In a break with Cayman Islands jurisprudence on the availability of court-supervised fund liquidations, the British Virgin Islands High Court of Justice has refused to appoint liquidators for a hedge fund that has permanently suspended redemptions and is in the process of liquidating in a soft wind-down, ruling that the fund had not lost its “substratum” for purposes of the Business Companies Act of 2004.  Plaintiff Aris Multi-Strategy Lending Fund, Ltd. (Aris), a fund of funds, had invested about $11 million with defendant Quantek Opportunity Fund, Ltd. (Fund).  The Fund was a feeder fund that invested all of its assets in non-party Quantek Master Fund SPC (Master Fund).  Following the liquidity crisis of 2008, the Fund and the Master Fund suspended all redemptions and the calculation of net asset value.  The Fund adopted a reorganization plan pursuant to which it planned to distribute the proceeds from the liquidation of the Master Fund’s portfolio in three installments over a period of three years.  Apparently dissatisfied with the pace of liquidation, Aris commenced an action seeking court-supervised liquidation of the Fund.  The only substantial issue before the Court was whether Aris was entitled to the appointment of liquidators for the Fund on the grounds that the Fund had “lost its substratum.”  Aris has been aggressive in taking fund managers to task through litigation.  For summaries of litigation by Aris against domestic funds, see “New York State Supreme Court Dismisses Hedge Funds of Funds’ Complaint against Accipiter Hedge Funds Based on Exculpatory Language in Accipiter Fund Documents and Absence of Fiduciary Duty ‘Among Constituent Limited Partners,’” Hedge Fund Law Report, Vol. 3, No. 7 (Feb. 17, 2010); “New York Supreme Court Rules that Aris Multi-Strategy Funds’ Suit against Hedge Funds for Fraud May Proceed, but Negligence Claims are Preempted under Martin Act,” Hedge Fund Law Report, Vol. 2, No. 51 (Dec. 23, 2009).  Aris’ founder has previously discussed with the Hedge Fund Law Report the issues raised in contemplating litigation against fund managers.  See “Why Are Most Hedge Fund Investors Reluctant to Sue Hedge Fund Managers, and What Are the Goals of Investors that Do Sue Managers? An Interview with Jason Papastavrou, Founder and Chief Investment Officer of Aris Capital Management, and Apostolos Peristeris, COO, CCO and GC of Aris,” Hedge Fund Law Report, Vol. 2, No. 52 (Dec. 30, 2009).