In a recent decision,1 Judge Sweet of the United States District Court for the Southern District of New York affirmed a bankruptcy court decision and refused to recognize under chapter 15 of the Bankruptcy Code either as “foreign main proceedings” or as “foreign nonmain proceedings” the well-publicized liquidations brought in the Grand Court of the Cayman Islands by two Bear Stearns hedge funds (the “Funds”).
Funds' assets in the U.S. has been denied by the United States Bankruptcy Court for the Southern District of New York. See 2007 Bankr. LEXIS 2949, *26 (Bankr. S.D.N.Y. Aug. 30 , 2007). The Funds were being liquidated in the Cayman Islands, but the bankruptcy court held that they were not eligible for Chapter 15 relief under the U.S. Bankruptcy Code (the "Code") because the liquidations were not pending in a country where the Funds had their "center of main interests" or an "establishment" for the conduct of business.
In a decision rendered late last week, Judge Lifland of the Southern District of New York Bankruptcy Court refused to recognize under chapter 15 of the Bankruptcy Code, either as “foreign main proceedings” or as “foreign nonmain proceedings,” the well-publicized liquidations brought in the Cayman Islands by two Bear Stearns hedge funds that were victims of volatility in the sub-prime lending market.
A decision recently handed down by the U.S. District Court for the Western District of Washington should be of interest to lenders and distressed debt purchasers. In Meridian Sunrise Village, LLC v. NB Distressed Debt Investment Fund Ltd. (In re Meridian Sunrise Village, LLC), 2014 BL 62646 (W.D. Wash. Mar. 6, 2014), a lender group had provided $75 million in financing to a company for the purpose of constructing a shopping center.
Recent Developments
Recent Developments
Recent Developments
In the July/August 2010 edition of the Business Restructuring Review (Vol. 9, No. 4), we reported on significant changes to Rule 2019 of the Federal Rules of Bankruptcy Procedure ("Rule 2019") recommended by the Advisory Committee on Bankruptcy Rules (the "Rules Committee").
Bankruptcy headlines in 2007 were awash with tidings of controversial developments in the chapter 11 cases of Northwest Airlines and its affiliates that sent shock waves through the "distressed" investment community. A New York bankruptcy court ruled that an unofficial, or "ad hoc," committee consisting of hedge funds and other distressed investment entities holding Northwest stock and claims was obligated under a formerly obscure provision in the Federal Rules of Bankruptcy Procedure—Rule 2019—to disclose the details of its members' trading positions, including the acquisition prices.
The failed bid of liquidators for two hedge funds affiliated with defunct investment firm Bear Stearns & Co., Inc., to obtain recognition of the funds’ Cayman Islands winding-up proceedings under chapter 15 of the Bankruptcy Code was featured prominently in business headlines during the late summer and fall of 2007.