REFCO BANKRUPTCY NEWS                              Issue Number 1 
Copyright 2005 (ISSN XXXX-XXXX)                  October 19, 2005
Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001
REFCO BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service,
 Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an
 ad hoc basis (generally every 10 to 20 days) as significant activity 
occurs in the Debtors' cases.  New issues are prepared by Lee Ria E.
 Villahermosa, Christopher G. Patalinghug, Frauline S. Abangan and 
Peter A. Chapman, Editors.  Subscription rate is US$45 per issue. 
 Any re-mailing of REFCO BANKRUPTCY NEWS is prohibited. 
10/17/05 Voluntary Petition Date
10/21/05 Deadline for Refco to File Flowers Sale Motion
10/31/05 Deadline for Court to Approve Flowers Bidding Procedures
11/01/05 Deadline to File Schedules of Assets & Liabilities
11/01/05 Deadline to File Statements of Financial Affairs
11/01/05 Deadline to File Lists of Leases and Contracts
11/06/05 Deadline to Provide Utilities With Adequate Assurance
11/10/05 Deadline for Court to Approve Flowers Sale Transaction
11/11/05 Deadline for Closing Flowers Sale (unless extended)
12/11/05 Drop Dead Deadline for Closing Flowers Sale Transaction
12/16/05 Deadline to make decisions about lease depositions
01/15/06 Deadline to remove actions under FRBP 9027
02/14/06 Expiration of Exclusive Plan Proposal Period
04/15/06 Expiration of Exclusive Solicitation Period
10/17/07 Deadline to Commence Avoidance Actions
 <None>  Organizational Meeting to Form Creditors' Committees
 <None>  First Meeting of Creditors under 11 USC Sec. 341
 <None>  Bar Date for filing Proofs of Claim 
 Refco, Inc. 
One World Financial Center
200 Liberty Street, Tower A
New York, New York 10281 
Tel: (212) 693-7000
 Refco Inc. and its direct and indirect subsidiaries provide 
execution and clearing services for exchange-traded derivatives.  
Refco is a major provider of prime brokerage services in the 
fixed income and foreign exchange markets.  
 The Company offers its customers rapid, low-cost trade execution 
and clearing services on a broad spectrum of derivatives 
exchanges and over-the-counter markets.  In 2004, the Company was 
the largest provider of customer transaction volume to the 
Chicago Mercantile Exchange, the largest derivatives exchange in 
the United States.  The Company serves accounts from over 20 
locations in over 10 countries.  Its customers include 
corporations, government agencies, hedge funds, managed futures 
funds, pension funds, financial institutions, retail clients and
professional traders.
In August 2005, Refco issued equity securities in an initial 
public offering.  On October 10, 2005, Refco discovered through
an internal review a $430,000,000 receivable owed to the Company 
by an entity controlled by Phillip R. Bennett, its Chief 
Executive Officer and Chairman of the Board of Directors.  The 
receivable has since been collected.  At the request of the Board 
of Directors of Refco, Mr. Bennett has taken a leave of absence.
Also on October 10, 2005, Refco appointed a new President and a 
new Chief Executive Officer.
On October 13, 2005, the Company assured its clients that its 
regulated subsidiaries were substantially unaffected by these 
events, and the business at these regulated subsidiaries was 
being conducted in the ordinary course, including customer 
deposit and withdrawal of segregated funds.  The Company also 
said that the liquidity within its non-regulated subsidiary, 
Refco Capital Management, which represents a material portion of 
the business of the Company, was no longer sufficient to continue 
operations.  The Company therefore imposed a 15-day moratorium on 
all activities of RCM to protect the value of the enterprise.


