MF Global Payout Plan Approved For Creditor Vote

A bankruptcy judge on Tuesday approved the outline of a plan by liquidators and creditors of failed brokerage MF Global to repay the company’s creditors, a key step toward ending its $40 billion Chapter 11 bankruptcy.

At a hearing in U.S. Bankruptcy Court in Manhattan, Judge Martin Glenn green-lighted the outline, which was amended to address minor concerns Glenn had raised in refusing to approve an earlier version of the outline last week.

MF Global, which had been led by former New Jersey Gov. Jon Corzine, is liquidating after declaring bankruptcy in October 2011. Investors ran for the hills after the company revealed exposure to risky European sovereign debt.

The case became a political fire storm when regulators discovered an estimated $1.6 billion hole in the trading accounts of the broker’s trading customers, later determined to be caused by the improper use of customer money to plug liquidity gaps.

Corzine resigned shortly after the bankruptcy, and has denied any wrongdoing.

Under the payout plan, the company’s trader customers would be repaid in full. Louis Freeh, the trustee liquidating the MF Global parent, has agreed if necessary to support an effort by customers’ trustee James Giddens to allocate some of the parent’s assets to customer accounts to ensure their full recovery.

Unsecured creditors of the MF Global parent are projected to recover between 13.4 cents and 39 cents on the dollar, while creditors of its finance unit will receive between 14.7 cents and 34 cents on the dollar.

Creditors under a $1.2 billion loan, including JPMorgan Chase & Co, will receive between 13.4 cents and 39 cents on the dollar under the plan.

The latest version of the plan includes arguments, raised by JPMorgan earlier this month, that creditors may be getting undercut. A portion of the loan facility was transferred from MF’s parent to its finance unit prior to bankruptcy, resulting in the finance unit owing money to both the holding company and the lenders. Eliminating that duplication could mean more recovery for the lenders, JPMorgan has argued.

Tuesday’s approval paves the way for creditors to vote on the plan itself. Assuming they support it, the plan would go before Judge Glenn for final confirmation in April.

The proposal already has the support of a majority of unsecured creditors. It was put forth by Freeh in conjunction with a group of hedge fund creditors, led by Silver Point Capital, Knighthead Capital and Cyrus Capital Partners, who hold more than 65% of the company’s $2.2 billion in unsecured claims.

