The Lowdown on Highland’s Bankruptcy

It’s unusual for hedge funds to file for bankruptcy — but it’s not unprecedented.

Dallas, Texas (Matt Nager/Bloomberg)

Dallas, Texas

(Matt Nager/Bloomberg)

Hedge Fund investors suffering agita after Wednesday’s Chapter 11 bankruptcy filing by Highland Capital Management LP can put down the Zantac.

Such hedge fund bankruptcies, which may attract lots of attention, are vanishingly rare and will likely remain so in the future, according to Lisa Schweitzer and Luke Barefoot, both partners at the law firm of Cleary Gottlieb Steen & Hamilton.

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