In December 2008, the Cayman Islands Court of Appeal, faced with a case arising out of a redemption request by a hedge fund investor, held that, depending on the terms of a Cayman fund’s governing articles, it may suspend redemptions of investors who have submitted their redemption notices, even after the redemption date has passed.  See “Cayman Court Suggests that Hedge Fund Investor does not Have Standing to Liquidate Fund,” Hedge Fund Law Report, Vol. 2, No. 3 (Jan. 20, 2009).  On December 13, 2010, that decision, which created uncertainty as to the rights of investors following redemption requests, was overruled by the Judicial Committee of the Privy Council in London.  The case presented the question of whether an investor in a hedge fund, Strategic Turnaround Master Partnership Limited (STMP), who had requested redemption and had not received payment by the agreed-upon redemption date for payment, had standing to petition for a winding up of the fund for its failure to pay its debts to creditors, or whether it merely remained a prospective creditor and shareholder who remained bound by the fund’s governing documents.  In deciding in favor of the investor, the Privy Council established that, absent clearly expressed provisions in a fund’s governing articles to the contrary, a redemption occurs on the intended redemption date – not on the date of payment of redemption proceeds – and, as a result, the investor becomes an actual creditor at that time.  We detail the background of this important action, the Privy Council’s legal analysis and the implications of this judgment for hedge fund managers and investors.