US firm Sentinel files for Ch 11 bankruptcy
Sunday, August 19, 2007
SENTINEL Management Group Inc, a cash management firm serving the US futures industry whose decision to freeze client accounts on Tuesday helped roil global financial markets, filed for Chapter 11 bankruptcy protection late on Friday.
The firm, which managed about US$1.6 billion of assets, said in the filing that 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 causingunnecessary 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".
That announcement had helped to drive US stocks lower, taking the Dow Jones industrial average to a four-month low, as it added to concerns about failing entities due to highly volatile markets and a credit squeeze.
News about Sentinel came on the heels of problems at funds managed by Bear Stearns Cos, Goldman Sachs Group Inc and other companies in the United States and abroad.
The bankruptcy filing said Sentinel estimated assets and liabilities both exceeded US$100 million, but it wasn't more specific. It said it estimated it had at least 200 creditors.
Late on Tuesday afternoon, a US Commodity Futures Trading Commission official, who requested anonymity, had said US futures exchanges were trying to get other futures companies to step in and ease Sentinel's concerns about client redemptions.
Reuters
The firm, which managed about US$1.6 billion of assets, said in the filing that 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 causingunnecessary 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".
That announcement had helped to drive US stocks lower, taking the Dow Jones industrial average to a four-month low, as it added to concerns about failing entities due to highly volatile markets and a credit squeeze.
News about Sentinel came on the heels of problems at funds managed by Bear Stearns Cos, Goldman Sachs Group Inc and other companies in the United States and abroad.
The bankruptcy filing said Sentinel estimated assets and liabilities both exceeded US$100 million, but it wasn't more specific. It said it estimated it had at least 200 creditors.
Late on Tuesday afternoon, a US Commodity Futures Trading Commission official, who requested anonymity, had said US futures exchanges were trying to get other futures companies to step in and ease Sentinel's concerns about client redemptions.
Reuters
Business Besides Oil
