Reuters: Bankruptcy News: UPDATE 1-MF Global customers may see more payback

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UPDATE 1-MF Global customers may see more payback Mar 15th 2012, 17:34 Thu Mar 15, 2012 1:34pm EDT By Nick Brown March 15 (Reuters) - The trustee liquidating MF Global's broker-dealer is asking a bankruptcy court for permission to distribute an additional $600 million to U.S. exchange customers whose accounts were frozen when the futures broker collapsed. Trustee James Giddens announced the plan in court papers on Thursday, saying he would also seek to distribute as much as $50 million to customers who traded on foreign exchanges, and $35 million to some customers who hold physical property such as gold bars. Customers who trade on U.S. exchanges have already received payouts amounting to roughly $3.9 billion, or about 72 percent of the value of their accounts. The latest payouts, if approved by Judge Martin Glenn in U.S. Bankruptcy Court in Manhattan, would increase that recovery percentage to more than 80 percent, Giddens estimated. The payouts would represent about a 10 percent payback for customers who trade on foreign exchanges, a group that has seen no recovery as of yet, Giddens estimated. Distributions would go out on a rolling basis, the trustee said -- a departure from previous payouts, which were done in bulk. The latest round would be paid out as customer claims are processed and validated, a process that remains ongoing, Giddens said. The broker-dealer's parent, MF Global Holdings Ltd, filed for bankruptcy on Oct. 31 after revealing $6.3 billion in exposure to risky European sovereign debt. Federal regulators have been investigating the cause of a massive hole in customer accounts, which Giddens has estimated at $1.6 billion. The company's former CEO, ex-New Jersey Governor Jon Corzine, resigned in November. The bankruptcy is In re MF Global Holdings Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059. The brokerage liquidation is In re MF Global Inc, in the same court, No. 11-2790. Link this Share this Digg this Email Reprints

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