Companies with onshore and offshore business may want to think twice about filing for Chapter 15: Two bankrupt Bear, Stearns Cos.
hedge funds lost their appeal of a ruling that denied them protection under the Bankruptcy Code.
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On Aug. 30, Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan refused to recognize the Grand Cayman Islands bankruptcy filings of Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. and Bear Stearns High-Grade Structured Strategies Enhanced Leverage Master Fund Ltd. as a foreign main proceeding under Chapter 15.
Lifland also denied recognition of their Cayman bankruptcies as a foreign nonmain proceeding -- the other option available under Chapter 15 -- so the hedge funds appealed his decision on Sept. 10.
Judge Robert Sweet of the U.S. District Court for the Southern District of New York in Manhattan then denied the funds' appeal on May 22.
According to debtor counsel Lisa Beckerman of Akin Gump Strauss Hauer & Feld LLP, the hedge funds now have 30 days to decide whether they will appeal the latest decision. If they appeal, the case would head to the U.S. Court of Appeals for the Second Circuit for briefing and oral argument. - Jamie Mason
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