Refco Agrees to Sell Futures Unit, Files for Bankruptcy

Refco struck a deal to sell its futures-trading business for $768 million to a group led by J.C. Flowers & Co. J.C. Flowers specializes in taking distressed financial companies and either turning them around or selling the pieces to other companies.  Refco said it expects definitive agreements to be reached soon.

Additionally, Refco and a number of its subsidiaries filed for bankruptcy under Chapter 11.  It is anticipated that the bankruptcy filing will slow the sale of assets but will allow for an orderly auction process, more time for due diligence and stem the tide of customer withdrawals. The WSJ reports that clients have removed at least $850 million from Refco's futures-trading business, representing 20% of its assets. Click here for a Reuters article with more details.