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Judge Won’t Buy Refco Trustee’s Argument

(CN) - "Because a trustee cannot sue to recover for a wrong undertaken by the debtor itself," a federal judge in Manhattan dismissed with prejudice the Refco Litigation Trust's request to replead claims against Grant Thornton, Ernst & Young and other accountants, banks and asset managers.

U.S. District Judge Gerard Lynch granted defendants' motions to dismiss all claims of Refco's litigation trustee: "This conclusion is the inevitable product of the Trustee's own complaint, which both on its face and after close examination, documents in detail how Refco participated in, and how it benefited from, the very fraudulent acts on which the Trustee seeks to sue. Accordingly, leave to replead is denied, and the complaint is dismissed with prejudice."

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