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IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION

.

01~1

. .
CAUSE NO. FSD _OF 2014( f/.J_j)

IN THE MATTER OF SECTION 36(3) OF THE EXEMPTED LIMITED PARTNERSHIP LAW, 2014
AND IN THE MATTER OF PERICLES EMERGING MARKET PARTNERS,

L.f>.

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WINDING UP PETITION
------------------------------------r~.----------------

To the Grand Court
The humble petition of Surf Horizon Limited, 332 Patrician Chambers, Agiou Andreou, P.C. 3035
Limassol, Cyprus (the "Petitioner") shows that:\

Parties

)

Pericles Emerging Market Partners, L.P. (the " Partnership") was registered in the Cayman
Islands on 26 March 2007 as an exempted limited partnership with registration number
19611 pursuant to th e Exempted Limited Partnership Law (2003 Revision) (referred to
herein, together with amendments and revisions thereto, as the "ELP Law"). The registered
office of the Partnership is situated at lntertrust Corporate Services (Cayman) Limited, 190
Elgin Avenue, George Town, Grand Cayman, Cayman Islands. The Partnership is presently
scheduled to be struck off the Cayman Islands' register of companies (the "Register") by the
Registrar of Companies (the "Registrar'') on 31 December 2014.

2

The Petitioner believes itself to be the sole limited partner of the Partnership and that
therefore it holds the majority (if not all) of the economic interest in the Partnership. The
Petitioner is a company incorporated in Cyprus on 11 July 2007 and its principal address in
Cyprus is 332 Patrician Chambers, Agiou Andreou, P.C. 3035 Limassol, Cyprus. The
Petitioner is a special purpose vehicle specifically established by 8-lnvest Ltd (''B-lnvest") in
order to participate and invest in the Partnership. 8-lnvest is an investment company
incorporated in Cyprus, which is in the business of acquiring and administering a diverse
portfolio of investments throughout the world. The equity in the Petitioner is held by
Sarvangasana Holdings SA ("Sarvangasana"). Sarvangasana was specifically established
This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

1
LITl-6335214-1

 by B-lnvest to hold any special purpose vehicles established to participate in B-lnvest's
various investment projects. B-lnvest's business, and therefore that of the Petitioner, is
conducted by B-lnvest's investment team in Moscow.

3

The general partner of the Partnership was Pericles Emerging Market Investors, L.P. (the
"GP"), which was registered in the Cayman Islands on 26 March 2007 as an exempted

limited partnership with registration number 19612 pursuant to the ELP Law. The GP was
struck off the Register by the Registrar on 31 October 2014.

4

The general partner of the GP is Pericles Investors, Ltd ("PIL"), which was registered in the
Cayman Islands on 7 December 2006 as an exempted limited company with reg istration
number 178664 pursuant to the Companies Law (2004 Revision). The Petitioner has
discovered that PIL was dissolved as a consequence of being struck off the Register by the
Registrar on 31 July 2012.

5

The investment manager of the Partnership is Pericles Emerging Market Managers L.P. (the
"Manager"), a Delaware partnership and an affiliate of the GP. The Manager functioned as
the day-to-day operator of the Partnership. A search of the appropriate Delaware Registry
has revealed that the status of the Manager in Delaware is considered to be "CancelledVoided,'' which is a Delaware limited partnershi p which has failed to pay its annual tax for a
period of three years from its due date.

An investment committee of the Manager was

responsible for approving all investment decisions of the Partnership. The initial members of
that investment committee were US citizens Rick Gates, Rick Davis, and Paul Maliafort.

6

Davis Manafort, Inc. ("Davis Manafort") a company incorporated in Delaware served as an
advisor to the Manager as regards the Partnership. The Partnership's confidential offering
memorandum dated December 2006 (the "OM") describes Davis Manafort as a business
development and public affairs consultancy, and partnership, which is located in Virginia in