Leave a Reply

Management Stories

Sonny Perdue
LegislationTrump Formally Picks Perdue As Agriculture Secretary
January 19, 2017
U.S. President-elect Donald Trump officially announced Sonny Perdue as his choice for secretary of agriculture on Thursday, selecting a former Read More
ManagementPresident Trump, Wisconsin Review, and a Dow-DuPont Update
January 18, 2017
Editors Paul Schrimpf and Eric Sfiligoj reflect on a new administration, a recent winter show, and crop protection company mergers. Read More
Werner Baumann, Bayer AG, and Hugh Grant, Monsanto
Industry NewsReport: Monsanto, Bayer CEOs Among Latest to Make Trump Tower Pilgrimage
January 18, 2017
The chief executive officers of German chemical giant Bayer AG and U.S. seed behemoth Monsanto, Werner Baumann and Hugh Grant, Read More
Management3 Financial Trends To Watch In Agriculture
January 17, 2017
I recently had the opportunity to attend a meeting of credit managers for Midwest ag supply and input companies, in part Read More
Trending Articles
AgriSync
Matt Hopkins17 Agriculture Apps That Will Help You Farm Smarter In 2017
December 9, 2016
Ag professionals are working smarter, not harder, than ever before. Smart farming technologies have enabled them to reduce costs, maximize Read More
R4023 Sprayer, John Deere
CropLife 100Ag Retail Equipment Report: The Green Party Continues
December 7, 2016
In the annual race for sales in the ag retail equipment marketplace, the color schemes for participants are a little Read More
Mike Stern
Precision AgClimate Corp. CEO Talks Retailer Support For Digital Ag
December 1, 2016
CropLife Magazine’s sister publication, AgriBusiness Global, recently sat down with Mike Stern, CEO of The Climate Corp., following the Monsanto subsidiary’s Read More
Precision AgTrimble Debuts End-to-End FMIS Platform
November 28, 2016
October’s inaugural PrecisionAg Vision Conference left this author with many thoughts and things to ponder in the coming months. Probably Read More
CHS Primeland
CropLife 100The 2016 CropLife 100 Report: Reviewing The Many Bulls And Bears Impacting This Year’s Marketplace
November 28, 2016
For virtually all of 2016, the nation was wholly focused on the big Presidential election. Some folks aligned themselves with Read More
Monsanto sign
Crop InputsMissouri Governor Meets With Bayer CEO To Discuss Monsanto Merger
November 21, 2016
Missouri Gov. Jay Nixon visited Bayer AG global headquarters in Leverkusen, Germany, on November 18 to discuss the proposed Bayer-Monsanto Read More
Latest News
Soybean field
Crop InputsNufarm Teams Up With John Deere Financial
January 19, 2017
Nufarm and John Deere Financial have teamed up to help farmers grow a better tomorrow. This program helps make purchases Read More
Sonny Perdue
LegislationTrump Formally Picks Perdue As Agriculture Secretary
January 19, 2017
U.S. President-elect Donald Trump officially announced Sonny Perdue as his choice for secretary of agriculture on Thursday, selecting a former Read More
ManagementPresident Trump, Wisconsin Review, and a Dow-DuPont Upd…
January 18, 2017
Editors Paul Schrimpf and Eric Sfiligoj reflect on a new administration, a recent winter show, and crop protection company mergers. Read More
Industry NewsBayer, MS Technologies Get China Approval For Balance G…
January 18, 2017
MS Technologies and Bayer have received import approval from China for Balance GT soybeans. The new Balance GT Soybean Performance Read More
Werner Baumann, Bayer AG, and Hugh Grant, Monsanto
Industry NewsReport: Monsanto, Bayer CEOs Among Latest to Make Trump…
January 18, 2017
The chief executive officers of German chemical giant Bayer AG and U.S. seed behemoth Monsanto, Werner Baumann and Hugh Grant, Read More
Giant Ragweed
HerbicidesStudy: Focusing On Weed Seedbank Can Help Manage Herbic…
January 18, 2017
Researchers writing in the latest issue of the journal Weed Science provide important insights on the control of herbicide-resistant giant Read More
Management3 Financial Trends To Watch In Agriculture
January 17, 2017
I recently had the opportunity to attend a meeting of credit managers for Midwest ag supply and input companies, in part Read More
Andersons Retail Store
CropLife 100The Andersons To Close All Retail Stores; Shutdown Does…
January 16, 2017
In a stunning announcement to the Toledo area, The Andersons Inc. said on Sunday that it would close its two Read More
Trimble TMX-2050 In-Cab Display
Eric SfiligojPrecision To Lead Agriculture In 2017?
January 16, 2017
Another new year is upon us! And I’m certain I speak for many in the agricultural world when I say Read More
Corn
Eric SfiligojThe Mood From Madison? In A Holding Pattern
January 16, 2017
Last week, I had the chance to attend the annual Wisconsin AgriBusiness Classic show in Madison, WI. It’s been a Read More
Syngenta Sign
Crop InputsAccenture Helps Syngenta Transform Its Global Logistics
January 13, 2017
Syngenta, a leading agriculture company, has collaborated with Accenture to design and implement a new digital logistics operating model across Read More
Fall Creek Seth Harden The Nature Conservancy
StewardshipLocal Farmers’ Watershed Initiative: Continuous Improve…
January 13, 2017
The goal in the Big Pine Watershed Project is to more intentionally do what local farmers and responsible ag retailers Read More
HerbicidesEPA Expands Enlist Duo Herbicide Registration To 34 Sta…
January 13, 2017
The U.S. EPA has expanded the geography for application of Enlist Duo herbicide from 15 to 34 states. This means Read More
Olson Ag Enterprise
CropLife 100Wilbur-Ellis Acquires Nebraska Seed Retailer
January 13, 2017
Wilbur-Ellis’ Agribusiness, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed and nutritional Read More
ManagementDeere-Precision Planting Update and the Ag Secretary Wa…
January 12, 2017
Editors Paul Schrimpf and Eric Sfiligoj provide the latest on the court date for John Deere/Precision Planting and the quest Read More
Monsanto sign
Seed/BiotechMonsanto, NRGene Form Agreement For Big Data Genomic An…
January 12, 2017
Monsanto Co. and NRGene have announced that the companies have reached a non-exclusive, multi-year global licensing agreement on NRGene’s genome-analysis Read More
AGCO Custom applicator
SprayersAGCO, Asmark Institute To Offer Training For Beginning …
January 11, 2017
AGCO Corp. and the Asmark Institute are collaborating to offer a new training program dedicated to educating and developing custom Read More
ManagementAg Land Values In Limbo In 2017
January 10, 2017
Several factors will come into play in 2017 that will determine the direction of land values. Randy Dickhut, senior vice Read More