MF Global Holdings Asks for Court-Appointed Trustee
MF Global Holdings Ltd. and its creditors asked the bankruptcy court handling its Chapter 11 filing to appoint a trustee to coordinate globally with regulators and wind-down its assets.
Separately, MF Global Holdings said it has yet to find an operating loan to finance operations in bankruptcy, and JPMorgan Chase & Co. (JPM), agent to a $1.2 billion loan, has agreed to allow the company to use $26 million in cash collateral if a trustee is appointed. JPMorgan and MF Global would have to negotiate a revised cash collateral agreement, the company said.
MF Global said a trustee is needed to coordinate investigations from various regulators and advocate for the prompt return of funds that belong to creditors.
A trustee will be able to “coordinate the investigations in a manner that will be more efficient and cost effective than could be achieved by debtors in possession,” lawyers for the company and its creditors wrote.
While the parent company filed for Chapter 11 bankruptcy to apportion returns to creditors, the broker-dealer unit, MF Global Inc. is being liquidated in a related court proceeding under a trustee appointed by the Securities Investor Protection Corp. It’s the broker-dealer unit that is being apportioned for former commodities and securities customers.
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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