The Grand Court Act Between: Charitable DAF Holdco, Ltd (in Official Liquidation) Plaintiff/Applicant v (1) Mark Eric Patrick (2) Paul Murphy (3) CDMCFAD, LLC (4) DFW Charitable Foundation (5) CDH GP, Ltd as General Partner for and on behalf of Charitable DAF FUND, LP, and in its Capacity as General Partner (6) CLO Holdco, Ltd Defendants/Respondents

• Jurisdiction: Cayman Islands
• Court: Grand Court (Cayman Islands)
• Judge: Raj Parker
• Judgment Date: 10 February 2026
• Docket Number: FSD NO. FSD 201 OF 2025 (RPJ)

In the Matter of the Grand Court Act

Between:

Charitable DAF Holdco, Ltd (In Official Liquidation)

Plaintiff/Applicant

and

(1) Mark Eric Patrick

(2) Paul Murphy

(3) CDMCFAD, LLC

(4) DFW Charitable Foundation

(5) CDH GP, LTD as General Partner for and on behalf of Charitable DAF FUND, LP, and in its Capacity as General Partner

(6) CLO Holdco, Ltd

Defendants/Respondents

NEUTRAL CITATION NUMBER: [2026] CIGC (FSD) 9

Before:

The Hon. Raj Parker

FSD NO. FSD 201 OF 2025 (RPJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

Proprietary injunction — jurisdiction — s.11 of the Grand Court Act (2015 Revision) — O.29, r.1 and r.2 of the Grand Court Rules — test for grant of injunction — serious issue to be tried — nature of proprietary interest — discretion — cross undertaking in damages — fortification — charitable fund structure — Cayman Islands exempted limited company in structure to make charitable distributions for US tax reasons to US charities — reorganisation by directors of fund structure — transference of limited partnership interest without notification to supporting organisations — claims of improper purpose to gain control — claims of excessive remuneration against directors — alleged transactions at undervalue.

Appearances:

Andrew Ayres KC with Caroline Moran, Luke Armitage and Alasdair Munro of Maples and Calder (Cayman) LLP on behalf of the Company

Andrew Scott KC with Mark Goodman, Ronan O'Doherty and George Connolly of Campbells LLP on behalf of the 1 ^st, 3 ^rd, 5 ^th and 6 ^th Defendants

David Quest KC with Peter Tyers-Smith and Daniel Mills of Kobre & Kim (Cayman) on behalf of the 2 ^nd Defendant

Jennifer Colegate with Fleur O'Driscoll and Nia Statham of Baker & Partners (Cayman) Limited on behalf of the 4 ^th Defendant

Introduction

1 Charitable DAF HoldCo, Ltd (in Official Liquidation) (the “Company”) is a Cayman Islands exempted company. It applies 1 for a proprietary injunction restraining the disposal of and dealing with assets over which the Company asserts a proprietary claim.

2 The application arises from transactions procured by the First and Second Defendants (Mr Mark Patrick and Mr Paul Murphy, collectively “the Directors” and D1 and D2) in alleged breach of fiduciary duties owed to the Company.

3 Four parties addressed the Court over a two-day hearing. Mr Andrew Ayres KC represented the Company, Mr Andrew Scott KC represented D1, D3, D5 and D6 (the “CDM Defendants” or “CDM Entities”), Mr David Quest KC represented D2 (“Mr Murphy”), and Ms Jennifer Colegate represented D4 (“DFW”).

4 All of the Defendants contested the application on various grounds. The affidavits and exhibits submitted on the application are voluminous. 2

5 In a nutshell the Company's claim alleges that unlawful steps were taken by the Directors to divest the Company of its sole asset, which is a limited partnership interest (the “Partnership

Interest”) in a Cayman Islands exempted limited partnership, Charitable DAF Fund, LP (the “Fund”)

6 The Company alleges that control of the Partnership Interest of the Company was transferred to D3 and/or D4, entities under Mr Patrick's sole control and ownership, for a gross undervalue of c.US$ 1.6 million in March 2025.

7 The Company points to the fact that the Fund's net asset value was estimated at c.US$ 270 million in September 2024.

8 The joint official liquidators (“JOLs”) 3, who bring the claim on behalf of the Company, are concerned that the Directors remain in control of the relevant assets and that the Company has been divested of its control of the Fund. They are concerned that value has been lost and will continue to be lost while the Directors enrich themselves by paying themselves what the JOLs say are ‘vast and unjustifiable’ fees and by the expenditure of large sums under the guise of ‘ordinary business expenses’.

Factual Background

The Fund

9 The factual background to the Fund's establishment and the transfer of the Partnership Interest is explained in the First Affidavit of Margot MacInnis sworn 15 July 2025 (“MacInnis 1”). The following is a summary of the relevant structures and transactions which show how this worked.

10 The Fund is a Cayman Islands exempted limited partnership formed to invest and manage assets for the benefit or ultimate benefit of certain registered charitable organisations in the US.

