Don't Let Your Side Letter Be A Wipeout

Associates Emma Brady and Sarah Carter have co-authored "Don't Let Your Side Letter be a Wipout," an article using relevant case law to underscore the significant side letters have in the private equity dealmaking space. This article has has been published in PEHUB; below is the introduction.

Side letters have long been in use in the private equity market, helping to interpret, supplement, modify and establish the terms contained in fund agreements and related documents.

A notable memorandum opinion of the Delaware Court of Chancery, ESG Capital Partners II LP v. Passport Special Opportunities Master Fund LP, serves as a reminder that while side letters are negotiated and entered into with increasing frequency, their enforceability and the preferential terms contained in them cannot be taken for granted.