The trustee for MF Global Inc. (MFGLQ) seeks to sell metal contracts to Jefferies Group Inc. to bring in $14.5 million for customers of the defunct brokerage.
The trustee, James Giddens, said in to court papers filed today in Manhattan, said that the sale will help distribute assets to customers who owned physical property. Such property, including contracts on precious metals, has been treated differently as it needed to be converted to cash first.
The trustee “has sought to find the most prudent and cost- effective method of converting the Physical Customer Property to cash,” and sale to Jefferies is the best means of doing so, lawyers for Giddens wrote.
The sale, still subject to court approval, would be for 99 percent of the aggregate closing price for futures contracts on the metals underlying the certificates, Giddens said.
The trustee has already distributed $3.9 billion to customers and has estimated a shortfall of $1.6 billion to what customers are owed.
MF Global Holdings (MFGLQ), run by former Goldman Sachs Group Inc. (GS) co-chairman Jon Corzine until his Nov. 4 resignation, filed the eighth-largest U.S. bankruptcy after a $6.3 billion trade on its own behalf on bonds of some of Europe’s most indebted nations led to margin calls. Its bankruptcy filing listed assets of $41 billion and debt of $39.7 billion.
The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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