MF Global Trustee seeks $2 billion for former commodities customers

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, Nov. 30- The Trustee for the liquidation of MF Global Inc. is seeking approval of a bulk transfer and distribution of up to $2.1 billion to former MF Global Inc. commodities customers. 

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MF Global Inc. Trustee, James Giddens, filed an expedited motion yesterday with the United States Bankruptcy Court for the Southern District of New York. The office of the Trustee reported that the transfer could take two to four weeks to complete. 

The proposed third bulk transfer will complement the first two bulk transfers and the expedited claims process, approved by the Bankruptcy Court earlier this month. The approval of this transfer will mean that approximately $4.1 billion will be distributed to former customers of MF Global Inc. Previous transfers include $1.5 billion in collateral for customers' trading accounts and $520 million in cash. 

According to a press release from the office of the Trustee, it is expected that this bulk transfer will be the most complex of the transfers to date, and will rely heavily on the Chicago Mercantile Exchange (CME) and other derivative clearing organizations (DCOs) for data and cooperation in implementing the distributions.

The CME offered a $550 million guarantee available for the benefit of commodity customers if any customer receives more than a proportionate share of the final distribution.

The bulk transfer announced yesterday will be the third since MF Global filed for bankruptcy October 31. US regulators and Justice Department officials are trying to find a separate $1.2 billion missing in customer funds.

Former MF Global chief executive Jon Corzine is scheduled to testify at a House Financial Services committee hearing December 15th. He is also expected to testify at a Senate Agriculture Committee hearing December 13th. The Senate Agriculture Committee also called a hearing for this Thursday to question top officials at the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) about their oversight of MF Global.


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