Matador Investments Ltd. (Matador or the Fund) is a fund of funds organized under the laws of the Cayman Islands.  Following a request by investors for redemption of their interests in Matador, the Fund first imposed a “gate” on redemptions (to stretch out redemption payments over time), and later imposed a complete freeze on redemptions.  The investors brought an action against the Fund seeking a judicial liquidation of the Fund on the ground that, following their redemption requests, they had become unpaid “creditors” of the Fund.  See “How Will the New Cayman Islands Insolvency Regime Affect the Winding-Up of Cayman Islands Hedge Funds?,” Hedge Fund Law Report, Vol. 2, No. 42 (Oct. 21, 2009).  Matador, relying on the recent Strategic Turnaround decision, argued that until the redemptions were paid in full, the investors were still bound by the Fund’s governing documents, which permitted both gates and freezes on redemptions.  The court disagreed, appointed a liquidator, and directed the Fund to commence winding up its affairs.  We explain the parties’ arguments and how the court distinguished the Matador investors from those in the Strategic Turnaround case.