NEW YORK — A federal judge on Monday barred investors from seizing the assets of two Bear Stearns Cos. hedge funds for 10 days but indicated he is considering lifting the funds' U.S. bankruptcy protections.
Judge Burton Lifland of the U.S. Bankruptcy Court in Manhattan said he hadn't reached a decision on the funds' request for U.S. Chapter 15 protection, which would allow the funds to seek bankruptcy-law protection in the United States while liquidating in the Cayman Islands.
The two funds bet heavily on subprime mortgage loans and as defaults increased, creditors began to clamor for their collateral, leaving the funds short on cash.