--------- _ --the__ United-States.- Davis __ Manafort __ was___described_in__ the__OM _as_having_ successfully_______ _
_ ___ -~~y-~lg_p~~ ·--~l.J~i~~~~---t!§_ll_~i3.S:!io_11_s_i_ri __ §~~-~~-- ~l:Jg~_ ~~-~~~~~}'',_ -~n9~~!~i§l __ 9~~~~?.P~~~!.______
telecommunications and technology, and in developing markets for both itself and its clients
for over 1O years. A search of the appropriate Delaware Registry has revealed that the

status of Davis

~v~anafort

in De!a\Nare is "Void/' \Mhich is a corporation that has failed to pay

its annual franchise tax for a period of 1 year. Rick Davis was a founding partner of Davis
Manafort, alongside Paul Manafort, and was also the managing director of Davis Manafort.
This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

2
LITl-6335214-1

 The OM specifically refers to the professional experience of Rick Davis and Paul Manafort. It
stated that they have over 20 years of experience in international and domestic business,
politics, government, and public policy development. "Principals" of the Manager are stated
in the OM to be the beneficial owners of the GP.

7

The Petitioner believes that the GP, PIL and the Manager are all directly or indirectly owned
by Paul Manafort, Rick Davis, and/or Rick Gates. Rick Gates was the key individual at the
GP and/or the Manager who carried on the Partnership's business on its behalf and with
whom the Petitlonei's iepiesentatlves communicated about all issues concerning the
Partnership.

Summary of Grounds for Petition

8

By way of summary, the Petitioner seeks a winding up order in respect of the Partnership
and its affairs on the basis that: (i) despite an agreement reached between the Petitioner and
the GP in late 2008 that the GP liquidate the business of the Partnership and make
appropriate consequent distributions - this has not been done and it is clear that the
Partnership is no longer conducting business; (ii) in any event, the GP is no longer
conducting the affairs of the Partnership due to the fact that it was struck off the Register on
31 October 2014 and its own general partner, PIL, having been dissolved as a consequence
of being struck off the Register on 31 July 2012; (iii) the Petitioner has not been provided
with any adequate information or reports as to value of the Partnership's assets or the status
of the agreed wind down of its business; (iv) the GP, the Manager, and key individuals
related to these entities have failed to communicate with the Petitioner's representatives
since June 20 11 despite repeated requests for information from the Petitioner. Accordingly in
all the circumstances:

(a)

An event, under the LPA (defined below), upon which the Partnership is to be wound
up and dissolved, has transpired;

__

--~--

_________ ____ (b) ______ Joe_ Pa rt_o~rshiR _b_ClliLQsUts._s11l;>_§tmtl1Jll_(wb~tb~_r_ RYrnE!§QilQtUstc:l_gls _q_t_9_1_1y __ci_g_tjvJty,_
the failure to liquidate the Partnership's business or the fact that it does not have a
general partner);
(c)

the relationship between the Petitioner and the GP has irretrievably broken down;

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RARJJJF)

3
LITl-6335214-1

 (d)

-.,,

the Petitioner is able to rely upon a justifiable loss of trust and confidence in the GP
and its Manager to conduct the Partnership's business;

1

(e)

the Petitioner has no alternative but to present the Petition; and

(f)

equity and/or the public interest requires an investigation to be conducted into the
current status of the Partnership's assets and the way in which the Partnership's
business has been conducted by those entrusted to administer its affairs;

such that it is just and equitable that the Partnership be 1.vound up and put into the hands of
court appointed liquidators.
The Partnership

9

The Partnership is a private equity fund. The Partnership's constitutional documents, which
provide for its establishment, structure and operation state, inter alia, as follows:

The OM
(a)

The Partnership's investment objective is to generate significant long term capital
appreciation by making private equity investments in Ukraine, Russia, other countries
within the Commonwealth of Independent States, Montenegro, and eastern and
southern Europe;

(b)

The Partnership originally sought US$200 million of aggregate capital commitments
from qualified investors;

(c)

The Partnership soug ht to achieve an aggregate compounded annual rate of return of
approximately 30%;

(d)

The Partnership's investment strategy was to take a disciplined and value-orientated,

________ __ ___ ______________appcoacb_by_ioJecalLa~ ________ -------------·---·---------------------------·--------------·------------- _

----------- -· -- ---- ------ ----- (if -- Taf!;feting·-·aears-

fequififfg

us$10-ra··us$2o·mnlioli" or-ca-pitar-where-tm:f·---··- -

Partnership had the ability to exert significant control or influence over the
diiection of its portfolio companies; and
(ii)

obtaining, where possible, a senior level or secured debt position and
sufficient asset or cash flow coverage on an absolute or return basis.

