Cerberus Capital Management
is the winner in the bidding for Austria's Bank Fuer Arbeit und Wirtschaft, the scandal-tarred bank that played a big role in the collapse of
Cerberus, based in New York, specializes in investing in distressed properties. A consortium led by Cerberus was one of four bidders for Bawag, as the lender is known. The sale of Bawag was managed by
It's not clear how much Cerberus is paying for Bawag. But the
Austria Press Agency
says the private equity firm is paying at least 3.2 billion euros, or $4.2 billion.
Bawag, which once had a significant ownership stake in Refco, allegedly helped the defunct broker's former CEO hide nearly $750 million in bad debts and receivables. As part of a non-prosecution agreement with federal prosecutors, Bawag agreed to pay at least $675 million in restitution.
Bawag had a secret deal with Refco's former CEO, Phil Bennett, which entitled it to a larger then publicly acknowledged payout from the 2004 LBO of Refco. Authorities allege the Austrian bank got nearly $800 million of the proceeds from the $1.8 billion buyout orchestrated by Thomas H. Lee Partners.
Refco collapsed in October 2005, just three months after it raised $583 million in an IPO.