Customers of bankrupt broker-dealer Refco Capital Markets Ltd. ? the main Bermuda unit of the troubled futures broker ? could recoup some of the money they had tied up in the company when it collapsed last October, Bloomberg News said yesterday, citing a plan submitted to the US bankruptcy court on Thursday.

Customers could be offered 23 cents to 65 cents on the dollar in cash under a proposal by the investment bank Abadi to buy the unit, Bloomberg said.

In total, Refco Capital Markets owes customers nearly $4.2 billion. Of that, Bermuda-based customers are out by more than $800,000, according to documents on file with the US Bankruptcy Court, Southern District of New York, detailing Refco Capital Market's shaky financial position.

Creditors have been given unsecured status by the US court overseeing proceedings. Unsecured creditors typically recover about 40 cents on the dollar under US Chapter 11 bankruptcy proceedings. In December, RCM customers petitioned the court to be liquidated under Chapter 7 of the bankruptcy code, rather than restructured under Chapter 11.

Thursday's proposal was attached to an objection to a pending motion to liquidate Refco Capital Markets, Bloomberg said. "The sponsors believe they have the support of sufficient current and former personnel to launch significant operations almost immediately," Abadi said in papers filed in bankruptcy court in New York. The other Refco bidders, or sponsors, are Greylock Capital, a private equity firm, and Dresdner Kleinwort Wasserstein Securities.

Conyers Dill & Pearman and Williams Barristers & Attorneys are acting as co-counsel in Bermuda on the Refco matter.

Refco's crisis dates back to October 10 when it announced its chairman and chief executive Philip R. Bennett had hidden $430 million in bad debt from investors. Bennett, after paying back the debt and stepping down from Refco, was arrested on October 12 and charged with securities fraud, sending the company into a death spiral.Bennett repaid the loan through an emergency loan from Austrian bank, Bawag P.S.K. Group, a long-time Refco client. The loan was wired into an account at Refco Capital Markets in the early morning hours of October 10, according to international news reports, hours before Refco went public with its financial woes. The company listed on the New York Stock Exchange two months before being hit by scandal.

At the time of its collapse, Refco, through its regulated and unregulated units, owed its customers about $17 billion. London-based Man Group Plc, the world's largest publicly-traded hedge fund firm, bought Refco's US-licensed futures brokerage, Refco LLC, in November for $319 million in cash and assumed debt. RCM, as an unregulated unit, handled private trades in contrast to the trades made by other Refco units on regulated exchanges, like the Chicago Mercantile Exchange.