Cayman Net News- According to a report in the Financial Times (FT), investors in two failed Cayman-registered hedge funds began legal action here on Tuesday in an attempt to seize control of the funds, which they hope to use as a platform to demand compensation from US investment bank, Bear Stearns.
The hearings listed for the Grand Court over 19 to 21 February before the Chief Justice Hon Anthony Smellie, are reported by the FT to involve a group of rebel shareholders in the Bear Stearns Enhanced Leverage Overseas and High Grade Overseas funds, who are now attempting to reverse the bank’s decision to put them into liquidation.
Apparently, investors had waged a successful campaign to appoint their own directors to one fund, a move to gain control that was blocked when the fund was put into liquidation.
The case represents just another facet in the complex legal action against Bear Stearns after the failure of the two hedge funds last July, with a combined loss of $1.6 billion, after bad investments in sub-prime mortgages.
