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TUESDAY, NOVEMBER 24, 2009
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Bear Stearns Takes Refuge in Caribbean

Bankrupt hedge funds ticketed for liquidation in friendly Caymans

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(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.

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 Reserve Chairman Ben Bernanke's comments on the economy and news that two Bear Stearns Cos....
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)
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 funds, renewing concerns that soured subprime loans will wreak financial havoc on Wall Street. (AP Photo/Mark Lennihan)
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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Blowholes   ((c) joyosity)
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 points after comments from a Bear Stearns executive reinvigorated the market's fears of...
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 two failed hedge funds, renewing concerns that soured subprime loans will wreak financial havoc on Wall Street....
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)
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bankruptcy • subprime mortgages • Bear Stearns • hedge fund • Caribbean • Cayman Islands

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