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When is a Redemption Effective?: Reserve International Liquidity Fund Ltd

July 2010 - Finance. Legal Developments by Ogier .

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The British Virgin Island’s Commercial Court has recently delivered a decision in Western Union International Limited v Reserve International Liquidity Fund Ltd which addresses the issue of when during the redemption process a redeeming investor becomes a creditor of the fund and is therefore entitled to apply for the appointment of a liquidator.

The BVI Court’s decision is significant when considered with the 2009 Cayman Islands decision in Re Strategic Turnaround Master Partnership Limited. While each case turns on its facts, these two decisions seem to adopt different approaches as to when a redeeming investor ceases to have rights as a member of a fund.

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