Adventures in Thievery: Bear Stearns Caymans Bankruptcy Filing

When people call for the unfettered free market, they are really calling for these sorts of larcenous behaviors.

One of the little observed parts of the 2005 bankruptcy law allows American firms to go venue shopping for places with phony tax laws, phony regulation and phony courts to avoid any consequences of their actions.

Creditors may argue that the main case should proceed in the U.S. To do so they must show the U.S. bankruptcy judge that the hedge funds had their ``center of main interests'' in the U.S, said Robin Phelan, of Haynes & Boone, who represented hedge fund InverWorld Inc. in its 1999 liquidation in the Caymans.

Because the two hedge funds were incorporated in the Cayman Islands, that's presumed to be the center of main interests, according to Phelan.

Of course, the plaintiffs are not angels either, investing in predatory lending as a way to make money.

If there were only a way for both sides to lose.