正文
Bear Stearns Caymans Filing May Hurt Bankrupt Funds' Creditors
By Jeff St.Onge and Bill Rochelle
Aug.7 (Bloomberg) -- Bear Stearns Cos.' decision to liquidate two bankrupthedge funds in the Cayman Islands instead of New York may limitcreditors' and investors' ability to get their money back.
Whilemost of their assets are in New York, the funds filed for bankruptcyprotection July 31 in a court in the Caymans, where they areincorporated. The bank also used a 2005 bankruptcy law to ask a U.S.judge in Manhattan to block all lawsuits against the funds and protecttheir U.S. assets during the Caymans proceedings.
The BearStearns cases may establish a precedent that would let other failedhedge funds liquidate in the Caymans, where judges have a track recordof favoring management. The local monetary authority estimates that three out of four hedge funds globally are incorporated in the islands.
''Thisis definitely going to be closely watched,'' said Evan Flaschen, alawyer with Bracewell & Giuliani in New York, who has representedcompanies and creditors in international bankruptcy cases. ''Otherhedge funds might do the same thing.''
By Jeff St.Onge and Bill Rochelle
Aug.7 (Bloomberg) -- Bear Stearns Cos.' decision to liquidate two bankrupthedge funds in the Cayman Islands instead of New York may limitcreditors' and investors' ability to get their money back.
Whilemost of their assets are in New York, the funds filed for bankruptcyprotection July 31 in a court in the Caymans, where they areincorporated. The bank also used a 2005 bankruptcy law to ask a U.S.judge in Manhattan to block all lawsuits against the funds and protecttheir U.S. assets during the Caymans proceedings.
The BearStearns cases may establish a precedent that would let other failedhedge funds liquidate in the Caymans, where judges have a track recordof favoring management. The local monetary authority estimates that three out of four hedge funds globally are incorporated in the islands.
''Thisis definitely going to be closely watched,'' said Evan Flaschen, alawyer with Bracewell & Giuliani in New York, who has representedcompanies and creditors in international bankruptcy cases. ''Otherhedge funds might do the same thing.''
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