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

4
LITl-6335214-1

 (e)

Not more than 20% of the aggregate commitments were to be invested in any one
investment;

(f)

Partnership commitments were to be called down pro rata on an as needed basis;

(g)

The key individuals involved in furthering the Partnership's investment program
included, Rick Davis, Rick Gates, Paul Manafort, Alexander Balanutsa, Christian
Ferry, Philip Griffin, and Konstantin Kilimnik (together referred to below as "Key
Individuals");

(h)

The Manager was described as maintaining a strategic relationship with Pegasus
Capital Advisors, L.P. ("Pegasus") which is a New York based investment group
specialising in private equity investments. In furthering its roles as the Partnership's
investment manager, the Manager was to leverage the strength of Pegasus' operating
partner structure;

(i)

Distributions from the Partnership were to be made at any time and as determined by
the GP, and "[i]n general, current cash receipts from dividends, interest and operating
income from Investments net of current expenses ("Current Income") will be
distributed at least quarterly, and net cash proceeds from the sale of Investments or
any portion of an Investment ("Disposition Proceeds" and together with Current
Income, ("Investment Proceeds") will be distributed as soon as practicable after
receipt thereof... Distributions of Investment Proceeds ... were to initially be allocated
among the Partners (including the [GP]) pro rata in proportion to their percentage
interests with respect to such Investment...";

U)

"Upon termination of the Partnership, the [GP] will be required to restore funds to the
Partnership to the extent that it may have received cumulative distributions in excess
of 20% of the total net profits of the Partnership ... ";

·· - - - - - --------~-(k)-- "The-Partnership-will· establish·· and· maintain-a-capitalaccount-for-each-Partner:·-All--------~ ···
--···--·· - --- -- -------- ---items of.income, gain.loss. and.deduction.will-be.allocated.to_ the_f?artners'_capitaL. _...
accounts in a manner generally consistent with the distribution procedures ... ";

(!)

The Partnership was to pay a management fee to the Investment Manager... equal to
2% per annum of commitments during the first 4 years and then 2% of funded
commitments thereafter;

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

5
LITl-6335214-1

 (m)

A limited partner may not sell, assign or transfer its interest in the Partnership without
the prior written consent of the GP and a limited partner may not voluntarily withdraw
any amount from the Partnership except in certain limited circumstances set out in the
Partnership Agreement; and

(n)

Annually the Partnership was to furnish audited financial statements to all limited
partners, valuations of all investments and tax information. On a quarterly basis, eaeh
limited partner was to be furnished with unaudited financial statements of the
Partnership and descriptive information for each of the investments.

The LPA
1o

The Petitioner and the GP are parties to an Amended and Restated Limited Partnership
Agreement dated 1 July 2008 (the "LPA").
(a)

Pursuant to clause 2.7 of the LPA, the term of the Partnership is 8 years from the
"Closing Date" which was 6 April 2007, so the term was intended to end on 6 April
2015. The LPA provides that the GP may extend the term for successive one year
periods up to a maximum of two years in order to effect an orderly winding up, but the
Petitioner has not been notified of any intention to extend the term of the Partnership;

(b)

Clause 3.1 (a)(i) provides that upon payment by a limited partner in response to a
capital call, the GP is to make a capital contribution equal to 0.2% (subject to certain
adjustments) of the contributions of the limited partners;

(c)

Clause 3. 1(e) provides that if the GP determines that a proposed investment in
respect of which partners have made a capital contribution will not be consummated,
the GP shall, within 90 days after such determination, refund the contributions;

(d)

Clause 3.4(a) provides that no partner shall have the right to withdraw capital from the

_______________________________ _p--9_r1rrership__Q[JQ_receiv~_§DY_cli$Jribu_tl_9_11 or

retum_Qfi1§_cagi~l_contriQution;_______________

__ _

----- -- -- -- -- --------<er- -- c1ause-3:4(cJOr provides-that ·15ro-cee-as-fronn:wr investment are- re-be aistribTitea-r=i-a · --- ·-- --·
later than 90 days following the end of each fiscal quarter in which the proceeds are
received;

