For Refco, More Cash On Demand
Given the demands on Refco’s available assets, what’s another few million dollars?
Given the demands on Refco’s available assets, what’s another few million dollars? A good number of customers of the collapsed broker are asking the U.S. Bankruptcy Court in New York handling its Chapter 11 proceedings to pay its $4.3 million legal bill simply because the customers believe they made a “substantial contribution” to the case by suing Refco and “eventually getting the judge to [establish] the legal framework for these cases to proceed.” According to the Associated Press, the customers represent an estimated $1.6 billion of the $2.75 billion in investor claims brought against Refco – including some of the broker’s biggest creditors, such as hedge fund V.R. Global Partners, Premier Bank National and RB Securities. The $4.3 million in fees sought would go to nine law firms, with Cleary, Gottlieb, Steen & Hamilton getting the biggest chunk of about $1.4 million. Meanwhile, in another Refco development, U.S. Bankruptcy Judge Robert Drain has put off deciding whether to reinstate some members of the creditors committee who were kicked off by the court-appointed trustee. Instead, the judge decided the now-divided committee can continue to operate as they did before they were removed. “This is a complex enough case that progress needs to be made incrementally,” the Judge said, reports The Wall Street Journal.