$32BN REFCO assets/liabilities black hole court told

[emad]

Refco court documents reveal huge discrepancy<br>By James Doran, Wall Street Correspondent<br> <br> <br> <br>A TOTAL of $32 billion of assets and $32 billion of liabilities were wiped off the balance sheet of Refco, the collapsing commodities trading firm, between February and August this year, it emerged last night. <br><br>According to a revised bankruptcy petition published last night by Refco, the company’s assets were listed as $16.5 billion (£9.3 billion), with liabilities of $16.8 billion for the end of August. The firm listed on the New York Stock Exchange on August 11. <br> <br>However, in its original Chapter 11 bankruptcy filing of Monday night, Refco claimed to have $48.7 billion of assets and $48.6 billion of liabilities as of February 28. <br><br>The company gave no explanation for the massive discrepancy, although it said in earlier filings that the figures could be subject to change because its accounts could not be relied upon. <br><br>Refco filed for bankruptcy protection on Monday after the discovery of $430 million of allegedly hidden debt, concealed in a company controlled by Phillip Bennett, the former Refco chief executive. Mr Bennett has been arrested and charged with securities fraud. <br><br>The bankruptcy filing also showed that clients of Refco’s over-the-counter trading businesses stand to lose more than $2.5 billion as many of their accounts were held in unregulated parts of the group and are now listed as unsecured debts. <br><br>The company is seeking court permission to go ahead with the sale of its regulated futures business to JC Flowers, a New York hedge fund, for $768 million. The proceeds will be used to pay off some of Refco’s creditors. <br><br>The unsecured creditors must stand in line behind the secured creditors, such as Bank of America, which is owed some $650 million. The report lists more than $3.4 billion of unsecured debts, with some $451 million owed to Bawag, the Austrian bank and a former investor in Refco. <br> <br> <!--EZCODE AUTOLINK START--><a href="http://www.timesonline.co.uk/newspaper/0,,173-1834324,00.html">www.timesonline.co.uk/new...24,00.html</a><!--EZCODE AUTOLINK END--><br> <br> <br> <br> <br> <br> <br> <br> <br> ALSO IN THIS SECTION <br> <br> <br>FTSE feels the chill as shares hit lowest level since June <br> <br> <p></p><i></i>

[dbeach]

ANOTHER SPY SCANDAL WAITING TO happen <p></p><i></i>

[glubglubglub]

This is a pretty bad story that's being given low-key treatment by the press, but I can't help at crack up as the company evaporates under what is the corporate equivalent of a run on the bank. <p></p><i></i>