Bear Stearns hedge fund liquidators seek stay of Cayman Islands case recognition denial, pending appeal

By Caroline Salls

Pittsburgh, Sept. 20 - Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd. and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd.'s provisional liquidators have requested a stay of the order denying recognition of their Cayman Islands bankruptcy proceedings pending outcome of an appeal.

According to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York, the hearing on the stay motion is scheduled for Sept. 24.

As previously reported, Judge Burton R. Lifland ruled that the Bear Stearns hedge funds cannot proceed with their Chapter 15 cases because their Cayman Islands proceedings were not recognized as foreign main proceedings.

Instead, Lifland said the funds need to file an involuntary Chapter 7 or involuntary Chapter 11 case to ensure their U.S. assets are protected.

Lifland extended the funds' preliminary injunction to give them the opportunity to file a Chapter 7 or Chapter 11 case.

The appeal was filed on Sept. 10.

The Bear Stearns hedge funds filed for bankruptcy on Aug. 1. The Chapter 15 case number is 07-12383.

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