(f)

Clause 7.1 provides that the GP shall keep complete and appropriate records and
books of account on a basis which allows the proper preparation of the Partnership's

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

6
LITl-6335214-1

 financial statements and tax returns. Any limited partner shall be permitted to inspect
the books and records;
(g)

Clause 7.3 provides that the GP shall send to the partners, on a quarterly basis, the
balance sheet, the statement of income and loss and a statement of the partners'
capital, an schedule of changes in the capital account, and a schedule and summary
description of each investment owned by the Partnership;

(h)

Clause 7.4 provides that the GP shall hold an annual meeting of Partners beginning in
the year 2007;

(i)

Clause 8.1 (b) provides that the GP will cease to the general partner upon the
occurrence of a "Disabling Event", and upon a Disabling Event the Partnership will be
dissolved and wound up. A Disabling Event is defined to include "the withdrawal,
bankruptcy, commencement of liquidation proceedings, insolvency or dissolution of
the General Partner;

U)

Clause 9.1 provides for the term and dissolution of the Partnership. It describes the
events (each an Event of Dissolution) upon the occurrence of which trigger the
dissolution of the Partnership; and

(k)

Clause 9.2 provides that upon the occurrence of an Event of Dissolution the
Partnership shall be wound up and liquidated. If there is no general partner of the
Partnership, or the dissolution results from the occurrence of a Disabling Event
pursuant to Clause 8.1 (b), a "Majority in Interest" of the Limited Partners may appoint
a liquidator to proceed with the winding up of the Partnership.

Subscription and Ass ignment of LP interest

11

The Petitioner acquired its interest in the Partnership through Altimax Investments Limited

----~-------- _____(~timax''L_t-ltim a_~jl3_~l§.Q__§_5-f2?_gl?LP.~IP05-§_Y..Etll~le within__ th.§__5-§D:l_~__ g!OU1?._QfQomp_9_11Je~---------- __

with 8-lnvest and is related to the Petitioner having common beneficial ownership. Altimax

-- ---· -··------·-·· -----·----·-· - --- ---·------·-···----·-·- --- -----. --···· ... --·------ ---··-----· ------- ------------------------- ---·----·-. -- ,. ·-· ·-· .. --·· ----·-·---·-·----------·-- --------·-----·--·· ---·- --·--- -------- ...,. ------·--------------------- -----·------------

had originally become a limited partner of the Partnership by entering into a limited
partnership agreement, on 17 April 2007. Altimax had agreed to commit US$200 million to
the Partnership pursuant to a subscription agreement dated 22 February 2007.
12

On 21 November 2007, Altimax agreed to transfer, convey and assign to the Petitioner its
full limited partnership interest in the Partnership entering into an assignment and
This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

7
LITl-6335214-1

 assumption of limited partnership interests in the Partnership ("Assignment Agreement").
The Partnership consented to that assignment and was itself a party to the Assignment
Agreement. Consequently, the Petitioner thereby assumed Altimax's entire interest and
obligations in the Partnership. Following numerous discussions between the GP and the
Petitioners' representatives discussing the proposed investments of the Partnership (during
the time period mid-2007 to mid-2008), the Petitioner entered into a subscription agreement
with the Partnership and the GP dated 1 July 2008 (the "Subscription Agreement").The
Subscription Agreement details that at that time the Petitioner agreed to commit US$100
million to the Partnership.
Investments of the Partnership

13

Pursuant to a development plan prepared for the Partnership by the Manager dated
November 2007 ("Fund Plan") and which was provided to the Petitioner's representative by
Rick Gates on 14 November 2007, the Partnership intended to make investments in various
enterprises in specific economic sectors located in cities in the Ukraine namely Kyiv, Odessa
and Mariupol. The Fund Plan states that it contained the "core ideas" for the investment
strategy of the Partnership. The intended investments were to be made in retail, real estate
development and management, cable television , media and road construction and
infrastructure sectors of the economy.

