Podcast - Credit Funds: A Framework for Addressing and Mitigating Conflicts of Interest
The Institutional Limited Partners Association (ILPA) has released new guidance for limited partners (LPs) and general partners (GPs) on net asset value–based facilities (NAV Facilities). NAV-based lending, a type of...more
We have said it before – the “credit cornerstone” of a subscription credit facility is the limited partnership agreement (the “LPA”) – it is the primary contract, together with any side letters, governing the relationship...more
Posts about limited partnerships on this blog are far eclipsed by discussions on just about any other form of business entity because, as we’ve noted in the past, limited partnerships are generally on the decline....more
While the market for NAV financings—loans to funds supported by the net asset value of their portfolios—grew in 2023 and continues to rapidly evolve, a consensus has developed around what is sometimes referred to as a “Holdco...more
On January 29, 2024, in Cantor Fitzgerald, L.P. v. Ainslie, the Delaware Supreme Court reversed a Chancery Court holding that a forfeiture-for-competition provision in a limited partnership agreement was unenforceable as an...more
Less than two months after the Delaware Supreme Court provided the employers, investment partners and other business leaders that trust in the stability of Delaware law to protect their critical business interests with the...more
Recallable capital has become an increasingly common concept in subscription credit facilities. In this Legal Update, we explain the concept of recallable capital and its role in subscription credit facilities, as well as...more
Last week, the Delaware Supreme Court reversed a Chancery Court decision that we wrote about previously, which invalidated a forfeiture-for-competition provision as an unreasonable restraint of trade. The Ainslie et al. v....more
On January 29, 2024, the Delaware Supreme Court unanimously reversed a major Delaware Chancery Court decision that had analyzed the “forfeiture for competition” provisions in a limited partnership agreement using a...more
Stemming a tide of Delaware decisions closely scrutinizing and refusing to enforce non-compete agreements, Delaware’s Supreme Court held that forfeiture-for-competition provisions arising out of a Delaware limited partnership...more
The Delaware Supreme Court yesterday upheld the enforceability of forfeiture-for-competition provisions in limited partnership agreements, reversing the Court of Chancery, which had reasoned that such provisions should be...more
Recallable capital is a hot topic these days in both subscription financing and NAV financing transactions, both at industry events and in the press. There has been a good deal of attention to this concept in the NAV market...more
Funds make use of series partnerships across jurisdictions to allow for segregation of partnership interests, assets, distributions and operations into separate series or classes. A particular quirk of Cayman series...more
A fund is a living, breathing organism that aims to achieve much more than being a vessel for a subscription credit facility. The limited partnership agreement (“LPA”) of the fund may have to be amended, restated,...more
On 19 July 2023, the Luxembourg Parliament adopted the draft bill n°8007 (the "New Law") which mainly aims at rectifying certain clerical errors and addressing certain inconsistences and uncertainties notably in the...more
Institutional investors and other limited partners are often told they must accept certain terms and provisions in alternative investment fund documents because such terms “are market.” Who is responsible for creating these...more
Those in the subscription credit market will likely be familiar with traditional collateral arrangements over the capital call rights of Cayman funds formed as exempted limited partnerships (ELPs). Recently, however, we have...more
Amongst the changes to the Limited Partnerships (Jersey) Law 1994 (the “LP Law”) that have been implemented, included are changes that both helpfully clarify and confirm certain provisions of the existing law with respect to...more
Over the past several years as Collateralized Loan Obligations (“CLOs”) reached new and dizzying heights in issuance volume, CFOs have been quietly, and under the radar, gaining market acceptance and momentum among asset...more
You know you’re in big trouble if the post-trial decision in a lawsuit you filed begins like this: “The court finds the plaintiff, Rowen Seibel, not credible. This is primarily because it appears he fabricated evidence...more
Ryan v. Buckeye Partners L.P. et al., C.A. No. 2021-0432-JRS (Del. Ch. Feb. 9, 2021) - Delaware is a notice pleading jurisdiction. But, even under this forgiving standard, the Court of Chancery Rule 8 still requires that...more
Astrum Fund I GP, LP v. Maracci, C.A. No. 2020-0919-PAF (Del. Ch. Jan. 27, 2022) - Maracci v. Astrum Fund I GP, LP, C.A. No. 2021-0073-PAF (Del. Ch. Jan. 27, 2022) A limited partnership agreement’s dispute resolution...more
A limited partnership without a general partner cannot lawfully continue. That’s why it’s critical that the limited partnership agreement thoughtfully address general partner succession and, when triggered, the agreement’s...more
On January 27, 2022, the SEC’s Division of Examinations (“EXAMS”) released a risk alert (the “Risk Alert”) outlining its observations regarding compliance issues uncovered by its staff in examinations of registered investment...more
In Highland Capital Mgmt. v. Dondero (In re Highland Capital Mgmt.), Case No. 21-03007-sgj (Bankr. N.D. Tex. 2021), the U.S. Bankruptcy Court for the Northern District of Texas held that a debtor could not be compelled to...more