(Bloomberg) -- RCS Capital -- the struggling broker-dealer cobbled together by real estate magnate Nicholas Schorsch -- has put its main operating unit, Cetera Financial, on the market and may take a huge loss, sources say.

The New York-based company is seeking at least $700 million for the division, which it bought just last year for about $1.2 billion, according to one of the sources. Cetera is a prominent network of 11 broker-dealers offering various wealth and asset management services. Cetera is on track this year to generate about $100 million in EBITDA, a key gauge of cash flow, a source says.

RCS has been in freefall since another Schorsch venture, American Realty Capital Properties, now known as Vereit, disclosed a year ago that it intentionally concealed accounting errors. That raised questions about RCS’s internal controls, and led brokers including LPL Financial to suspend sales of its investment products. Schorsch resigned from the boards of RCS and his other companies in December.

“The board of directors of RCS is exploring options to raise significant capital to rationalize the RCS capital structure,” says Andrew Backman, an RCS managing director. “These efforts are focused on positioning the business for growth and long-term value creation for all stakeholders supported by Cetera’s market-leading position. The company has engaged Lazard in connection with these efforts.” Initial bids were due last week, a source says.

RCS is weighing a sale Cetera because it needs to raise cash to ensure it doesn’t default on its debt, according to the sources. It had about $742 million long-term debt as of June 30, according to its second-quarter report. In August, the firm raised $25 million for debt repayment by agreeing to sell its wholesale distribution division to Apollo Global Management, which simultaneously entered into a strategic agreement with Cetera.    

RCS stock, which has collapsed this year from $19 a year ago, climbed nearly 20% Monday afternoon, giving the company a market value of about $120 million.

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