Elliott Management Seeks to Trade MF Global Claims From Behind Firewall

MF Global Holdings Ltd. creditor Elliott Management Corp. is seeking approval to trade claims against the bankrupt company after establishing a screening wall, according to a bankruptcy court filing.

The screening wall would isolate Elliott’s trading activities from its activities as a member of MF Global’s official creditors committee and prevent Elliott’s trading staff from using non-public information garnered from staff working with the creditors committee, according to today’s filing in U.S. Bankruptcy Court in Manhattan.

Committee members are barred from trading the company’s claims unless they put in protections to prevent their traders from using confidential information.

MF Global, the parent of broker-dealer MF Global Inc., sought bankruptcy protection Oct. 31 after revealing investments related to $6.3 billion in European sovereign debt. Jon Corzine, the former co-chief executive officer of Goldman Sachs Group Inc., quit as MF Global’s CEO on Nov .4. MF Global listed $39.7 billion in debt and $41 billion in assets and said it has about $26 million in cash in its Oct. 31 bankruptcy filing.

The case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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