Refco Lender Had Its Own Dark Places

The November 2003 financing statement, which was filed with the Delaware Department of State, lists Bawag as being a secured lender to DF Capital, which was formed in July 2002. The document does not disclose how much money Bawag provided to DF Capital, but it provides a lengthy description of the collateral posted as the security for the loan.

In sum, the collateral consisted of all of DF Capital's "rights under the proceeds participation agreement with Refco Group.'' Those rights included "payment of money,'' and possible "insurance claims and proceeds.''

The proceeds participation agreement is a mysterious document; few people familiar with the Refco scandal seem to know much about it.

One source claims the agreement, which was drawn up in 2003, was designed to provide a mechanism for giving Bawag a greater financial interest in Refco than its initial 10% equity stake. The source says Bawag had wanted to keep its increased financial interest in Refco a secret.

Bawag officials did not return a phone call on the matter.

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