14

The Fund Plan sets out th e Partnership's overall investment strategy which was: (i) to
acquire small to mid-size companies in the same industries and located in regions across
the Ukraine and to consolidate them to form larger "national" companies; (ii) the
consolidation of these companies was intended to allow for operational efficiencies within
these companies to be achieved; (iii) these "national" companies would subsequently be
sold either through direct sales transactions, or where appropriate, a public offering of the
relevant entity's shares. However, save for one investment into a Ukrainian company, Black
Sea Cable (Ukraine) ("BSC") in the telecommunications sector, providing cable and internet

·---------·-·---------- -- services-(discussed in more-detail- below), these investments did-not eventuate;---------------- - -------15

Rick Gates had regularly visited the offices of the Petitioner's representatives in Moscow
during late 2007 and the Fund Plan had been presented as an investment proposal for the
Partnership. Following these meetings the Petitioner's representatives raised numerous
concerns in correspondence and by telephone with both Rick Gates and Paul Manafort
about the various investments proposed.

Of all of the suggested investments for the

Partnership, the Petitioner considered that the Partnership's proposed investment into BSC
This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

8
LITl-6335214-1

 had some merit. As is described in more detail below at paragraph 21, the Petitioner
therefore invested US$18,938,400 into the Partnership in order for it to acquire the
investment into BSC. Rick Gates confirmed by email to the Petitioner's representatives on
23 April 2008 that the acquisition of BSC for the Partnership was underway in that closing
had occurred on 18 April 2008 and that the acquisition would be finalised two to three weeks
thereafter.

The GP's Proposed Investment Structure
16

The Fund Plan describes the proposed acquisition and legal structuring of the Partnership's
investment into BSC as follows: "BSC is a Ukranian limited liability company wholly owned

by Tech Corp in the United Kingdom. [Pericles] will buy 100% of the shares of BSC through

a Pericles controlled entity, EVO Holdings .... ("EVO") .... ln addition, there are three
subsidiaries of BSC (Satellite LLC ("Satelite"), Idea/Plus LLC ("Ideal+") and NIK.A TV

"Nika") all Ukranian companies 100% owned by BSC.

Th ese companies hold the

necessary licences to distribute cable services to BSC's curren t customers.

At closing,

these three Ukranian entities will be placed in trust with our attorney's [sic] using their
services as nominee shareholders until the licences can be properly changed without
jeopardizing [sic] current se;vices."

17

In email correspondence between th e Petitioner's representatives and Paul Manafort in
October 2007. Paul Manafort explained how the Partnership's investments into the proposed
investments (including BSC) would be structured. The Partnership would make capital calls
on the limited partners (pursuant to article 6 of the LPA). Monies received from the payment
of capital calls would be paid into or otherwise transferred to the bank account of PEM
Advisors Limited ("PEM") a Cypriot company established by the GP and/or the Manager.
PEM was then to loan the proceeds of any capital calls to Cypriot special purpose vehicles

("SPV" or "SPVs" as appropriate) specifically established for the purpose of facilitating the
Partnership's investments. An SPV was to be established to invest into each asset. Paul
- -------------------- Manafort-explainedthat the- Partnership's-investment into each SPV was to-be-structured-as- - ------

- ---- ------ - ---- -- - -a loan rather: than through-the acquisition of-theequity of-therelevant-Sl?.\Lso-as to avoid-the _____ _
unnecessary occasioning of Cyprus taxation. The initial sole beneficial owner of each SPV
was Rick Gates.

Paul Manafort explained that the shares in the SPVs were to be

subsequently transferred to another Cypriot entity incorporated by the Manager andior the
GP, LOAV Advisors Limited ("LOAV"). Paul Manafort explained further that he held all of

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

9
LITl-6335214-1

 the equity in LOAV but had assigned 50% of this equity to Rick Davis, who would become a
registered shareholder at a later date.

18

Despite the information provided by Paul Manafort in correspondence or otherwise by the
GP or Manager, about how the Partnership's investments would be structured, and
particularly the investment structure for BSC, the Petitioner is uncertain as to the structure
actually utilised.

