Waterfall says pref accrues on unreturned capital, then the return of capital clause fires second

I've seen the mirror image of that clause far more often, where refinance proceeds reduce unreturned capital in full and the pref stops on every dollar returned. Yours as written favors the LP, which is why I'd assume the drafting is doing something you haven't found rather than assuming a gift.

Two places to look. First, the definition of distributable cash, and specifically whether refinancing proceeds are inside it at all. A lot of these documents route capital events through a separate section with its own order of distribution, and if refi proceeds are distributed under section 5.2 rather than 5.1, the pref language in 5.1 may not touch them. Second, look at how the IRR hurdle is calculated, because if it's measured on actual cash flows to the LP it doesn't care about the unreturned capital definition, and the extra accrued pref just gets absorbed before you hit 14%.

Also check the definition of preferred return itself for a cap, something like "in no event shall the preferred return exceed" a stated multiple. That's a common backstop.

Getting the same paragraph twice from investor relations usually means the person answering is reading the same page you are. Ask to be put on a call with whoever drafted or negotiated the LPA. If they won't do that for $50k before a Friday deadline, that's information too. Have your own attorney read the definitions section, this is exactly the kind of thing that needs one.