$6.7 billion payout to MF Global’s former customers begins
Nearly 26,500 will share payout
Former customers of MF Global Holdings Ltd.'s bankrupt brokerage will be paid the entire $6.7 billion they are owed after a payout that began April 4, according to a Reuters report.
The payout will be shared by 26,500 former commodities and securities customers of the brokerage. The brokerage's parent company - once run by Jon Corzine, former co-chairman of Goldman Sachs and governor of New Jersey - filed for Chapter 11 bankruptcy protection nearly two and a half years ago.
U.S. Bankruptcy Judge Martin Glenn approved a plan in November to fully repay MF Global customers.
"Checks are going in the mail that will make all public customers of MF Global Inc, 100 percent whole," said James Giddens, MF Global's trustee and a Hughes, Hubbard & Reed partner who leads that firm's corporate reorganization and bankruptcy group, said in a statement.
Some of the money has come from settlements with onetime MF Global counterparties JPMorgan Chase & Co. and CME Group Inc. Additional funds may be received from a British unit, MF Global UK Ltd., Giddens said.
Giddens said 24,020 former U.S. commodities futures and options customers would recover $5.4 billion. Another $880 million would go to 2,047 former foreign commodities futures and options customers, and $376 million would be returned to 428 former securities customers.
MF Global troubles came amid worries about a $6.3 billion bet by Corzine on European sovereign debt and that money from customer accounts had been used to cover liquidity shortfalls.
Corzine and other former MF Global officials remain subject to other lawsuits by investors, customers and regulators.