The courts in both the Cayman Islands and the British
Virgin Islands have recently handed down a number of judgments focused on the
liquidation of hedge funds and the circumstances in which it is just and
equitable for funds to be wound up on a petition by one or more shareholders.
On 13 December 2010 the Privy Council delivered its judgment in Re
Strategic Turnaround Master Partnership Ltd. The case concerned the
ability of a fund to suspend the redemption of shares and the payment of
redemption proceeds.
It is not uncommon to hear statements to the effect that the rules of
the court are intended to be complied with, and not intended to be mere
‘targets’ towards which to aspire.
The increasing number of challenges has been evident and there have
been four cases on the subject of residence and domicile in the same
number of months. This article looks first at three cases involving
persons leaving the UK and second at a person coming to the UK.
The court upheld the decision of the Court of Appeal and, applying the ex turpi causa non oritur actio (ex turpi causa in brief) principle, struck out summarily the claim against the auditors Moore Stephens of the company Stone Rolls
Fallout from the sub-prime credit crisis, the Bernard Madoff affair and recent events in the banking and finance sector have had a severe impact on the hedge fund industry leaving many offshore funds facing substantial redemption requests with insufficient liquidity to meet them.