Case will throw light on funds before Bear Stearns collapsed

When it emerged that two of Bear Stearns' hedge funds were in trouble in June 2007, few could have realised the implications.

As word spread that the funds needed to raise $4bn (£2.4bn) to cover losses, it appeared it might be an isolated situation that could be dealt with by selling assets.

But two years on, Bear has collapsed; Lehman Brothers has been liquidated, Merrill Lynch has jumped into the arms of Bank of America and the entire global economy has faced the worst recession for 70 years.

When pinpointing the start of the downturn, most commentators agree the implosion of Bear's Credit Strategies Master Fund and its sister Enhanced Master Fund mark the beginning of a cataclysmic series of events that provoked the financial crisis.