MF Global Inc.’s former customers should get “significantly” increased distributions in coming months, and the goal is still 100 percent recoveries, the failed brokerage’s trustee said.
Customers who traded on U.S. exchanges may get distributions starting in early September that would bring their percentage recoveries into “the high nineties” while customers who traded on foreign exchanges may get “in the sixties,” trustee James Giddens said in a statement today.
“These further distributions are dependent on final approval of a motion by the trustee to confirm the allocation of property already received,” Giddens said. His projections assume that agreements with MF Global’s U.K. unit and JPMorgan Chase & Co. (JPM) take effect in mid-August.
A prior projection in June estimated customers would get 94 cents on their dollar. Giddens said at the time that disputes including a lawsuit against directors and officers delayed the potential for full recovery.
Most customers have already recovered 89 percent of what they were owed, Giddens said in a report covering his progress from Dec. 5 to June 4. He said today he eventually expects to file a motion with the bankruptcy court in Manhattan that may allow a final distribution of 100 cents on the dollar to all of MF Global’s commodities futures customers.
Management Sued
A pending lawsuit against the company’s former management, including ex-New Jersey Governor and onetime Goldman Sachs Group Inc. Co-Chairman Jon Corzine, will affect the size and timing of further distributions, Giddens has said.
MF Global Holdings Ltd., the brokerage’s parent company, filed for bankruptcy on Oct. 31, 2011, after a wrong-way $6.3 billion bet on bonds of some of Europe’s most indebted nations. The company listed assets of $41 billion and debts of $39.7 billion.
The holding company’s Chapter 11 case is In re MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The liquidation of the broker is In re MF Global Inc., 11-bk-02790, in the same court.
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