The 2008 financial crisis raised investor concerns related to the discretion that hedge funds and their managers often maintained with respect to decisions impacting investor redemptions.  In some circumstances, hedge funds invoked gates or suspended redemptions that delayed distribution of redemption proceeds that were to be delivered pursuant to fund governing documents.  In other circumstances, hedge funds paid redemption proceeds “in kind” as opposed to making cash payments.  While hedge fund governing documents often give hedge funds and their managers broad discretion in making distributions in kind, a recent decision handed down by the Grand Court of the Cayman Islands supports the proposition that hedge funds do not have unfettered discretion to make in kind distributions to investors and that a favorable valuation assigned by a fund to an in kind distribution of redemption proceeds may not insulate it from a claim that the fund is insolvent and should be liquidated.