International Law

Recovering Assets From Bankrupt Cayman Island Hedge Funds:

By David Beker

More than 8,500 hedge funds are registered in the Cayman Islands. Some estimate that three out of every four hedge funds are incorporated in the Western Caribbean Islands. As the following two articles indicate, Bear Stearns' decision to file for bankruptcy protection on behalf of its two bankrupt hedge funds (Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. & Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd.) in the courts in the Cayman Islands, where the hedge funds are incorporated and where the legal system if disposed to favoring management over creditors, will be an early test of how creditors and investors fare in recovering assets when hedge funds go bankrupt in offshore jurisdictions. It will also be an early test of the provisions in Chapter 15 of the Bankruptcy Code which the funds are relying on to stop creditors and investors from suing the funds and Bear Stearns in U.S. courts while the bankruptcy cases are administered in the Cayman Islands.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aX9aWxCf9y3o&refer=home

http://www.portfolio.com/views/blogs/daily-brief/2007/08/07/new-frontiers-in-bankruptcy

Full post as published by International Asset Recovery Law Blog on August 08, 2007 (boomark / email).