Merrill Lynch files liquidation for Fred Leighton

As per media reports, Merrill Lynch Mortgage Capital Inc. has filed a motion in the U.S. Bankruptcy Court, pertaining to Chapter 7 liquidation, for Fred Leighton, to which it had been a prominent creditor so far.

Merrill Lynch feels that the company is likely to exhaust its operating cash reserves by end-December 2008. In addition to the motion, Merrill Lynch has asked Fred Leighton’s owner, Ralph Esmerian, be replaced by a "disinterested Chapter 11 trustee," following Esmerian’s failure to improve the business and also for not being openly sharing inventory records.