In a decision rendered late last week, Judge Lifland of the Southern District of New York Bankruptcy Court refused to recognize under chapter 15 of the Bankruptcy Code, either as “foreign main proceedings” or as “foreign nonmain proceedings,” the well-publicized liquidations brought in the Cayman Islands by two Bear Stearns hedge funds that were victims of volatility in the sub-prime lending market. Judge Lifland’s ruling would seem to close the door on distressed New York-based hedge funds choosing offshore proceedings as the principal vehicle for their liquidation and then seeking ancillary relief from a US bankruptcy court.