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We present new results on the dynamics and gravitational-wave emission from the collapse of differentially-rotating neutron stars. We have considered a number of polytropic stellar models having different values of the dimensionless angular momentum J/M^2, where J and M are the asymptotic angular momentum and mass of the star, respectively. For neutron stars with J/M^21, i.e., "supra-Kerr" models, on the other hand, we were not able to find models that are dynamically unstable and all of the computed supra-Kerr models were found to be far from the stability threshold. For these models a gravitational collapse is possible only after a very severe and artificial reduction of the pressure, which then leads to a torus developing nonaxisymmetric instabilities and eventually contracting to a stable axisymmetric stellar configuration. While this does not exclude the possibility that a naked singularity can be produced by the collapse of a differentially rotating star, it also suggests that cosmic censorship is not violated and that generic conditions for a supra-Kerr progenitor do not lead to a naked singularity.