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MF Global Holdings Officers Will Get Bonuses If Court Approves

Jon S. Corzine, left, former chairman and chief executive officer of MF Global Holdings Ltd., Bradley Abelow, center, president and chief operating officer of MF Global, and Henri Steenkamp, right, the company's chief financial officer, at a Senate Agriculture Committee hearing in Washingtonon Dec. 13, 2011. Photographer: Andrew Harrer/Bloomberg

March 10 (Bloomberg) -- The MF Global Holdings Ltd. executives who oversaw the company before it failed last year should get bonuses this year if a bankruptcy court approves, said Frank Piantidosi, an adviser working with the trustee, Louis Freeh. A senator objected to Freeh in a letter.

The compensation packages are still being prepared, and would apply to Chief Operating Officer Bradley Abelow, General Counsel Laurie Ferber and Chief Financial Officer Henri J. Steenkamp, Piantidosi of Freeh Group International Solutions LLC said in an e-mail.

“The value that Brad, Henri and Laurie bring by helping to liquidate and recover assets for the estate outweighs the cost to retain them,” Piantidosi said. It would cost more to replace them with outside consultants less familiar with MF Global’s operations, he said.

U.S. Senator Amy Klobuchar, a Minnesota Democrat, asked Freeh to deny any bonuses and focus on recovering customer funds; “While Minnesota farmers and ranchers still have not been able to recover all of their missing funds, MF Global executives may be getting hundreds of thousands of dollars in bonuses,” Klobuchar said in a statement posted on her website. “That is simply unacceptable.”

MF Global Holdings, once run by former New Jersey Democratic Governor Jon Corzine, filed the eighth-largest U.S. bankruptcy on Oct. 31 after getting margin calls and bank demands for money at its operating unit, MF Global Inc. While the holding company is returning funds to creditors under Freeh in a Chapter 11 bankruptcy, the operating unit is retuning funds to customers under a separate trustee, James Giddens, appointed under the Securities Investor Protection Corp.

Giddens’s Staff

Giddens’s staff currently consists of about 70 former MF Global employees, none of whom are executives or get bonuses, said Kent Jarrell, a spokesman for Giddens. The brokerage estate, which is entirely separate from that of the holding company, has cut staff week by week as it comes closer to completing its work and expects to have 50 people left by next month, he said. Giddens, who is making his own investigation of the brokerage’s assets, has estimated a $1.6 billion shortfall between what has been identified, and what customers are owed.

The bonus amounts for the three executives would be less than they made prior to the bankruptcy, said Diana DeSocio, an MF Global spokeswoman. She declined to comment on how much they might be and said Freeh will separately seek court permission to pay another 21 staff working on the estate. The staff are assisting Freeh with identifying assets, and fulfilling the company’s duty to report to regulators and tax authorities, she said. The bonuses were reported earlier by the Wall Street Journal.

Assisting Freeh

Members of Freeh Group International, a consulting firm, and Freeh Sporkin & Sullivan LLP, a law firm, are both assisting Freeh.

Klobuchar said in her letter to Freeh that the same executives were at the helm of the company when it collapsed, and that issuing bonuses sends the “wrong message to customers already skeptical of the bankruptcy process.” Klobuchar serves on the Senate Agriculture Committee.

MF Global Holdings filed bankruptcy after a $6.3 billion trade on its own behalf on bonds of some of Europe’s most indebted nations led to margin calls. Its bankruptcy filing listed assets of $41 billion and debt of $39.7 billion.

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).

To contact the reporter on this story: Tiffany Kary in New York at

To contact the editor responsible for this story: John Pickering at

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