Saying it would allow for a more streamlined liquidation process, the Commodity Customer Coalition, the primary advocate group for former MF Global customers, wants the U.S. Bankruptcy Court to handle the case under Chapter 7 of the bankruptcy code. Chapter 7 is designed specifically for liquidation of assets and would preserve more potential payback for customers. The coalition is hoping the CFTC will file the motion itself.
MF Global Holdings Ltd collapsed after it revealed exposure to risky European sovereign debt. According to monthly expense filings, MF Global has spent more than 11-million dollars since filing for bankruptcy on October 31. It is surviving on about 26-million in cash that had been pledged to JPMorgan Chase & Co as collateral on loans.
Panel Wants to Hear from MF Global Treasurer
The House Financial Services oversight and investigations subcommittee will meet Wednesday to decide whether to compel Edith O’Brien, a treasurer at MF Global’s brokerage arm, to testify at a March 28 hearing on the firm’s collapse. O’Brien has been identified by former chief executive officer Jon S. Corzine as someone with knowledge of a funds transfer from the firm’s customer accounts before it filed for bankruptcy. O’Brien had “respectfully” declined to testify during an earlier hearing.
In a letter to lawmakers, Financial Services Committee staff wrote, “In light of the documents that the Subcommittee has reviewed and the interviews it has taken, as well as Mr. Corzine’s testimony regarding Ms. O’Brien’s role at MF Global, the Subcommittee believes that Ms. O’Brien’s appearance and testimony at the March 28, 2012 hearing is necessary to ensure the completeness and accuracy of the Subcommittee’s investigative record.” The MF Global bankruptcy is the eighth-largest U.S. bankruptcy.
Source: NAFB News Service