Practical Decile-style guidance:

- If the Cornerstone LPA has no escrow, provision through conservative cash management, not assumed legal protection.
- Common practice is to avoid distributing 100% of interim carry. Keep an internal GP reserve/holdback outside the fund so the GP can satisfy a later clawback if needed.
- Size that reserve against worst-case clawback exposure, updated after each carry distribution and at each valuation/distribution cycle.
- Keep carry recipients aware that distributed carry may need to be repaid later, and avoid spending all after-tax proceeds.
- Operationally, this is exactly why integrated fund accounting matters: “carried interest accruals that don't properly account for clawback exposure” can create painful obligations later.

References:
- https://decilehub.com/base/1-general_questions/163588-the-gp-clawback-is-only-trued-up-at-final-liquidation-with-no-escrow-and-no-personal-guarantee-behind-it-if-the-carry-has-been-already-distributed-spent-and-taxed-how-does-an-lp-actually-collect
- https://decilegroup.com/articles/vc-fund-accounting