuss the use of targeted search terms, date ranges, and custodian lists to minimize the burden of production on Vantor while ensuring the preservation and disclosure of all relevant communications.
Absent an agreement for voluntary production by February 5, 2024, Ironside intends to file its petition under CPLR § 3102(c) promptly thereafter, together with a proposed order and subpoena directed to DataVault Solutions Inc. Ironside will also seek such other and further relief as the court may deem just and appropriate under the circumstances.
VI. Document Preservation Demand
Ironside hereby reiterates and supplements its demand — previously communicated in our November 15, 2023 demand letter — that Vantor immediately take all steps necessary to preserve all documents and electronically stored information ("ESI") relevant to the Ironside account and the matters described herein. This preservation obligation is ongoing and applies to all forms of documents and ESI, whether stored electronically or in hard copy, and regardless of whether such materials are maintained by Vantor directly or by any third-party custodian, vendor, cloud service provider, or data repository.
Without limiting the generality of the foregoing, this preservation obligation extends specifically to all records maintained by DataVault Solutions Inc. and any other custodians, vendors, or repositories holding Vantor communications or data relating to Ironside, including but not limited to backup tapes, archival media, and disaster recovery systems.
Ironside specifically demands the preservation of the following categories of materials:
(a) All emails, instant messages, text messages, chat logs, and other electronic communications of Nathan Orris, Deepa Rajaram, Raymond Kettler, Susan Hargrove, Timothy Falk, and any other Vantor employee or contractor involved in or with knowledge of Ironside portfolio valuations during the period from the first quarter of 2021 through the third quarter of 2023;
(b) All internal valuation models, pricing spreadsheets, mark-to-model templates, broker quote logs, dealer indication records, model adjustment documentation, override approval records, and any other documentation relating to the valuation of positions held by Fund I, Fund II, or Fund III during the relevant period; and
(c) All quality control records, supervisory review logs, exception reports, escalation records, compliance review memoranda, and internal audit materials relating to Ironside positions or the Ironside account during the relevant period.
Ironside expects Vantor to issue immediate litigation hold notices to all relevant custodians and to take affirmative steps to prevent the destruction, alteration, overwriting, or deletion of any potentially relevant materials. This includes, without limitation, the suspension of any automatic deletion policies, data retention schedules, or archival purge routines that might result in the loss of relevant ESI.
Ironside puts Vantor on notice that any spoliation, destruction, alteration, or failure to preserve relevant evidence will be brought to the attention of the court and that Ironside will seek all available sanctions, including adverse inference instructions, monetary sanctions, and such other relief as may be warranted under the circumstances.
VII. Reservation of Rights
Nothing in this letter shall be construed as a waiver, limitation, or release of any of Ironside's claims, remedies, or rights against Vantor or any other party, whether arising under the FAA, at common law, or under any applicable statute or regulation. Ironside expressly reserves, and does not waive, all claims and causes of action it may have or hereafter assert, including but not limited to claims for:
(a) Fraud;
(b) Fraudulent concealment;
(c) Negligent misrepresentation;
(d) Breach of contract (including breach of the FAA and the Ironside Valuation Policy incorporated therein);
(e) Breach of fiduciary duty;
(f) Aiding and abetting fraud;
(g) Unjust enrichment; and
(h) Any other claims or causes of action that may arise from the facts and circumstances described herein or that may be revealed through the discovery process.
Ironside further expressly reserves the right to seek compensatory damages, consequential damages, punitive damages, pre-judgment and post-judgment interest, attorneys' fees and costs of litigation pursuant to Section 9.4 of the FAA, and all other relief to which Ironside may be entitled at law or in equity.
As stated in our November 15, 2023 demand letter, Ironside reiterates its position that the contractual liability cap set forth in Section 9.3 of the FAA is unenforceable as applied to claims of fraud and willful misconduct. It is well established under New York law that contractual limitations on liability do not shield a party from the consequences of its own fraud, and Ironside intends to challenge the enforceability of Section 9.3 in any judicial proceeding.
VIII. Request for Response
Ironside requests that Whitfield, Dane & Corcoran LLP provide a written response to this letter on or before February 5, 2024, indicating whether Vantor will agree to voluntary production of the email archives and internal communications described herein, or whether Ironside should proceed with the filing of a petition under CPLR § 3102(c). If Vantor intends to propose any alternative framework for the production or preservation of relevant materials, Ironside requests that such proposal be included in your response.
All correspondence in this matter should be directed to the undersigned at the address below:
Yuki Nakamura, Esq. Calderwood & Harkness LLP 51 West 52nd Street, 40th Floor New York, NY 10019 Telephone: (212) 506-7142
Email: ynakamura@calderwoodharkness.com
We look forward to your prompt response.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Yuki Nakamura Partner Telephone: (212) 506-7142
Email: ynakamura@calderwoodharkness.com
cc (via email):
Samuel Eklund, Esq. (Calderwood & Harkness LLP) Linda Osei, Esq. (Calderwood & Harkness LLP) Katherine Lim, Esq. (General Counsel & Chief Compliance Officer, Ironside Capital Management LP) Elliot Brennan (Managing Partner & Chief Investment Officer, Ironside Capital Management LP)

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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