Three Louisiana pension funds fear huge losses from their $100 million in investments in Fletcher Asset Management.The Bermuda-based hedge fund Fletcher International is affiliated with that New York firm, and is fighting in a New York court to halt an attempted liquidation in Bermuda. The issue is whether hedge funds that incorporate abroad can use US Bankruptcy Court to stop investors when they seek liquidation in places like Bermuda.An article in the Times Picayune of New Orleans yesterday described how officials went to meet with the hedge fund’s manager, prominent Wall Street investor Alphonse “Buddy” Fletcher junior, after requests made to Fletcher to cash out tens of millions of dollars in holdings were met with promissory notes instead.“Each of the three funds invested between 3.9 percent to 8.6 percent of their assets in Fletcher after the firm made a pitch promising to deliver every investor’s dream: high returns with low risk,” the paper reported.“In a petition filed earlier this year in the Grand Court of the Cayman Islands, the pension officials argued that liquidators should be appointed by the court to investigate the company’s affairs and take control of its assets, saying Fletcher had failed to file audited financial statements since 2008, and that the fund appeared to lack directors for two months beginning in November 2011.“In 2008, trustees of the pension systems invested a combined $100 million in the Fletcher fund, a multi-level ‘master-feeder’ fund structure involving companies incorporated in the Bahamas, Bermuda, Delaware and the Cayman Islands.“The arrangement, which officials say is similar to others that the Firefighters’ Retirement System and Municipal Employees’ Retirement System have invested with in the past, promised a guaranteed 12 percent return on their money. If the return dipped lower, the difference would be made up by $50 million put up by a third-party investor that was advised by Citco Fund Services, an independent hedge fund administrator.”The paper said officials at the state pension funds have petitioned the Grand Court of the Cayman Islands, where the investment fund is based, in an attempt to force it into liquidation, a request that was granted in April. Fletcher has appealed that ruling.Another fund, in which the FIA Leveraged Fund had directly invested its assets, has also been put into voluntary liquidation, the paper said, citing an official.“That fund, in turn, invested its assets in a Delaware company, Fletcher International Inc, which in turn invested its assets in the master fund, Fletcher International Ltd, a company incorporated in Bermuda, according to court documents. In May, lawyers for the three pension systems also petitioned the Cayman Islands court to force Fletcher’s ‘master fund’, Fletcher International Ltd, into liquidation.”In response to the legal manoeuvring, Fletcher International filed for bankruptcy protection in New York on July 2, an attempt to control its assets and manage the liquidation on its own, according to a court filing, which says Fletcher has more “technical knowledge and experience” to liquidate the assets “in a manner that will maximise value”.The United States Bankruptcy Court for the Southern District of New York then issued a 14-day restraining order, which Stockstill said has temporarily prevented the liquidators from taking any further action against the fund.The Offshore Alert website meanwhile reported yesterday on a filing in which Fletcher International seeks to give a different ownership structure claiming the Bermuda fund is actually 100 percent owned by a Delaware firm. The company that previously claimed to be the majority owner, Fletcher Income Arbitrage Fund, did not own any shares at all, according to his new affidavit.