Thursday, 1 December 2011

MF Global trustee seeks to pay out $2.1 billion more (Reuters)

(Reuters) ? The trustee liquidating MF Global Holdings Ltd's broker-dealer unit asked a federal bankruptcy judge to authorize the distribution of another $2.1 billion to former commodities customers, roughly doubling the total payout to $4.1 billion.

James Giddens, the trustee for MF Global Inc, said the increased payout should restore at least two-thirds of U.S. segregated customer property pro rata to the former customers.

Giddens said the latest transfer could take two to four weeks and would require help from CME Group Inc's Chicago Mercantile Exchange and other derivative clearing organizations.

The payout requires approval by U.S. Bankruptcy Judge Martin Glenn in Manhattan, who authorized two transfers this month. A hearing is set for December 9, court records show.

Once run by former New Jersey Governor Jon Corzine, MF Global filed for Chapter 11 protection on October 31 after the New York-based company revealed a $6.3 billion bet on European sovereign debt. That worried investors, credit rating agencies and trading partners, and spurred a liquidity shortfall.

Former FBI director Louis Freeh was asked on Friday to become the trustee for the MF Global parent company. He would also work to return money to creditors, and coordinate with investigators looking for missing customer funds.

Giddens' has estimated that this shortfall could total $1.2 billion, and on Tuesday said the amount remains uncertain.

(Reporting by Jonathan Stempel in New York, editing by Gerald E. McCormick)

Source: http://us.rd.yahoo.com/dailynews/rss/business/*http%3A//news.yahoo.com/s/nm/20111129/bs_nm/us_mfglobal_trustee

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