Refco Inc.’s board of directors, including former Chief Executive Phillip Bennett, has resigned, the company said on Friday, a move that will allow the bankrupt company to avoid being overseen by a U.S. trustee.
Lawyers for Refco and a committee of its creditors said on Tuesday that keeping a U.S. trustee out of the Refco bankruptcy would streamline an already complicated process and keep costs down.
U.S. Bankruptcy Court Judge Robert Drain said on Tuesday that Refco could avoid having a trustee named if its board of directors resigned by Friday, and at least one independent director was named.
The company said on Friday that the board had resigned, effective January 12, and that Stephen Brecher, managing director at Greenwich Corporate Strategy Group, was named as a new director. Refco said in a statement that it intends to appoint additional independent directors.
Bennett resigned voluntarily from all his positions at Refco but may still seek to be compensated for 2005, Refco lawyers said at a hearing on Friday.
When Refco went public in August, Bennett was chief executive, president and chairman of the board. But he was suspended from the company in October.
In November, Bennett pleaded not guilty to eight counts of conspiracy, fraud and other charges related to the accounting scandal that drove the futures broker into bankruptcy.
According to a letter read by Refco lawyers in court, Bennett’s resignation is not meant to relinquish his rights under his employment agreement. Refco’s initial offering prospectus said Bennett’s employment agreement entitled him to an annual salary of $1.1 million plus bonus.