Dennis Klejna, Esq., the Company's executive vice president and 
general counsel, relates that in a very rapid time period, and 
with extraordinary efforts, Refco and a private equity group lead 
by J.C. Flowers & Co. LLC negotiated an agreement to sell the 
Company's core futures brokerage business.  The agreement 
generally provides that the buyers, which also include Silver 
Point Capital, MatlinPatterson Global Advisers LLC and Texas 
Pacific Group, will purchase the equity interest in Refco LLC, 
along with certain other subsidiaries, for a purchase price based 
on the net regulatory capital of the acquired entities.  The 
agreement also provides for customary buyer protections, and 
requires Bankruptcy Court approval of the transaction on an 
expedited basis.
In connection with the transaction, Refco and 23 of its 
subsidiaries have filed for protection under Chapter 11 of the 
United States Bankruptcy Code.  Mr. Klejna emphasizes that none 
of Refco's regulated subsidiaries, including futures commission 
merchant Refco LLC and broker dealer Refco Securities, LLC, is a 
debtor, and their operations are continuing.
Mr. Klejna indicates that the company is not in a position to 
estimate cash receipts and disbursements for the next 30 days.  
Mr. Keljna says that the company's average payroll expenses for 
the first half of 2005 were $711,000 per week.  This may vary for 
the next 30 days.
              CONSOLIDATED BALANCE SHEETS (unaudited)
                        As of May 31, 2005
 Cash and cash equivalents                           $405,029,000
 Cash and securities segregated
under federal and other regulations:
   Cash and cash equivalents                       1,053,218,000
   Securities purchased under agreements to resell    67,013,000
Securities purchased under agreements to resell   46,551,374,000
Deposits with clearing organizations               2,519,147,000
Receivables from securities borrowed               2,631,989,000
Receivables from broker-dealers and 
   clearing organizations                         10,770,348,000
Receivables from customers, net of reserves        1,807,446,000
Securities owned, at market or fair value          6,774,039,000
Memberships in exchanges                              36,159,000
Goodwill                                             744,110,000
Identifiable intangible assets                       595,931,000
Other assets                                         363,888,000
Total assets                                     $74,319,691,000
   Short-term borrowings, including current
      portion of long-term borrowings               $144,913,000
   Securities sold under agreements to repurchase 43,333,241,000
   Payable from securities loaned                  2,458,147,000
   Payable to broker-dealers 
      and clearing organizations                   8,444,520,000
   Payable to customers                            7,622,809,000
   Securities sold, not yet purchased             10,590,379,000
   Accounts payable, accrued expenses
      and other liabilities                          278,149,000
Long-term borrowings                               1,236,000,000
Total liabilities                                 74,108,158,000
Commitments and contingent liabilities
Membership interests issued by
   subsidiary and minority interest                   23,606,000
Member's equity                                      187,927,000
Total liabilities and member's equity            $74,319,691,000
 In its Chapter 11 petition, Refco Inc. and its affiliates 
reported to the Bankruptcy Court that as of February 28, 2005, 
their financial condition was:
       Total Assets: $48,765,349,000
       Total Debts:  $48,599,748,000
 In a filing with the Securities and Exchange Commission, Refco 
Group Ltd., LLC, and its subsidiaries disclosed that their 
consolidated balance sheet as of May 31, 2005, reflects:
       Total Assets: $74,319,691,000
       Total Debts:  $74,108,158,000
 As of August 31, 2005, Mr. Klejna reports, the Debtors' 
consolidated financial position was:
       Total Assets: $16.5 billion 
       Total Debts:  $16.8 billion 
      NEW YORK, New York -- October 17, 2005 -- Refco, Inc. 
announced today that it has entered into a memorandum of 
understanding with a group of investors led by J.C. Flowers & Co. 
LLC for the sale of the Company's futures brokerage business 
conducted through Refco LLC, Refco Overseas Ltd., Refco Singapore 
Ltd. and certain related subsidiaries and other 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 expects to execute definitive agreements shortly, 
although there can be no assurance that any definitive agreement 
ultimately will be reached or that a sale ultimately will be 
     Mark Winkelman will serve as Chairman of Refco LLC, and 
Jacob Goldfield will serve as Vice Chairman.  Mr. Winkelman was 
formerly head of J. Aron & Co. and co-head of the Goldman Sachs 
fixed income division.  Mr. 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."
