Bankruptcy judge approves MF Global's liquidation plan

Fri Apr 5, 2013 1:06pm EDT
 
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By Nick Brown

NEW YORK (Reuters) - MF Global MFGLQ.PK on Friday won court approval of a plan to liquidate its assets, pay back creditors and end the $40 billion bankruptcy that rocked the financial world in 2011.

The commodities brokerage, run by former New Jersey Governor Jon Corzine, collapsed after investors were spooked by its exposure to about $6.3 billion in European sovereign debt.

The approval marked a major step in ending the massive Chapter 11 filing, as MF Global is now able to implement the plan and pay creditors.

Judge Martin Glenn approved the plan at a hearing in U.S. Bankruptcy Court in Manhattan, after noting the "long road" to confirmation.

"While there have been some very strongly held views and differences, counsel have worked exceedingly well together to resolve most of them, limiting what the court had to decide," Glenn said.

The case became a political fire storm after it was discovered that about $1.6 billion was missing from the accounts of the broker's commodities trader customers. Regulators later determined that MF Global had misappropriated the customer money to cover liquidity gaps as it faltered.

RARE APPEARANCE BY FREEH

Louis Freeh, the trustee liquidating MF Global's estate, made a rare public appearance at Friday's court hearing, providing some reassurance to customers.   Continued...

 
Former MF Global CEO Jon Corzine testifies before a House Financial Services Committee Oversight and Investigations Subcommittee hearing on the collapse of MF Global, at the U.S. Capitol in Washington, December 15, 2011. REUTERS/Jonathan Ernst