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Hedge Fund SageCrest Files For Bankruptcy

West Palm Beach (HedgeCo.net) – In an effort to head off a forced asset sale, Windmill Management’s SageCrest Finance and SageCrest II filed for Chapter 11 bankruptcy after its assets fell sharply.

The hedge fund filed at U.S. Bankruptcy Court in Bridgeport, Conn. In a letter to investors, The fund said that the bankruptcy process would give SageCrest the time necessary to conduct an orderly liquidation of their assets to maximise the return to investors.

The fund described its investment strategy as making short-term loans to small- and mid-sized firms that cannot secure them from banks and specialty lenders. "Our position in a market where lending opportunities continue to outpace sources of capital provides an ideal point of departure for growth." The SageCrest website says, "Our investments target asset-rich and undervalued situations overlooked by, and with limited access to, the mainstream capital markets."

In its bankruptcy filing, SageCrest claimed fewer than 49 creditors and debts of between $1 million and $10 million. The hedge fund, which once boasted assets of as much as $650 million, said it now had between $50 million and $100 million.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

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Hedge Fund SageCrest Files for Bankruptcy

New York (HedgeCo.Net) – Greenwich-based hedge fund SageCrest Finance has filed for Chapter 11 bankruptcy protection.  The credit opportunity fund, which grants short-term loan to companies left with few financing alternatives, said its recent losses were due to the condition of the debt markets coupled with mounting lawsuits. 

The fund once managed around $900 million.  Current assets are listed at $50-$100 million.  In addition to providing short term capital to businesses, SageCrest also extended loans to plaintiffs in slip-and-fall lawsuits.  They also dabbled in the art world and are caught in a nasty battle mired with scandal to retrieve $40 million which they claim is owed to them.

SageCrest is run by Alan and Philip Morton.  The fund has had its recent share of bad press, with two investors suing the company for various reasons this year.  Westerly Capital filed a suit in June claiming the managers ran the fund to their own benefit and to the detriment of its clients.  This followed an earlier suit by Wood Creek Capital Management, who claimed that SageCrest did not adhere to its redemption policy.   

In a petition filed on Sunday in U.S. Bankruptcy Court in Connecticut, SageCrest listed debts in the range of $1 million to $10 million.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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