Fletcher International Ltd., a hedge fund managed by the investment firm of Alphonse “Buddy” Fletcher, sued to block Cayman Islands-appointed liquidators from selling off its assets, after having filed for bankruptcy.

The lawsuit, filed in U.S. Bankruptcy Court in Manhattan July 2, seeks to stop Ernst & Young, official liquidators appointed by a Cayman Island judge after three Louisiana pension funds sued to get their money back, from interfering with the hedge fund’s efforts to reorganize under Chapter 11.

The liquidators filed a petition to wind up the company in Bermuda “thereby seeking to make an end run around the New York court” where litigation was under way on the same issue, Fletcher International’s president Floyd Saunders said in a court-filed statement.

Alphonse Fletcher gained prominence on Wall Street in 2003 when his firm reported 300 percent-a-year returns, according to the Wall Street Journal, which first reported the bankruptcy of Fletcher International. Alphonse Fletcher was also profiled in the book “Stock Market Wizards” and last year sued the co-op board at The Dakota apartment building, accusing it of racial discrimination and defamation, according to the New York Times. The Dakota, where Alphonse Fletcher served as president from 2007 to 2009, was the home of John Lennon.

Fletcher International filed for bankruptcy protection in Manhattan on June 29, listing assets of about $52.5 million and liabilities of about $23.8 million. The numbers are uncertain, according to the bankruptcy filing, because there is no active trading market for some of the assets and some of the liabilities may be disputed.

Credit Suisse

The hedge fund also claimed Credit Suisse Group AG’s securities units are refusing to return about $1.66 million belonging to Fletcher International. Credit Suisse withheld the money, claiming it’s to offset debts of Fletcher International and that other parties may claim rights to the hedge fund’s assets, according to the filing. The bank didn’t immediately respond to a request for comment left at its corporation communications department in Sydney.

Founded in 1991, Fletcher Asset Management created a group of private investment funds which are arranged in a “master- feeder fund” structure, according to the bankruptcy filing. Feeder funds buy common or preferred shares or debt with money from investors, according to the filing. Fletcher International is the “master fund” in the structure.

A Cayman Island judge ordered the liquidation of two feeder funds, including the FIA Leveraged Fund (FIAL), after the Firefighters’ Retirement System, the New Orleans Fire Fighters’ Pension & Relief Fund and the Municipal Employees’ Retirement System of Louisiana, who had bought $100 million of shares in FIAL in 2008, sought to have the investment returned.

The filing in Cayman Islands by the Louisiana pension funds in January, seeking to have the funds liquidated, was made after almost a year of negotiations over the redemption of the investments, according to the bankruptcy filing.

The case is Fletcher International Ltd. v. Fletcher Income Arbitrage Fund in Voluntary Liquidation. 12-12796. U.S. Bankruptcy Court Southern District of New York (Manhattan.)

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