MF Global Holdings, Ltd. (fka MFGLQ)

[mrfence]

MF Global: High Court approves client money distribution process

Author: Laura Miller
IFAonline | 11 Jun 2013 | 14:25
Categories: Investment
Topics: courts| court case

inShare.0 The High Court has approved a procedure for distributing the approximately $1bn of client money held by the UK arm of failed investment firm MF Global.

The application was made by the administrators of MF Global UK to address the fact that there is no such distribution procedure in the Financial Conduct Authority's client money rules, nor is there one in The Investment Bank Special Administration Rules.

The absence of such a procedure meant that the administrators had to make substantial reserves for claims they considered to be invalid, and for unknown claims.

The administrators and an external legal team drafted a unique client money distribution procedure, which will now enable the administrators and MF Global UK UK to distribute client monies under a clear and fair procedure, without the need to reserve for unknown claims or for rejected claims that are not appealed.

This judgment follows a series of historic landmark Court approvals, including, initially in July last year, of the first distribution plan for the return of client assets under the special administration regime, and most recently in January this year, the Hindsight Application judgment.

MF Global filed for bankruptcy in October 2011 after it took a $6.3bn position on European government debt which was undone by eurozone market volatility and destroyed market confidence in the company.

Read more: http://www.ifaonline.co.uk/ifaonline/news/2274149/mf-global-high-court-approves-client-money-distribution-process#ixzz2VxE2AJJ0
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