In the most recent decision in the ongoing litigation involving failed hedge funds managed by Lancer Management Group, Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York detailed the obligations of hedge fund managers and investors with respect to preservation of evidence in anticipation of litigation.  See Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC (No. 05-CV-9016 (S.D.N.Y. Jan. 15, 2010)).  More generally, since litigation is a reasonably foreseeable fact of life for hedge fund managers, the Pension Committee decision offers authoritative guidance to hedge fund managers on structuring policies and procedures with respect to data collection, preservation and destruction.  In other words, the key take-away from the Pension Committee decision is that by the time a hedge fund files or receives a complaint, it is too late to start thinking about data management issues.  Rather, data management has to be integrated into the compliance culture and processes at a hedge fund manager, and anything less than best of breed data management may result in draconian spoliation sanctions and reputational harm.  In an effort to assist hedge fund managers in translating the principles of the Pension Committee decision into actual policies, procedures and practices, this article discusses: the facts and legal analysis of the Pension Committee case; the practical considerations from the case most relevant to hedge fund managers (including tips relating to the irrelevance of organizational size to discovery obligations, interdepartmental cooperation, data mapping and document destruction); considerations with respect to departed or terminated employees (including provisions to include in severance agreements); back-up tapes; and cross-border data preservation and access issues (with a focus on the interaction of European privacy regulations and U.S. discovery rules).  The Hedge Fund Law Report has covered the Lancer litigation extensively.  See, e.g., “Second Circuit Revives Hedge Fund Fraud Claims Against Banc of America Securities,” Hedge Fund Law Report, Vol. 2, No. 26, (Jul. 2, 2009); “Federal Court Permits Suit Concerning Collapsed Lancer Funds to Proceed in Part,” Hedge Fund Law Report, Vol. 2, No. 5 (Feb. 4, 2009); “Federal Court Bars Investors’ Claims Against Hedge Fund Administrator,” Hedge Fund Law Report, Vol. 1, No. 28 (Dec. 16, 2008).)