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'Strong and growing' interest in Refco units

Bankrupt commodities brokerage Refco Inc.  said Wednesday that it sees “strong and growing” interest in the sale of its regulated subsidiaries, which were excluded from the company’s Chapter 11 filing last week.
/ Source: Reuters

Bankrupt commodities brokerage Refco Inc.  said Wednesday that it sees “strong and growing” interest in the sale of its regulated subsidiaries, which were excluded from the company’s Chapter 11 filing last week.

The company’s chief executive officer, William Sexton, in the statement called the interest “widespread recognition within the financial community of the value of Refco as a viable, going-concern business.”

Private equity group J.C. Flowers & Co. was one of the first bidders to express interest in Refco last week, but pulled out of the bidding after a bankruptcy judge asked it to amend its sale agreement.

Subsequent expressions of interest have been made by U.S. broker-dealer Interactive Brokers Group, which entered a confidentiality agreement with the company on Wednesday, and futures commission merchant TradeLink LLC.

Much of the interest so far has focused on the company’s coveted futures brokerage unit.

Refco’s unraveling began Oct. 10, when the company disclosed it was carrying $430 million in bad debts from an entity controlled by its then-chief executive officer, Phillip Bennett. Bennett that day was put on leave by the company and has since been charged with securities fraud.

Sexton, who had disclosed plans to resign as Refco’s chief operating officer prior to the company’s bankruptcy, agreed to remain with the company and succeed Bennett after Bennett was placed on leave.