Customers of bankrupt securities firm MF Global Holdings Ltd.
(MFGLQ) will get a significant chunk of money back in coming
months, according to projections made by a trustee in a court
filing made public Thursday night.
Trustee James Giddens, who represents customers of the failed
firm's brokerage unit, said in the filing that MF Global customers
in the U.S. who invested on domestic exchanges could receive up to
93 cents on the dollar of their cash back, according to the filing
in the U.S. Bankruptcy Court in the Southern District of New
York.
That payment, an increase from the current estimated payment of
about 81 cents on the dollar, stems from a December agreement Mr.
Giddens reached with the U.K. bankruptcy administrator for MF
Global's London unit and the trustee for MF Global's parent
company, Louis Freeh.
Mr. Giddens's filing also projected that customers of MF
Global's U.S. brokerage who invested overseas would see their
payments increase to 47 cents on the dollar, with a potential
future payment that would increase their overall recovery of assets
to a range of 68 cents to 74 cents on the dollar.
Customers of the failed brokerage firm run by former New Jersey
Governor and Goldman Sachs Group Inc. (GS) Chairman Jon S. Corzine
lost cash that they left at the brokerage firm when MF Global
collapsed in October 2011. Various trustees have been working to
recover assets since then.
Also Thursday, a group of MF Global creditors filed a plan of
liquidation for the failed brokerage firm. The proposal outlined a
plan to pay back creditors of MF Global's general estate within a
year, and should restore the accounts of brokerage customers to
100% within months, according to a person familiar with the ad-hoc
group.
The Thursday night U.S. Bankruptcy Court in Manhattan filing was
made by an ad-hoc group of creditors led by Silver Point Capital,
Cyrus Capital Partners LP and Knighthead Capital Management LLC.
Those creditors own about 65% of MF Global's $2.2 billion in
unsecured debt, according to the filing.
If the creditors' plan materializes, the $1.6 billion shortfall
once reported in customer accounts will all have been paid back.
Earlier in the week, the U.K administrator also outlined plans for
increased payments for MF Global's overseas customers. A bankruptcy
judge will sort out the various plans and determine how much
various customers and creditors will receive.
--Joseph Checkler contributed to this article.
Write to Aaron Lucchetti at Aaron.Lucchetti@wsj.com
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