Suspending withdrawals or redemptions from a hedge fund is a last-resort option for a fund manager facing a financial crisis. If circumstances – such as the impact of the coronavirus pandemic on the global markets – compel a manager to consider imposing a suspension, it is critical that the manager follow certain key steps to avoid lawsuits by investors and enforcement actions by the SEC. This three-part series explores the process of suspending withdrawals. This second article examines the process by which a fund manager may initiate a suspension. The first article reviewed suspensions during the 2008 financial crisis compared to the current pandemic; reasons a fund manager may consider imposing a suspension; the downsides of doing so; and the SEC’s view of suspensions. The third article will explain the steps for lifting a suspension and actions that managers should be taking now to prepare for a potential suspension in the future. See our two-part series on winding down funds: “How Managers Make the Decision and Communicate It to Investors and Service Providers” (Mar. 2, 2017); and “Navigating Illiquid Assets, Unanticipated Windfalls and Fees and Expenses During Liquidation” (Mar. 16, 2017).