CME Group Inc. reached an agreement to return $175 million in MF Global Holdings Ltd. property, a trustee in the bankruptcy of the failed brokerage said on Thursday, $130 million of which is earmarked for former customers of the firm.
The settlement helps push the trustee closer to making whole customers who lost an estimated $1.6 billion after the company improperly mixed client funds with its own money. MF Global filed for bankruptcy last October.
MF Global customers who traded on U.S. exchanges have to date received roughly 72 percent of their claims.
The accord must be reviewed by the bankruptcy court and will not be implemented until it receives approval, trustee James Giddens said in a statement.
CME expected the agreement to speed up the process of returning money to customers.
"We look forward to the court's approval of this plan," CME spokeswoman Laurie Bischel said.
The $130 million will be split between commodity customers trading on domestic and foreign exchanges, Giddens said.
Some $16.5 million will remain with CME to deal with MF Global-related claims against it and the rest of the money will go into a general fund, a spokesman for Giddens said.
Last week, Giddens said he was in negotiations to recover $175 million controlled by CME, which was MF Global's primary regulator.
CME held in excess of $175 million of MF Global's property, including about $161 million in a guaranty fund as security for its financial obligations, $13.5 million in margin requirements and 35 exchange memberships, according to a court filing.
A hearing on the agreement is scheduled for July 11.
As Giddens settled claims with CME, his disputes with MF Global's parent company appeared to be just heating up.
Giddens had denied roughly $650 million in customer claims from the MF Global parent and an attorney for Louis Freeh, the trustee winding down the parent, said at a court hearing on Thursday that he plans to file objections to that denial, setting the stage for a court battle.
MF Global's parent also has general creditor claims worth about $1.6 billion against the broker-dealer, said Freeh's attorney, Brett Miller.
Giddens is also gearing up for a court battle in the U.K. over about $700 million held there that Giddens says belongs to U.S. customers.
A trial in that case is set for next April, a lengthy timetable that garnered some criticism from Judge Martin Glenn, who oversees MF Global's bankruptcy in the United States.
"It's eye-popping to me that it isn't until April 2013," Glenn said. "I assure you if it were a trial here, it wouldn't be" that long a wait.
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