Some MF Global Inc. employees fired in New York and Chicago learned of their fate from news reports that the trustee liquidating the broker-dealer had decided to terminate all 1,066 of them, according to three people familiar with the matter.
Trustee James Giddens distributed a statement yesterday announcing the firings at the unit of bankrupt MF Global Holdings Ltd. It was reported by the news media before many employees were notified, said one person familiar with the release who asked not to be identified because they weren’t authorized to speak publicly about it. Two employees who declined to be named because they said it may damage their job prospects also said they heard of the firings through the media.
“We were well into the process of notifying employees and were attempting to personally reach as many employees as possible when the release went out,” said Kent Jarrell, a spokesman for Giddens. Tiffany Galvin, a spokeswoman for MF Global, declined to comment on the trustee’s decision.
MF Global Holdings filed for bankruptcy Oct. 31 after a $6.3 billion bet on the bonds of some of Europe’s most indebted nations prompted regulator concerns and a credit rating downgrade. Giddens, overseeing the liquidation of the bankrupt company’s brokerage unit, is managing the subsidiary’s wind-down under the Securities Investor Protection Act.
The action is necessary to “preserve assets and identify and marshal other property to maximize the estate in a manner that is fair to all customers and other creditors,” Giddens said in the statement. He seeks to end leases Nov. 30 for MF Global properties rented in Washington, Boston, San Francisco, Dallas, Florida and two spaces at Park Avenue Plaza in New York City.
As many as 200 former employees are being hired to assist in the liquidation, Giddens said. The unit’s Chicago offices will stay open as the business is wound down.
In Chicago, where the offices are one block south of that city’s landmark Board of Trade Building, now occupied by the Chicago Mercantile Exchange, individuals were leaving at midday, loading boxes and bags into waiting cars and taxis.
At a midtown Manhattan bar near MF Global’s headquarters, a group gathered for beer and discussed the rapid downfall of the firm. An e-mail from human resources arrived in the in-boxes of employees alerting them to a “town hall” meeting on each floor, said one of the two former employees.
The ex-employee said he learned he was being fired from Google News. His colleague, who was on the same floor, said he found out he was being fired when his father called him after seeing reports on news wires.
With the trustee’s news release distributed at 11:43 a.m. New York time, not all employees had been told personally they had lost their jobs, the first employee said.
On one floor, where a town hall meeting was scheduled for 1 p.m., employees started hearing the news shortly before noon, he said.
At the midtown bar, hugs were exchanged among members of the group. Before one of their number departed, another told him they should arrange weekly meetings until each had found jobs.
The bankruptcy case is MF Global Holdings Ltd., 11-bk-15059; and the brokerage case is In re MF Global Inc., 11-ap-2790, U.S. Bankruptcy Court, Southern District of New York (Manhattan).