     In connection with the transaction, Refco Inc. and certain 
subsidiaries have filed for protection under Chapter 11 of the 
United States Bankruptcy Code on October 17, 2005.  None of 
Refco's regulated subsidiaries, including the futures brokerage 
business conducted through Refco LLC, Refco Overseas Ltd. and 
Refco Singapore Ltd, and the registered broker dealer Refco
Securities LLC have filed for bankruptcy protection.  Refco 
expects that the Bankruptcy Court will enter an order 
establishing procedures for submission of competing proposals in 
due course.
     The proposed purchase price of $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 dated as of October 17, 2005.
     Greenhill & Co. LLC will continue as the Company's financial 
advisor.  In accordance with the terms of its engagement, the 
services of Goldman, Sachs & Co. terminated on October 17, 2005, 
upon the bankruptcy filing.
                          About Refco Inc.
      Refco Inc. (NYSE: RFX) is a diversified financial services 
organization with operations in 14 countries and an extensive 
global institutional and retail client base.  Refco's worldwide 
subsidiaries are members of principal U.S. and international 
exchanges, and are among the most active members of futures 
exchanges in Chicago, New York, London and Singapore.  In 
addition to its futures brokerage activities, Refco is a major 
broker of cash market products, including foreign exchange, 
foreign exchange options, government securities, domestic and 
international equities, emerging market debt, and OTC financial 
and commodity products.  Refco is one of the largest global 
clearing firms for derivatives.  For more information, visit
                   About J.C. Flowers & Co. LLC
     J.C. Flowers & Co. LLC is an investment firm specializing in 
financial services.
                      About The Enstar Group
     The Enstar Group (Nasdaq: ESGR) is a publicly traded company 
engaged in the operation of several businesses in the financial 
services industry, including Castlewood Ltd., Bermuda.  Mr. 
Flowers is the largest shareholder of Enstar.
                    About Silver Point Capital
     Silver Point Capital specializes in credit analysis and 
diversified credit-related investments.
            About MatlinPatterson Global Advisors LLC
     MatlinPatterson is a private equity firm specializing in 
control investments in distressed situations on a global basis.
               About Texas Pacific Group (TPG)
     Texas Pacific Group is a global private equity firm 
investing in businesses across a range of industries.
Lead Debtor: Refco Inc.
             One World Financial Center
             200 Liberty Street, Tower A
             New York, New York 10281
Bankruptcy Case No.: 05-60006
Debtor affiliates filing separate chapter 11 petitions: 
      Entity                                     Case No.
      ------                                     --------
      Bersec International LLC                   05-_____
      Kroeck & Associates, LLC                   05-_____
      Marshall Metals LLC                        05-_____
      New Refco Group Ltd., LLC                  05-_____
      Refco Administration LLC                   05-_____
      Refco Capital LLC                          05-_____
      Refco Capital Holdings LLC                 05-_____
      Refco Capital Management LLC               05-_____
      Refco Capital Markets, LTD                 05-_____
      Refco Capital Trading LLC                  05-_____
      Refco Finance Inc.                         05-_____
      Refco Financial LLC                        05-_____
      Refco Fixed Assets Management LLC          05-_____
      Refco F/X Associates LLC                   05-_____
      Refco Global Capital Management LLC        05-_____
      Refco Global Finance Ltd.                  05-_____
      Refco Global Futures LLC                   05-_____
      Refco Global Holdings LLC                  05-_____
      Refco Group Ltd., LLC                      05-_____
      Refco Information Services LLC             05-_____
      Refco Mortgage Securities, LLC             05-_____
      Refco Regulated Companies LLC              05-_____
 Chapter 11 Petition Date: October 17, 2005
 Court: Southern District of New York
 Judge: Robert D. Drain 
 Debtors' Counsel: J. Gregory Milmoe, Esq.
