Refco Meltdown fka RFC

[gaboracs]

BANKRUPTCY FILING BEFORE MONDAY?

Bonds from Refco plummeted 17 cents on the dollar to 23 cents on the dollar on Friday, indicating that bond investors see a bankruptcy filing as highly likely. Friday's lender meeting ended without a firm decision.

Should Refco seek bankruptcy protection for any or all of its units, the company and its advisers are likely to mull whether to file before Monday, when stricter bankruptcy laws go into effect.

An outside buyer scooping up parts of Refco is another possibility. Man Group's (London:EMG.L - News) brokerage unit, Man Financial, has expressed interest in buying Refco's futures business, according to a source close to the matter, who added that various private equity firms are also showing interest.

Determining the worth of Refco's units is, at this point, nearly impossible, since most of Refco's market value has been wiped out in the last five days. The company has also been losing clients and their money. In addition, the extent of the alleged accounting fraud remains unclear.

Refco also faces mounting class-action lawsuits, which are likely to lead to high litigation costs.

Refco's commodities unit is the largest U.S. independent commodities brokerage. Refco Securities, LLC, which announced it was no longer taking new clients this week, is a broker-dealer that accounts for nearly half of the company's gross revenues.

Refco Capital Markets, a prime broker serving the hedge fund community, halted activities and froze all its accounts on Thursday.




http://biz.yahoo.com/rb/051016/financial_refco.html?.v=1
http://www.machcobra.com/board/showthread.php?p=737#post737