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February 15, 2008 |
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REFCO INC: Sale of 35% Equity Stake in FXCM Consummated RJM, LLC, the plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner, the plan administrator to Refco Capital Markets, Ltd., notified the U.S. Bankruptcy Court for the Southern District of New York that the sale of Refco Group Ltd.'s 35% equity interest in Forex Capital Markets, LLC, has been consummated. The names of the purchasers had been withheld for confidentiality purposes, according to Steven Wilamowsky, Esq., at Bingham McCutchen LLP, in New York. As reported in the Troubled Company Reporter on November 29, 2007, the Plan Administrators asked the Court to approve their settlement agreement with Forex Capital Markets, LLC, Forex Trading LLC, FXCM Canada Ltd., FXCM LLC, David Sakhai, William Ahdout, Kenneth Grossman, Michael Romersa, and Edward Yusupov. Reorganized Refco Group Ltd. holds a 35% equity interest in Forex Capital Markets, LLC. Pursuant to Refco's confirmed Chapter 11 Plan, RJM has authority to exercise Refco's rights in respect of RGL's 35% interest in FXCM, including all rights related to its liquidation or disposition. The sale of RGL's interest is subject to the requirement that certain claims against the Refco parties and RCM be resolved. The Settlement Agreement provides that: a. The Plan Administrators will seek Court approval allowing the claims filed by the FXCM Parties: 1. Claim No. 9140, to be allowed as a Class 6 FXA Convenience Class Claim for $3,290.87 under the Plan; 2. Claim No. 9870, to be allowed as a Class 5(a) FXA General Unsecured Claim for $8,281,529.63; 3. Claim No. 9871, to be allowed as a Contributing Debtor Class 5(a) General Unsecured Claim for $8,281,529.63. b. The Plan Administrators ask Court to expunge FXCM Parties' 31 other claims -- Claim Nos. 6629, 6630, 6631, 6632, 6633, 6634, 6635, 6636, 6637, 7564, 7566, 7568, 7569, 7570, 7571, 7572, 14268, 14269, 14270, 14271, 14272, 14273, 14274, 14275, 14276, 14427, 14428, 14429, 14430, 14431, 14432. Jeffrey M. Olinsky, Esq., at Bingham McCutchen LLP, in New York, told the Court the Plan Administrators have carefully reviewed the claims filed by the FXCM Parties, as well as the books and records of the Reorganized Debtors and RCM as they relate to the claims. The Plan Administrators believe that Claim Nos. 9140, 9870 and 9871 are properly allowable at the amounts set, and the rest of the FXCM Parties' claims should be expunged. Mr. Olinsky said the FXCM Parties agree that the 31 other claims should be expunged. "Expunging these other claims will eliminate 31 claims against the Reorganized Debtors' and RCM's estates that seek damages based on alleged fraudulent conduct of the Debtors," he said. Mr. Olinsky noted the Agreement would result in proceeds from the sale of RGL's 35% equity interest in FXCM becoming available for distribution to creditors of the Contributing Debtors. The Court approved the Settlement Agreement in December. A full-text copy of the FXCM Settlement Agreement is available for free at http://bankrupt.com/misc/FXCMsettlementAgreement.pdf About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 76 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). |
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