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MF Global Media Report
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MF Global Brokerage to Sell Litigation Rights to Parent
Jul 24, 2015 | The Wall Street Journal
By Jacqueline Palank
MF Global will hand pending litigation against its leaders—including former Chief Executive Jon Corzine—to its parent company under a newly announced deal that will allow the defunct brokerage to pay its unsecured creditors nearly in full. In papers filed Friday with the U.S. Bankruptcy Court in Manhattan, MF Global’s liquidation trustee requested court permission to sell the brokerage’s assets, including its right to pursue pending litigation, to its parent company. -
MF Global creditors to recoup more as bankruptcy nears end
Jul 24, 2015 | Reuters
By Jonathan Stempel
The trustee liquidating the bankrupt brokerage unit of Jon Corzine's MF Global Holdings Ltd on Friday announced an agreement that would enable unsecured creditors to recoup nearly everything they are owed, and largely conclude the unit's nearly four-year liquidation. James Giddens, the trustee, said he would sell various claims held by the MF Global Inc brokerage, including claims against Corzine, who was chief executive of MF Global, and other officials, to the plan administrator overseeing the parent's Chapter 11 case. The administrator would in exchange give up claims in the brokerage's bankruptcy. -
MF Global creditors to recoup more as bankruptcy nears end
Jul 24, 2015 | MF Global Liquidation Nearing End With New Agreement
By Andy Traveller
A new agreement related to the liquidation of bankrupt brokerage, MF Global, will enable creditors to recoup nearly everything they are owed, marking the impending end of the four-year liquidation process. In a statement, James Giddens, the Trustee, said he would sell various claims, estate assets, contracts, documents and data – including the Trustee’s claims and discovery obligations in the litigation against former MF Global CEO Jon Corzine and others – held by the brokerage to the plan administrator – subject to court approval. The administrator would in exchange give up claims in the brokerage’s bankruptcy.
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MF Global Brokerage to Sell Litigation Rights to Parent
Jul 24, 2015 | The Wall Street Journal
By Jacqueline Palank
MF Global will hand pending litigation against its leaders—including former Chief Executive Jon Corzine—to its parent company under a newly announced deal that will allow the defunct brokerage to pay its unsecured creditors nearly in full.
In papers filed Friday with the U.S. Bankruptcy Court in Manhattan, MF Global’s liquidation trustee requested court permission to sell the brokerage’s assets, including its right to pursue pending litigation, to its parent company.
In return, the parent company will forgo its right to collect on the $1.16 billion unsecured claim it brought against the brokerage. The dropped claim frees up cash that will allow the brokerage to ultimately repay up to 95% of its other unsecured creditors’ claims.
Chief among the assets to be sold is the brokerage’s claims in litigation seeking to hold accountable Mr. Corzine, the former New Jersey governor, and other ex-MF Global officers, directors and employees for the brokerage’s 2011 collapse, which came in the wake of risky bets on European sovereign debt and exposed what was believed to be a $1.6 billion shortfall in customer funds.
Mr. Corzine and others have denied wrongdoing for the firm’s implosion and recently agreed to pay $64.5 million to settle similar litigation brought by investors. A lawyer for Mr. Corzine couldn’t immediately be reached.
During the course of the brokerage’s liquidation, the shortfall in customer funds has been recovered, while secured creditors have been paid in full. Court papers show unsecured creditors have recovered nearly $1 billion to date—about 74% of their claims, although that stands to change under the newly announced deal.
“Unsecured general creditors can now expect a near full recovery on their allowed claims, an outcome that was inconceivable when this liquidation began less than four years ago,”James W. Giddens, the brokerage’s liquidation trustee, said in a statement.
In addition to the litigation rights, MF Global’s parent company stands to gain such assets as the brokerage’s rights to recover anywhere from $34.9 million to $48.5 million from the company’s U.K. arm, court papers show.
The bankruptcy court has been asked to review the deal at an Aug. 19 hearing.
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MF Global creditors to recoup more as bankruptcy nears end
Jul 24, 2015 | Reuters
By Jonathan Stempel
The trustee liquidating the bankrupt brokerage unit of Jon Corzine's MF Global Holdings Ltd on Friday announced an agreement that would enable unsecured creditors to recoup nearly everything they are owed, and largely conclude the unit's nearly four-year liquidation.
James Giddens, the trustee, said he would sell various claims held by the MF Global Inc brokerage, including claims against Corzine, who was chief executive of MF Global, and other officials, to the plan administrator overseeing the parent's Chapter 11 case. The administrator would in exchange give up claims in the brokerage's bankruptcy.
Giddens said the agreement would add $186 million to the brokerage's bankruptcy estate, and let him pay unsecured creditors a total of 94 percent to 95 percent on their claims, including the nearly $1 billion they have already received.
"This agreement marks a final chapter in the liquidation," Giddens said in a statement.
The trustee previously paid out $6.7 billion to customers and $33.2 million to other creditors, compensating them in full. He said the brokerage liquidation will end once seven remaining claims are resolved.
In a court filing, Erik Graber, chief operating officer of the administrator, said the agreement would benefit the parent's estate by adding "significant litigation and insurance claims."
The agreement requires court approval; a hearing has been set for Aug. 19.
MF Global filed for bankruptcy on Oct. 31, 2011, as worries mounted about Corzine's $6.3 billion bet on sovereign debt, as well as credit rating downgrades, margin calls and news that customer funds had been used to cover liquidity shortfalls.
Corzine became chairman and chief executive of MF Global in 2010, shortly after leaving office as the governor of New Jersey. He is also a former U.S. senator and a former co-chairman of Goldman Sachs.
He and other former MF Global officials this month reached a $64.5 million settlement of litigation by shareholders and bondholders. Corzine still faces lawsuits by formercommodities customers and the U.S. Commodity Futures Trading Commission.
The cases are In re: MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-02790; and In re: MF Global Holdings Ltd et al in the same court, No. 11-15059. (Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)
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MF Global creditors to recoup more as bankruptcy nears end
Jul 24, 2015 | MF Global Liquidation Nearing End With New Agreement
By Andy Traveller
A new agreement related to the liquidation of bankrupt brokerage, MF Global, will enable creditors to recoup nearly everything they are owed, marking the impending end of the four-year liquidation process.
In a statement, James Giddens, the Trustee, said he would sell various claims, estate assets, contracts, documents and data – including the Trustee’s claims and discovery obligations in the litigation against former MF Global CEO Jon Corzine and others – held by the brokerage to the plan administrator – subject to court approval. The administrator would in exchange give up claims in the brokerage’s bankruptcy.
The agreement boosts the recovery by a sum of $186 million, allowing the trustee to pay creditors a total of 94 percent to 95 percent on their claims, including the nearly $1 billion they have already received.
“This agreement marks a final chapter in the liquidation,” Giddens said in a statement. “Unsecured general creditors can now expect a near full recovery on their allowed claims, an outcome that was inconceivable when this liquidation began less than four years ago.”
Customers and secured creditors have already been paid out in full, cumulatively received payments to the tune of more than $6.7 billion.
Prior to its financial woes, the brokerage had been providing exchange-traded derivatives as well as over-the-counter products such as contracts for difference (CFDs), foreign exchange and spread betting.
After a bad bet on European sovereign debt left the company seriously in the red, MF Global made improper transfers totalling more than $891 million from client funds to cover the loses.
Seven more claims from unsecured general creditors to the MF Global estate remain. Giddens said the brokerage liquidation will end once these are resolved.
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