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Bear Stearns’ Hedge Funds’ Chapter 15 application rejected on COMI grounds

In a judgement here, published on 30 August 2007, Judge Burton Lifland in the US Bankruptcy Court (Southern District of New York) declined to recognise the Cayman Islands provisional liquidations of two Bear Stearns' Hedge Funds as foreign main proceedings.

Although registered in the Cayman Islands, the two companies' Centres of Main Interest were in the USA so the provisional liquidations could not be main proceedings.

Neither could they be foreign non-main proceedings as neither company had an establishment in the Cayman Islands.

The decision specifically uses the UNCITRAL Model Law and the European Insolvency Regulation to interpret the provisions of Chapter 15 of the US Bankruptcy Code. It also disagrees with parts of the Sphinx decision. Eurofood is cited.

 

 

 

Date: 3rd September, 2007
Author: Chris Laughton

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