Cayman Fund Of Funds Wins U.S. Bankruptcy Protection

Jan 28 2010 | 1:45pm ET

A closing Cayman Islands fund of hedge funds has been won bankruptcy protection in the U.S.

The liquidation of SIFCO5, which also invested in private equity funds, in the Cayman Islands was recognized by the U.S. Bankruptcy Court in Wilmington, Del., which granted Chapter 15 bankruptcy protection to the fund’s U.S. assets. The law firm representing the Caymans-appointed liquidators called the decision significant, as U.S. courts have been reluctant to grant Chapter 15 protection to other Cayman companies.

The decision is “welcome news to investors, managers, administrators, liquidators and receivers of funds in foreign insolvency proceedings who may have seen earlier decisions as closing the door to obtaining the assistance of U.S. courts in connection with the liquidation of fund assets,” Brian Pfeiffer of Schulte Roth & Zabel said.

SIFCO5 went into liquidation in September.

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