MF Global trustee says clients may be made whole
NEW YORK (AP) — Former brokerage customers of MF Global could fully recover cash that was frozen when the trading firm collapsed, according to the bankruptcy trustee in the Chapter 11 case.
The projection is based on the latest analysis of recoverable assets available in MF Global's bankruptcy, versus pending claims, the trustee, former FBI Director Louis Freeh, said in a court filing Saturday.
The report outlines a potential range of recovery for brokerage customers, depending on various scenarios, from a shortfall of $6 million to a surplus of $120 million. Those figures are based on calculations that recoverable assets range from about $6.857 billion to $6.983 billion, versus claims of $6.863 billion.
If there's a surplus, customers whose money was frozen when MF Global collapsed in October 2011 could get a full recovery of their losses.
That does not include other classes of creditors, such as lenders with unsecured claims, which are not expected to fully recover their claims. For example, one such group of lenders is expected to receive a distribution ranging from 14 percent to about 34 percent, according to the filing, with potentially no recovery for other groups.
Freeh's update was filed with Judge Martin Glenn in U.S. Bankruptcy Court for New York's Southern District. Freeh is a former federal judge who served as director of the Federal Bureau of Investigation from 1993 through 2001. He's now chairman of Freeh Group International Solutions LLC, a global risk-management firm.