Judge Names Fletcher Bankruptcy Trustee

Oct 9 2012 | 10:56am ET

A bankrupt Fletcher Asset Management hedge fund has a new boss.

U.S. Bankruptcy Judge Robert Gerber has named Richard Davis trustee of the Fletcher International Fund. Davis' appointment is a defeat for New York-based Fletcher and its founder, Alphonse Fletcher, who opposed a trustee. The trustee was sought by three Louisiana public pension funds that invested $100 million in the fund.

Davis, a former partner at law firm Weil Gotshal & Manges, told the New York Post that his "function will be to review the assets, review the valuations and conduct investigations." And, he added, "we absolutely are going to investigate whether or not there has been fraud."

Fletcher put the International fund into bankruptcy in June to prevent a Cayman Islands-appointed liquidator from selling its assets. A Caymans court has found that the fund's assets are worthless, while Fletcher contends that at least one asset, United Community Banks, is worth $136 million—enough to pay back the pension funds.

The pensions, which are behind the liquidation effort in the Caymans, have been battling Fletcher for more than a year, after the hedge fund filled their July 2011 redemption request with promissory notes.

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