Bankruptcy Blocked For Bear Stearns Hedge Funds

Law360, New York (August 31, 2007, 12:00 AM EDT) -- A federal judge has blocked Bear Stearns & Co. Inc. from using Chapter 15 bankruptcy protection for two of its Cayman Island-registered hedge funds that imploded earlier this year after bad bets in the subprime mortgage market.

Judge Burton R. Lifland of the United States Bankruptcy Court in the Southern District of New York nixed the funds' bid for Chapter 15 bankruptcy protection, which is used to handle cross-border insolvency cases.

Judge Lifland said that the Bear Stearns hedge funds couldn't use Chapter 15 because the...
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