IDD Daily Updates and Restructuring Alert Weekly Updates, our email alerts
Hedge Fund SageCrest Seeks Bankruptcy Protection
Deutsche Bank is among the hedge fund's lenders.
August 19, 2008
Greenwich, Conn.-based hedge fund SageCrest Finance, operated by Windmill Management, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court District of Connecticut, amid pressure from lenders and investors. SageCrest II entered bankruptcy protection on Sunday, the court confirmed to IDD.
According to the court spokesperson, it appears to have been a “quick filing” and creditors have not yet been formally notified.
Deutsche Bank is a lender to SageCrest, and reportedly has been urging the hedge fund to liquidate some assets to repay its debt to the bank. Deutsche issued a loan facility to SageCrest in 2007, the balance of which stands at approximately $110 million as of June, according to reports. The fund's ability to repay the loan was impaired after a series of failed investments earier this year.
Deutsche has been urging the hedge fund to liquidate assets to accelerate further repayment on its loans, a request SageCrest and Windmill have denied claiming selling now at "fire sale" prices would result in a loss to investors.
In June, SageCrest investor Wood Creek Capital Management sued the fund’s managers for failing to repay its investment.
Mindmill Management stated in a letter to investors dated yesterday, a copy of which IDD has obtained, that mounting pressure from Deutsche combined with Wood Creek's $5.8 million lawsuit and the threat of more litigation to come forced its hand in filing for bankruptcy. In a second letter by Windmill, the firm stated
paying redemptions would have an "adverse effect" on the fund and therfeore all redemption requests which have been submitted but not paid are officially "disallowed."
For more information on related topics, visit the following:
