Platinum Partners’ flagship hedge fund on Monday secured a legal shield that puts on-hold litigation accusing the troubled fund of looting Texas oil and gas company Black Elk Energy Offshore LLC, the Wall Street Journal reported today. Bankruptcy Judge Shelley Chapman said during a court hearing in Manhattan that she will grant the Platinum fund and a separate feeder fund recognition under chapter 15, the section of U.S. bankruptcy law dealing with international insolvencies. Her decision gives breathing space to the funds’ Cayman Island liquidators. The funds were placed in liquidation in the Cayman Islands over the summer with “a large amount of investor redemptions remaining unpaid past their due date,” according to filings by the liquidators made with the U.S. Bankruptcy Court in New York.
