Refco has filed for bankruptcy; and has decided to sell its brokerage unit for $768 million to an investor group, in an effort to save the firm from following in the footsteps of Bayou and collapsing, according to Reuters.

Customers have been taking their money out of the firm ever since Phillip Bennet was charged with securities fraud.

The $768 million equals 103% of the net capital of the acquired businesses. Refco will also have the option to retain up to 20% of the equity value of the entities being sold. Refco has filed a Form 8- K today with the Securities and Exchange Commission that includes the executed memorandum of understanding.

A group of investors led by J.C. Flowers & Co. will be taking over the company's brokerage business, which is conducted through Refco LLC, Refco Overseas Ltd., Refco Singapore Ltd., along with other related subsidiaries and assets. The investor group includes entities associated with J.C. Flowers & Co. LLC, The Enstar Group, Inc., Silver Point Capital, MatlinPatterson Global Advisers LLC, and Texas Pacific Group.

The company is expecting to make definite agreements shortly, although it is not a sure thing that there will actually be an agreement or that a sale will be consummated.

Mark Winkelman has been selected to serve as chairman of Refco LLC, and Jacob Goldfield will serve as vice chairman. Winkelman was formerly head of J. Aron & Co. and co-head of the Goldman Sachs fixed income division.

Winkelman said, "We believe that Refco has a tremendously bright future ahead of it. Refco's unique platform offers clients a compelling value proposition, and we are providing Refco with a stable and well-capitalized shareholder base that will permit it to continue providing superior service to clients. We expect to close this transaction as soon as possible and we will begin our partnership with Refco employees immediately."

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