                  Sally McDonald Henry, Esq.
                  Richard B. Levin, Esq.
                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, New York 10036
                  Tel: (212) 735-3000 
                  Fax: (212) 735-2000
In its Chapter 11 petition, Refco Inc. and its affiliates 
reported to the Bankruptcy Court that as of February 28, 2005, 
their financial condition was:
      Total Assets: $48,765,349,000
      Total Debts:  $48,599,748,000
In a filing with the Securities and Exchange Commission, Refco 
Group Ltd., LLC, and its subsidiaries disclosed that their 
consolidated balance sheet as of May 31, 2005, reflects:
      Total Assets: $74,319,691,000
      Total Debts:  $74,108,158,000
As of August 31, 2005, Mr. Klejna reports, the Debtors' 
consolidated financial position was:
      Total Assets: $16.5 billion 
      Total Debts:  $16.8 billion 
   Entity                                           Claim Amount
   ------                                           ------------
Bawag International Finance                         $451,158,506
Bank fur Arbeit und Wirtschaft und
Osterreichische Postsparkasse
Aktiengesellschaft Sietzergasse 2-4 A-1010          
Vienna, Austria
P: +43/1/534 53/3 12 10
F: +43/1/534 53/ 2284
 Wells Fargo                                         $390,000,000
Corporate Trust Services
Mac N9303-120 
Sixth & Marquette
Minneapolis, MN 55497
P: 612-3 16-47727
Attn: Julie J. Becker
 VR Global Partners, LP                              $380,149,056
Avora Business Park
Moscow, Russia 115035                             
 Rogers Raw Materials Fund                           $287,436,182
C/O Beeland Management
141 West Jackson Blvd., Suite 1340
Chicago, IL 60604
P: (312) 264-4375
 Bancafe International Bank Ltd                      $176,006,738 
Carrera 11 82-76 
Segundo 2 
Bogota, Colombia 
P: 636-4349                                         
      - and - 
 Bancafe International Bank Ltd
801 Brickell Ave. Ph1
Miami, FL 33131 
P: 305-372-9909 
F: 305-372-1797
 Markwood Investments                                $110,056,725
Via Lovanio
#19 00198 
Rome, Italy                                         
 Capital Management Select Fund                      $109,009,282
Lynford Manor, Lynford Cay 
Nassau, Bahamas                                     
 Leuthold Funds Inc                                  $107,264,868
Leuthold Industrial Metals, LP 
100 North 6th Street Suite 412A
Minneapolis, MN 55403 
P: 612-332-9141 
F: 612-332-0797 
Attn: David Cragg                                   
 Rietumu Banka                                       $100,860,048
JSC Rietumu Banka 
Reg. No. 40003074497 
VAT No. LV40003074497 
54 Brivibas str 
Riga, LV-1011 LATVIA 
P: +371-7025555 
F: +371-7025588                                     
 Cosmorex Ltd                                         $91,393,820
CP 8057 28080 
Madrid, Spain 
P: +34-607-745-555 
F: +34-667-706-622                                   
 BCO Hipotecario Inv. Turistic                        $85,807,030
(Fidelicomiso Federal Forex Invest) 
Av Venezuela 
Torre Cremerca, Piso 2 
Ofici B2 El Rosal 
Caracas, VENEZUELA                                   
 VR ARGENTINA RECOVERY FUND                           $77,710,311
Avrora Business Park 
77 Sadovnicheskayanab BLDG 1 
Moscow, 115035 Russia                                
 Rogers International Raw Materials                   $75,213,814
c/o Beeland Management 
141 West Jackson Blvd., Ste. 1340 
Chicago IL 60604 
P: (312) 264-4375                                    
 Creative Finance Limited                             $65,111,071
Marcy Building, Purcell Estate
P.O. Box 2416 
Road Town, British Virgin Islands                    
 Cargill                                              $67,000,000
PO Box 9300 
Minneapolis, MN 55440-9300 
P: (952) 742-7575 
F: (952) 742-7393                                    
 JWH Global Trust                                     $50,576,912
c/o Refco Commodity Management Inc. 
