Moments ago, we learned courtesy of the head of Mutual Fund Research at Morningstar, Russ Kinnel, that the next leg of the junk bond crisis has officially arrived, after Third Avenue announced it has blocked investor redemptions from its high yield-heavy Focused Credit Fund, which according to the company has entered a “Plan of Liquidation” effective December 9.

Third Avenue says outflows would have forced them to accept “prices that would unfairly disadvantage the remaining shareholders.”

— Russ Kinnel (@RussKinnel) December 10, 2015

The redemption block takes place after the fund lost some 27% in 2015, with assets plunging by a whopping 66%.

This is what happened:

We believe that, with time, FCF would have been able to realize investment returns in the normal course. Investor requests for redemption, however, in addition to the general reduction of liquidity in the fixed income markets, have made it impracticable for FCF going forward to create sufficient cash to pay anticipated redemptions without resorting to sales at prices that would unfairly disadvantage the remaining shareholders.

As a result, all shareholders will be equally disadvantaged.

How long will investors have to wait for the “Liquidating Trust” to become, well, liquid? Quite a while:

In line with its investment approach, FCF has some investments in companies that have undergone restructurings in the last eighteen months, and while we believe that these investments are likely to generate positive returns for shareholders over time, if FCF were forced to sell those investments immediately, it would only realize a portion of those investments’ fair value given current market conditions. We believe that doing so would be contrary to the interests of all of our shareholders, which is why we have taken steps to protect shareholder value by returning cash and implementing the Liquidating Trust to seek maximum value for these investments.