MF Global Holdings on Monday filed for Chapter 11 bankruptcy protection.
The firm listed total debt of $39.7 billion and assets of $41 billion in Chapter 11 papers filed in U.S. Bankruptcy Court in New York. Its finance unit, MF Global Finance USA, also filed, with debt of as much as $50 million and assets of as much as $500 million.
“The boards of directors of both entities authorized the filing of the Chapter 11 petition in order to protect their assets,” the companies said in a statement.
MF Global's board had met through the weekend in New York to consider options including a sale to avert failure, according to a person with direct knowledge of the situation. Following a record loss, MF Global was suspended on Monday from doing new business with the New York Federal Reserve, according to a statement on the regulator's website. Trading in MF Global's stock was also halted.
MF Global declined 67% last week amid its disclosures of bets on European sovereign-debt. The company reported a $191.6 million quarterly loss on Oct. 25, and Moody's Investors Service and Fitch Ratings cut its credit rankings to junk.
According to the bankruptcy filing, investment management firms that owned more than 5% of MF Global’s outstanding stock as of Sept. 30 included Pyramis Global Advisors, with 8.44%, RS Investments, 7.81%; hedge fund Fine Capital Partners, 7.37%; TIAA-CREF Investment Management, 5.77%; and Dimensional, with 5.41%.
Douglas Appell contributed to this story.