KPMG LLP, the accounting firm that is administering MF Global’s bankruptcy in the United Kingdom, says that employee cash bonuses promised before the firm's demise will be treated as unsecured claims.
The decision moves the payouts to near the bottom of the creditor pile and essentially ensures that the monies will never be paid.
MF Global filed for bankrupty protection on Oct. 31. It was the fifth-largest financial company to file for bankruptcy. Although auditors and regulators are far from being finished sorting out the mess, initial evidence suggests that the failure was the result of big losing bets on European sovereign debt.
Roughly $1.2 billion in MF Global client money is currently missing.
MF Global U.K. Staff May Not Get Bonuses Pledged Before Failure