NEW YORK — Employees of ForstmannLeff Associates LLC, caught in the middle of a controversy surrounding parent company Refco Group Holdings Inc., will acquire complete ownership of their boutique investment management firm before year's end.
Richard Goldman, president and CEO of New York-based ForstmannLeff, said the firm struck a deal Nov. 11 to acquire the 65% stake in his firm that had been held by Phillip Bennett through Mr. Bennett's holding company, Refco Group Holdings. Mr. Bennett, the former CEO of Refco Inc., was indicted by a grand jury Nov. 10 on eight counts of conspiracy, securities fraud, false filings and wire fraud.
The firm's management and employees already owned the remaining 35% of the firm.
"This transfer simplifies the firm's ownership structure and provides the employees with full autonomy over the business," said Mr. Goldman.
The assets of Mr. Bennett's holding company have now been placed in an escrow account, and before the transaction can be completed, ForstmannLeff must formally notify its clients by sending a "negative consent letter" that gives them the option of terminating the firm, Mr. Goldman said.
"I believe that they will be favorably inclined to support the transaction," said Mr. Goldman. Assuming the deal goes through as planned, the 100% interest of the firm will be transferred to its employees in early December.