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ARTICLE · 24 NOVEMBER 2017

Privy Council Clarifies The Old Law (1989-2011 Position) Regarding Section 37 Redemptions

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In late 2008, RMF Market Neutral Strategies (Master) Limited ("RMF") sought to cash in its investments in DD Growth Premium 2X Fund (In Official Liquidation) (the "Company"), a feeder fund incorporated in the Cayman Islands, ...

Cayman IslandsLitigation, Mediation & Arbitration
Paul Smith
Paul Smith
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In late 2008, RMF Market Neutral Strategies (Master) Limited ("RMF") sought to cash in its investments in DD Growth Premium 2X Fund (In Official Liquidation) (the "Company"), a feeder fund incorporated in the Cayman Islands, by exercising its right to have its shares in the Company redeemed. In response, the Company paid US$23 million to RMF (less than 40% owed to RMF by way of redemption) before running out of money and being wound up.

When the Company was wound up it transpired that it had, in effect, become a Ponzi scheme and that the Company was insolvent at the date of the payments. There was no suggestion that any of the redeeming investors, including RMF, knew about the fraud.

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