JPMorgan derivatives spin-off Cygnifi has filed for Chapter 11 bankruptcy protection in New York and is seeking buyers for its source code, intellectual property rights and analytics libraries.
Cygnifi's British and Japanese subsidiaries have also been placed into liquidation.
During its Chapter 11 process, which is expected to take at least 90 days, Cygnifi will seek buyers for its assets. Cygnifi has developed several market-leading applications for derivatives pricing, portfolio valuation, credit risk management, and collateral management. Many of these have been based on JPMorgan's proprietary derivatives systems.
The company says it will also consider partners for a merger or acquisition.
"Cygnifi always planned to raise additional capital in order to propel the business through to sustained profitability," says a statement posted on the company's Web site. "After the severe downturn on the capital markets of the past 12 months, Cygnifi has been unable to raise that additional capital from strategic investors or venture capital firms."
First round investors in Cygnifi include LabMorgan, Sybase, Numerix and Bridge Information Systems.
The company says the Chapter 11 process "provides a unique opportunity for banks, software companies and other interested parties to cost-effectively acquire some of the outstanding derivatives technology to have emerged on Wall Street over the past decade."
Interested buyers are being invited to see demonstrations of software and to inspect code and documentation. A Sale Room at the company's New York office has been established for this purpose, and remote demonstrations are also available.
Cygnifi was recently selected by FpML.org to oversee the introduction of a working draft of the Financial products Mark-Up Language for interest rate derivatives. It had also established a partnership with international law firm Allen & Overy to develop a database outlining the jurisdictional issues involved in trading collateralised credit risk.
News of the disposal comes three months after the company's retreat from the collateral management business with the loss of some 25 jobs.