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December 18, 2007 |
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BEAR STEARNS: Receives Subpoena from New York Attorney General New York Attorney General Andrew Cuomo sent subpoenas to Bear Stearns Cos., Merrill Lynch & Co., and Deutsche Bank AG, seeking information related to the packaging and selling of debt tied to "high-risk mortgages," the Wall Street Journal reported. The investigation is examining how investment banks adequately reviewed the quality of mortgages before packaging them into products that were then sold to investors, Reuters says. The subpoenas also asked information about how the debt was pooled into securities, including the investment firms' relationship with credit-rating firms, Reuters added. Mr. Cuomo stated in October that he had subpoenaed the investment banks in relation to his probe into the United States mortgage loan market, Reuters related. Bear Stearns Cos. is parent to Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., who are undergoing winding up proceedings in the Cayman Islands. The Cayman Island hedge funds invested in collateralized debt obligations related to U.S. subprime mortgage loans. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On Aug. 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than US$100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) |
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