MF Global Inc., the defunct brokerage once led by Jon Corzine, will begin final distributions to fully satisfy $6.7 billion in claims from former customers, starting tomorrow and lasting several weeks, the trustee overseeing the repayments said.
“Checks are going in the mail that will make all public customers of MF Global Inc. 100 percent whole,” the trustee, James Giddens, said today in a statement. He called the repayment in full, which he had predicted since November, the result of “Herculean efforts” by many professionals in the case. It will satisfy claims of more than 26,000 securities and commodities customers.
MF Global Holdings Ltd., the brokerage’s parent company, filed for bankruptcy on Oct. 31, 2011, after a wrong-way, $6.3 billion bet on bonds of some of Europe’s most indebted nations. More than $1.6 billion in customer funds that should have been segregated were missing. The company listed assets of $41 billion and debts of $39.7 billion.
“Ensuring full restitution to customers has been a primary focus,” Gretchen Lowe, acting director of the Commodity Futures Trading Commission’s division of enforcement, said today in a statement. The CFTC will “continue to ensure that those who violate U.S. commodity laws and regulations designed to protect customer funds will be held accountable,” she said.
Interim distributions have been made to customers. The final distribution was made possible by a temporary loan from the general estate of the brokerage’s bankruptcy and decisions by U.S. Bankruptcy Judge Martin Glenn and U.S. District Judge Victor Marrero in New York to reject objections by ex-managers including Corzine, the former MF Global chairman and chief executive officer.
“The 100 percent customer recovery does not diminish the consequences of the unprecedented customer property segregation failure that led to MFGI’s liquidation, including the length of time customers have been without their property,” Giddens said in today’s statement.
Corzine, the ex-New Jersey governor and onetime Goldman Sachs Group Inc. co-chairman, had challenged the terms of a court-approved settlement that would advance funds from the brokerage’s bankruptcy estate to pay customers’ claims. Other ex-MF Global managers who were accused of wrongdoing in a lawsuit along with Corzine, including Bradley Abelow and Henri Steenkamp, joined him in the appeal.
Steven Goldberg, a spokesman for Corzine, declined to comment on Giddens’s announcement today. In November, he said Corzine is “very pleased that customers will receive a full recovery.”
The holding company’s Chapter 11 case is In re MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The liquidation of the broker is In re MF Global Inc., 11-bk-02790, in the same court.