MF Global creditors have plan to get paid

Bankruptcy Trustee

Louis Freeh, the former Federal Bureau of Investigation director serving as MF Global’s trustee, has been unwinding the company under Chapter 11 of the U.S. Bankruptcy Code in an effort to repay creditors.

James Giddens is separately liquidating the brokerage, MF Global Inc., to repay customers under the Securities Investor Protection Act. Each trustee has conducted his own probe into how the company failed and they have sometimes been at odds over whether certain sums belong to creditors or brokerage customers.

Freeh and administrators of MF Global Holdings’ U.K. arm last month settled claims with Giddens. The agreements require approval from U.S. Bankruptcy Judge Martin Glenn.

“These settlements removed a series of substantial obstacles to the resolution of the debtors’ financial affairs,” the creditors said in the disclosure statement.

Lewis Goldberg, a spokesman for Freeh, didn’t immediately reply to an e-mail seeking comment on the liquidation plan.

U.K. Settlement

Former customers of the U.K. arm will get about 60 percent of their money returned after the settlement, its administrators said. Unsecured creditors are set to receive a payment of about 20 percent of the value of their claims following the agreement.

Giddens has paid the U.S.-based brokerage’s U.S. and foreign customers about $4.9 billion since it failed. Excluding $500 million from the proposed U.K. accord, he had $1.2 billion in hand, out of $1.4 billion in remaining assets, according to data through Oct. 31.

Commodity customers shouldn’t expect to get paid in full unless Giddens wins key legal battles, he said in December.

The case is In re MF Global Holdings Ltd., 11-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Bloomberg News

------------------------------------------------------------------

See also:

<< Page 2 of 2

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus