Judge approves Refco creditors' request for documents

A federal bankruptcy court Wednesday refused to delay a request by Refco Inc.'s unsecured creditors to subpoena records connected with the company's collapse.

Judge Robert Drain said the committee could go ahead and demand documents related to the hidden losses that triggered the scandal-ridden brokerage firm's meltdown last month, and to Refco's $583 million (Ђ495.4 million) initial public offering in August.

The committee is demanding records from Phillip Bennett, Refco's former boss, and other former executives, as well as buyout shop Thomas Lee Partners, which took the company public, and company accountants Grant Thornton LLP.

Bennett was indicted this month on charges of conspiracy, securities fraud, wire fraud and making false filings with the Securities and Exchange Commission, and underwriters of Refco's IPO have received subpoenas from regulators looking into the brokerage firm's collapse.

David Kennedy, for the U.S. Attorney's Office, said the request was premature and would hurt the government's investigation.

"The request is a fishing expedition by the creditors' committee in particularly dark waters and it will interfere with a grand jury investigation that is still in its infancy," he said.

He said the committee's request should be delayed three months to allow the prosecutors to complete their investigation. The committee was demanding the documents within 20 days.

Drain, who is overseeing the Chapter 11 proceedings, accepted that the committee needed the documents to move forward and noted that the committee would comply with confidentiality restrictions, AP reported. V.A.

Subscribe to Pravda.Ru Telegram channel, Facebook, RSS!

Author`s name Editorial Team