MF Global Holdings, Ltd. (fka MFGLQ)

[sterlingkuning]

Tepper Snags MF Global Shares
MFGLQ

http://blogs.wsj.com/bankruptcy/2011/11/16/tepper-snags-mf-global-shares/?mod=google_news_blog

Hedge-fund manager David Tepper has a history of profiting from the financial distress of others. It’s made him one of Wall Street’s wealthiest investors.

Maybe that’s why Tepper and his Appaloosa Management LP hedge fund scooped up an 8.64% stake in MF Global Holdings Ltd. stock just days after the securities firm collapsed into Chapter 11, according to a filing with SEC.

Buying up shares in a bankrupt company is a risky bet, as equity is in the first-loss position in Chapter 11. But Tepper is one of the Street’s savviest distressed investors, and he’s taken equity stakes in bankrupt companies (see the Chapter 11 case of Delphi Corp.) before.

Still, there’s no guarantee MF Global Holdings will have a business to reorganize. MF Global Inc., the company’s main operating arm, is being unwound by a trustee under the provisions of the Securities Investor Protection Act. And investigators from the Commodity Futures Trading Commission along with the trustee are still looking into the whereabouts of $600 million in missing client money.

MF Global Holdings listed assets of $41 billion against debts of $39.7 billion in its bankruptcy filing, and liquidators are reportedly trying to sell the company’s lucrative Asian assets.

Of course, one valuable asset of the estate will be potential lawsuits against company insiders, including its former chief executive, Jon Corzine.

Tepper made his purchase on Nov. 2, just days after MF Global filed for bankruptcy. Two days after the purchase, Corzine resigned as MF Global’s CEO.

Tepper and Corzine have a history. Corzine was Tepper’s superior at Goldman Sachs when the hedge-fund manager was passed over for partnership. Years later, when Corzine successfully ran for governor of New Jersey after leaving Goldman, Tepper didn’t contribute to his campaign, according to a 2006 Wall Street Journal profile of the hedge-fund manager.

Tepper, you may remember, last year bought a mansion in the Hamptons from Corzine’s ex-wife (she got it in the divorce) for $44 million, only to raze it to the ground to build a bigger oceanfront getaway in its place. In reference to the purchase, Tepper told New York magazine: “You could say there was a little justice in the world.”

In any event, Tepper isn’t talking. He didn’t return calls for comment. Corzine declined to comment.