This article appears courtesy of Institutional Investor
Source: Institutional Investor Daily-Hedge Funds
Private equity firm J.C. Flowers is out, and a slew of hedge funds may be in, as the growing scrum around embattled derivatives broker Refco took several frenzied turns.
With other bidders -- as many as 50, according to The New York Times -- and Refco creditors crying foul at the breakup fee and other provisions negotiated by Refco and the Flowers-led investor group, Manhattan Bankruptcy Court Judge Robert D. Drain eliminated Flowers' option to bid on other Refco units, and asked Flowers and Refco to cut the amount in potential fees due Flowers. But the new deal still raised hackles among creditors other bidders, and Drain said he would approve only a $5 million breakup fee, one-third of the new Flowers-Refco proposal.
In a statement, Flowers said it is "not prepared to commit at this time" to the purchase, but has "not made a decision on whether we will participate in the bankruptcy auction," which will be run by Greenhill & Co. Judge Drain set a Nov.