Judge Says Creditors Can Review Refco Papers
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A federal bankruptcy judge ruled Wednesday that Refco Inc. creditors are entitled to review documents related to the company’s demise, a move that lawyers said would prevent federal prosecutors from slowing the bankruptcy reorganization process.
Refco, a commodities and futures broker, filed for bankruptcy protection Oct. 17 after its former chief executive, Phillip Bennett, was charged with securities fraud and customers fled.
Judge Robert Drain of the U.S. Bankruptcy Court in Manhattan ruled that creditors are entitled to discovery of various Refco documents, subject to some restrictions.
The company’s unsecured creditors had sought access to documents that could help them determine which entities they should pursue to recover their money, apart from Refco itself.
The U.S. attorney’s office in Manhattan, however, had requested a three-month delay, saying the release of information about parties under investigation, including Bennett, could interfere with the criminal probe.
A spokesman for the office could not immediately be reached for comment.
Refco last week sold its U.S. regulated commodity futures business to a unit of Britain’s Man Group for $282 million.
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