(Bloomberg News) MF Global Holdings Ltd., the holding company for the broker-dealer run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy after making bets on European sovereign debt.

The New York-based firm listed total debt of $39.7 billion and assets of $41 billion in Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan. Its finance unit, MF Global Finance USA Inc., also filed, with debt of as much as $50 million and assets of as much as $500 million.

"The boards of directors of both entities authorized the filing of the Chapter 11 petition in order to protect their assets," the companies said today in a statement.

MF Global's board had met through the weekend in New York to consider options including a sale to avert failure, according to a person with direct knowledge of the situation. Following a record loss, MF Global was suspended today from doing new business with the New York Federal Reserve, according to a statement on the regulator's website. Trading in MF Global's stock was also halted.

MF Global declined 67 percent last week and its bonds started trading at distressed levels amid its disclosures of bets on European sovereign-debt. MF Global held talk with five potential buyers for all or parts of the company, including banks, private-equity firms and brokers, said the person, who asked not to be identified because the talks were private.

Record Loss

MF Global reported a $191.6 million quarterly loss on Oct. 25 and Moody's Investors Service and Fitch Ratings cut its credit rankings to junk.

The firm was getting advice from Evercore Partners Inc. as it sought buyers. Skadden, Arps, Slate Meagher & Flom LLP is representing the company as bankruptcy counsel in the case, which was assigned to Judge Stuart M. Bernstein.

The broker of commodities, derivatives, equity and foreign exchange had $7.2 billion of customer funds in segregated accounts as of Aug. 31, according to the Commodity Futures Trading Commission. It was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York and is a member of more than 70 financial exchanges, according to its website.

Unsecured creditors include JPMorgan Chase & Co., as trustee for holders of $1.2 billion in debt, and Deutsche Bank AG, as trustee for holders of more than $1 billion in notes due in 2016 and 2018, MF Global said in court papers. JPMorgan itself holds less than $100 million of the debt, according to a person close to the New York-based bank, who spoke on condition of anonymity because the dealings aren't public.