Cay Compass -A US bankruptcy court ruling last week concerning two failed hedge funds incorporated in the Cayman Islands could have implications for other troubled hedge funds incorporated off–shore.
The court ruled the two hedge funds could not protect themselves from claims by US creditors by liquidating in the Cayman Islands.
But according to finance experts on Grand Cayman, the ruling will not make the Cayman Islands any less attractive as an investment location for fund managers.
The two Bear Stearns’ funds at the center of the proceedings – estimated to have had more than US$1.5 billion of capital as recently as March – filed for bankruptcy on 31 July after suffering large losses on the US subprime mortgage market.
Provisional liquidators now think recoveries for the two funds will amount to US$25 million and US$50 million respectively.
