The Plano, Texas-based company listed both assets and debt of $100 million to $500 million in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Chapter 11 is the section of the U.S. Bankruptcy Code used by companies to reorganize. In 2011, Penson had revenue of $217.3 million, court papers show.
“Average daily trading volume in equities fell by 5 percent in 2010 and 8 percent in 2011, and short selling continued to fall in each of the years from 2009 through 2011,” Bryce B. Engel, chief operating officer of Penson Worldwide, said in court papers.
“This decrease in market participation and activity had a direct, negative impact on Penson’s commission and interest revenues which were closely correlated to activity in the financial markets,” Engel said.
Penson began to market Nexa Technologies Inc. as a going- concern sale, and expects to complete a sale of Nexa during the bankruptcy process, Engel said. Nexa is Penson’s only operating entity in the U.S. in bankruptcy.
Affiliates SAI Holdings, Penson Financial Services, Penson Financial Futures, Penson Holdings, Penson Execution Services, Nexa Technologies, GHP1, GHP2 and Penson Futures also sought protection.
Penson’s largest unsecured creditors listed in court papers include holders of about $216 million in 12.5 percent senior second lien secured notes due in 2017; holders of about $62.9 million in 8 percent senior convertible notes due in 2014; and Sungard Financial Systems LLC, owed $6.4 million.
The case is In re Penson Worldwide Inc., 13-10061, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Dawn McCarty in Wilmington at email@example.com