Bear Stearns hedge fund indenture trustee withdraws injunction relief motion

By Caroline Salls

Pittsburgh, Dec. 7 - Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd.'s derivative transaction indenture trustee withdrew a request for relief from the hedge funds' preliminary injunction, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Bank of America, NA said the injunction was overly broad.

Bank of America also argued that the injunction should not prevent it from exercising its voting rights in connection with the indenture.

The firm said it wanted to exercise its voting rights to amend the derivative transaction indenture so no payments could be made to any holders of preference shares unless all of the issuer's outstanding secured floating-rate notes had been paid, as well as all of the outstanding discount commercial paper notes.

Bank of America also argued that its voting rights would not disrupt the funds' Cayman Islands liquidating proceedings, and therefore the injunction granted under Chapter 15 should not apply to Bank of America's voting rights.

On Sept. 24, the court issued an injunction, which prevented creditors from taking legal action in the United States against the funds.

The Bear Stearns hedge funds filed for protection in the Cayman Islands on July 15 and subsequently filed for bankruptcy in the United States on Aug. 1.

The funds are Cayman Islands investment companies. The Chapter 15 case number is 07-12383.

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