JPMorgan, the largest U.S. bank, sought permission to file the claim in court papers filed in Manhattan bankruptcy court today. The 2007 loan it made to the now bankrupt brokerage company is a revolving credit facility that includes other lenders, with JPMorgan acting as their agent.
The filing of the claim is a procedural matter, and won’t “affect the substantive rights of the Debtors, the statutory creditors’ committee of MF Global Holdings Ltd.,” or other parties in the case, lawyers for the bank wrote.
Customer accounts of MF Global Inc. believed to hold $5.45 billion were frozen Oct. 31, the day after the New York-based company reported a shortfall in funds that are required to be segregated under rules of the U.S. Commodity Futures Trading Commission. About $1.2 billion in customer funds is believed to be missing, according to James Giddens, the trustee appointed to liquidate the company and distribute refunds to customers.
While Giddens is overseeing distributions to customers at MF Global Inc., its parent, MF Global Holdings Inc., once run by former New Jersey Governor and Goldman Sachs Group Inc. (GS) co- chairman Jon Corzine, filed for bankruptcy separately to apportion returns to creditors, including bondholders and lenders such as JPMorgan.
The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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