Pacts in MF Global liquidation could free up cash

Two separate agreements were announced on Saturday. One is between James Giddens, the bankruptcy trustee overseeing the liquidation of MF Global's main brokerage unit, and Richard Heis, who is overseeing the liquidation of the company's United Kingdom operations. Giddens and Heis agreed to resolve all claims between the two corporate entities.

Giddens also reached an agreement resolving claims between the estate representing creditors of the brokerage unit and the one representing those of parent company MF Global Holdings Ltd.

Giddens said in a prepared statement that the agreements "are in the best interests of former customers and other creditors," and allow trustees to request court approval for additional cash distributions.

The agreement between the brokerage unit trustee and the UK-based unit could result in $500 million to $600 million being returned to the estate for U.S. brokerage customers, the parties said.

Giddens said he has applied with a U.S. bankruptcy court to make additional distributions as a result of the agreement.

Heis said the agreement will "clear important obstacles and allow us to significantly reduce reserves that have blocked us from additional distributions to the former customers and creditors of MF Global UK."