New Stream Enters Bankruptcy After Striking Deal With Creditors

Mar 16 2011 | 1:10pm ET

Hedge fund New Stream Capital has filed for Chapter 11 bankruptcy protection.

The Ridgefield, Conn.-based firm won the support of the "vast majority" of its creditors to restructure its hundreds of millions of dollars in debt, Dow Jones Daily Bankruptcy Journal reports. The hedge fund also filed a Chapter 11 plan for the sale of its life-settlement portfolio, asking the federal Bankruptcy Court in Wilmington, Del., to consider the filings quickly.

The life-settlement portfolio would be sold to McKinsey & Co.'s MIO Partners for $127.5 million, unless another bidder appears with a higher offer.

New Stream, which has been preparing for a Chapter 11 filing for months and which has battled angry investors that sought to push it into involuntary bankruptcy to derail its own plans, said the bankruptcy filing was the result of "many months of negotiations" with its creditors, including its own feeder funds.

"Although many of the debtors' investors, primarily hedge funds and other sophisticated investors, will recover only a portion of their investment, the vast majority have agreed to accept the plan since the alternatives to confirmation are far less attractive," the firm said in its court filing.

All of the investors in New Stream's Bermuda fund, which has some $450 million in claims against the firm, have accepted the settlement, which about two-thirds of the investors in its Cayman Islands and U.S. funds, with $320 million in claims, did so. In December, the firm settled the Bermuda fund's claims with the promise of the $127.5 million it would raise from the sale to MIO.

That deal came just months after the troubled firm learned that its head of investor relations, Tara Bryson, had been arrested for running "a complex marijuana cultivation operation capable of producing a marijuana crop year-round." At the home of Bryson and her boyfriend in Newtown, Conn., police found some 200 pot plants and other weed-growing paraphernalia.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.