Trustee of MF Global Inc seeks court permission for distribution of $461m to creditors

MF Global, the ill-fated brokerage, went insolvent in 2011 but the saga around the bankruptcy, return of customer funds, litigation and regulatory probes of the corporate management, seems to be never-ending. Today brought a piece of good news to the creditors of MF Global Inc (MFGI).

James W. Giddens, Trustee for the liquidation of MFGI, has filed a motion with the U.S. Bankruptcy Court for the Southern District of New York, Honorable Judge Martin Glenn presiding, asking permission to make a second interim distribution on allowed unsecured general creditor claims. The sum to be distributed equals approximately $461 million and will take total distributions on these claims to 72%.

“This is another significant milestone in the MF Global Inc. liquidation as we continue winding down the estate,” Giddens said. “When MF Global failed, the prospect of any general unsecured distribution was in doubt. I am pleased that today we are in a position where former customers and secured general claimants are fully satisfied and unsecured general creditors are now about to recover a substantial majority of their claims.”

The Trustee’s motion also demands authorization to set up the second unsecured claims reserve and to release funds from the reserves that are no longer needed.

Up until this moment, the Trustee has distributed:

  • Customer claimants – $6.7 billion to cover 100% of allowed claims;
  • Secured, administrative and priority general claimants – $32.3 million to cover 100% of allowed claims;
  • Unsecured general claimants – $518.7 million first interim distribution to cover 39% of allowed claims.

As mentioned in previous articles by LeapRate, the Commodities Futures Trading Commission (CFTC) keeps investigating MF Global Holdings, the parent company of MFGI. In December 2014, the US regulator imposed an extra $100 million civil penalty on the company, adding it to already existing $1.2 billion client restitution settlement.

To view the official announcement on the actions taken by MFGI’s trustee, click here.

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