Corzine, others settle most litigation over MF Global collapse

Thu Jul 21, 2016 3:35pm EDT
 
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By Jonathan Stempel

NEW YORK (Reuters) - Jon Corzine has settled a lawsuit by the trustee for the former New Jersey governor's company MF Global Holdings Ltd, as part of a $132 million accord to end much of the remaining litigation over the brokerage's 2011 collapse.

Lawyers for the trustee Nader Tavakoli and MF Global's bankruptcy plan administrator on Wednesday night asked a U.S. bankruptcy judge to approve the payout, saying it "provides closure and maximizes recoveries to the estates' creditors."

A substantial majority of the payout would be made by insurers on behalf of Corzine and other defendants, including MF Global's former Chief Operating Officer Bradley Abelow and former Chief Financial Officer Henri Steenkamp.

They have denied mismanaging MF Global, and did not admit liability in agreeing to settle.

Individual defendants, whose identities are confidential, would fund part of the payout, which includes interest payments to customers who have already recouped their funds.

The accord "will provide for much greater recoveries for creditors than they could have expected when MF Global filed for bankruptcy," Tavakoli said in a phone interview on Thursday.

A lawyer for Corzine did not immediately respond to a request for comment.

MF Global filed for bankruptcy on Oct. 31, 2011 after investors grew anxious over credit rating downgrades, margin calls, Corzine's $6.3 billion wager on European sovereign debt, and news that customer funds were used to shore up liquidity.   Continued...

 
Former MF Global CEO Jon Corzine (L) and COO Bradley Abelow (R) testify 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