Hedge Funds Working Both Sides of Bankrupt Companies
Questions (and possibly large-scale litigation) are brewing over the role of hedge funds in creditors’ committees. Over at Forbes.com, they look to the Chapter 11 bankruptcy of FiberMark in Vermont. A hedge fund, Silver Point Capital, is sitting on the creditors’ committee of FiberMark as it goes through bankruptcy. Silver Point has been accused of using confidential information that it obtained as a member of the creditors’ committee to trade FiberMark securities. Forbes looks to the potential for other hedge funds to face similar conflict-of-interest questions.
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