MF Global Holdings, Ltd. (fka MFGLQ)

[sterlingkuning]

Hedge funds and other financial firms looking to buy MF Global customers' bankruptcy claims

Read more: http://www.nypost.com/p/news/business/mf_vulture_club_H43D4GDAUh6ju04ulNnfoJ#ixzz1hN4yQs00
Wall Street’s vultures are swooping in with offers to buy bankruptcy claims held by MF’s brokerage customers.
A slew of hedge funds, banks and other financial firms, including Longacre Fund Management, Elliott Management, Triax Capital Advisors and Contrarian Capital, have started contacting MF customers with offers to buy their claims for cash — but at a discount to their face value, The Post has learned.
Commonly referred to as “vulture investors” because they seek to profit off distressed situations like bankruptcies, these shops are seeking to buy the rights to money owed to MF customers in the aftermath of the firm’s Halloween bankruptcy.

MF’s brokerage customers saw more than $5 billion in assets frozen after it emerged that a whopping $1.2 billion was missing from customers’ accounts.
The bulk of the offers coming in are for between 80 cents to 85 cents on the dollar, sources said.
Those offers suggest savvy investors are anticipating returns of 90 cents on the dollar or higher.
But MF’s customers also appear pretty confident that they’re going to be made close to whole, if not completely whole, prompting them to shoo the vultures away.
“I’m still optimistic that we’re going to get — if not 100 percent back — then close to 100 percent back,” said David Healy, an MF customer from Manhattan.
Dan McCool, of Palm Beach Gardens, Fla., said he didn’t even bother to hear the bid before saying no and hanging up the phone.
“I just told them I wasn’t interested,” he said. “My feeling is, I don’t know if we’ll get all the funds we’re entitled to, but I’m going to let it play out.”
Boosting confidence in the value of those claims has been the enormous pressure — political and otherwise — to find the missing money and return it to MF customers as soon as possible.
Unlike stock accounts, commodity and futures brokerage accounts don’t come with an insurance safety net because their funds are supposed to be kept separate, and therefore safe, even in bankruptcy.
MF’s brokerage trustee, James Giddens, has paid most US customers up to 72 percent of their money back in a matter of weeks — record time for burned brokerage customers.
Dozens of investigators are still combing through MF’s books to find out what went wrong. In the meantime, it’s hard to predict whether or when another round of payments might be coming.
“We hope to make additional interim payments, but we have not yet found additional funds to do that,” Kent Jarrell, spokesman for the trustee, told The Post.
Giddens has about $1 billion of customer funds on reserve, which some customers have said they’re counting on. But that money could also get tied up in lawsuits or unexpected customer claims.
Barrett Mikelberg of Triax Capital Advisors said he expects more MF customers to start accepting offers to buy claims in the coming months as the current stream of payouts slows.
“I expect a lot of people to be transacting in the next couple of months once there’s more transparency in this case,” he said.


Read more: http://www.nypost.com/p/news/business/mf_vulture_club_H43D4GDAUh6ju04ulNnfoJ#ixzz1hN51h9XV