Bear takes shelter in Caymans
Bear Stearns’ decision to liquidate its hedge fund in the Cayman Islands may blaze a trail for other collapsed hedge funds, Bloomberg said.
Bear Stearns’ decision to liquidate its hedge fund in the Cayman Islands may blaze a trail for other collapsed hedge funds, Bloomberg said.
In the Caymans, where Bears’ Structured Credit and Enhanced Leveraged funds are registered, judges historically have favored management, and opaque laws have made it harder to pursue legal action in the islands, Bloomberg reported.
Both funds filed for bankruptcy protection in the Caymans on July 31, even though their assets are in the U.S.
The local monetary authority estimates that three out of four hedge funds globally are incorporated in the Caymans, Bloomberg reported.
Bear Stearns has also asked a bankruptcy judge in Manhattan to block suits against the funds and protect U.S. assets during proceedings in the Caymans.
Meanwhile, Bear Stearns’ share price has been tanking, hitting a low of $99.75 yesterday and stirring up takeover chatter, MarketWatch reported.
Deutsche Bank and Credit Suisse are possible suitors positioned to buy Bear Stearns once the firm’s price falls to an attractive level, an analyst told MarketWatch.
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