Reuters: Bankruptcy News: Freeh: No bonuses for MF Global employees

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Freeh: No bonuses for MF Global employees Apr 24th 2012, 21:16 April 24 | Tue Apr 24, 2012 5:16pm EDT April 24 (Reuters) - A federal judge on Tuesday authorized the trustee liquidating MF Global Holdings Inc's brokerage unit to distribute as much as $685 million to customers whose accounts had been frozen when the futures brokerage went bankrupt. The payout authorized by U.S. Bankruptcy Judge Martin Glenn in Manhattan is on top of the more than $4 billion that the trustee James Giddens has already distributed, according to the trustee's spokesman Kent Jarrell. It includes as much as $600 million to be paid to U.S. exchange customers, up to $50 million for customers who traded on non-U.S. exchanges, and up to $35 million for customers who held physical property such as gold bars. Jarrell said the payout leaves Giddens about $750 million in reserve to cover potential claims by other parties, including other MF Global affiliates. It may allow customers who traded on U.S. exchanges to recover more than 80 percent of their account values. It also represents a payback of about 10 percent for customers who traded on foreign exchanges. Glenn approved the payout on the same day Louis Freeh, the former FBI director and now trustee for MF Global's parent company, told Congressional lawmakers he has no plans to pay bonuses to current or former company employees. Customers had objected to bonuses in the wake of reports that executives including Chief Operating Officer Bradley Abelow, General Counsel Laurie Ferber and Chief Financial Officer Henri Steenkamp might be eligible for them. These customers consider it unfair to pay bonuses to people they hold in part responsible for MF Global's sudden collapse. "I want to make it very clear, it was never my intention to pay any bonuses," Freeh told the Senate Banking Committee. He said he needs to retain 15 employees to help manage the bankruptcy and secure a $22 million tax refund. Once run by Jon Corzine, the former Goldman Sachs chief and New Jersey governor, MF Global filed for Chapter 11 last Oct. 31 amid a liquidity crunch prompted by worries over its $6.3 billion bet on European sovereign debt. The collapse has prompted a variety of regulatory and congressional investigations, in part focused on an estimated $1.6 billion of customer money that remains missing. On Monday, the U.S. Judicial Panel on Multidistrict Litigation consolidated more than 20 lawsuits by MF Global shareholders and customers into a single case in Manhattan federal court. The panel overruled objections by commodities customers who thought their claims should be handled separately. U.S. District Judge Victor Marrero will oversee the combined litigation. Separately, the National Futures Association, an independent regulator for the commodities and futures industry, in a letter dated Tuesday offered U.S. Attorney Patrick Fitzgerald in Chicago its assistance in probing any potential criminal conduct surrounding MF Global's collapse. The cases are In re: MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-02790; and In re: MF Global Holdings Ltd., U.S. District Court, Southern District of New York, No. 12-md-02338. The bankruptcy case for MF Global's parent company is In re: MF Global Holdings Ltd et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059. Link this Share this Digg this Email Reprints

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