Saturday, 29 April 2017
Last updated 14 hours ago
Sep 25 2007 | 7:59am ET
The liquidators of two failed Bear Stearns hedge funds have marshaled their arguments against seeking bankruptcy protection, telling the judge that ordered them to do so that it would hurt creditors.
KPMG’s Simon Lovell Clayton Whicker and Kristen Beighton told U.S. Bankruptcy Judge Burton Lifland—who on Aug. 30 rejected their Chapter 15 bankruptcy filing, which would have allowed the funds to liquidate in the Cayman Islands, where they are registered—that a Chapter 11 or Chapter 7 filing are “not viable options.”
According to a Friday filing, creditors of the Bear Stearns High-Grade Structured Credit Strategies Fund are in line to receive about $25 million, while those of the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund may get $50 million, but legal costs associated with Chapter 11 or Chapter 7 bankruptcy would eat up some of those funds.
Lifland had ordered the liquidators to seek Chapter 11 or Chapter 7 protection by Sept. 29, after which creditors will be permitted to seize the funds’ assets. Whicker and Beighton have appealed his decision and asked him to extend the restraining order until a federal appeals court judge can review his ruling.