Cash relief for bankrupt MF's customers
Source: Agencies |
November 19, 2011, Saturday
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Print Edition
Print Edition
THE trustee liquidating MF Global Holdings Ltd's broker-dealer unit has won court permission to distribute US$520 million of cash to customers, providing relief to customers whose accounts have been frozen since the futures brokerage went bankrupt.
US Bankruptcy Judge Martin Glenn approved the payout at a hearing in Manhattan, New York, on Thursday.
Later, the company announced J. Randy MacDonald, its global head of retail, was no longer employed. The company said in a US Securities and Exchange Commission filing that MacDonald had "ceased to be employed" and would not receive severance or termination payments.
MacDonald was owed US$8.9 million in severance, according to a July proxy filing. His departure comes two weeks after MF's Chief Executive, former New Jersey Governor and Goldman Sachs head Jon Corzine resigned without taking roughly US$9 million in severance.
Chief Operating Officer Bradley Abelow, also entitled to about US$9 million in severance, is still employed.
MF, which went bankrupt on October 31, laid off nearly half its staff, including more than 1,000 employees of the firm's broker-dealer unit.
The payout approved by Glenn represents 60 percent of the US$869 million that was frozen since October 31 across commodity customer accounts that contained only cash, bankruptcy trustee James Giddens said.
Still unclear is the whereabouts of about US$600 million of customer funds that are unaccounted for since MF Global's Chapter 11 filing, and whether MF Global might have improperly mixed customer funds with its own.
MF's bankruptcy came after the New York-based company revealed it made a US$6.3 billion bet on European sovereign debt. Customers and counterparties began to flee, resulting in margin calls and a liquidity crunch. Corzine quit on November 4.
US Bankruptcy Judge Martin Glenn approved the payout at a hearing in Manhattan, New York, on Thursday.
Later, the company announced J. Randy MacDonald, its global head of retail, was no longer employed. The company said in a US Securities and Exchange Commission filing that MacDonald had "ceased to be employed" and would not receive severance or termination payments.
MacDonald was owed US$8.9 million in severance, according to a July proxy filing. His departure comes two weeks after MF's Chief Executive, former New Jersey Governor and Goldman Sachs head Jon Corzine resigned without taking roughly US$9 million in severance.
Chief Operating Officer Bradley Abelow, also entitled to about US$9 million in severance, is still employed.
MF, which went bankrupt on October 31, laid off nearly half its staff, including more than 1,000 employees of the firm's broker-dealer unit.
The payout approved by Glenn represents 60 percent of the US$869 million that was frozen since October 31 across commodity customer accounts that contained only cash, bankruptcy trustee James Giddens said.
Still unclear is the whereabouts of about US$600 million of customer funds that are unaccounted for since MF Global's Chapter 11 filing, and whether MF Global might have improperly mixed customer funds with its own.
MF's bankruptcy came after the New York-based company revealed it made a US$6.3 billion bet on European sovereign debt. Customers and counterparties began to flee, resulting in margin calls and a liquidity crunch. Corzine quit on November 4.
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