Judge Approves MF Global’s Liquidation Plan
MF Global won court approval of a plan to liquidate its assets, pay back creditors and end the $40 billion bankruptcy that rocked the financial world in 2011. The commodities brokerage, run by former New Jersey Governor Jon Corzine, collapsed after investors were spooked by its exposure to about $6.3 billion in European sovereign debt, reports Reuters. The approval marked a major step in ending the massive Chapter 11 filing, as MF Global is now able to implement the plan and pay creditors.
Judge Martin Glenn approved the plan at a hearing in U.S. Bankruptcy Court in Manhattan, after noting the “long road” to confirmation.
“While there have been some very strongly held views and differences, counsel have worked exceedingly well together to resolve most of them, limiting what the court had to decide,” Glenn said.
The case became a political fire storm after it was discovered that about $1.6 billion was missing from the accounts of the broker’s commodities trader customers. Regulators later determined that MF Global had misappropriated the customer money to cover liquidity gaps as it faltered.
Most customers have already been reimbursed for about 93% of the value of their accounts.
While Corzine has not faced criminal charges, he and several other MF Global officials have been ordered to testify at numerous congressional hearings. Also, congressional committees, the FBI and the Securities & Exchange Commission have launched investigations into the source of missing customer money.
No criminal charges have been filed in connection with the case, and Corzine has denied wrongdoing.