Sun, Apr 07, 2013 - Page 13 News List

MF Global wins approval to liquidate


MF Global’s parent company has won court approval for its liquidation plan.

Judge Martin Glenn approved the plan on Friday in US bankruptcy court in Manhattan. MF Global Holdings Ltd collapsed in late 2011 after a calamitous bet on bonds issued by debt-burdened European countries.

MF Global had more than US$41 billion in assets. Its collapse was the eighth-largest corporate bankruptcy in US history and the biggest on Wall Street since the September 2008 collapse of Lehman Brothers that set off the financial crisis.

Creditors to MF Global Holdings, the parent company, have not been paid for their losses, but the plan approved on Friday lays out how they will get their money. Former FBI director Louis Freeh is acting as their trustee to recover the money that the creditors are owed.

MF Global also owed money to customers, including farmers, ranchers and other business owners who used the company to hedge their risks against fluctuating crop prices. When the company collapsed, more than US$1 billion in customer money was discovered to be missing.

About 89 percent of the money owed to US customers has been distributed, and 18 percent for foreign customers, said James Giddens, the trustee in charge of recovering money for customers from the broker-dealer, MF Global Inc.

The approval comes a day after Freeh filed a report lambasting former MF Global chief executive Jon Corzine and other top managers, saying they had ignored the warnings of their chief risk officer.

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