SOURCE: Maître Frederik-Karel Canoy

July 28, 2005 15:07 ET

REFCO IPO, LEE PARTNERS case: French Lawyer CANOY's response

PARIS -- (MARKET WIRE) -- July 28, 2005 -- "On September 8, 2004, plaintiff Gérard SILLAM (Mr. SILLAM) filed a complaint, Index No. 602925/04 (jury trial demanded), in the Supreme Court of the State of New York, County of New York against defendants REFCO GROUP Ltd, LLC ("REFCO GROUP") and Mr. Phillip R. BENNETT ("Mr. BENNETT"). The plaintiff has been seeking compensatory and punitive damages for torts and unjust enrichment in the amount of US$ 1,020,000,000 in the United States.

"On October 12, 2004, defendant Mr. BENNETT's attorneys, Mayer, Brown, Rowe & Maw LLP, removed his civil action to the United States District Court for the Southern District of New York. The case was assigned to Judge Barbara Jones.

"On the very same day, Mr. BENNETT proceeded to the filing of Form S-4 registration statement under the securities act of 1933 at the Securities and Exchange Commission, with copies to Thomas H. Lee Partners' attorneys.

"Such statement did not disclose the risks associated with the legal actions pending on October, 12, 2004, in United States, and also France.

"The plaintiff advised that his American complaint would require the addition of defendants, notably Halim SAAD, a Lebanese national, former head of the Institutional Desk at Refco Overseas Ltd in London, and Thomas H. Lee Partners, and that the appropriate forum was the Supreme Court of the State of New York.

"As a result, in November 2004, Mr. SILLAM, without prejudice, voluntarily dismissed the civil action which had been removed to the United States District Court for the Southern District of New York. There was no adjudication upon the merits of the complaint.

"The plaintiff asserted the merits of his complaint and preserved his right to engage an action based on or including the same or related and additional claims in the relevant courts of the United Stated or any state.

"As of today, the grounds for this $1.02 billion claim still exist in the United States.

"Regarding the French civil proceedings, it should be noted that seven valid Courts Orders were issued including three Court Orders issued by the Paris High Court on September 26, 2003 and on December 3, 2003. They ruled in favor in Mr. SILLAM by ordering a Court Surety and the seizure of Refco Overseas Limited and Refco Securities S.A assets at Euronext and others financial institutions such as BNP PARIBAS and Societe Generale's subsidiary PAREL S.A. in Paris. The Executing Judge of the Paris High Court granted seizure orders for the total amount of 89 million euros."

"These Court Orders have not been removed so far.

"Mr. SILLAM was advised not to execute these Court Orders in order to prevent the possible bankruptcy of the French and/or the English affiliate or REFCO GROUP. As a matter of fact, court testimonies issued by REFCO SECURITIES SA CEO Alain FELLOUS and its CFO Cyril GUILLAUME supported that a previous asset seizure Court Order for 11.6 million Euros dated April 12, 2002 would be likely to result in REFCO SECURITIES S.A. bankruptcy.

"A ruling was then issued by three Judges in the Paris Commercial Court on January 30, 2004, and dismissed Refco's arguments regarding the Refco's request to remove the civil case to London (Refco having appealed the decision, this matter case is still pending)."

"Regarding the criminal proceedings, it should be noted that Refco had previously filed a criminal complaint against Mr. SILLAM for blackmail, which had been soon dismissed by the Paris High Court's Prosecutor. Said complaint for blackmail may turn out to be deemed a slander based report, which is a criminal offense punished under French law."

"Four Court Orders have been issued in the Paris High Court in favor of Mr. SILLAM in respect to the Refco case, by the Senior investigating Judges Ms. Michèle Colin and Ms. Edith Boizette (the Senior Investigating Judge of the Finance Section Paris High Court). These court orders are deemed to render the four criminal complaints admissible.

"These Court Orders were all followed by four demands of the Prosecutor of the Paris High Court which required the opening of four criminal probes, which is not automatically granted by law.

"The second criminal complaint, filed on January 7, 2004 targeted Refco's French lawyers, JEANTETASSOCIES and CABINET YVES LEVY, who, on behalf of Refco, have allegedly crooked with false testimonies a Court Order of the Court of Appeals of Paris regarding a remove from one Court to another. The Prosecutor of the Paris High Court also requested the Senior Investigating Judge to open a specific criminal probe in order to investigate Refco's lawyers conduct.

"Such criminal investigations are still on progress.

"Mr. Halim SAAD, who, on behalf of Refco, had allegedly issued a fraudulent Contract Letter, with the Managing Director of ROL complicity, was placed, in accordance with provision article 133-2 of the Code de Penal Procedure, under the status of assisted witness ("témoin assisté") on June 17, 2005, in Paris by the Finance Section Senior Investigating Judge in charge of the case since January 13, 2005. Said action aimed at a former Refco director has implied doubts as to fraud committed on behalf of Refco Overseas Ltd. and/or REFCO GROUP.

"Mr. SILLAM did not initiate these criminal proceedings on a stand alone basis but rather reported complaints to the appropriate Judges.

"Further information related to the criminal complaint filed on June 30, 2005, against Thomas H. Lee Partners, REFCO GROUP, some respective affiliates and Mr. Thomas H. Lee, Mr. Scott A. Schoen, Mr. BENNETT and other individuals of the two groups, will not be disclosed at this stage of the criminal proceedings.

"From the preceding, it appears that, due its nature and extent, the public statement issued by Refco dated July 14 2005 may be likely to possibly mislead the public and investors."

Contact Information

  • Press Contact:
    Maître Frederik-Karel Canoy
    Attorney at Law
    Ph +33 (0)6 13 80 22 21
    +33 (0)1 43 98 96 36
    fax 01 43 98 23 18
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