Refco Inc., which collapsed amidst the revelations of an accounting scandal just over a year ago, has emerged from Chapter 11 bankruptcy to wrap up its business.A federal bankruptcy court approved the company’s exit plan on Dec. 15 to essentially dissolve itself by selling off its remaining operations and eliminating others. Payouts won’t put much of a dent in the $16.8 billion that creditors have claimed they are owed.
According to Refco, secured lenders will be paid about $718 million in cash, while bondholders will receive 83.4 cents on the dollar for their claims and Refco Capital Markets securities customers will receive about 85.6 cents on the dollar. Unsecured creditors will receive between 23 cents and 37.6 cents on the dollar.
The futures and commodities broker, along with nearly two-dozen affiliates, filed for bankruptcy in October 2005, a week after announcing that its former chief executive Philip Bennett had hid $430 million of debt. In the summer of 2005, Refco had raised millions in an initial public stock offering.
Bennett has pleaded innocent to fraud charges and is scheduled to stand trial in March.
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