Seeking bankruptcy-court protection, Sun Country Airlines filed for Chapter 11 bankruptcy on Monday, a few days after the founder of its parent company, Petters Group Worldwide, became the target in a multimillion dollar fraud investigation. Petters Group became the sole owner of Sun Country last November, after co-owning the carrier since October 2006.

According to federal prosecutors, the founder of the Minnetonka, Minneapolis - a firm that owns Fingerhut, Polaroid, Sun Country and other investments – Thomas Petters was arrested Friday on charges of mail and wire fraud, money laundering and obstructing justice. Earlier in the week, Petters had resigned as chairman and chief executive of the company.

Authorities say that the fraud was a part of a scheme that went on for years to swindle investors out of more than $100 million.

Explaining the proceedings in a statement, Sun Country Chairman and CEO, Stan Gadek said that the carrier had planned on a short-term bridge loan from its owner to get through the slow autumn period and into its heavy winter travel season. But that plan fell through after the parent company ran into legal troubles.

Gadek said he learned that federal authorities were thinking of putting the Petters companies into receivership. In order to avoid that fate and retain control of the airline, which does not face probe by prosecutors, his board voted to seek court protection. He said: “We were forced to take this action as a result of recent events at Petters Group Worldwide.” However, he also added that the airline plans to continue operating on its normal schedule.

The second-largest airline serving Minneapolis, Sun Country is small in comparison to market leader, Northwest Airlines Corporation. Still, on the leisure routes, it serves in competition with Northwest. This small airline has been flying for 25 years, and has had a previous trip through Chapter 11 in 2002, while Northwest had a bankruptcy reorganization of its own in 2005 and 2006.