Alaron headed for Bankruptcy?

Discussion in 'Prop Firms' started by lpchad, Aug 3, 2009.

  1. lpchad


    A group of Alaron Trading Co. creditors are trying to force the Chicago-based futures broker into bankruptcy protection, saying they are owed more than $5 million.

    Alan Freeman, a broker from Chicago; Barry Hirsch, a broker from Northbrook, and Bruce Freeman, a broker in Scottsdale, Ariz., jointly filed an involuntary Chapter 7 bankruptcy petition against Alaron on Friday in federal court in Chicago.

    Alan Freeman says he’s owned $4.3 million; Mr. Hirsch claims $848,000 is due to him, and Bruce Freeman says he’s owed $302,000. In addition, Barry Hirsch joined with Mark Hirsch, who shares an address in Northbrook with Barry, in claiming a debt of $123,000.

    It is unclear from the petition whether Alan and Bruce Freeman are related.

    The claims come less than two months after Alaron was acquired by rival Chicago-based brokerage Peregrine Financial Group for an undisclosed price. Executives from both firms said Alaron had more than $130 million in customer assets at the time and would boost Peregrine’s assets under management to more than $400 million.

    The acquisition was to be the first of what Peregrine President and Chief Operating Officer Russ Wasendorf Jr. said would be a series of purchases en route to a target of $1 billion under management.

    But a separate lawsuit Alaron filed against a former employee on July 27 suggests another dimension to the dispute over Alaron’s assets. In the suit, Alaron accused its former South Miami operations manager of taking all of the branch's customers and office space, costing Alaron $3.2 million in lost revenue and $2 million in lost goodwill.

    Alan Freeman, the lead petitioner in the involuntary bankruptcy case, declined to comment, as did a spokeswoman for Peregrine. Steven Greenberg, Alaron’s CEO, didn’t respond to a request for comment.