On January 5, 2009, the United States District Court for the Southern District of New York ruled that investors seeking to recover over $550 million in losses stemming from the liquidation of British Virgin Islands-based hedge funds Lancer Offshore, Inc. and OmniFund Ltd. could proceed with certain claims against the funds’ administrators and affiliated parties.  The ruling allows the plaintiffs to continue to press their claim that Citco Group, parent firm of the funds’ administrator, was a “culpable participant,” and hence liable, in the funds’ collapse.  In this follow-up to an article published in our December 16, 2008 issue, we detail the factual background of the case and the court’s holding and legal analysis.