The MF Global trustee than plans to return millions to MF Global customers said Thursday he may bring civil lawsuits against some of the company’s employees – asserting claims for breach of fiduciary duty and for violating rules that govern the segregation of client funds. Trustee James Giddens did not name specific targets – but a spokesperson says the individuals include officers, directors and other employees. It is not known if former Chief Executive Jon Corzine – who left the company in November – is among them. Giddens says he is committed to negotiating cooperative resolutions with the individuals where possible.
Corzine and other current and former executives are facing more than 20 civil class action lawsuits from customers. As a precondition for customers to receive their share of the 685-million dollar payout Giddens is trying to work out through the courts – they would be required to release certain claims against third parties and assign them to Giddens. At a U.S. Bankruptcy Court hearing in Manhattan Thursday – the Judge held off on approving the payout. He voiced skepticism about the requirement to release and assign claims – as well as concern the pending class actions would be dismissed if the claims were reassigned. The lead attorney for Giddens says the release only applies to claims related to money already repaid to customers and would streamline the recovery process.
Source: NAFB News Service