Elliott Management sues Stronghold over alleged excessive fund expenses

A high-stakes courtroom clash exposes tensions in private equity. Elliott accuses Stronghold of overcharging—will the judge intervene?

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2025 November 14 . 10:01 PM

1 min read

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Elliott Management sues Stronghold over alleged excessive fund expenses

Elliott Management has escalated a legal battle with Stronghold Investment Management, filing a lawsuit in the Delaware Chancery Court on Thursday, March 30, 2023. The dispute centers around alleged excessive expenses related to a $100 million investment in oil and gas-focused funds. This court fight is unusual in the private equity world, where such disagreements are typically resolved behind closed doors.

Elliott, known for challenging large public companies, has heightened its concerns since the trial. It alleges that Stronghold has refused to liquidate two of the funds, despite an earlier agreement. The investment management firm also claims that Stronghold has continued to acquire assets and run up 'excessive expenses', as cited in the recent financial disclosures.

Chancellor Kathaleen St. J. McCormick's lawsuit seeks access to internal company records concerning the alleged inflated expenses. Elliott accuses Stronghold of improperly overcharging expenses to the oil and gas-focused private equity funds it invested in. Stronghold, however, denies overcharging and argues it has sufficiently accounted for costs.

Elliott's new complaint seeks damages and a receiver to oversee the wind down of the partnerships. The dispute, while rare in the private equity world, highlights the potential for disagreements between investors and fund managers. Both parties await the court's decision.