Fund Disputes

Arising from factors such as trading losses, illiquidity, misevaluation and mismanagement, fund-related disputes are becoming a common feature of the international commercial landscape. Complex by nature, funds experiencing distress require a team of dedicated expert lawyers who are well rehearsed in this specialist area.

Appleby’s Fund Disputes team is an industry leader, being one of the few offshore firms to field a specialist team dealing with fund disputes, and having been involved in a number of high-profile proceedings. Our team of highly skilled and talented fund disputes lawyers have experience that covers all types of funds, including corporate funds, limited partnerships, unit trusts, regulated mutual funds, closed-ended funds and private equity funds. We act for a wide range of parties involved in fund-related matters, including office-holders, directors, auditors, investment managers, shareholders and creditors.

Appleby provides Fund Disputes services in Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey and Mauritius. We can also call on our experienced Funds and Investment Services team to provide further technical advice.

We regularly provide advice and assistance regarding matters such as:

  • Redemption issues
  • Shareholders' rights
  • Directors’ liabilities
  • Enforceability of side letters
  • Disputes between service providers
  • Valuation issues
  • Fraud and mismanagement of fund assets
  • Restructuring distressed funds
  • Winding up and dissolution of insolvent funds

Some recent examples of work include:

  • Advising and representing the liquidators in relation to their actions to recover losses for investors who lost US$1.5 billion in the collapse of Bear Stearns subprime-invested hedge fund, the largest and highest-profile hedge fund collapse arising out of the subprime mortgage crisis
  • Acting for Phoenix Meridian Equity Ltd. in the first Cayman Islands case on misvaluation to go to trial, raising unprecedented issues about construction of fund investment documentation, and the obligation of funds to disclose underlying hedging transaction costs to investors
  • Advising Gottex Fund Management Sarl on its attempt to redeem a US$40 million investment in CPIM Structured Credit Fund and its challenge through the Cayman Islands Court of the fund’s retrospective imposition of a ‘gate’ on its redemption notice to block the payment of redemption proceeds.