Bear to get (another) day in court

Few things are harder to kill than a zombie hedge fund. Bear Stearns’ entanglement with Michael Berger’s Manhattan Investment Fund—soon to celebrate the eighth anniversary of its implosion—will go back under the colonoscope after a federal judge yesterday tossed a bankruptcy judge’s order that it cough up $160-odd million relating to allegedly fraudulent transfers in 1999.

US District Judge Naomi Reice Buchwald said that Bear Stearns took a number of steps, including contacting the fund’s auditor, Deloitte & Touche, and warning it of problems.

“We find that there are genuine issues of material fact as to whether the proactive steps taken by Bear Stearns demonstrated diligence in its investigation of the fund,” the judge wrote. “Thus, trial will be necessary on this issue.”

Of course, with Bear itself doing a creditable zombie impersonation these days so it should be a fair fight.

Bear Stearns to get trial over hedge fund money
by Tim McLaughlin
Reuters Dec. 18 2007