Refco finally fell into Chapter 11 yesterday. The Chapter 11 of Refco and its
subsidiaries – including Refco Capital Markets, Ltd. and Refco F/X Associates
LLC – became effective yesterday.
11 plan had been confirmed by the US Bankruptcy Court in New York on
15 December. The effective date of the plan now permits the companies to
complete an expeditious orderly wind-up of their businesses.
plan is premised on a series of interdependent settlements and compromises in
one of the most complex bankruptcy cases in history. Under the terms of the
Plan, secured lenders who were owed $717.7 million were paid in full in cash
prior to confirmation of the plan; bondholders are expected to receive 83.4
cents on the dollar for their claims; Refco Capital Markets’ securities
customers are expected to receive approximately 85.6 cents on the dollar for
their claims, and Refco Capital Markets’ general unsecured creditors are
expected to receive approximately 37.6 cents on the dollar for their claims.
General unsecured creditors at the other Refco companies are expected to receive
between 23 and 37.5 cents on the dollar for their claims. In addition, shareholders
and certain creditors of the company will have the opportunity to participate
in recoveries obtained by both the Litigation Trust and Private Actions Trust,
which will hold certain litigation claims.
effectiveness of the plan has enabled Marc S. Kirschner, the Chapter 11 Trustee
of Refco Capital Markets, Ltd., to make substantial interim distributions to
creditors of Refco Capital Markets by year-end. The other Refco companies will
be wound up by RJM, LLC, operated by Robert J. Manzo, and assisted by Capstone
Advisory Group, LLC.
23 of its affiliates filed for bankruptcy protection with the US Bankruptcy
Court for the Southern District of New York on 17 October 2005.