In the October issue of Private Funds Management, a feature titled “Shouldering the Burden of Legal Fees” reviews what liability LPs have when funds in which they are invested face unexpected lawsuits. “The partnership agreement and side letters will lay out the terms for what’s technically required of the GP and the LP in the event of litigation against the sponsor, and that includes any extraordinary situation that may prompt it,” states private investment funds partner Peter Laybourn (Boston). Transparency remains the best policy, and as Mr. Laybourn outlines in the feature, “if LPs might inquire about it, GPs should, from an IR perspective, consider disclosing it before they have the chance to ask.”
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