MMIP received substantial redemption requests in mid-2011 ultimately reducing the assets under management from around $100 million to $30 million. The assets that remained were illiquid and the fund was unable to meet further redemption requests submitted by the investors or fees incurred by the investment manager.
KRyS Global was appointed as liquidator, along with an Irish firm, subject to supervision of the Grand Court of the Cayman Islands.
Questions arose over the validity of redemptions and impact on the ranking of
redeeming investors for distribution purposes. If the redemptions were valid, then all of the remaining assets would be distributed solely to the redeemers. However, if the redemptions were invalid, than the remaining assets could be distributed pro-rata to all investors.
KRyS Global determined the redemptions were invalid under the provisions of the Companies Law and explained its rationale to unpaid redeemers. No challenges were made to the decision avoiding costly potential litigation over the issue.
By taking a considered and transparent approach, KRyS Global was able to address the redemption dispute without the need for protracted litigation.