"Private Credit Valuations Under Pressure: Enforcement Trends, Litigation Risks and Mitigation Tactics," Private Equity Law Report

Partners Stephen Ascher and Charles Riely and Associate Shailee Diwanji Sharma co-authored an article for Private Equity Law Report examining the regulatory and litigation risks facing the private credit industry as valuation practices come under increasing scrutiny.

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The authors detail how investor redemption pressures and heightened regulatory focus, including the Securities and Exchange Commission's (SEC) 2026 examination priorities, have put fund managers, boards, and valuation committees on notice. A key driver is the classification of private credit assets as Level 3 under fair value accounting standards, meaning valuations depend on subjective assumptions that can be challenged after the fact by regulators, investors, or opposing experts.

The article outlines categories of emerging civil litigation, from securities fraud class actions against publicly traded business development companies to breach of fiduciary duty claims and LP-GP disputes, and addresses the criminal dimension, noting that Jay Clayton, the former SEC chair now serving as US Attorney for the Southern District of New York, publicly warned that "sketchy marks" in private market valuations had drawn prosecutorial attention. Stephen, Charles, and Shailee offer steps fund managers, boards, and valuation committees can take to strengthen valuation governance, build contemporaneous documentation, and address redemption fairness obligations during periods of portfolio stress.

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© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.

"Private Credit Valuations Under Pressure: Enforcement Trends, Litigation Risks and Mitigation Tactics," Private Equity Law Report

Partners Stephen Ascher and Charles Riely and Associate Shailee Diwanji Sharma co-authored an article for Private Equity Law Report examining the regulatory and litigation risks facing the private credit industry as valuation practices come under increasing scrutiny.

Read More

The authors detail how investor redemption pressures and heightened regulatory focus, including the Securities and Exchange Commission's (SEC) 2026 examination priorities, have put fund managers, boards, and valuation committees on notice. A key driver is the classification of private credit assets as Level 3 under fair value accounting standards, meaning valuations depend on subjective assumptions that can be challenged after the fact by regulators, investors, or opposing experts.

The article outlines categories of emerging civil litigation, from securities fraud class actions against publicly traded business development companies to breach of fiduciary duty claims and LP-GP disputes, and addresses the criminal dimension, noting that Jay Clayton, the former SEC chair now serving as US Attorney for the Southern District of New York, publicly warned that "sketchy marks" in private market valuations had drawn prosecutorial attention. Stephen, Charles, and Shailee offer steps fund managers, boards, and valuation committees can take to strengthen valuation governance, build contemporaneous documentation, and address redemption fairness obligations during periods of portfolio stress.

Related Locations

© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.

News and Insights

Event

Partner John Storino to Speak at Sandpiper Partners' “AI and Outside Counsel Guidelines Roundtable”

On October 8, Partner John Storino will serve as a panelist at the “AI and Outside Counsel Guidelines Roundtable,” hosted by Sandpiper Partners in Chicago.

October 8, 2026

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Partner Meghan Greenfield to Speak on Supreme Court Climate Case at Edison Electric Institute's Fall Legal Conference

On Wednesday, October 7, Partner Meghan Greenfield will speak on a panel titled "Boulder County v. Suncor Energy: What the Supreme Court's Climate Case Means for the Energy Industry" at the Edison Electric Institute's Fall Legal Conference in Salt Lake City, Utah.

October 7, 2026

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The Form Rules Everything: A Seventh Circuit Ruling on ERISA's Substantial Compliance Doctrine

Partner Joseph Torres and Special Counsel Jennifer Beach authored an article for Employee Relations Law Journal examining the Seventh Circuit's decision in Packaging Corp. of America Thrift Plan for Hourly Employees v. Langdon, a ruling that addresses both the standard of review in ERISA interpleader actions and the continued viability of the substantial compliance doctrine for changing plan beneficiaries.

October 5, 2026

Recognition

Jenner & Block Rises in American Lawyer Rankings for Summer Associate Experience

Jenner & Block ranked 14th nationally in The American Lawyer’s 2026 Summer Associate Satisfaction Survey, jumping 10 spots from last year. The annual survey measures summer associate satisfaction at US law firms based on ratings provided directly by summer associates across key firm qualities.

October 2, 2026

Publications

Partner Ashley Callen Discusses Potential Congressional Investigations in Reuters

Partner Ashley Callen was quoted in a Reuters article examining how Democrats could ramp up congressional investigations into Trump family business dealings if they win control of the House or Senate in the 2026 midterm elections this November.

September 30, 2026

Event

Associate Steven Arango Addresses North Korean IT Worker Threat in Talks to Business Executives for National Security Members in Texas

On September 29 and 30, Associate Steven Arango led luncheon discussions titled "North Korea's IT Worker Threat: Corporate Risk and Response" for Business Executives for National Security (BENS) members in Dallas and Austin, Texas, speaking to an audience of CEOs, CISOs, and other senior leaders from the national security, finance, and healthcare sectors.

September 2026