11 The Fund is governed by the Second Amended and Restated Exempted Limited Partnership Agreement dated 11 March 2024 (the “ARLPA”).

12 The Fund was formed in 2011 at the instigation of Mr James Dondero, a U.S. resident and the founder of Highland Capital Management, L.P. (“Highland”), to enable certain assets to be donated to those registered charitable organisations.

13 The Fund's sole asset is or was its single share, comprising 100% of the issued share capital in CLO HoldCo, Ltd (D6).

The Company

14 The Company, until recently the Fund's sole limited partner, and owner of the 99% Partnership Interest, was incorporated in the Cayman Islands on 7 November 2011.

15 The Company's share capital is divided into Participating Shares and Management Shares 4:

• (1) The entirety of the Participating Shares were, from 2011 to 2024, held by four nonprofit U.S. companies 5 (the “Original Participating Shareholders”) that act as “Supporting Organisations” to US charities (the “Charities”). 6 Each is a charitable entity exempt from taxation under section 501(c)(3) of the U.S. Internal Revenue Code of 1986 (the “IR Code”). Mr Dondero was (and remains) involved at board level with these Supporting Organisations, but according to Ms MacInnis he does not control them. The Defendants say that he does own and in effect controls them.

• (2) The Management Shares were initially held by a Mr Grant Scott, but were transferred to Mr Patrick on 25 March 2021, on which date Mr Patrick was also appointed to replace Mr Scott as sole director of the Company.

16 On 22 April 2021, Mr Patrick, as Management Shareholder, appointed Mr Murphy as a director of the Company. Mr Murphy is resident in the Cayman Islands.

17 The Company's Memorandum and Articles of Association 7 provide that Management Shareholders had the right to receive notice of, and to attend, to speak at and to vote at, any general meeting of the Company, but no right to participate in the profits or assets of the Company (Article 11).

18 The Participating Shareholders have no right to vote at Company meetings, but did have rights in a winding up or repayment of capital and the right to participate in the profits or assets of the Company by way of dividend in accordance with Article 12.

19 The Participating Shareholders therefore have the economic interest in the Company, whereas the Management Shareholders have the control rights.

20 The Company was placed into voluntary liquidation by directors' resolution on 2 April 2025.

The General Partner of the Fund

21 Under the ARLPA, sole control over the management and distribution of the Fund's assets was granted to the Fund's general partner. From its formation until 7 March 2024, the Fund's General Partner was Charitable DAF GP, LLC, a Delaware limited liability company registered as a foreign company in the Cayman Islands (the “Original GP”). On 25 March 2021, the same date he appointed Mr Patrick sole director of the Company, and transferred his 100 Management Shares to him, Mr Scott also transferred to Mr Patrick the entire issued share capital in the Original GP. On 7 March 2024, the Original GP was replaced by CDH GP, Ltd, a Cayman Islands incorporated company (D5 and the “New GP”), of which Mr Patrick is sole shareholder and director.

Charitable Purpose and Tax Considerations

The Fund's Purpose

22 The purpose of the Fund was to make investments for the ultimate benefit of the Charities which the Supporting Organisations supported.

23 The Charities are the following four U.S. charitable or non-profit organisations:

• (1) The Dallas Foundation: a charitable entity established in Texas in 1929 which has awarded over US$1 billion in grants and manages over US$500 million in assets.

• (2) Greater Kansas City Community Foundation: a charitable entity established in Missouri in 1978 which has awarded over US$7 billion in grants and manages over US$6 billion held in charitable funds.

• (3) Santa Barbara Foundation: a charity established in 1928 which is the largest community foundation on California's Central Coast and manages assets of over US$800 million.

• (4) North Texas Community Foundation: which manages assets totalling US$513 million and donated US$38.9 million to local non-profits in 2023.

The Tax Structure 8

24 As a matter of US tax law, in order for the Charities to benefit from distributions from the Fund in a tax efficient manner, it was necessary for them to hold their interests through an offshore ‘corporate blocker’, i.e. the Company.

25 Section 501(c)(3) of the IR Code provides that charitable organisations which meet certain criteria are exempt from state and federal taxes except to the extent that they receive income classified as unrelated business taxable income (“UBTI”).

26 Section 509 of the IR Code defines the term “supporting organisation” as a tax-exempt entity that must be organised and then operate exclusively either (i) for the benefit of, (ii) to perform the functions of, or (iii) to carry out the purposes of, one or more supported organisations (the Charities). The supported organisations must also be s501(c)(3) entities.

27 Both the Charities and the Supporting Organisations apparently meet the criteria of s501(c)(3), and are therefore exempt from US state and federal taxes save to the extent that they receive UBTI.

28 Apparently as a matter of US tax law, some income received directly from the Fund by the Charities would likely be considered UBTI.

29 In order to ‘insulate’ the Charities from UBTI,...