Cetera Announces Exit from Bankruptcy

by San Antonio Attorney

RCS Capital Corporation, the parent company of Cetera Financial Group, revealed through an official statement last Wednesday that it has finally emerged from bankruptcy.  Undergoing its reorganization process, the company now stands as a private company with $150 million as its new capital.  The only operating branch that it has is Cetera Financial Group.

Since it has been in a place of rebirth as a company that arose from shambles, RCS Capital’s new name will be Aretec.  However, this name will not serve as the company’s official name in the marketplace.

Robert Moore, the former financial president of LPL, serves as the non-executive chairman of the board of the Cetera Financial Group.

RCAP filed for Chapter 11 bankruptcy last January.  The company cited assets of almost $2 billion and pending debts of $1.4 billion.

Last March, RCS Capital also filed for bankruptcy addressing all the holding companies of its broker and dealers.  This move aims to hold a restructuring plan for its creditors.  Fortunately, the bankruptcy court gave approval to its plans.

Investors Capital will soon be merged with another of Cetera’s branch of companies called Cetera Advisors.  VSR Financial will acquire the merger with another company called Summit Brokerage Services.

The positive result may be an end to Cetera’s ordeal of financial troubles.  Nicholas Schorsh, founder of RCS Capital, served as the main company that created a lot of business interests, involving manufacturing and distribution of investments.

Schorsh took over the firm last June 2013 and he eventually gained a total of $55 million, increasing the company value at $335 million.

Schorsh utilized the gained capital and invested it for an acquisition.  This stitches together firms and Cetera Financial Group as the second biggest network of independent companies.

But there were discrepancies, especially in Schorsch’s financial empire, which sparked a ‘domino effect.’ This occurrence pushed Schorsh to resign from the firm during its time of reorganization.

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