US Trustee Can't Take Over Bayou Ch. 11: 2nd Circ.

Law360, New York (May 1, 2009, 12:00 AM EDT) -- An appeals court has rejected a U.S. trustee's attempt to replace collapsed hedge fund Bayou Group LLC's manager in its bankruptcy proceedings.

In an opinion filed Friday, the U.S. Appeals Court for the Second Circuit affirmed two lower courts' rulings permitting Jeff Marwil to continue as Bayou's managing member, ruling that the U.S. trustee had failed to present compelling reasons for his replacement.

U.S. Trustee Diana G. Adams had appealed a judgment from the U.S. District Court for the Southern District of New York upholding a...
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