Enter your email address and start getting breaking law firm and legal news right now!
|Free Market Evaluation - Send us your resume and we will give you free feedback|
Freeh Plans to Help MF Global Customers Get All or Most of Their Money Back View Count: 84
On Friday, MF Global trustee Louis Freeh filed a plan in the U.S. Bankruptcy Court incorporating most recent financial data and creating the plan in cooperation with a group of unsecured creditors led by Silver Point Capital, Knighthead Capital and Cyrus Capital Partners.
Freeh’s plan has met with approval mostly from unsecured creditors, and proposes to divide up MF Global’s assets in a manner that could mean full payback for MF Global traders whose money were put on hold with the company filing for bankruptcy.
Freeh believes that MF Global’s U.S. broker-dealer unit can have up to a $120 million surplus, but could also end up with a $6 million shortfall. But according to those affected, that is an insignificant amount compared to the $1.6 billion loss that customers thought they might have to face when the company went bankrupt.
However, Freeh’s plan, which is built on the latest available financial data is less certain of things as much as a plan issued last month by the group of unsecured creditors who projected “payment in full.” While the earlier plan had envisaged unsecured creditors recovering between 11.5 percent to 41.5 percent of their claims, Freeh’s plan considers a recovery range between 13.4 percent and 38.9 percent for unsecured creditors.
In the updated proposal, JPMorgan Chase & Co will get back all of its $7.8 million secured setoff claims against MF Global, though an unsecured liquidity facility of JPMorgan would recover the same as other unsecured creditors with regard to its $1.15 billion claim.
Freeh’s new plan to sort out the MF Global recovery and distribution will go for approval before Judge Martin Glenn in the U.S. Bankruptcy Court in Manhattan on 14 February.
The bankruptcy is In re MF Global Holdings Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.Freeh Plans to Help MF Global Customers Get All or Most of Their Money Back by Scott