19

The GP and/or the Manager provided a structure chart of the proposed investment into BSC
on 3 March 2008. It is unclear from the chart, but it appears to show that, despite Paul
Manafort's explanation in October 2007 of the structure to be used to hold the Partnership's
investment, the SPV established by the GP to facilitate the Partnerships investment into
BSC is called EVO Advisors Limited SPV ("EVO SPV"). It is therefore unclear whether the
Partnership's investment into BSC was held via EVO Holdings or EVO SPV. Further, the
structure chart appears to show that another Cypriot entity, Black Sea View Limited, has
been utilised by the GP as a holding company into the proposed stru cture between PEM and
EVO SPV. Overall, it is entirely unclear from the documents provided by the GP to the
Petitioner the precise nature of the structure utilised by the Partnership to hold its investment
into BSC.

20

The Petitioner made enquires of the Ukrain ian corporate registry which have identified the
following equity holders in BSC and the entities which the Petitioner was told are its
subsidiaries:
(a)

"Black Sea Telecompany LLP" (which the Petitioner believes is BSC) in which the
equity is held by (i) Nika and (ii) a company incorporated in the British Virgin Islands
called Card Man lmpEx Corp (BVI) ("CardMan");

(b)

"Nika TV Telecompany LLP" (which the Petitioner believes is Nika) in which the equity
is held by (i) CardMan (in a majority position) and (ii) Smirnov Sergiy Gennadiyovich
("SSG") (in a minority position);

(c)

"Satelit Limited LLP" (which the Petitioner believes is Satelite) in which the equity is
held by Nika;

(d)

"Ideal+ Telecompany" (which the Petitioner believes is Ideal+) in which all of the
equity is held by SSG.

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

10
LITl-6335214-1

 The Petitioner is unaware of what (if any) relationship there is between on the one hand
CardMan, SSG, and Nika and on the other hand, the GP or the Manager or any of their
related entities. Further, should CardMan, Nika or SSG have acquired BSC, Nika or Satelite
from entities established by the GP to hold the Partnership's interests, it is unclear what has
become of any consideration paid.
The Petitioner's contributions to the Partnership
21

On 15 April 2008, the Petitioner paid US$18,938,400 pursuant to a capital contribution notice
dated 26 March 2008 (the "Contribution"). As instructed by the GP the Contribution was
paid directly to PEM.

The Petitioner does not know whether the GP paid a capital

contribution equal to 0.2% of the Petitioner's contribution in accordance with Clause 3.1 (a)(i)
of the LPA.
22

Pursuant to articles 6 and 3.1 (iv) of the LPA, the Petitioner (and previously Altimax) was
required to pay capital contributions in order for the Partnership to pay a management fee
(the "Management Fee") to the Manager.

In accordance with these provisions, the

Management Fee is payable semi-annually in advance, and was equal to 2.0% per annum of
the aggregate amount of commitments (based on a capital commitment of US$200 million as

)

originally agreed by Altimax) and upon expiration of the commitment period, 2.0% per
annum of the total amount of funded comm itments. On or about 12 April 2008 the Petitioner
agreed with GP that it would reduce its total capital commitment to the Partnership to
US$100 million in consideration for which the Partnership would pay an increased
Management Fee of 2.7% . This agreement was subsequently confirmed in writing in the
Subscription Agreement.
23

Together, Altimax and the Petitioner have paid the following capital contributions in respect
of the Management Fee (in accordance with Articles 6.2(d) and 3.1 (iv) of the LPA), in 2007
and 2008:
(a)

Altimax paid US$2 million on 11 April 2007 for the first half of 2007;

(b)

The Petitioner paid US$2 million on 16 November 2007 pursuant to an invoice dated
October 2007 for the second half of 2007;

(c)

The Petitioner paid $2 million on 28 March 2008 pursuant to an invoice dated March
2008 for the first half of 2008;

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

·1 ·1
LITl-6335214-1

 (d)

The Petitioner paid US$1,350,000 on 31 July 2008 pursuant to an invoice dated July
2008 for the second half of 2008

24

The Petitioner (and Altimax) have together therefore paid a total of US$7,350,000 in capital
commitments (the "MF Commitments"). Payments of the MF Commitments were wired to
the US bank account of Pericles Capital Partners LLC on the specific instructions of the GP
(and more particularly on the explicit instructions of Paul Manafort).

25

After July 2008, the Petitioner did not receive any further invoices from the GP in respect of
Management Fees or for the purpose of funding further investments of the Partnership.

