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MF Global 020916
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Liquidation of MF Global Comes to an End
Feb 9, 2016 | Wall Street Journal
By Stephanie Gleason
Marking the conclusion of MF Global Inc.’s bankruptcy case, a judge Tuesday officially closed the estate of the defunct brokerage firm and discharged the federally appointed trustee, James Giddens, who clawed back a 95% recovery for the commodity broker’s unsecured creditors and repaid its customers in full. -
MF Global customers recover $8.1B from brokerage's failure
Feb 9, 2016 | USA Today
By Kevin McCoy
Former securities and commodities customers of MF Global have recovered $8.1 billion — virtually all of their assets — with Tuesday's conclusion of the bankruptcy court liquidation of the failed brokerage formerly headed by Jon Corzine.
MF Global Liquidation Closing Media Coverage
Full Text of Stories Below
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Liquidation of MF Global Comes to an End
Feb 9, 2016 | Wall Street Journal
By Stephanie Gleason
Marking the conclusion of MF Global Inc.’s bankruptcy case, a judge Tuesday officially closed the estate of the defunct brokerage firm and discharged the federally appointed trustee, James Giddens, who clawed back a 95% recovery for the commodity broker’s unsecured creditors and repaid its customers in full.
The end of the case was “a day we could dimly foresee when this case began four years ago on Halloween,” said James Kobak, a lawyer for the trustee during the hearing in U.S. Bankruptcy Court in New York. Over that time the trustee has returned some $7 billion worth of property to customers.
MF Global imploded in the fall of 2011 with a $1.6 billion shortfall in segregated accounts. The end came after Chief Executive Jon S. Corzine’s bets on European sovereign debt came to light, raising questions about the firm’s risk management.
Mr. Kobak also noted that at the beginning of the case some had expressed doubt as to whether the Securities Investor Protection Act, the law covering the liquidation of failed brokerages, could handle the liquidation of a firm as complex as MF Global.
Having been tested in two of the most complex brokerage liquidation cases in history, MF Global and Lehman Brothers, “the statute has more than vindicated itself,” Mr. Kobak said.
Stephen Harbeck, the president of the Securities Investor Protection Corp., the agency formed under SIPA, also appeared during the hearing to thank the court on behalf of the investors it serves.
Bankruptcy Judge Martin Glenn recalled during the hearing the importance of those investors particularly in this case.
“What made this case somewhat unique was that many of the MF Global Inc. customers were farmers in the Midwest, who used commodity trading as a way of protecting their financial interest,” Judge Glenn said.
The flood of letters he received from irate farmers at the beginning of the case added “a very human dimension,” to the proceedings, he said.
Although the liquidation of MF Global Inc. is over, litigation involving holding company parent MF Global Holdings is pending.
Claims in litigation seeking to hold accountable Mr. Corz ine, the former New Jersey governor and onetime Goldman Sachs Group Inc. chairman, and other former officers, directors and employees of MF Global for the brokerage’s 2011 collapse were transferred to the MF Global Holdings parent company, allowing the brokerage’s liquidation to conclude. Parties in that case are near reaching a conclusion in that case as well.
A lawyer for Mr. Corzine, who has denied wrongdoing with respect to MF Global’s demise, wasn’t immediately available for comment.
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MF Global customers recover $8.1B from brokerage's failure
Feb 9, 2016 | USA Today
By Kevin McCoy
Former securities and commodities customers of MF Global have recovered $8.1 billion — virtually all of their assets — with Tuesday's conclusion of the bankruptcy court liquidation of the failed brokerage formerly headed by Jon Corzine.Judge Martin Glenn approved one of the final remaining chapters that followed MF Global's Oct. 2011 collapse amid a $1.6 billion shortfall in customer accounts.
The Securities Investor Protection Corporation, a federally-mandated company that works to return cash, stock and other securities to brokerage customers, said the $8.1 billion in distributions includes:
$6.9 billion to cover 100% of allowed claims by MF Global customers.$35 million for 100% of allowed claims by administrative and priority general claimants whose claims were secured.$219 million to cover 95% of unsecured general claimants.
"The end of the MF Global liquidation demonstrates that the law designed to protect customers of failed brokerages works, and works well," said SIPC President Stephen Harbeck.
The outcome "was unimaginable when the proceeding began," said bankruptcy trustee James Giddens.
MF Global's implosion resulted in part from approximately $6 billion in ill-timed investments on debt of Ireland, Italy, Portugal, Spain and other European nations. The investments were part of a strategy in which Corzine — a former U.S. senator, New Jersey governor and Goldman Sachs chief executive — planned to transform the brokerage into an investment bank.
However, margin calls and credit downgrades by rating agencies beset the brokerage in 2011. MF Global officials tapped more than $1.6 billion in customer funds that were supposed to be held in secure accounts, and used the money to cover liquidity shortfalls in a failed attempt to head off the bankruptcy filing.
MF Global's parent company helped free money to fund the customer repayments by agreeing to give up rights to its $1.16 billion unsecured claim against the brokerage.
A bankruptcy court ruling in November approved a $64.5 million settlement between Corzine and other former MF Global officials and investors who sued them over the company's collapse.
MF Global Liquidation Closing Media Coverage
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