MF Global Trustee Louis Freeh outlined an amended version of a plan to divide the company’s assets and distribute them among various creditor classes. Freeh projected MF Global’s U.S. broker-dealer unit could have up to a 120-million dollar surplus – which would mean full payback for traders whose money was frozen when MF Global went bankrupt in October of 2011. Still – Freeh said the broker-dealer unit could also end up with a 6-million dollar shortfall. That is small compared to the 1.6-billion dollar hole customers expected to face at the beginning of the case – but it is a less certain forecast from the payout plan version released last month.
Freeh’s newest proposal narrows recovery ranges for holders of the company’s 2.2-billion dollars in unsecured claims. Creditors now are expected to recover between 13.4 and 38.9-percent of claims. The new proposal also specifies JPMorgan Chase and Co will recover all of its nearly 7.8-million in secured setoff claims against MF Global units. The plan will go before a U.S. Bankruptcy Court Judge in Manhattan for approval on February 14th.
Source: NAFB News Service