MF Global Trustee: Noncash Property Must Be Claimed By Nov 15, With Charges
November 07 2011 - 9:15PM
Dow Jones News
Customers of MF Global Holdings Ltd. (MFGLQ) have until Nov. 15
to request the return of noncash collateral held by the collapsed
broker-dealer, according to the trustee handling the firm's
liquidation.
Asset managers and investors that traded through MF Global will
have to pay the firm's estate an amount "determined by the trustee"
before the collateral is returned, representatives of the trustee
wrote in a notice issued to MF Global's clients and distributed by
exchange operator CME Group Inc. (CME) late Monday.
CME and the trustee, James Giddens, are working to divide and
distribute MF Global's business among rival firms with the aim of
freeing up some of the investment capital that became frozen with
MF Global's bankruptcy filing last Monday. At the close of business
Tuesday, customers with open trading positions are expected to gain
access to most of the exchange-held margin for trades they had on
at the time MF Global filed for bankruptcy.
The trustee's late-Monday notice covers certain "non-cash
property" including warehouse receipts, bills of lading and other
securities registered in customers' names that are securing open
contract positions. If the trustee has not received instructions
for the return of such property by Nov. 15, he intends to liquidate
the holdings, according to the notice. Clients whose property ends
up sold by the trustee will still have a claim against MF Global
Inc. in bankruptcy proceedings.
In the U.S., MF Global was estimated to have held about $5.5
billion in customer funds on deposit at the time of its bankruptcy
filing. CME's effort to shift open trading positions to other
clearinghouse member firms is seen freeing up an estimated $1.5
billion of that figure.
--Jacob Bunge, Dow Jones Newswires; 312-750-4117;
jacob.bunge@dowjones.com
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