Dec. 15, 2005, 4:40PM
Judge OKs Refco Sale of Unit at Auction
© 2005 The Associated Press
NEW YORK — A federal judge approved plans for troubled Refco Inc. to sell its retail currency-trading unit at an auction Jan. 26.
So far, the highest bid for that business is from the brokerage FXCM. It has offered $110 million to acquire customer accounts and to buy back a 35 percent ownership stake it had previously sold to Refco.
A sale of Refco's currency business, which everyday investors use to bet on the value of the yen, euro and other denominations, would help the brokerage repay its many creditors.
At an auction in November, Refco sold its flagship commodities and futures units to competitor Man Financial Inc. for $323 million.
The process for selling Refco's currency business would be similar, according to a ruling Thursday by Judge Robert D. Drain in U.S. Bankruptcy Court for the Southern District of New York, which is overseeing parent Refco Inc.'s assets.
Refco's meltdown began Oct. 10, when the company disclosed that then-chief executive, Phillip R. Bennett, had secretly moved $430 million in debts to an entity he controlled.
In quick succession, Bennett was arrested on federal securities fraud charges, customers began fleeing all Refco's trading units, and the brokerage filed for bankruptcy protection. Court approves sale plan for Refco forex stake
Thu Dec 15, 2005 4:54 PM ET
NEW YORK, Dec 15 (Reuters) - A U.S. bankruptcy court judge on Thursday approved plans for bankrupt futures and commodities brokerage Refco Inc. (RFXCQ.PK: Quote, Profile, Research) to sell its stake in a retail currency brokerage unit next month, said a company spokesman.
An auction for the stake will be held on Jan 26, assuming there are multiple bidders. Interested parties must submit their bids by Jan. 20, and will be notified if they are qualified by Jan. 25.
Refco is looking to sell its minority stake in Forex Capital Markets, a retail foreign exchange brokerage. Forex Capital Markets last month offered to buy the stake for $110 million, including forgiven receivables.
Refco filed for Chapter 11 bankruptcy protection on Oct. 17, one week after suspending Chief Executive Phillip Bennett and accusing him of hiding $430 million of debt before the New York-based company went public in August. This sparked an exodus of customers.
Bennett, a 57-year-old Briton, pleaded not guilty on Nov. 18 to eight counts of conspiracy, securities fraud and other charges. His next hearing is scheduled for Jan. 18.
A U.S. bankruptcy court is handling the sale of Refco assets to help repay creditors.
Its most sought after asset, the accounts and staff of its regulated futures and securities business, was sold last month to Man Financial, the brokerage arm of UK-listed hedge fund firm Man Group Plc. (EMG.L: Quote, Profile, Research) for $282 million in cash. Company News
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Refco Receives Court Approval of Bidding Procedures for
Proposed Sale of Retail Foreign Exchange Assets
NEW YORK, Dec. 15 /PRNewswire-FirstCall/ -- Refco Inc. (OTC: RFXCQ) announced today that it has received Court approval of bidding procedures for the proposed sale of assets related to Refco's online foreign-exchange trading unit, namely:
* The sale of more than 15,000 retail client accounts of Refco
FX Associates LLC (http://www.RefcoFX.com); and
* The 35% share of Forex Capital Markets LLC (FXCM) currently owned by
Refco. FXCM, a Futures Commission Merchant registered with the CFTC and
a member of the National Futures Association, provides a foreign
currency trading platform and execution services to retail investors
The order establishes, among other things, the following deadlines and procedures:
* Deadline for the interested parties to qualify as potential bidders and
access the virtual data room: January 20th at noon;
* Deadline for the submission of a qualified bid package: January 23rd,
at 10:00 a.m.;
* Potential bidders will be notified whether they are a "qualified bidder"
under the Bidding Procedures Order by 10:00 a.m. on January 25th;
* If there is more than one "qualified bidder," an auction would be held
at the offices of Skadden, Arps, Slate, Meagher & Flom LLP on January
26th at 10:00 a.m.; and
* A hearing to approve the sale to the winning bidder will be held at the
U.S. Bankruptcy Court in lower Manhattan on January 27th, at 10:00 a.m.
The bidding procedures for the sale of Refco's retail foreign exchange assets are similar to those employed in the sale of the assets of Refco LLC, the company's regulated commodity futures business, which was completed on November 25.
"We are gratified with the court's approval of the bidding procedures and look forward to completing the sale process quickly," said Robert Dangremond, Refco's chief executive officer.
"We expect the sale to demonstrate interest among financial institutions and important entities in the online foreign-exchange trading business and are convinced the process will demonstrate once again the value placed on the Refco franchise by those in the industry," Mr. Dangremond said.
All those interested in taking part in the bidding process should contact Ashish Contractor at Greenhill & Co. at 212-389-1500.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of the 1995. In this press release, all statements other than statements of historical fact are forward looking statements that involve risks and uncertainties and actual results could differ. These forward-looking statements are based on assumptions that we have made in light of our experience and on our perceptions of historical events, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements have a reasonable basis, you should be aware that numerous factors, including the outcome of the Audit Committee's investigation; our ability to obtain financing arrangement or alternatives; changes in domestic and international market conditions; competition; our ability to attract and retain customers; our relationships with introducing brokers; retention of our management team; our ability to manage our growth or integrate future acquisitions, our exposure to significant credit risks with respect to our customers, international operations and exchange membership requirements, the effectiveness of compliance and risk management methods, potential litigation or investigations, employee or introducing broker misconduct or errors, reputational harm, and changes in capital requirements, could cause actual results to differ materially from our expectations. Because of these factors, we caution that you should no place undue reliance on any of our forward-looking statements. Further, any forward looking statement speaks only as of today. It is impossible for us to predict how new events or developments may affect us. The Company disclaims any intention or obligation to update or revise any forward-looking statements, either to reflect new information or developments or for any other reason.
SOURCE Refco Inc.
CONTACT: James Craig, Steven Goldberg, or Meaghan Repko, of Sitrick and Company Inc., +1- 212-573-6100, for Refco Inc. -0- Dec/16/2005 1:21 GMT
Last Updated: December 15, 2005 20:21 EST |
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