Refco Can Send $300M From BAWAG Pact To Lenders

Law360, New York (October 6, 2006, 12:00 AM EDT) -- Despite objections from stockholders who felt they were getting short shrift, the federal judge overseeing Refco Inc.’s Chapter 11 case has given the company permission to put $300 million gleaned from a settlement with an Austrian bank toward a $642 million secured loan.

The settlement arose from a dispute with BAWAG P.S.K. Group—the bank that loaned erstwhile Refco chief executive Phillip Bennett $430 million, and allegedly abetted the accounting fraud scheme that led to Refco’s spectacular collapse when revealed in 2005.

In November 2005, BAWAG sued...
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