The MF Global trustee will soon ramp up a process for resolving the status of IB security deposits. Many IBs had such security deposits held in MF Global commodity accounts at MF Global, and the SIPA trustee sent determination letters in mid-June 2012 denying the customer claim status of those deposits. A large number of those IBs then filed objections to those denials prior to the 30 day deadline for doing so.
The trustee now has a four month window from the date of each objection filing, from mid-July to mid-November, to work to resolve each claimant's objection before each claimant could file for a more formal hearing process with the court. The resolution process during this four month window will involve direct communication between the trustee's professionals and claimants, and may involve review of facts specific to each claimant, negotiation and settlement talks. Thus, IBs who had such security deposits and objected to the trustee's denial of their commodity customer claims should anticipate being contacted by the trustee's representatives between now and mid-November to discuss and potentially resolve their objections.
For such IBs that are unable to resolve their disputes with the trustee, a more formal hearing process would begin at some point after mid-November. The trustee foresees an omnibus proceeding whereby a few IBs with larger claims would represent all the remaining IBs who didn't resolve their objections during the four month window. This process would involve court filings entered by the trustee and on behalf of the IBs, and ultimate resolution may occur through settlement or a judicial decision.
Neal R. Stevens
Of Counsel
nstevens@SRCattorneys.com
312 565.1045 tel (chi) | 212 334.7948 tel (nyc)
Schuyler, Roche & Crisham, P.C
www.SRCattorneys.com
