MF Global shortfall less than estimated

While today’s release from the MF Global Inc. trustee ominously stated that the gap between customer claims and the assets under its control was $1.6 billion; higher than their estimated shortfall of $1.2 billion, it revealed that the actual shortfall is considerably less than the oft mentioned $1. 2billion.

Trustee spokesman Kent Jarrell acknowledged that the shortfall is no higher than $900 million.

The trustee has returned approximately $3.9 billion to former MF Global customers and is holding approximately $1.4 billion in reserve. There is $700 million under control of the administrators of MF Global UK Ltd. that the trustee is attempting to get so with the total claims of $6.9 billion, the shortfall is no greater than $900 million.

“We are now taking the UK money and putting it in the gap,” says Jarrell. “Our estimate when it is over is there will be $6.9 billion worth of claims ($6 billion in 4D segregated accounts, $900 million in part 30.7 accounts).”

The bad news is that getting the money out of the UK will take a long time. “We really realized the $700 million in the UK is going to be a long slog so we simply decided, because of a number of things, that it was time to give one statement and give a breakdown.”

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