One World Financial Center 
200 West Liberty St., 22nd Floor 
New York, NY 10281
RB Securities Limited                                $50,661,064
54 Brivibas Street 
LV-1011 Riga, Lativa 
P: + 371 702-52-84 
F: + 371 702-52-26
 PREMIER TRUST CUSTODY                                $49,365,415
 London & Amsterdam Trust Company                     $47,560,980
PO Box 10459 APO 
3rd Floor 
Century Yard 
Cricket Square, Elgin Ave. 
Grand Cayman, Cayman Island
 Stilton International Holdings
Trident Chambers, Wickhams Cay
P.O. Box 146
Road Town, British Virgin Islands                    $46,820,415
 Refco Advantage Multi-Manager Fund Futures Series    $41,713,723
c/o Refco Alternative Investments Group 
One World Financial Center 
200 West Liberty St., 22nd Floor 
New York, NY 10281                                   
 Banesco Ny Banesco Banco Universal C.A.              $39,596,609
Av Urdaneta, Esquina El Chorre, Torre Untbanca
Caracas Venezuela                                    
 Josefina Franco Sillier                              $32,862,419
Carretera Mexico-Toluca No. 4000 
Col. Cuajimalpa D.R. 0500 Mexico                     
 Rovida                                               $32,831,461
London & Amsterdam Trust Company 
PO Box 10459 APO 
3rd Floor
Century Yard, Cricket Sq.                            
 Caja S.A.                                            $30,950,115
Sarmiento 299 1 Subsuelo (1353) 
Buenos Aires, Argentina 
P: (54 11) 4317-8900 
F: (54 11) 4317-8909                                 
 Global Management Worldwide                          $28,976,612
Trident Corp. 
Service Floor 1 
Kings Court Bay St. 
PO Box 3944 
Nassau, Bahamas                                      
 Abadi & Co. Securities                               $28,046,904
375 Park Avenue, Suite 3301 
New York, NY 10152 
P: (212) 319 -4135
 Refco Winton Diversified Futures Fund                $27,226,697
c/o Refco Global Finance 
One World Financial Center 
200 West Liberty Street, 22nd Floor 
New York, NY 10281
 Pioneer Futures, Inc.                                $25,932,000
One North End Ave., Suite 1251 
New York, NY 10282
 Daichi Commodities CO., LTD.                         $24,894,833
10-10 Shinsen Cho, Shibuya-Ku 
Tokyo, I5O-0045 JAPAN
 GS Jenkins Portfolio LLC.                            $24,631,959
c/o Refco Capital Markets 
One World Financial Center 
200 West Liberty Street, 22nd Floor 
New York, NY 10281
 Winchester Preservation                              $23,349,765
c/o Joseph D, Freney 
Christiana Bank & Trust Co. 
