A new agreement related to the liquidation of bankrupt brokerage, MF Global, will enable creditors to recoup nearly everything they are owed, marking the impending end of the four-year liquidation process.
In a statement, James Giddens, the Trustee, said he would sell various claims, estate assets, contracts, documents and data – including the Trustee’s claims and discovery obligations in the litigation against former MF Global CEO Jon Corzine and others – held by the brokerage to the plan administrator – subject to court approval. The administrator would in exchange give up claims in the brokerage’s bankruptcy.
The agreement boosts the recovery by a sum of $186 million, allowing the trustee to pay creditors a total of 94 percent to 95 percent on their claims, including the nearly $1 billion they have already received.
“This agreement marks a final chapter in the liquidation,” Giddens said in a statement. “Unsecured general creditors can now expect a near full recovery on their allowed claims, an outcome that was inconceivable when this liquidation began less than four years ago.”
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Customers and secured creditors have already been paid out in full, cumulatively received payments to the tune of more than $6.7 billion.
Prior to its financial woes, the brokerage had been providing exchange-traded derivatives as well as over-the-counter products such as contracts for difference (CFDs), foreign exchange and spread betting.
After a bad bet on European sovereign debt left the company seriously in the red, MF Global made improper transfers totalling more than $891 million from client funds to cover the losses.
Seven more claims from unsecured general creditors to the MF Global estate still remain. Giddens said the brokerage liquidation would end once these are resolved.