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Re: mrfence post# 2431

Sunday, 10/05/2014 1:15:09 PM

Sunday, October 05, 2014 1:15:09 PM

Post# of 2533
The brokerage isn't technically in bankruptcy ???
http://online.wsj.com/articles/mf-global-payout-approved-for-unsecured-creditors-1412192185

MF Global Payout Approved for Unsecured Creditors

Judge Approves Payout to Creditors Who Have Waited Nearly Three Years for Their Money
By Joseph Checkler


Oct. 1, 2014 3:36 p.m. ET

A man exits the office complex of MF Global Holdings Ltd. in New York. Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan on Wednesday approved a payout to the unsecured creditors of the collapsed brokerage. REUTERS

NEW YORK—A judge on Wednesday approved a payout to MF Global's unsecured creditors, who have waited nearly three years as customers of the collapsed brokerage already had their money returned.

Judge Martin Glenn of U.S. Bankruptcy Court in Manhattan said James W. Giddens, the trustee in charge of winding down the brokerage, could pay the unsecured creditors about $295 million.

A lawyer for Mr. Giddens said distributions to the unsecured creditors could begin as soon as the order is final. He also said settlements of unresolved claims could soon result in "very substantial" creditor distributions beyond the one approved Wednesday.

Earlier this year, Mr. Giddens set his final distributions to customers and all but a few individual brokerage and commodity customers have received the full amount of what they were owed.

Now, the unsecured creditors will receive a first distribution of more than 20% of the amount Mr. Giddens has agreed to pay. Holders of secured, administrative and priority claims that have been resolved will get the full amount of their money all at once.

Last week, Judge Glenn held off on approving the measure, saying he was "not happy" that lawyers for Mr. Giddens hadn't provided detailed information about some unresolved claims that they wanted to be estimated at zero dollars.

Mr. Giddens had requested to create a reserve fund of more than $400 million for unresolved claims, and to put a cap on the claims' amounts. The judge wanted specific information about the claims and legal arguments as to why he should place a cap on the amounts.

"I have a much better understanding of how you arrived at the numbers," Judge Glenn said to a lawyer for Mr. Giddens on Wednesday.

The brokerage and its parent company, MF Global Holdings Ltd., imploded in October 2011 after investors fled the firm upon learning about then-Chief Executive Jon S. Corzine's bets on European sovereign debt. The exodus created what was believed to be a $1.6 billion shortfall in customer accounts that should have been segregated from MF Global's money pool. The shortfall has since been recovered.

In April 2013, Judge Glenn approved a liquidation plan for the brokerage's parent, which called for unsecured bondholders to recover 12 cents to 42 cents on the dollar. Holders of a $1.2 billion revolving loan were to get 27 cents to 80 cents on the dollar under the proposal.

The brokerage isn't technically in bankruptcy, but is being unwound under the provisions of the Securities Investor Protection Act, which governs the liquidation of failed brokerages.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com.)

Write to Joseph Checkler at joseph.checkler@wsj.com

Corrections & Amplifications

An earlier version of this article incorrectly said that distributions to creditors will begin once the order is signed. They will begin once the order is final.


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