MF Global’s Liquidation Plan Gets Court Approval

by San Antonio Attorney

MF Global’s parent company has won court approval for its liquidation plan.

Judge Martin Glenn confirmed MF Global Holdings Ltd. bankruptcy plan on Friday. The company collapsed in 2011 following a devastating $6.3 billion bet on European sovereign debt.

Based on court papers filed, MF Global has $41 billion in assets. Its bankruptcy was considered as the largest corporate bankruptcy on Wall Street since 2008 when Lehman Brothers that triggered the global financial meltdown. Around $1 billion in customer funds are missing.

The liquidation plan explains how MF Global will repay a handful of its creditors.

Regarding the customer’s of MF Global, almost 90 percent of the debts to U.S. clients have been given out, and 18 per cent for overseas clients. That is according to MF Global trustee James Giddens.

The court’s confirmation comes after another MF Global trustee Louis Freeh filed a written report criticizing the company’s former CEO Jon Corzine as well as other managers that they had disregarded warning signs of the risks.

Freeh is given the job of seeking to retrieve money for MF Global’s creditors.

On Thursday, a representative for Corzine firmly denied Freeh’s report and blamed the shortcomings of banks and other businesses that dealt with MF Global.

Corzine, who was the former executive of Goldman Sachs and also governor of New Jersey and U.S. senator, resigned as MF Global CEO following the collapse of the company in 2011.

A year ago Giddens joined a legal action against Corzine along with other former executives filed by MF Global clients. The company’s investors also have filed a lawsuit against Corzine as well as other executives.

So far nobody has been charged in the suit. Congress, federal regulators and Chicago federal grand jury have looked into MF Global’s bankruptcy and the missing money of customers.

 

Bankruptcy liquidation involves selling of assets to pay back creditors. In the end, the debtor is released from his legal obligations to repay the debt that he or she can no longer hope to pay off under any circumstances. Contact a Bankruptcy Attorney San Antonio to find out if you are qualified to file for Chapter 7 bankruptcy.

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