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July 25, 2008 6:55:29 AM CDT

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Bear Stearns Takes Refuge in Caribbean

Posted Aug 7, 07 8:13 PM CDT in US,  Business 

(Newser) – Bear Stearns, faced with the implosion of two hedge funds worth more than $1 billion, has decided to liquidate them in the Cayman Islands—a move that will give creditors and investors less access to their money.  Bloomberg forecasts a court battle over the tactic, which an analyst said will yield creditors and investors “a pittance on the dollar.”

Though their assets are stateside, the two funds that collapsed are incorporated in the Caymans. Three out of four hedge funds are incorporated somewhere in the Caribbean, Bloomberg estimates. The case will be watched closely, as it may establish a precedent for other failed funds.

Source Bloomberg

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A specialist on the floor of the New York Stock Exchange keeps his eyes on three monitors late on a down trading day, Wednesday, July 18, 2007. Stocks retreated as investors reacted uneasily to Federal...   (Associated Press)
In this photo released by the New York Stock Exchange, the board showing the totals of the day's activity is shown, Friday, Aug. 3, 2007 in New York. The Dow Jones industrial average sank more than 280...   (Associated Press)
The logo for Bear Stearns is shown at its corporate headquarters in New York, Wednesday, July 18, 2007. Stocks retreated Wednesday after Bear Stearns Cos. told investors there was little value left in...   (Associated Press)
People enter Bear Stearns corporate headquarters in New York, Wednesday, July 18, 2007. Stocks retreated Wednesday after Bear Stearns Cos. told investors there was little value left in two failed hedge...   (Associated Press)
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subprime mortgages  • Bear Stearns  • hedge fund  • bankruptcy  • Caribbean  • Cayman Islands


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