3801 Kennett Pike, Suite 200 
Greenville, DE 19807
 BANCO AGRI BANCO AGRICOLA (PANAMA) S.A.              $22,314,386
      - and - 
 Peak Partners Offshore Master Fund Limited           $22,205,344
PO Box 2199 
GT Grand Pavilion Commercial Center 
802 West Bay Road 
Grand Cayman, Cayman Islands
 Arbat Equity Arbitrage Fund                          $19,106,989
Trident Corporate Services 
1st Floor Kings Court 
Bay Street 
P.O. Box N3944 
Nassau, Bahamas
 Renaissance Securities (Cyprus) Ltd.                 $17,820,709
2-4 Arch Makarios 
111 Avenue Capital Center, 9th Floor 
1505 Nicosia Cyprus
 AQR Absolute Return                                  $17,482,100
c/o Caledonian Bank & Trust LTD 
PO Box 1043 
GT Caledonian House
Grand Cayman, Cayman Islands
 Geshoa Fund                                          $17,319,494
PO BOX 31106 SMB 
 RK Consulting                                        $14,074,345
7, Kountouriotou Street 
14563 Kifissia 
 VR Capital Group Ltd.                                $13,690,549 
NAB 77 BLDG 1 
P: +358 600 41 902
 GTC Bank, INC.                                       $12,971,439
P: (507) 265-7371 
F: (507) 265-7396
 Inversiones Concambi                                 $12,799,137
P.O. BOX 02-5304 
MIAMI, PL 33102
 Miura Financial Services                             $12,150,213
 NKB Investments LTD                                  $11,699,430
196 Makarios III Avenue
Ariel Corner 3rd Floor
Office 301 3030 
Limassol CYPRUS
 Tokyo Forex Financial Inc                            $11,689,354
Shinjyuku Oak Tower, 35th Floor
6-8-1 Nishishinjyuku
Shinjyuku-Ku, Tokyo JAPAN
 Birmingham Merchant S.A.                             $11,215,413
 BAC International                                    $10,906,506
P: (507) 265-8289
F: 507-205-4031
 Total Bank                                           $10,657,732
P: (0212) 264.72.54/49.42
F: (0212) 266.58.12
 Reserve Invest (Cypress) Limited                     $10,499,733
3301 BLOCK 3
 Refco Commodity Futures Fund                         $10,166,045
c/o Refco Alternative Investments Group
One World Financial Center
200 Liberty Street, 22nd Floor
New York, New York 10281
P: 877 538 8820
F: 877 229 0005
 Refco Inc. and its 23 debtor-affiliates anticipate that numerous 
notices, applications, motions, other pleadings, hearings, and 
orders in their chapter 11 cases will affect several of the
Debtors.  Thus, the Debtors ask the Court for an order directing 
joint administration of their Chapter 11 cases.
 According to J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, 
Meagher & Flom LLP, in New York, the joint administration of the 
Debtors' Chapter 11 cases will permit the Clerk of the Court to 
use a single general docket for each of the Debtors' cases and to
combine notices to creditors and other parties-in-interest of the 
Debtors' estates.  
 The Debtors propose that all pleadings and papers filed in their 
jointly-administered Chapter 11 cases be captioned:
         In re                         | Chapter 11
   Refco Inc. et al.,                  | Case No. 05-60006 (RDD)
                              Debtors. | (Jointly Administered)
 According to Mr. Milmoe, the use of simplified caption, without 
reference to the Debtors' states of incorporation and tax 
identification numbers, will eliminate cumbersome and confusing 
procedures and ensure a uniformity of pleading identification.
 Rule 1015(b) of the Federal Rules of Bankruptcy Procedure 
provides that if two or more petitions are pending in the same 
court by or against a debtor and an affiliate, the court may 
order joint administration of the estates of the debtor and those 
 Mr. Milmoe tells Judge Drain that Refco and its debtor-affiliates 
are "affiliates" as that term is defined in Section 101(2) of the 
Bankruptcy Code and as used in Bankruptcy Rule 1015(b).  Thus, he 
says, joint administration of the Debtors' Chapter 11 cases is 
appropriate under Bankruptcy Rule 1015(b).
 Mr. Milmoe points out that joint administration will protect 
parties-in-interest by ensuring that they will be apprised of the 
various matters before the Court in the Debtors' cases.  In 
addition, the creditors' rights will not be adversely affected by 
joint administration since the Debtors' request is purely 
procedural and is in no way intended to affect substantive 
 Debtor Refco Capital Markets, Ltd., maintains multiple bank 
accounts at JPMorgan Chase Bank, N.A., in U.S. dollars and 
various foreign currencies, including accounts maintained in the 
United States and abroad.  As of the Petition Date, some of these 
accounts had positive balances while others were overdrawn.
Capital Markets and JPMorgan agree that all of the Debtor's 
accounts denominated in currencies other than U.S. dollars should 
be converted to U.S. dollars to avoid risks related to 
fluctuations in various currencies' values.
