A trustee for failed brokerage MF Global Inc. (MFGLQ:US) has begun litigation in the U.K. that aimed at recovering $700 million in customer funds, according to a statement.
The trustee, James Giddens, said in April that he had been working since November to return the money and filed a claim with the administrators overseeing the company’s MF Global UK Ltd. unit. According to today’s statement, an application for direction, which begins the legal process, has been filed with the English court.
“As the advocate for all former customers of MF Global Inc., we are prepared to fight in any jurisdiction for the return of customer funds to their rightful owners,” Giddens said in the statement. The trustee has said a dispute over whether the money should have been segregated under English law must be decided in a lawsuit.
Giddens, appointed under the Securities Investor Protection Act to return funds to former customers of the failed brokerage, has estimated there is a $1.6 billion shortfall compared to what they are owed.
MF Global was the operating unit of MF Global Holdings Ltd., which filed for bankruptcy in October.
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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