You've just described the current crisis in the credit markets. The crisis wasn't so bad when it started with higher-than-expected defaults in subprime credit markets, but people are panicking a lot more now that liquidity is drying up for high-quality assets. Many firms' business models are based around having access to sufficient liquidity, they aren't built to buy and hold.

If you need money and it's all locked up in non-liquid assets, you do what you have to do to stay afloat.