Upon conversion of all of the accounts to U.S. dollars, Capital 
Markets and JPMorgan agree to state a combined balance between 
Capital Markets and the Bank by netting the result of the 
conversion of all non-U.S. dollar accounts to U.S. dollars in 
accounts maintained with the Bank.
Accordingly, Capital Markets asks the Court to authorize JPMorgan 
to convert all of its accounts at the Bank that are denominated 
in currencies other than U.S. dollars to U.S. dollars.
Upon the conversion of all Capital Markets accounts at JPMorgan, 
the Bank will promptly provide an accounting to Capital Markets 
of the foreign currencies converted in each account, the 
applicable conversion rates, fees, if any, and the total dollars 
derived, along with a reconciliation reflecting the netting all 
of the Capital Markets accounts at the Bank.
Capital Markets asks the Court to modify the automatic stay under 
Section 362 of the Bankruptcy Code, to the extent necessary, to 
permit JPMorgan to convert the Capital Markets accounts.
JPMorgan is represented in the Debtors' cases by Andrew D. 
Gottfried, Esq., at Morgan, Lewis & Bockius LLP, in New York.
 On October 17, 2005, Refco Inc. entered into a memorandum of 
understanding with J.C. Flowers & Co. LLC.  The MOU outlines the 
principal terms and conditions upon which FGS Refco Acquisition 
Co., LLC, a Delaware limited liability company organized by:
    -- J.C. Flowers, 
   -- J. Goldfield & Co., LLC, 
   -- Silver Point Finance, LLC, 
   -- MatlinPatterson Global Advisers LLC, and 
   -- TPG Partners IV, LP,
 proposes to acquire all of the capital stock and operations of 
Refco, LLC, and certain of its affiliates including Refco 
Overseas Limited, and Refco Singapore, which are engaged in the 
regulated futures and commodities trading activities, from Refco, 
Inc., and Refco Global Futures LLC. 
 The purchase price will be equal to 103% of the net regulatory 
capital of the Acquired Business as of closing plus, any amounts 
payable in respect of additional assets purchased.  The net 
regulatory capital of the Acquired Business is currently 
$746,000,000, so if the capital remains unchanged, the purchase 
price at closing will be $768,000,000. 
 The Debtors will have the right to retain up to 20% of the equity 
of the Subsidiaries.
 The Purchase Price will be payable in cash, provided, that to the 
extent that the Purchase Price exceeds $900 million, the excess 
Purchase Price will be in the form of an unsecured note on 
commercially reasonable terms.
 The Debtors agree to file a sale motion on or before October 21, 
 The Sale Motion will seek these buyer protections: 
    (a) reimbursement of Sponsors' reasonably documented expenses 
       up to $5,000,000 in the aggregate;
    (b) a break-up fee equal to 2.8% of the Purchase Price to be 
       paid in the event the Debtors sell the assets to a buyer 
       other than FGS Refco; and 
    (c) bid procedures for the auction of the Acquired Business, 
           (i) a $20 million overbid requirement of any qualified 
          (ii) a requirement that any qualified bidder be 
              reasonably acceptable to the Company's designated 
              self-regulatory organization, the Chicago 
              Mercantile Exchange, and 
         (iii) to the extent that any other bidder in the 
              bankruptcy auction offers to employ fewer employees 
              than the Buyer, the additional severance cost 
              incurred by Debtors will be reflected in the 
              calculation of the price offered by the other 
 The hearing to consider the proposed Bid Procedures must be held 
no later than October 31, 2005.  The Debtors must obtain Court 
approval of the sale no later than November 10, 2005.  Subject to 
one 30-day extension, Refco is required to close the transaction 
no later than November 11, 2005.
 Either party will have the right to terminate the MOU by giving 
notice to the other party in the event that an Acquisition 
Agreement has not been executed on or before October 24, 2005.
 A full-text copy of the Memorandum of Understanding is available 
for free at:
*** End of Issue No. 1 ***

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