updated 11/10/2005 10:45:48 AM ET 2005-11-10T15:45:48

British commodities broker Man Group PLC has won the bidding war to acquire the solvent remnants of bankrupt rival Refco Inc., a Refco spokesman said Thursday.

Refco spokesman Steven Goldberg confirmed Man’s winning bid, but details of the bid were not immediately available. Refco was expected to present Man’s offer to the U.S. Bankruptcy Court in Manhattan later in the day.

Man’s bid requires the court’s approval. The bid will likely hinge on the court’s approval of a new plan for Refco’s remaining solvent subsidiary, Refco LLC, to go into Chapter 7 bankruptcy so that Man can liquidate the company and fold its remaining customer accounts into its own brokerage subsidiary in a matter of days.

Under the current terms of Refco’s court-approved bid, Refco LLC would have to be purchased as an entire company, instead of as liquidated assets. Without Chapter 7 approval, consolidating those accounts into an existing company would have made for numerous regulatory hurdles.

Man’s winning bid came after an auction at Skadden Arps Slate Meager & Flom LLP, which began Wednesday morning and stretched into the night. Refco’s Chapter 7 request, filed late Wednesday, apparently removed a roadblock for at least some of the potential acquirers.

“During the negotiations, the potential bidders expressed concerns with respect to the structure of the transaction,” Refco said in the filing. “As the negotiations continued, it became increasingly clear that the sellers would obtain the maximum value of (Refco) by invoking the protections afforded under ... Chapter 7.”

Refco filed for bankruptcy on Oct. 17, just eight days after it announced a $420 million shortfall in its books. Refco Chief Executive Phillip Bennett took responsibility for the money, taking out a loan to pay it back just before the company placed him on indefinite leave Oct. 10.

Bennett was arrested the following evening and charged with securities fraud in U.S. District Court in Manhattan. He remains free on a $50 million bond. The questionable accounting led Refco’s customers to flee the company in droves, resulting in a crippling loss of assets that ultimately forced bankruptcy.

Private buyout firm J.C. Flowers & Co. LLP had tentatively agreed to purchase pieces of Refco for $768 million, but dropped the bid after the bankruptcy court reduced its breakup fee should Refco be purchased by someone else.

Other bidders that have announced their intentions include Refco competitor Interactive Brokers Group LLC, a consortium headed by Dubai Investment Group and Man Financial, a subsidiary of British company Man Group PLC.

Chicago-based futures and options brokerage Alaron Trading Corp. said Wednesday its bid failed to qualify. The company said it was unclear why its bid failed.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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