In what legal experts have called a rare move by a hedge fund, troubled Greenwich, CT hedge fund SageCrest II has filed for bankruptcy protection in an effort to head off a forced asset sale. In a letter to investors, a copy of which was obtained by the Hedge Fund Law Report, SageCrest said that Deutsche Bank’s recent refusal to allow the fund to draw on a $400 million line of credit was one of the reasons for the bankruptcy filing. Liquidity of fund assets may play a role in whether bankruptcy is within the range of considerations in distressed situation. For example, in the midst of a wave of redemption requests, a fund with a substantial percentage of illiquid assets may consider a bankruptcy filing as one method of preserving the value of those assets. However, experts caution that even for funds in distress, a bankruptcy filing should only be considered once other options have been exhausted, since a filing diminishes the control of the fund manager over the disposition of assets.