Cetera Bailout: Carlyle, Eaton Vance, Fortress Forgo RCS Debt Payments

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Investment firms Fortress Investment Group, Eaton Vance Management and Carlyle Investment Management are permitting RCS Capital to forgo debt payments, as the brokerage prepares to file for Chapter 11 bankruptcy and focus its attention on restructuring its retail broker-dealer network, Cetera Financial Group, according to an SEC filing on Wednesday.

RCS also said it will give details of a retention program for its advisors no later than Jan. 8.

On Monday, RCS said that some of its “key stakeholders” had agreed to invest $150 million in Cetera to help position the company for long-term growth. It was not immediately clear which lenders had agreed to the investment.

Once fast-growing RCS plans to file for a pre-arranged bankruptcy in late January, supported by steering committee of its lenders. Shareholders will be wiped out.

Though RCS had said earlier it planned to use the proceeds of its sale of Hatteras Funds to prepay loans, it may now keep them, according to the document. 

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