NEW YORK, Feb 15 (Reuters) - Refco Inc. (RFXCQ.PK: Quote, Profile, Research), the bankrupt futures and commodities brokerage, said on Wednesday it has canceled the auction scheduled for Thursday, Feb. 16 of its foreign exchange assets. In a statement, Refco said it canceled the auction for the online foreign exchange assets of its Refco FX Associates LLC unit because it had not received any bids other than the original offer by Forex Capital Markets LLC (FXCM). A hearing in the U.S. Bankruptcy Court scheduled for Friday Feb. 17 for the sale of the assets -- about 17,000 retail client accounts and a 35 percent stake in FXCM -- is expected to be postponed. Refco said the creditors' committee in the Refco case and the agent for Refco's bank lenders have advised Refco they intend to object to the approval of the sale to FXCM and have requested more time. A new hearing date has not been set.
Dear RefcoFX Client, The auction process is now over. FXCM submitted the highest bid and won the auction. Unfortunately, the creditors of Refco are now objecting to the deal indicating their belief that the approximately $110 million purchase price is not enough money. FXCM is committed to seeking a conclusion to this process that will support the RefcoFX clients. FXCM's offer, if approved by the Court, would provide for the full funding of the RefcoFX client accounts. We appreciate your continued support during this process. Refco has set up a toll-free information line (866-327-0774) to answer additional questions or you may e-mail Meagan_Repko@sitrick.com. We will continue to update you as more information becomes available. Best Regards, Refco F/X Associates LLC
I'm surprised this development hasn't generated more interest. Not long ago, the question whether RefcoFX customers would be made good was ET's equivalent of a steel cage match.
Yes........with 17,000 account (bag) holders you would think there would be more interest in this thread. PS....Does anyone have a link to the RefcoFX bulletin about not honoring any trading gains made after October 17?
Feb. 17, 2006, 3:09PM Refco Creditors Move to Block Unit Sale © 2006 The Associated Press WASHINGTON â Refco Inc.'s creditors moved to block the sale of the company's foreign-exchange unit to an electronic currency-trading firm, saying the prospective buyer simply wants to "flip those assets to an outside investor at a huge profit." In court papers, the creditors said Forex Capital Markets LLC shouldn't be permitted to buy Refco FX Associates LLC _ even though an attempted auction attracted no rival bids for the unit. They said Refco would be better off if it simply "wound down" Refco FX and put its "very valuable" 35 percent stake in Forex Capital Markets up for sale. Forex Capital Markets, also known as FXCM, caters exclusively to online retail investors. Refco is a minority partner in the business. After Refco filed its Chapter 11 bankruptcy petition amid an accounting scandal last October, FXCM said it began to look for ways "of replacing Refco as a joint-venture partner." FXCM offered $110 million for the Refco FX's assets _ including Refco's stake in FXCM _ but ran into opposition from Refco creditors. The delayed acquisition, it said in a letter to the U.S. Bankruptcy Court in Manhattan late Thursday, is hurting FXCM's business. In January alone, FXCM said it lost $13.7 million. FXCM asked U.S. Bankruptcy Judge Robert Drain to let the firm complete its purchase of Refco FX before an April 21 deadline. It said it needs "significant lead time to be prepared for a closing," and accused Refco's creditors of "attempting to use delay for tactical advantage." Refco's creditors committee said FXCM's purchase offer was unacceptably low, and that it would provide only about $40 million in cash to Refco FX creditors.
Does anyone know what the Judge said to the objection. Knowing American justice, he will probably discredit the auction, and let the creditors take all Refco's customer's money.....
Of course $110 million is too low of a price for Refco FX, because thats probably less than the actual money in the accounts. Unless a larger bid comes in, the creditors will try to liquidate all the accounts, take the money, and make all the account-holders unsecured creditors at the back of the line. It all depends on what the judge does.
110 million usd it is, but that is with assumption some money owed to FXCM by Refco is canceled, and also includes the 35% stake oRefco owns in FXCM. Ofcourse I (we) don;t have access to all books, but the creditors are just trying to get the most out for themselves. So if selling the FXCM stake without our accounts would earn an amount X and liquidating our accounts would make amount Y and X plus Y is more then the 110 mio USD they try to do this ofcourse. Everybody is out for the best deal for themselves and sad part is we can only sit and wait. I still think it's a cat and mouse game and the creditors are trying to squeeze out a little more. Let's hope for the best.
This waiting game is getting ridiculous. We were waiting and waiting from last November and hoping this delay will end soon. But there are always reasons to pospone the completion of the deal. For all of refcofx clients out there, arent you curious about your own money? Why cant I find any complaints to refcofx or at least actions taken to sue refcofx? We need to get our money back soon. Judge is useless. Refcofx Clients have the rights to get the money back too.. dont just think of how the creditors would get their own money. It is 15000+ clients' money there freezed and nothing we can do to get them back. Let me know if any of you want to put an act to complaint. We should start to take action against this.