After a weekend of meetings to try to save Refco, the large commodity and futures trading firm that virtually unraveled last week, a private equity firm, J. C. Flowers, has emerged as a likely buyer of Refco's futures business, said one person briefed on the negotiations. That unit was the sole functioning arm of Refco. J. C. Flowers, a $1.5 billion to $2 billion fund founded by J. Christopher Flowers, a former partner at Goldman Sachs, could announce as early as today that it will buy the business for an undisclosed price. Negotiations with company officials and advisers continued last night though other potential buyers expressed interest. J. C. Flowers is based in New York.Greenhill was hired over the weekend to work with Goldman Sachs to advise Refco. Goldman and Credit Suisse First Boston were the lead banks for Refco's initial public offering in August that raised $583 million. Goldman agreed when it was hired last week not to take a fee for the assignment. At the same time, Refco is expected to put its capital markets business into bankruptcy this week. Refco announced Thursday that it had imposed a 15-day moratorium on all activities in the unit, which offers services like lending stock, financing and clearing trades to hedge funds and other institutions as well as brokerage services for derivative and foreign exchange transactions, because it did not have enough cash. It was the only one of Refco's three units that was unregulated. Company officials and advisers scrambled over the weekend to find a way to unwind trades in its brokerage and capital markets businesses. Many Wall Street firms stopped honoring Refco trades last Thursday. Trades take two days to settle, so the Thursday trades would come due today, putting pressure on Refco to find an orderly way to complete them. Company officials hope to meet today with Refco's major foreign exchange counterparties, the entities on the other side of a trade, to settle those transactions. The decision to put Refco Capital Markets into bankruptcy could be an attempt to limit liability associated with that unit as well as a way to manage the settlements. "It sounds like they think the regulated entities may have a more survivable business model, a better customer base, exchange memberships, etc.," said Tom Foley, a credit analyst at Standard & Poor's. The regulated businesses could also be put into bankruptcy this week, but no decision appeared to have been made late last night. That will depend in part on whether such a filing would help the buyer. The company's main businesses faced a roller coaster ride last week after the company announced on Monday that its former chief executive, Phillip R. Bennett, had failed to disclose that a company he controlled owed Refco $430 million - a transaction that securities law requires to be disclosed as a related party transaction. The company, based in New York, also said that its financial statements back to 2002 could not be relied on. Mr. Bennett paid back the money, using his 34 percent stake in the company, worth more than $1 billion before the company collapsed. He was arrested on Tuesday and charged with securities fraud.
