Fletcher Moves To Preempt Fund Liquidation

Jul 5 2012 | 12:08pm ET

Fletcher Asset Management has taken to the U.S. courts to block the liquidation of one of his hedge funds.

The New York-based firm filed for bankruptcy protection for its Fletcher International on June 29 and then, on Monday, asked U.S. Bankruptcy Court in Manhattan to prevent liquidators, appointed by a Cayman Islands court, from selling its ssets.

Fletcher has appealed the Cayman Islands decision.

The liquidator, Ernst & Young, was appointed in April after a Cayman Islands judge approved a winding-up petition filed by three Louisiana public pension funds. Those pensions moved in January to have the Fletcher fund liquidated after almost a year of negotiations with the hedge fund that followed a July 2011 redemption request that was filled by promissory notes.

The pension funds had invested $100 million in Fletcher, but the Caymans judge ruled that the hedge fund was insolvent. In its U.S. bankruptcy filing, Fletcher International listed assets of $52.5 million and liabilities of $23.8 million. The hedge fund also said that Credit Suisse Group is refusing to return $1.66 million of its money.

According to Fletcher, Ernst & Young's decision to file a winding-up petition in Bermuda is an effort "to make an end run around the New York court."


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