Tags: MF | Global | Trustee | Claims

MF Global Trustee Sees $3 Billion in Potential Claims

Tuesday, 05 June 2012 08:08 AM EDT

MF Global Holdings Ltd. could have more than $3 billion in claims against its former affiliates, Louis Freeh, the trustee overseeing the wind-down of the parent company of the collapsed broker-dealer, said in his first status report.

The potential recoveries for the parent company's creditors will come primarily from such claims, Freeh said in his 119-page report that was submitted to the bankruptcy court.

Freeh said his investigation into potential claims and causes of action is in its early stages, and details will be provided to the court as it progresses.

"This report gets to the heart of the complex intercompany relationships inherent in a global firm that provided financing for its affiliates and subsidiaries all over the world," Freeh said.

MF Global collapsed after investors abandoned it following revelations of heavy bets it made on European debt.

Separately, James Giddens, the trustee liquidating the company's broker-dealer unit, said in a 275-page report he might bring civil claims against former Chief Executive Jon Corzine and other top MF Global executives for negligence and breach of duties to customers.

Giddens has estimated that $1.6 billion disappeared from customer accounts when the company, which filed for bankruptcy on October 31, 2011, improperly mixed client funds with its own money.

Both trustees had agreed to issue periodic status reports as part of their work on the case.

© 2024 Thomson/Reuters. All rights reserved.

Tuesday, 05 June 2012 08:08 AM
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