Searching for smart, safe news you can TRUST?

Support safe, smart, REAL journalism. Sign up for our Axios AM & PM newsletters and get smarter, faster.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Searching for smart, safe news you can TRUST?

Support safe, smart, REAL journalism. Sign up for our Axios AM & PM newsletters and get smarter, faster.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech Mahindra is an IT outsourcing giant, and even sponsors its own racing team. Photo by Xavier Bonilla/NurPhoto via Getty Images.

Private equity firms rarely sue their limited partners, let alone well-heeled ones. But that's exactly what's happening between San Francisco-based Northgate Capital and Indian outsourcing giant Tech Mahindra, according to court documents.

The bottom line: The dispute had remained behind the closed doors of arbitration, but spilled out into the public after a witness didn't show up to testify.

  • June 2015: Tech Mahindra commits to invest $40 million into a fintech-focused fund being raised by Northgate.
  • September 2016: Northgate calls $1.04 million, in order to cover expenses. It is the first capital call, and does not relate to an investment. Tech Mahindra doesn't pay.

Seems at first like a cut-and-dry contract violation, but then you need to factor in the major personnel turnover at Northgate, which was originally founded in 2000 by former pro football players Brent Jones and Tommy Vardell.

  • In between Tech Mahindra's commitment and Northgate's call, both Jones and Vardell left their full-time roles at Northgate.
  • Their departures were at first denied by The Capital Partnership, an overseas investment firm that had acquired a majority stake in Northgate from another third party.
  • This mattered because the limited partnership agreement included a keyman clause related to the departure of Jones, Vardell and a third person who had already bailed. Tech Mahindra claims it didn't receive the notice to which it was entitled and that its non-payment came after it learned the truth.
  • Tech Mahindra also alleges that Northgate didn't make a good-faith effort to find other investors, as it had been promised, while Northgate claims Tech Mahindra initially refused to pay because it claimed to have not received Indian regulatory approvals that it actually had received.

Complicating things is the matter of Hosein Khajeh-Hosseiny, who was promoted from Northgate managing partner to CEO once The Capital Partnership assumed control. He also was listed as a sole keyman in the LPA, but left this past summer.

  • His departure doesn't affect the LPA, per se, but Tech Mahindra wants him to testify in-person at an arbitration hearing.
  • Khajeh-Hosseiny agreed to testify tomorrow (Nov. 2), saying it was best for his schedule. But when the broader arbitration hearing commenced this past Monday, Khajeh-Hosseiny's lawyer said he was overseas and would be unavailable indefinitely.
  • That lawyer tells me that Khajeh-Hosseiny, a British citizen who already provided hours of testimony via a taped deposition, is stuck in London, awaiting administrative approval of his travel visa. He had expected to have it by now, but doesn't.

Tech Mahindra is asking for Khajeh-Hosseiny to be held in contempt of court — and it was his non-appearance that moved all of the relevant court docs from private arbitration into the public sphere.

Go deeper

Updated 6 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: The good and bad news about antibody therapies — Fauci: Hotspots have materialized across "the entire country."
  2. World: Belgium imposes lockdown, citing "health emergency" due to influx of cases.
  3. Economy: Conference Board predicts economy won’t fully recover until late 2021.
  4. Education: Surge threatens to shut classrooms down again.
  5. Technology: The pandemic isn't slowing tech.
  6. Travel: CDC replaces COVID-19 cruise ban with less restrictive "conditional sailing order."
  7. Sports: High school football's pandemic struggles.
  8. 🎧Podcast: The vaccine race turns toward nationalism.
Dan Primack, author of Pro Rata
Updated 6 hours ago - Economy & Business

Dunkin' Brands agrees to $11B Inspire Brands sale

Photo: Alexi Rosenfeld/Getty Images

Dunkin' Brands, operator of both Dunkin' Donuts and Baskin-Robbins, agreed on Friday to be taken private for nearly $11.3 billion, including debt, by Inspire Brands, a restaurant platform sponsored by private equity firm Roark Capital.

Why it matters: Buying Dunkin’ will more than double Inspire’s footprint, making it one of the biggest restaurant deals in the past 10 years. This could ultimately set up an IPO for Inspire, which already owns Arby's, Jimmy John's and Buffalo Wild Wings.

Ina Fried, author of Login
8 hours ago - Technology

Federal judge halts Trump administration limit on TikTok

Illustration: Aïda Amer/Axios

A federal judge on Friday issued an injunction preventing the Trump administration from imposing limits on the distribution of TikTok, Bloomberg reports. The injunction request came as part of a suit brought by creators who make a living on the video service.

Why it matters: The administration has been seeking to force a sale of, or block, the Chinese-owned service. It also moved to ban the service from operating in the U.S. as of Nov. 12, a move which was put on hold by Friday's injunction.