X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The trustee overseeing liquidation of Refco Capital Markets filed two more lawsuits in the latest legal shot to recover millions of dollars from Refco’s former auditors, Grant Thornton, and a private equity firm and its director, Thomas H. Lee. The latest filings in federal court in New York this week add to the stack of litigation, including an August Illinois state lawsuit against law firm Mayer Brown, Rowe & Maw; Grant Thornton, Ernst & Young, PricewaterhouseCoopers, Credit Suisse Securities, Banc of America, Deutsche Bank Securities and other Refco insiders. The Cook County lawsuit seeks over $2 billion in damages and penalties for alleged breach of fiduciary duty, fraud, malpractice and aiding a fraud. The two new lawsuits were filed Oct. 9 by two Refco Litigation Trusts, created in 2006 to pursue Refco bankruptcy estate claims. They were filed in the Southern District of New York seeks hundreds of millions of dollars. Refco Inc., a futures and commodities dealer, collapsed in Oct. 2005 just a week after it was disclosed that its CEO Philip Bennett had carried certain debt deals on the company books as loans. The company descended into bankruptcy. The New York lawsuits assert that Boston’s Thomas H. Lee Partners, which handled the Refco initial public stock offering, as well as Chicago auditors Grant Thornton, were aware, or should have known, of a fraudulent scheme by former Refco executives to sell bonds and other securities that they were entrusted to hold for customers. “The allegations contained in these latest complaints filed by six creditors of Refco Capital Management essentially track a previously dismissed class action and are misdirected and entirely without merit,” according to a statement provided by THL Partners. THL Partners filed its own lawsuits in July and August against Grant Thornton and the Mayer Brown firm in New York federal court and New York state court alleging the auditor and lawyers failed to disclose allegedly fraudulent loans that led to Refco’s collapse. The latest suits by Refco creditors assert the amount allegedly stolen from the customer accounts “dwarfed Refco’s total capital,” Capital Management Select Fund v. Bennett, 07-cv-8688. The New York lawsuits allege breach of fiduciary duty, unjust enrichment and fraudulent conveyances.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.