Hedge fund must prove Cayman Islands is best for bankruptcy
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| Published on Friday, September 14, 2007 |
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By Tiffany Kary and Bill Rochelle
NEW YORK, USA (Bloomberg): Basis Capital Fund Management Ltd, the Australian firm seeking to liquidate a failed fund in the Cayman Islands, must prove it does enough business there to avoid having to file for court protection in the US, a judge said.
Bankruptcy Judge Robert Gerber in New York on Wednesday gave Basis Capital a four-page list of evidence he'd like to see before deciding whether the Cayman Islands can be the main center of liquidation for its Basis Yield Alpha Fund, court filings show.
The judge asked for information on where Basis Yield's back-office operations were conducted, where the fund's assets and personnel were located, where the financial records were kept and who actually conducted the fund's business.
Karen Dine, a lawyer for Basis Yield, didn't immediately return a call seeking comment.
Bear Stearns Cos. lost its bid to liquidate two bankrupt hedge funds in the Cayman Islands last month, a decision that sets a high bar for proving that funds with offices in the Caribbean nation have enough business there to meet the legal standard for US protection in bankruptcy proceedings.
Basis Yield filed for liquidation last month in the Cayman Islands and submitted a petition in New York under Chapter 15 of the US bankruptcy code on August 29. Under Chapter 15, foreign courts manage a liquidation once a US court determines that a company's "center of main interests" lies in the other country.
Basis Yield won recognition of its Cayman Islands liquidation from a British court on September 5 and will present evidence for its case for US protection in a hearing scheduled for November 19. | | | | Reads : 184 | | | |
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