Media Coverage
Source: Bloomberg News
Media Coverage
01.12.12
MF Global recently distributed $3.8 million, said the trustee appointed to liquidate the troubled brokerage at a recent meeting with about 100 customers, reports Bloomberg. About $1.5 billion remains under the brokerage’s control, while $1.2 billion in customer funds are still missing.
“Next will be a fight over what is and what isn’t customer property, based on transactions that may have commingled customer with general property,” said Richard Epling, the head of Pillsbury’s New York, Northern Virginia and Washington, DC Insolvency & Restructuring Practices. Commenting further on the MF Global case, Epling said it will probably take a long time to unwind how the money from customer accounts was lost because it appears to have been systemic and involve complex repurchase agreements.
“Eventually, [trustee James] Giddens may bring lawsuits to ‘claw back’ money from counterparties who got it in the days before MF Global’s bankruptcy on the argument that the company was already insolvent, and those parties are likely to say they don’t have to give it back because it was used to cover margin on a legitimate trade,” Epling said. “Such disputes shouldn’t hold up the bankruptcy from determining what priority creditors and customers have for being repaid.”
“You can figure out who gets paid out of what bucket of assets even if you don’t know what’s in what bucket right now,” he said.