| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers B > Headlines for Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd./Bear Stearns High-Grade Struct > News item |
Bear Stearns hedge funds obtain a preliminary injunction to protect assets, property
By Reshmi Basu
New York, Aug. 9 - Two of Bear Stearns' bankrupt hedge funds received a preliminary injunction that would protect the funds from legal action in the United States, according to a Thursday ruling from the U.S. Bankruptcy Court for the Southern District of New York.
On July 31, Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. filed for protection in the Cayman Islands, where both of the funds are incorporated.
Following the volatility in the U.S. subprime mortgage lending market, Bear Stearns said the funds collapsed due to margin calls and heavy redemptions.
In court Thursday, Bear Stearns requested a temporary restraining order that would prevent creditor action and lawsuits against it in the United States during the Cayman Islands proceedings, arguing that such actions would disrupt the Cayman hearings.
Given the ongoing media attention surrounding the case, the order is necessary to prevent a "race" to courts and therefore a disorderly distribution of assets, said Bear Stearns attorney Fred S. Hodara, of Akin, Gump, Strauss, Hauer & Feld, LLP.
He added that no objections to the motion were filed.
In granting the limited protection, judge Burton R. Lifland said the "injunction should be broad enough and short enough" to deal with the issues at hand.
In addition he said the length of the restraining order would depend on the outcome of the Aug. 27 hearing on the recognition of the foreign proceeding.
In signing the order, Lifland jokingly told the court, "I don't know if it's a harbinger but I just ran out of ink."
The funds are Cayman Islands investment companies. The Chapter 15 case number is 07-12383.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.