Bear Stearns steps in to avert meltdown of two hedge funds

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Bear Stearns, eager to avoid the dissolution of two big, but struggling, hedge funds, has reportedly proposed a $3.2 billion bailout that would keep the funds’ creditors from seizing and selling assets.

The firm yesterday informed the funds’ lenders that it would take over their loans. The bailout was proffered after reports that at least three of the lenders had offered their collateral for sale. Bear Stearns did not return calls for comment.

The deal could save the troubled High-Grade Structured Credit Strategies Enhanced Leverage Fund and High-Grade Structured Credit Strategies Fund.

The funds made long bets on subprime