Private Equity Law Report: Anticipating and Mitigating Threats Posed by the Latest Surge in Private Credit Litigation
October 15, 2026
O’Melveny partners Meaghan VerGow and Lauren M. Wagner spoke with the Private Equity Law Report about how sponsors can assess pressure points in their own private credit funds based on issues raised in litigation. Wagner said: “In late 2025 and going into early 2026, we saw redemption pressure coupled with increased concerns about software sector disruptions driven by artificial intelligence. The convergence of those two factors arguably contributed to an increased litigation environment around private credit funds and BDCs in particular.” VerGow said: “No court has found that the practices challenged in these cases are deficient, and most of these cases have not yet finished motion-to-dismiss briefing. Instead, the complaints show where plaintiffs are focusing their scrutiny, including the accuracy of disclosures, the structures of the fees and the diligence of borrowers.”
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