Investors in Bear Stearns’ two failed hedge funds may have a harder time getting their money back because the company liquidated its funds in the Cayman Islands instead of New York, reports Bloomberg News. While most of the funds’ assets were in New York, they were incorporated in the islands and Bear has asked a U.S. judge to protect the funds’ assets while proceedings move forward in the Caymans. The islands’ judicial system tends to favor management. The Bear scenario may establish a precedent for where future failed hedge funds declare bankruptcy. “This is definitely going to be closely watched,” said Evan Flaschen, a lawyer with Bracewell & Giuliani in New York. “Other hedge funds might do the same thing.”