Quote from mlollar:
I guess I only see a best case and worst case scenario happening at some point. Either everyone keeps their accounts in tact, or noone does, regardless of what the Duffy group is able to do. I don't forsee a select group of investors that are able to keep their accounts because they banded together and everyone else looses. Not when a court is involved.
I could be wrong.
Mike
Nah, I don't think you are.
I think this is one of the crappiest
"deals" I've ever seen ... you can keep your account, if you agree to churn it!
http://www.nypost.com/php/pfriendly..._twisted_over_sale_business_zachery_kouwe.htm
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Article
REFCO CUSTOMERS TWISTED OVER SALE
By ZACHERY KOUWE
July 13, 2006 -- Fuming customers of disgraced futures giant Refco, already unable to get the cash from their frozen accounts, are calling the shattered firm's move to sell their accounts to a rival brokerage a "raw deal."
Last week, Refco agreed to sell the accounts in its RefcoFX currency-trading division to New York futures broker GAIN Capital Group. The sale reduces the number of creditors scrambling to collect what's left of Refco's estate.
The 17,000 RefcoFX traders, who have about $103 million in the firm, plan to file an official protest today in the U.S. Bankruptcy Court in New York against the deal, according to Todd Duffy, an attorney representing the customers.
In return, GAIN has offered to deposit up to $150 in each trading account if customers make at least one trade.
Those with more than $150 in their accounts are angered because GAIN will only reimburse them if they cross certain trading thresholds - which customers have labeled unreasonable - over the next two years.
"If you have an account worth more than $25,000, you have to put more money on top of the $150 you get just to start trading, and then you have to make 240 trades per month for six months in order to qualify to get your own money back," Duffy said.
"It sounds to me like everybody wins but the customer," said Gail Butler, who has more than $50,000 tied up in a RefcoFX account. "How crazy is it that I have to jump through those hoops to get my money back in installments over two years interest-free. Just when I think they can't sink any lower, they do."
A letter from one customer to the RefcoFX Customer Coalition said, "Ruthless predators in the Refco case have preyed upon the poor, scattered flock of RefcoFX customers" since the company's collapse.
The letter asked: "How do you feel being first sheared and then ripped to the bone like a helpless little lamb?"
A spokeswoman for Refco said: "this was the best deal we could negotiate under the circumstances and we believe it offers the best chance of enhanced recoveries for those who participate. If someone is willing to provide better consideration to customers we expect we will hear from them."
The customers have been unable to withdraw their money since last October when ex-CEO Phillip Bennett was indicted for stealing $430 million and plunging the company into Chapter 11.
In its filing with the court, Refco said it doesn't believe that most "of the larger customers will elect to open an account with GAIN and meet the trading thresholds necessary to obtain a 100 percent recovery."
Judge Robert Drain of the U.S. Bankruptcy Court in New York is expected to hold a hearing on the RefcoFX sale on July 20.
zachery.kouwe@nypost.com