Continued Fun at Bear Stearns & Related News / Opinions

[rose-colored-coolaid]

[TJ_98370]

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....The $1.6 billion bailout package Bear put up is almost certain to be paid back. The lenders who backed the funds initially have been paid back, too. The investors - Bear's clients - on the other hand, will get a "thank you" and "come again soon."....

The only question that remains is how much of the $1.6 billion bailout package will Bear get back? DJO believes they will get it all back.
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[deejayoh]

[TJ_98370]

[TJ_98370]

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A federal judge refused to grant permanent protection from U.S. lawsuits for Bear Stearns Cos.' two bankrupt hedge funds, questioning whether the Cayman Islands should be the principal site of their liquidation.

U.S. Bankruptcy Judge Burton Lifland in New York today said he ``will issue a decision in the next week to 10 days'' on whether Bear Stearns picked the proper jurisdiction for the funds, whose assets are mostly located in New York. He banned any suits against the funds while he deliberates........
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[Eleua]

[TJ_98370]

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Troubled offshore funds may have to become more creative in looking to protect their U.S. assets from creditors, if a controversial new bankruptcy court decision is upheld. A U.S. bankruptcy court in New York has declined to recognize the Cayman Islands liquidation proceedings filed by two Bear Stearns hedge funds whose Cayman liquidators had sought to protect against seizure of U.S. assets by filing petitions for protection under Chapter 15 of the Bankruptcy Code. Chapter 15 is a comparatively new addition to U.S. law, and the meaning and effect of that law are still being tested. .........
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............In a controversial Opinion issued on August 30, 2007 by Bankruptcy Judge Burton R. Lifland, the court declined to recognize the funds' Cayman liquidation proceedings, whether as "foreign main" or "foreign non-main." Instead, Judge Lifland invited the funds' foreign representatives to commence an involuntary Chapter 11 proceeding, if protection for U.S. assets was desired. Judge Lifland held that a Cayman exempted company could not, under Cayman Law, have the requisite "center of main interest," or COMI, in the Caymans, as exempted companies must inherently transact business abroad. As for the Bear Stearns funds, Judge Lifland opined that the funds' COMI was likely in New York, despite registration in the Cayman Islands, as the funds' day-to-day operations and assets were New York-based. Without a COMI in the Cayman Islands, Judge Lifland declined to deem the Cayman liquidation proceedings as the funds' main proceeding.......

[TJ_98370]

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It appears Mr. Lewis may be doing some bottom fishing:



British billionaire Joseph Lewis, a magnate who controls more than 170 companies, has acquired a 7 percent stake in investment bank Bear Stearns Cos., becoming one of its largest shareholders.

Lewis, who runs Florida-based investment vehicle Tavistock Group, bought 8.1 million shares between Aug. 6 and Sep. 7, according to documents filed Monday with the Securities and Exchange Commission. That would make him the investment bank's largest shareholder, assuming no others holders have adjusted their stakes substantially of late......
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[TJ_98370]

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From Calculated Risk:



It used to be basically impossible to keep up with the terms of newly-issued mortgage deals, but you could at least stay up to date with downgrades. Now that the situation is completely reversed, I thought it might be interesting to look at the terms of one of the very few new issues out there.....
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[deejayoh]

[TJ_98370]

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A group of London investors is expected to join shortly an arbitration claim filed in the U.S. against Bear Stearns & Co. for allegedly misrepresenting the risk and return of two failed hedge funds. Legal action was initiated on Aug. 1 by New York securities law firms Zamansky & Associates and Rich & Intelisano on behalf of an undisclosed investor.......

..........In the original complaint, filed with an NASD arbitration tribunal, the U.S. investor charges that the Bear funds never provided transparent disclosure about the full extent of their sub-prime exposure due to investments in pooled collateralized debt obligations and asset-backed securities. "In fact," says the filing, "investors were not given full disclosure until well after it was too late for them to redeem their investments, and the fund was worthless."

Zamansky also alleges that Bear Stearns misstated the funds' returns. "We believe that Bear Stearns misrepresented the risk to investors of these funds," he said. "Bear represented that they had risk controls in place to mitigate losses. On conference calls, they [also] misrepresented the performance of the funds to prevent a run on the bank." If true, such actions would constitute securities fraud under the Securities Exchange Act of 1934.

A spokesperson for Bear Stearns said that "the allegations are unjustified and without merit. The accredited, high-net-worth investors in the fund were made very aware that this was a high-risk, speculative investment vehicle.".......
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[TJ_98370]

DJO-

Those were informative articles.

I think Bear Stearns will survive. What's a measly $200 million. Somebody will just have to do without their Christmas bonus this year, maybe.

[deejayoh]

TJ - did you see this? all the hullabaloo about bear looks like it completely missed the story...

[Siddha]

LOL!!!

[TJ_98370]