Refco

Have you heard that a company larger than Delta Airlines recently filed for bankruptcy protection? I’m not surprised. It is receiving surprisingly little coverage for as momentous an event as it is. Read about it here.

The bankruptcy filing came a week after Phillip R. Bennett, Refco's president and chief executive, was arrested and charged with hiding $430 million in debt owed to Refco in a separate company he controlled.

And this:

With the hearing pending, Refco made a new bankruptcy filing showing total assets of $16.5 billion through the end of August -- a sharp reduction from the $48.8 billion as of Feb. 28 listed in its initial petition filed on Oct. 17.

Liabilities were also cut to $16.8 billion in the new filing from $48.6 billion listed earlier in the week.

$32 Billion, gone….ppoooff…in 8 months. This is astounding. This is worse than Enron and Worldcom combined. I cannot wait to see how this unfolds. And, then, there is this simply priceless position taken by Refco’s accounting firm Grant Thornton.

"We anticipate the legal costs will be expensive, as they are in every case," he said. "But Grant Thornton is very sound financially and we anticipate any legal costs will be absorbed by the firm. We have insurance if needed."

Insurance? I am pretty sure Arthur Andersen had insurance too.