Published December 22, 2012
The trustee for the failed MF Global Inc on Saturday announced two key agreements that are expected to accelerate cash payouts to clients and creditors of the failed futures brokerage.
James Giddens, trustee for the MF Global estate, said in a statement he has negotiated deals to resolve disputes with the company's former British affiliate and the parent company, MF Global Holdings Ltd.
As a result of the UK agreement, Giddens estimated between$500 million and $600 million could be returned to the MF Global estate if the deal is finalized.
Giddens, whose job is to recover as much money as possible for customers, has returned about 80 percent of the money in customer trading accounts.
Giddens said claims by MF Global's securities customers could be fully restored. Commodities customers could get "significant additional distributions," he said.
The estate has a hearing scheduled for January 31, 2013 before the United States Bankruptcy Court for the Southern District of New York, the first step toward getting the UK agreement approved.
"The trustee's goal is still to return 100 percent to the commodities customers, and we will be going before the court in an attempt to achieve that," Kent Jarrell, a spokesman for Giddens, said on Saturday.
MF Global improperly used customer money to plug liquidity gaps as the brokerage was in freefall last year, creating a roughly $1.6 billion gap in customer accounts, according to a June report by Giddens. The company filed for bankruptcy in October 2011.
As a result of money changing hands during MF Global's chaotic collapse, various company affiliates have been fighting over who owes money to whom.
Earlier this month, Giddens released a report saying more than 28,000 claims have been filed by the brokerage's commodities and securities customers, all but 200 have been fully resolved.
So far, Giddens has returned approximately $4.7 billion to commodities customers hit by the brokerage's collapse.
(Reporting By Patrick Temple-West; Editing by Nick Zieminski)