Bear Stearns Cos.' two bankrupt hedge funds have appealed a ruling by a federal judge who refused to grant protection from US lawsuits on the basis of a Cayman Islands liquidation.
A notice of appeal, filed in US District Court in New York on Monday, said the funds' Cayman Islands liquidators will appeal the decision in federal court. US Bankruptcy Judge Burton Lifland said on August 30 that the funds' filings in the Cayman Islands didn't make them eligible for protection under Chapter 15, a provision of US bankruptcy law designed to assist foreign companies liquidating overseas.
Simon Whicker and Kristen Beighton, liquidators for the Cayman Islands funds, filed the notice of appeal, which didn't include information about the grounds for the appeal. Whicker didn't immediately return a call for comment.
Lifland denied Bear Stearns' request on the grounds that the funds' Cayman Islands interests didn't meet rules that would qualify a liquidation there as a "foreign main proceeding."
"There are no employees or managers in the Cayman Islands, the investment manager for the funds is located in New York, the administrator that runs the back-office operation of the funds is in the US along with the funds' books and records," Lifland wrote in his ruling.
Fred Hodara, the US counsel for the foreign liquidators, didn't immediately return a call for comment. Hodara is a partner with Akin Gump Strauss Hauer & Feld in New York.