Cayman lawyers say toxic asset funds multiplying

[Robbien]

Source: Reuters

WASHINGTON (Reuters) - Distressed asset funds targeting U.S. toxic bank assets are being set up at a rapid clip using Cayman Islands legal structures, said lawyers from a Cayman law firm on Tuesday.

"There are a lot of funds being established now to take on the toxic assets," Charles Jennings, managing partner at the law firm of Maples and Calder, told Reuters.

. . .

Smith, of Maples and Calder, said a Cayman-based fund for buying toxic assets would use a typical structure, with a master fund in the Cayman Islands, a Delaware-based feeder fund for U.S. taxable investors, and a Cayman feeder fund for non-U.S. investors and tax-exempt U.S. investors.

The lawyers were in Washington on Tuesday discussing the Cayman Islands' role in the financial system with journalists in a public relations push. The island nation has been under pressure from congressional investigators over tax issues.

Legislation introduced in the Senate earlier this month targets offshore financial havens such as Switzerland and the Cayman Islands for shutdown. Senator Carl Levin, the bill's sponsor, has criticized the Caymans over its tax business.

Jennings questioned the potential for unintended consequences from the Levin bill "potentially gumming up the international flow of capital just at a time when it is most critical."

Read more: http://news.google.com/news?pz=1&ned=us&hl=en&q=%22star+tribune%22+avista

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Ironic. Taxpayer funds being used to support these tax-exempt toxic assets investment funds.

[Demeter]

1. I'm Speechless

[KamaAina]

2. And just who, might I ask, is setting up these funds?

And what's the reason for sitting on your a$$ while the financial system implodes?

[Lucky Luciano]

4. It is pretty safe to say that Carlyle and all other private equity

firms would have preferred the bull market and easy credit to continue....this is just a bad situation that they are trying to make the best of (for themselves only of course).

[acmavm]

3. Wow. Wow. Just Wow! Why is this shit happening? Can no one do anything?

I guess we ARE going to have to get the torches and the pitchforks.

How do we organize?

[AndyTiedye]

5. A Better Question is "Who Are They Selling this Crap To?"

[dgibby]

7. I was just asking myself that very question.

I realize I'm an economic Neanderthal, but I don't get it.:shrug:

[Robbien]

8. They really don't have to sell them to anyone

Taxpayers give them the money to buy the toxic assets from the banks. The private equity funds make money off the fees earned from buying and managing the toxic investments. (We, the taxpayer, of course pays those fees).

Banks win. Private equity funds win. Taxpayers will receive any monies collected if the toxic assets ever sell.

[Alamuti Lotus]

6. These off-shore banking/money laundering havens should just be carpet bombed

forget Fallujah or Gaza, the enemy is clearly located right off the coast......