May 30, 2008

Cayman Islands Liquidations of Failed Bear Stearns Hedge Funds Denied Access to US Bankruptcy Court

In an opinion filed on May 27, 2008, Judge Sweet of the US District Court for the Southern District of New York affirmed a Bankruptcy Court decision holding that the official Cayman Islands liquidations of two failed Bear Stearns hedge funds were not entitled to recognition by the US Bankruptcy Court as either “main” or “nonmain” proceedings under Chapter 15 of the Bankruptcy Code.

Bayou Creditors Sue Goldman Prime Brokerage Unit to Avoid Allegedly Fraudulent Transfers

On May 30, 2008, the Official Unsecured Creditors’ Committee of Bayou Group, LLC and affiliated fund and advisory entities filed an adversary proceeding against Goldman Sachs Execution and Clearing, L.P. and Spear, Leeds & Kellogg, L.P. in the Bayou Chapter 11 bankruptcy case pending in the SDNY, claiming that the Bayou bankruptcy estate is entitled to avoid allegedly fraudulent transfers to Goldman margin accounts.

Asian Corporate Governance Association Publishes White Paper Critiquing Corporate Governance in Japan

Asian Corporate Governance Association published a white paper calling for an overhaul of Japanese corporate governance, just as hedge fund TCI’s fight for greater control of J-Power heats up.

Do Credit Default Swaps Need to Be Regulated as Insurance?

The New York State Insurance Superintendent suggested in an interview that short positions in credit default swaps may be ripe for regulation as insurance, but the views of industry participants and other commentators are sharply divided.