Winding Down of the Partnership

26

By mid-summer 2008, there were clear indications of the oncoming world financial crisis, and
at this time the Petitioner was the only limited partner in the Partnership which had made
only one investment (BSC). In September 2008 the Petitioner informed the GP that it was
suspending further investment into the Partnership. By late 2008/early 2009 it was agreed
between the GP and the Petitioner that either the Partnership would be wound up or the
Petitioner would be replaced by another limited partner wh ich would assume the Petitioner's
obligations (the "Wind Down").

1

,./

27

During 201 O and 2011 the Petitioner's representative communicated with Rick Gates to
enquire as to the progress of the Wind Down , and was informed that the GP was looking for
available opportunities to sell the investment in BSC. In addition, Rick Gates informed the
Petitioner (by email dated 17 September 2010) that the audit of the Partnership was
underway, and was req uired to be filed by the end of 2010. Further, that these audit reports
would be provided to the Petitioner. The Petitioner has not been provided with these audit
reports nor is it aware whether any further audits were performed in respect of the
Partnership.

----------28- ---The- last-contact-that-the- Petitioner-had from-the-GP-was an-email received on-2-June--201-1-------________________ whe[ein_the_Gf?._indicatedthatits__ goaLwas_to_sell _the_Partnership'.s_investmenUn_BSG but _____ _
was unable to do so due to market conditions. The Petitioner made further repeated
attempts in 2013 to contact the GP (both Paul Manafort and Rick Gates peiSonally)
requesting updates on the progress of the Wind Down but these requests were ieft
unanswered. It appears that Paul Manafort and Rick Gates have simply disappeared.

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

12
LITl-6335214-1

 29

It also appears that given the apparent total inactivity of the Partnership, none of the Key
Individuals are currently involved in its business.

30

The Petitioner is unable to take action against the GP as it no longer exists given its striking
off by the Registrar on 31 October 2014, and its principals have disappeared.

31

The GP's failure to provide the Petitioner with details of the Partnership's investments
(including financial statements, an investment schedule and description, and any other
records or reasonable computation) is in breach of Article 7 of the LPA.

Event requiring the Partnership to be wound up
32

In circumstances where the GP has been dissolved (in accordance with section 37 (1) of the
ELP Law), the Partnership does not have a general partner and this fact also amounts to a
Disabling Event under the LPA.

An Event of Dissolution under the LPA has therefore

occurred and the Partnership ought to be wound up. The Petitioner is not certain whether it
is in fact the only limited partner of the Partnership and therefore is unable to appoint a
liquidator over the Partnership in accordance with the LPA. In any event, given the obvious
need for an investigation into the affairs of the Partnership to be conducted by a Court
appointed liquidator with appropriate statutory powers, the limited powers available to a
liquidator appointed pursuant to the LPA would be insufficient in any event.

Recent Investigations
33

The Petitioner has recently discovered that the GP failed to pay the annual fees of the
Partnership since 201 i and the Partnership owed Cl$12,000.00 in outstanding fees and
penalties. On 30 October 2014 the Petitioner paid C1$12,000.00 to the Registrar of
Companies to prevent the Partnership from being struck off on 31 October as previously
scheduled by the Registrar. The Petitioner understands that the Partnership has not filed
annual ieturns for the years 2011 to 2014 inclusive.

--- ______ .. Other-Matters. -- --------7 34

-- ----- ------ --- ---------------------- -------------------------- --------- ------ ---------- -- ----------------------- ---- ------------------------

In light of its payment of the Contribution and the MF Commitments, the Petitioner considers
itself to possess a tangible interest in the proposed winding up of the Partnership.

35

The Petitioner understands from the Registrar that the Partnership will be struck off on 31st
December 2014 unless a winding up order is made. Consequently, the Petitioner urgently
This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

13
LITl-6335214-1

 seeks the listing of this Petition to be heard as soon as possible and in any event, before 31
December 2014.
Grounds for the Petition

36

In all the circumstances identified above:
(a)

the Partnership has lost its substratum (whether by reason of the failure to liquidate
the Partnership's business in accordance with the Wind Down or the fact that it does
not have a general partner which is carr1ing on its business);

(b)

the relationship between the Petitioner and the GP has irretrievably broken down;

(c)

the Petitioner is able to rely upon a justifiable loss of trust and confidence in the GP
and its Manager to conduct the Partnership's business given that there has been no
communication from the GP since June 2011;

(d)

the Petitioner has no alternative but to present the Petition;

(e)

equity and/or the public interest requires an investigation to be conducted into the
current status of the Partnersh ip's assets and the way in which the Partnership's
business has been conducted by those entrusted to administer its affairs.

