With the New Year, the management of RCS Capital (RCAP)--the beleaguered parent company of theCetera Financial Group of independent broker-dealers--is trying to turn apage on the company’s troubles.

It did so with a bang late-Monday, announcing plans for aChapter 11 bankruptcy filing, the injection ofsome $150 million from key stakeholders, as well as debt andcapital restructuring plans that should allow Cetera to become anindependent, privately held firm.

Shares of RCS Capital did not trade on the first trading day of2016. They closed trading at roughly $0.30 on Dec. 31,significantly off its 2015 high of nearly $13.30.

“RCS Capital’s announcement today defines the path fortransforming Cetera into a private, independently run organizationthat is dedicated exclusively to the financial advisors andfinancial institutions we support,” said Cetera CEO Larry Roth, ina statement.

There had been much industry speculation that Cetera might be sold to a private-equity groupor insurance company.

“The restructuring marks a fresh start that will place theissues of the past months firmly behind Cetera, while providing thefinancial advisor network with the capital and operationalstructure to profitably grow its market leadership,” Rothexplained.

RCAP says it intends to file a voluntary petition for aprearranged Chapter 11 bankruptcy later this month.

In cooperation with its senior secured lenders, the firm plans“to pursue an expedited schedule for the company’s emergence fromChapter 11,” according to a press release. “Cetera's memberbroker-dealer firms will not beinvolved with the contemplated Chapter 11 filing.”

Roth seemed pleased to putting the past year’s woes behind himand Cetera: “This has not always been an easy journey, and we thankthe advisors and institutions we serve for the remarkable loyaltyand patience they have shown to us throughout this time,” he addedin a statement.

Cuts and more cuts

As part of the plan to get rid of some non-core assets andliabilities, it expects to trim most corporate overhead expensesand other liabilities. The restructuring likely will involve theelimination of RCS Capital’s common and preferred equity.

“Other than the new proposed equity retention program for Ceterafinancial advisors and key employees, substantially all of theequity of the company following the restructuring will be owned bythe current first- and second-lien lenders,” RCAP explained. .

Cetera’s proposed retention plan for advisors and some employeesshould include both cash and equity in the post-bankruptcy company.Furthermore, Cetera and RCS Capital’s lenders “have agreed inprinciple that the reorganization will protect the current deferredcompensation arrangements,” according to the news release.

The restructuring entails more than $500 million in debtreductions and preferred-stock eliminations. The $150 million onnew working capital will be used by Cetera “to make continuedsignificant investments in technology, advisor growth and serviceenhancements,” according the RCS Capital, which adds that it aimsto complete the restructuring and related plans in the secondquarter.

“Thanks to its autonomous operating and financial structurewithin the RCS Capital framework, Cetera has generated sufficientcapital funding and solid cash flows from our well-establishedbroker-dealer firms,” Roth stated.

Cetera, he adds, does not anticipate that RCAP’s plans willimpact existing deferred-compensation or other related compensationplans, “which are expected to remain in effect in their currentform.”

RCS Capital said it is “winding down” the troubledwholesale-distribution business of Realty Capital Securities andshould complete this process by the end of the first quarter. Theclosure of it investment banking, capital markets and relatedadvisory services business are on a similar timetable.

2014-2015 debacle

In late-2015, RCAP board member Edward Michael Weil resigned;earlier, he had served as CEO of the firm, as well as president,treasurer, secretary and director.

In addition, he had leadership roles at American Realty CapitalProperties, or ARCP, and of nontraded REITs sponsored by ARCapital.

The entwined entities--founded by real-estate mogul NicholasSchorsch--came under intense scrutiny after ARCP reported $23million in accounting errors in October 2014; more recently, a dealto sell some of RCS Capital's assets fell apart when Apollo GlobalManagement cancelled the transaction.

RCS Capital said it was shuttering its troubled wholesaledistribution unit, Realty Capital Securities, and agreed to pay $3million to the state of Massachusetts to settle charges tied toalleged fraudulent proxy-voting schemes in late-2015.

That news followed a decision by Moody’s Investors Service todowngrade RCAP’s credit ratings on $750 million of debt. Thedowngrades reflect “RCS' diminished ability to satisfy its debtload from its ongoing activities, and also the risk that it may notbe able to attract a sufficient and timely amount of new investmentthat is necessary to fully protect creditors' interests, as itseeks to recapitalize its balance sheet,” Moody’s explained in astatement.

According to Moody’s, RCS Capital had a total of $850 million indebt and $300 million in preferred equity in 2015. It bought Ceterafor $1.15 billion in early 2014.

Massachusetts’ regulators charged registered representatives ofRealty Capital Securities--a broker-dealer that is part ofRCAP--with impersonating shareholders and casting proxy votes infavor of management proposals at meetings of an investment programsponsored by American Realty Capital, a company owned by NicholasSchorsch and William Kahane that manages nontraded real estateinvestment trusts or nontraded REITs.