After the 2008 market collapse, the Steel Partners II family of hedge funds (Steel Partners) was flooded with redemption requests.  Because the funds were locked into long-term investments, the funds’ manager proposed a restructuring plan under which the investors could receive a cash distribution and either (1) shares in a new publicly-traded entity that would hold the funds’ assets, or (2) a pro rata distribution of the funds’ securities holdings.  Certain limited partners sued to enjoin that plan and demanded an “orderly liquidation” of the funds.  Relying heavily on the fact that Steel Partners’ offering documents specifically contemplated temporary freezes on redemptions and permitted mandatory redemptions and distributions of assets in kind, the Delaware Chancery Court denied the plaintiffs’ demand for a preliminary injunction.  We explain the restructuring plan in detail, and explain the court’s analysis.