|Refco Inc.||back to case studies|
|Financial irregularities and criminal arrest of CEO just two months after IPO
Largest Broker-Dealer bankruptcy with over $16 billion in assets and liabilities
Capstone was engaged by the Refco Capital Markets, Ltd. (“RCM”) Chapter 11 Trustee to assist in evaluating intercompany transactions between RCM and Refco Inc. and its subsidiaries (the “Refco Estate”). A settlement was achieved in September 2006 and a Plan of Reorganization was approved by the Court on December 16, 2006 (the “Plan”).
Under the Plan, Capstone professionals became the Refco Plan Administrator as well as officers of the Post-Emergence Refco Estate serving as President, Chief Financial Officer and Treasurer and are responsible for managing the orderly wind-down of the Chapter 11 Estates.
As senior management, we performed the following services:
Through December 31, 2009, Class 5a Contributing Debtor Claimants have received the maximum recovery under the Plan, 40%, compared to the Disclosure Statement estimate of 23%. In addition, the Refco Estates distributed over $600 million to RCM, compared to $460 million contemplated under the Plan.