Embattled brokerage firm RCS Capital Corp. plans to file for chapter 11 bankruptcy protection under a prearranged filing intended to allow RCS to focus on its retail advice unit Cetera Financial Group, the Wall Street Journal reported today. RCS said that its lenders have agreed in principle to invest $150 million in new working capital into Cetera. The company said that it expects debt reduction and the elimination of preferred stock will total more than $500 million. Just over a month ago, RCS said that it would wind down its wholesale distribution business as part of a $3 million settlement with Massachusetts securities regulators over its use of fake proxy votes. The company has been working to raise capital and sell assets in the wake of a collapsed deal for Apollo Global Management LLC to buy a controlling stake in a group of trusts and other funds with $19 billion in real-estate holdings from RCS founder Nicholas Schorsch.
