In a lawsuit filed in April 2008, Joseph Umbach, founder of the Mystic line of beverages, accused Carrington Investment Partners, L.P. (the Fund), a billion dollar mortgage-backed securities hedge fund, of “involuntarily” tying up his one million dollar investment in the Fund and improperly “rescinding” a redemption notice he submitted to the Fund’s sole manager, Bruce Rose.  Umbach sought a declaration that the action taken by Carrington and Rose was “an illegal or unenforceable ex post facto” action, and charged that the defendants committed securities fraud, breached their fiduciary duty to him, committed fraud and negligent misrepresentation and breached the terms of their contract.  On February 18, 2009, the United States District Court for the District of Connecticut dismissed Umbach’s request for declaratory judgment, because it found that his remaining claims against the Fund, Carrington Capital Management, LLC (the General Partner) and Bruce Rose, could go forward.  We outline the relevant facts from the complaint and the court’s opinion, and explain the court’s legal analysis.  The case illustrates, among other things, the deference a federal court will give to an agreement between an investor and a hedge fund manager providing the investor with preferential liquidity terms.