More than a year after the collapse of MF Global, its customers are getting some potentially encouraging news from the brokerage’s bankruptcy trustee.
Former FBI director and current MF Global trustee Louis Freeh said in a court filing Saturday that customers whose money was frozen when the brokerage went under in October 2011 could recover all of that cash.
According to Freeh, MF Global has recoverable assets of roughly $6.857 billion to $6.983 billion, while claims pending against the firm total $6.863 billion. If the firm’s assets fall on the higher end of the spectrum, Freeh predicts that there could be a surplus of up to $120 million, which would be doled out to customers. (If the total falls on the lower end, however, the firm could be facing a deficit of $6 million).
Former firm customers may have a glimmer of hope, but other creditors—including those with unsecured claims—likely will not be made whole, even if there is a surplus.
MF Global collapsed more than a year ago amid fears over its exposure to bad European debt. Following the company’s Chapter 11 bankruptcy filing, regulators discovered a $1.6 billion shortfall in its customer-segregated funds, which, by law, are supposed to be kept separate from the firm’s money.
Read more at U.S. News & World Report.
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