Just over a month after suing its partner in its life insurance settlement portfolio, Ritchie Capital Management is preparing to seek bankruptcy protection for it.

The Geneva, Ill.-based hedge fund, which has faced nothing but bad news for much of the last year, blamed life insurer Coventry First for some $700 million in losses to the portfolio, which the firms purchased jointly, and which makes up part of Ritchie’s flagship hedge fund. The once-multi-billion dollar firm told Bloomberg News that it may be able to avoid bankruptcy for the portfolio, but did not say how.

Ritchie has suffered from lackluster returns and big drawdowns for the past two years, and has been selling assets to pay clients, including a “significant portion” of its multi-strategy fund sold to Reservoir Capital Group, and its debt-financing unit, which went to BlueCrest Capital Finance.

In an interview, Ritchie spokesman Justin Meise said that the firm “continuously explores all options to preserve value in its portfolios” but it does not “discuss its specific management plans publicly.”

Coventry called Ritchie’s suit “a cheap publicity stunt” and “an apparent attempt to blame others for its own shortcoming or wrongdoings.” The Philadelphia-based insurer is also facing a lawsuit filed by the New York attorney general’s office.