A Cayman Island mutual fund whose manager was charged in a $100 million bait-and-switch scheme filed for chapter 15 bankruptcy protection in the U.S. to protect its assets from lawsuits by disgruntled investors, Bloomberg News reported. Representatives of the so-called Income Collecting 1-3 Months T-Bills Mutual Fund asked a federal bankruptcy judge in New York on Friday to recognize their efforts to liquidate the company, which they said would include an attempt to pay back investors. Recognition of the foreign liquidation would put a hold on any lawsuits against the fund. The fund’s manager, Ofer Abarbanel, was arrested June 24 in Los Angeles and charged with securities and wire fraud. U.S. prosecutors said the California man told an investor group that its money would be primarily placed in short-term U.S. Treasury securities but instead put it in funds he controlled or was closely associated with. Two days before Abarbanel’s arrest, the fund was placed in liquidation in the Cayman Islands on the vote of its sole shareholder, NY Alaska ETF Management LP, according to court records. The fund’s representatives said in court papers that the fund has “a particular need” for recognition of its liquidation efforts, given the Securities and Exchange Commission’s findings of “potential significant fraud against the fund and its creditors.” According to the SEC, the fund “had $106 million in liabilities against possibly only approximately $88 million in assets,” the lawyers said. “Based upon these serious allegations of fraud, it is likely that other parties may assert litigation against the fund. A stay of any pending and potential future proceedings will be important to the (representatives’) investigation and efforts to collect assets and wind down the fund.” Read more.