NEW YORK Sentinel Management Group Inc., a U.S. futures commission merchant whose decision to freeze client accounts on Tuesday helped roil global financial markets, filed for Chapter 11 bankruptcy protection late on Friday.
The cash management company, which managed about $1.6 billion of assets, said its board decided it was in "the best interests of the corporation, its creditors and other interested parties that a voluntary petition be filed ... in an effort to restructure the indebtedness of the corporation," according to a filing in the bankruptcy court for the Northern District of Illinois.
Sentinel told clients in an August 13 letter: "we are concerned that we cannot meet any significant redemption requests without selling securities at deep discounts to their fair value and therefore causing unnecessary losses to our clients."
The Northbrook, Illinois-based firm said then that "we don't believe it is in anyone's best interest if a run on Sentinel took place and we were in a forced liquidation mode."
The bankruptcy filing said Sentinel estimated assets and liabilities both exceeded $100 million, but it wasn't more specific. It said it estimated it had at least 200 creditors.
It said it signed a letter on August 15 engaging the law firm of Goldberg Kohn Bell Black Rosenbloom and Moritz Ltd. to help with the bankruptcy petition.