White Oak Global Advisors, Llc

Allegations: ONE CLIENT (THE "PLAINTIFF") CLAIMED THAT WHITE OAK HAD BREACHED THE "MOST FAVORED NATION" (MFN) PROVISION RELATED TO FEES OF ITS INVESTMENT MANAGEMENT AGREEMENT (IMA) AND ASSERTED CERTAIN OTHER LEGAL CLAIMS UNDER THE IMA AND ERISA. Status: On Appeal Summary: AS PREVIOUSLY DISCLOSED, THE PLAINTIFF FILED AN ACTION AGAINST WHITE OAK IN THE DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (THE "COURT") TO CONFIRM AN ARBITRATION AWARD DATED AUGUST 4, 2021, FOLLOWING AN ARBITRATION PROCEEDING BETWEEN THE PARTIES. THE ARBITRATION AWARD FOUND IN FAVOR OF THE PLAINTIFF ON CERTAIN ERISA AND OTHER CLAIMS. IN AN OPINION DATED MARCH 17, 2022 (THE "OPINION"), THE COURT CONFIRMED THE ARBITRATION AWARD, INCLUDING THAT THE PLAINTIFF IS ENTITLED TO RECEIVE THE NET ASSET VALUE OF ITS INVESTMENTS WITH WHITE OAK AS OF AUGUST 4, 2021, WHICH WAS THE DATE OF THE FINAL ARBITRATION AWARD, AND THAT WHITE OAK COULD RETURN ASSETS TO THE PLAINTIFF IN ACCORDANCE WITH THE IMA AND THE ARBITRATION AWARD. THOSE ASSETS HAVE BEEN DISTRIBUTED TO THE PLAINTIFF AS OF AUGUST 4, 2021. THE COURT ALSO CONFIRMED THE ARBITRATOR'S AWARD THAT FOUND WHITE OAK HAD VIOLATED ERISA. FOLLOWING A MOTION BY THE PLAINTIFF, ON JULY 14, 2022, THE COURT CLERK ENTERED A CORRECTED JUDGMENT IDENTIFYING THE SPECIFIC AMOUNTS OWED FOR ATTORNEYS' FEES, A "DAY ONE" FEE, AND PREJUDGMENT INTEREST ON THAT DAY ONE FEE. THE CORRECTED JUDGMENT ALSO ORDERS (A) WHITE OAK TO PAY 9% PREJUDGMENT INTEREST ON THE AUGUST 4, 2021 NET ASSET VALUE OF PLAINTIFF'S INVESTMENT STARTING IN SEPTEMBER 2018, (B) THE DISGORGEMENT OF UNIDENTIFIED PROFITS, AND (C) THE REMOVAL OF WHITE OAK AS FIDUCIARY AND INVESTMENT MANAGER. ON SEPTEMBER 8, 2022, THE PLAINTIFF AND WHITE OAK FILED A MOTION TO RECOVER THE ATTORNEYS' FEES AND COSTS INCURRED IN THE DISTRICT COURT PROCEEDING TO CONFIRM THE ARBITRATION AWARD. ON OCTOBER 27, 2022, THE COURT GRANTED THE PLAINTIFF'S MOTION FOR AN AWARD OF APPROXIMATELY $1.65M IN ATTORNEYS' FEES RELATED TO THE COURT PROCEEDINGS TO CONFIRM THE ARBITRATION AWARD. WHITE OAK APPEALED THE COURT'S JUDGMENTS AND HAS POSTED APPEAL BONDS TO SECURE THE MONETARY PORTIONS OF THE JUDGMENTS PENDING APPEAL. WHITE OAK ARGUED, BASED ON AN INTERVENING U.S. SUPREME COURT CASE, THAT THE FEDERAL DISTRICT COURT JUDGE DID NOT HAVE JURISDICTION TO CONFIRM THE ARBITRATION AWARD. WHITE OAK ALSO ARGUED THAT IF THE SECOND CIRCUIT FINDS THE DISTRICT COURT HAS JURISDICTION, THE DISTRICT COURT JUDGE ERRED ON THE MERITS IN CONFIRMING THE AWARD, RAISING THE FOLLOWING FOUR ARGUMENTS THAT THE DISTRICT COURT JUDGE ERRED IN AWARDING: (1) PREJUDGMENT INTEREST STARTING IN SEPTEMBER 2018, BECAUSE THE ARBITRATOR DID NOT MAKE SUCH AN AWARD TO THE PLAINTIFF AND THE PLAINTIFF CONTINUED TO BENEFIT FROM WHITE OAK'S INVESTMENT MANAGEMENT AFTER SEPTEMBER 2018; (2) THE PLAINTIFF THE DAY ONE MANAGEMENT FEE BECAUSE THE ARBITRATOR FOUND THAT WHITE OAK COULD RETAIN ITS MANAGEMENT FEES AND BECAUSE THE PLAINTIFF PROFITED BY $700K FROM THE DAY ONE PROVISION; (3) THE PLAINTIFF $1.65M FOR ATTORNEYS' FEES BECAUSE THERE WAS NO LEGAL BASIS TO AWARD THE PLAINTIFF THOSE ATTORNEYS' FEES; AND (4) DISGORGEMENT OF UNSPECIFIED PROFITS, BECAUSE THE ARBITRATOR DID NOT AWARD SUCH PROFITS AND THE PLAINTIFF FAILED TO ESTABLISH IN THE ARBITRATION THAT WHITE OAK EARNED ANY SUCH PROFITS. THE APPEAL DOES NOT DIRECTLY CHALLENGE THE JUDGMENT CONFIRMING THE $5.7M IN ATTORNEYS' FEES THE ARBITRATOR AWARDED TO THE PLAINTIFF FOR ITS LAWYERS' WORK ON THE ARBITRATION-STAGE PROCEEDINGS. ORAL ARGUMENT WAS HEARD BEFORE A PANEL OF THREE JUDGES AT THE SECOND CIRCUIT ON OCTOBER 25, 2023, AND THE PARTIES AWAIT THE COURT'S DECISION. SEPARATELY, THE PLAINTIFF FILED A MOTION SEEKING TO REQUIRE WHITE OAK TO PAY PLAINTIFF THE DIFFERENCE BETWEEN THE VALUE OF ITS ASSETS ON AUGUST 4, 2021, AND THE 30 DAYS (AS ALLOWED UNDER THE ARBITRATION DECISION) BY WHICH THE PLAINTIFF RECEIVED THOSE ASSETS (WHICH VALUE APPROXIMATES ~$350K). ON FEBRUARY 22, 2024, THE MAGISTRATE JUDGE ISSUED A RECOMMENDED BENCH RULING THAT WHITE OAK SHOULD PAY SUCH DIFFERENCE AS WELL AS THE PLAINTIFF'S ATTORNEY'S FEES. THE PARTIES AWAIT A FINAL DECISION ON THIS RECOMMENDED RULING.