NEW YORK (Dow Jones/AP) ? Refco Inc. on Wednesday won permission to pay more than $655 million to a group of lenders that helped underwrite the company?s initial public offering in August 2005, just months before an accounting scandal precipitated the company?s collapse.

US Bankruptcy Judge Robert Drain approved a settlement in which Refco agreed to repay $642 million in loan principal and about $13 million in fees to a group of secured lenders led by Banc of America Securities and Credit Suisse Securities. The lenders played a key role in the $670 million IPO Refco completed in 2005.

Drain said the settlement was a necessary precursor to a ?global? resolution of Refco?s Chapter 11 case. The company, which is winding down its operations, this month submitted a plan to pay creditors of dozens of Refco subsidiaries in the United States and abroad. Drain said the deal was particularly important because it exempted the secured lenders from claims by third parties.

?It is clear to me that it is important to resolve potential claims that have been aired against secured lenders, which this settlement effectively deals with,? Drain said. Refco has said it intends to pay off the secured lenders by October 16.

Refco, a giant commodity brokerage, collapsed into bankruptcy last October amid allegations that its chief executive, Phillip Bennett, had hidden $430 million in bad debt. The allegations caused the company?s stock to lose nearly 98 percent of its value within days. Shareholders, led by the giant bond fund Pacific Investment Management Co., filed a class-action lawsuit against Refco and its IPO underwriters.

Refco has said that paying off the loans from the underwriters would help the company ensure it has enough money to pay off other creditors as well. That?s because Refco has been accumulating interest on the loans at the rate of $6 million a month.

On Wednesday, a Refco attorney, Gregory Milmoe, told Drain the payment also helps the company resolve its bankruptcy proceedings quickly. Refco is seeking to conclude its Chapter 11 case by December.

?This is an effort to put pencils and swords down and deal with lenders,? Milmoe said. He called the deal ?critical and fundamental to our global resolution,? referring to the more extensive Chapter 11 plan Refco filed earlier this month.

Refco has said it intends to use proceeds of another settlement to pay off the secured lenders. Austria?s fourth-largest bank, Bawag P.S.K. Group, agreed earlier this year to pay $506 million to a settle a lawsuit filed by Refco?s creditors, who accused the bank of being ?partners in crime? with Bennett. Bennett, who faces a criminal trial on fraud charges, has pleaded not guilty.

Refco said it would use $300 million of the Bawag proceeds to pay the IPO lenders. That generated objections from a group of hedge funds, which said a judge ought to decide first on how those proceeds should be allocated.

Milmoe, the Refco attorney, said Drain?s approval of the settlement with the IPO lenders didn?t constitute ?pre-approval? of Refco?s request to use Bawag proceeds.

He said that although Refco may end up using Bawag proceeds to make the payment to the IPO lenders, it has other alternatives. Refco?s Bermuda-based unit, Refco Capital Markets Ltd., is ?sitting on $2 billion in cash,? Milmoe said.

Refco?s former flagship unit, Refco LLC, is still ?thrashing through claims? but is expected ultimately to contribute $800 million in cash for distribution to creditors.