Filings will include broker-dealer holding companies of its Cetera firms, according to a source
Mar 26, 2016 @ 10:05 am | By Bruce Kelly | Investment News
RCS Capital Corp. this weekend intends to take significant step in cleaning up its fiscal woes by making another round of bankruptcy filings that will include broker-dealer holding companies of its Cetera Financial Group firms, according to a source familiar with the situation.
Burdened by debt, RCS Capital Corp., or RCAP, filed for a pre-arranged Chapter 11 filing at the end of January as part of an agreement reached with a majority of its first and second lien lenders. RCAP’s bankruptcy seeks to eliminate hundreds of millions of dollars of debt. Cetera Financial Group is expected to emerge as an independent company after the bankruptcy.
Certain holding companies of the broker-dealers within the Cetera network of 9,100 advisers are guarantors of RCAP’s debt. In order to eliminate these guarantees without impairing or impacting any other aspect of the business, RCAP will include these entities in a subsequent pre-packaged Chapter 11 filing in federal bankruptcy court in Delaware this weekend, according to the source.