LONDON -- The U.K. administrators for MF Global Holdings (MFGLQ)
Wednesday said the high court has approved an asset distribution
plan that allows it to return around 54 million pounds ($84
million) of client assets.
The ruling is the latest twist in a long-running attempt to
return money and securities to clients of failed broker-dealer MF
Global Inc., which filed for Chapter 11 bankruptcy protection in
New York last October.
A spokeswoman for KPMG, the administrators, said about $1
billion in assets--comprising stocks, commodities and warrants--has
still yet to be disbursed to clients. MF Global Inc. is claiming
the bulk of these assets, some $639 million, from MF Global UK.
KPMG has "issued court proceedings to seek determination of the
validity of the claim; the trial is scheduled for April 2013," said
KPMG's Richard Heiss, joint special administrator of MF Global UK.
"Today's court hearing represents an important milestone in
returning some GBP54 million of agreed client assets."
The dispute between MF Global Holdings' two sets of
administrators over the broker's assets is reflected in claims
against the money funds as well as the assets. The U.K.
administrators for MF Global Holdings said in June that they
expected to recover between $2.8 billion and $3.2 billion in money
funds for clients and creditors of the failed broker-dealer.
KPMG has already made an interim distribution of 26 cents to the
$1 to MF Global clients but won't be able to complete distribution
until two legal matters are resolved.
The first issue turns on the difficulty of separating out money
specifically ring-fenced for clients, called segregated funds, from
money held in a general pool of funds at MF Global Holdings. MF
Global UK wasn't required to keep the two types of funds separate,
whereas MF Global Inc. was.
The second issue turns on an appeal by the Chapter 11 Trustee of
MF Global Finance USA Inc., against the administrators' rejection
of its $418 million claim.
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