News
March 04, 2008

Jenner & Block's team representing Frederick Grede, the trustee in bankruptcy of Sentinel Management Group, filed a $550 million lawsuit against the Bank of New York, Sentinel's banker yesterday.  The complaint alleges that the bank established an improper account structure that facilitated a scheme by certain insiders at Sentinel to defraud the company of hundreds of millions of dollars.  In addition to damages, the complaint seeks avoidance of hundreds of millions of dollars in alleged fraudulent transfers to the bank, subordination of the bank's lien to the claims of Sentinel's customers and other creditors, and other relief.

Sentinel Management Group, a Northbrook, Illinois-based cash management firm, filed for bankruptcy protection on August 17, 2007, after freezing customer redemptions earlier that week.  Sentinel’s records reveal that it has more than $1 billion in liabilities, and a significant shortfall in liquid assets available to pay those liabilities.  On October 12, Jenner & Block filed suit on behalf of Mr. Grede against the company’s insiders and affiliates, accusing them of a ‘‘long-term, massive fraud’’ and seeking $350 million plus punitive damages.

The Jenner & Block team on this matter includes Partners Chris C. Gair, Vincent E. Lazar, Catherine L. Steege, J. Kevin McCall, John F. Kinney, and Daniel R. Murray.