37

It is therefore just and equitable that the Partnership be wound up and that independent
official liquidators be appointed to wind up the affairs of the Partnership in accordance with
the statutory scheme.

Nomination of Joint Official Liq uidators

38

The Petitioner nominates Alexander Lawson and Kris Beighton of KPMG for appointment as
joint official liquidators of the Partnership (the "Liquidators").

YOUR PETITIONER THEREFORE HUMBLY PRAYS THAT:
1

The Partnership be wound up in accordance with section 36(3) of the Exempted Limited
Partnernhlp Law, 2014 and section 92(e) of the Companies Law (2013 Revision).

2

Alexander Lawson and Kris Beighton of KPMG to be appointed as joint official liquidators of
the Partnership.
This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

14
LITl-6335214-1

 3

The Liquidators shall not be required to give security for their appointment.

4

The Liquidators shall have the power to act jointly and severally in their capacity as

-~

-~

Liquidators of the Partnership.
5

The Liquidators shall be authorised to do any acts or things considered by them to be
necessary or desirable in connection with the dissolution of the Partnership and the winding
up of its affairs.

6

The Liquidators shall be authorised to exercise all the powers set out in parag raphs

1,2,4,7,8, 1O and 11 of Part 1 of the Third Schedule of the Companies Law (as amended) and
section 110(2) thereof without the further sanction of this Honourable Court.
7

Without limitation to the generality of the powers specified in paragraphs 4, 5 and 6 above, it
is confirmed that the Liquidators shall have the power to:
(a)

bring or defend any action or other legal proceeding in the name and on behalf of the
Partnership in order to secure the assets of the Partnership;

(b)

take all action required consistent with applicable law to carry on the business of the
Partnership so far as may be necessary for its beneficial winding up; and

(c)

take all action on behalf of the Partnership in the name of and to the exclusion of the
GP which shall fo rthwith have no authority or power to act in relation to the
Partnership other than at the direction and with the consent of the Liquidators.

8

No disposition of the Partnership's property by or with the authority of the Liquidators in
carrying out their duties and functions and the exercise of their powers under any Order
granted pursuant to this Petition shall be voided by virtue of section 99 of the Companies
Law.

------ ----9-- - -----The-tiquidators·- shall· be-at liberty to· appoinrattorneys;-counsel· and-professiona1-a-dviso-rs _________ _
. - ---- -- ---------Whether. in.the Cayman Islands or elsewhere, as-they-may consider- necessary-to advise and
assist them in the performance of their duties in accordance with Order 25 of the Companies
Winding Up Rules 2008 (as amended).

1O

The Petitioner's costs of and incidental to the Petition shall be paid out of the assets of the
Partnership as an expense of the liquidation, such costs to be taxed on an indemnity basis if
not agreed with the Liquidators.
This Petition was filed by Ogier, attorneys for the Petitioner, whose address for seivice is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

15
LITl-6335214-1

 11

The Liquidators shall be at liberty to apply.

12

Such further and/or other relief as this Honourable Court deems appropriate.

AND your Petitioner will ever pray, etc.
Dated the 4th day of December 2014

OGIER
Attorneys at Law for the Petitioner
NOTE: This Petition is intended to be served on: The Partnership at lntertrust Corporate Services
(Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman , Cayman Islands
The GP at lntertrust Corporate Services (Cayma~) Limited, 190 Elgin Avenue, George Town, Grand
Cayman, Cayman Islands

This Petition was filed by Ogier, attorneys for the Petitioner, whose address for service is:
89 Nexus Way, Camana Bay, Grand Cayman KY1-9007, Cayman Islands (Ref: 425079.00001/RAR/JJF)

i6
LITl-6335214-1