Conoco fights MF Global trustee over $93.5 million
By Ann Saphir
CHICAGO (Reuters) - ConocoPhillips (COP.N: Quote) and MF Global Inc's bankruptcy trustee are squaring off in a $93.5 million dispute that illustrates how hard it is to divvy up the assets of the failed brokerage, a Reuters analysis of a court filing shows.
On Friday last week, the oil company -- a longstanding MF Global MFGLQ.PK customer -- filed an objection to the trustee's treatment of its claim, calling his approach "flawed" and saying Conoco had not received the bulk of the distributions from its MF Global accounts to which it was entitled.
The filing does not say how much Conoco (COP.N: Quote) believes it is still owed. A Reuters analysis based on figures included in the court filing, the trustee's determination of Conoco's claim, and the amounts the trustee has returned to most other customers shows the figure is around $35 million.
The same analysis shows bankruptcy trustee James Giddens believes he has overpaid Conoco by about $58 million.
The difference lies in the way Conoco and Giddens view $205 million in letters of credit that Conoco and its Canadian unit had lodged with MF Global to back energy trades.
Giddens has returned the letters to Conoco, counting their full face value toward fulfillment of Conoco's claim, but did not return any of the other collateral -- amounting to about $92 million -- in the accounts whose treatment Conoco is disputing.
In Friday's objection, Conoco called such an approach a "miscalculation". It argued that the trustee should have distributed payments based on the amount in the accounts above and beyond the face value of the letters of credit.
There is no indication in the filing that the trustee has sought the return of funds from Conoco. But an agreement covering part of the disputed claim, included as an exhibit to the filing, spells out the trustee's view that Conoco has received more than its fair share so far. Continued...