Abadi & Co. Chief Proposes To Buy And Revive Refco

Carlos Abadi, who runs the New York investment bank, Abadi & Co., is in discussions with customers of Refco Capital Markets to acquire the company and take it out of bankruptcy, his lawyer told a U.S. judge yesterday.

At least 18 customers have sued Refco Capital Markets seeking the return of more than $1.8 billion from their accounts. RCM parent, Refco Incorporated, has said the funds are unsecured company debt, not customer property. A federal bankruptcy court is scheduled to consider the dispute later this month.

Mr. Abadi said that his investment group includes the investment bank Dresdner Kleinwort Wasserstein Group and Greylock, a private venture capital firm. Mr. Abadi said the deal would include a cash infusion "in the low nine figures."

A lawyer for Mr. Abadi, Richard Smolev, disclosed the proposal at a hearing in New York where U.S. Bankruptcy Judge Robert Drain is considering a request by the Justice Department to appoint a trustee to run the company and protect its creditors.