Bloomberg News

MF Global Singapore Ex-Employees Sue Over Information

May 07, 2012

MF Global Singapore has paid money owed to more than 90 percent of customers from a court-approved fund of as much as $350 million. Photographer: Stephen Yang/Bloomberg

MF Global Singapore has paid money owed to more than 90 percent of customers from a court-approved fund of as much as $350 million. Photographer: Stephen Yang/Bloomberg

A group of former employees at MF Global Holdings Ltd. (MFGLQ:US)’s Singapore unit claim in a lawsuit that they’re not being informed about how they’ll be paid money they are owed.

The unit of the bankrupt company, once run by Jon S. Corzine, was sued by seven former employees, including the head of sales for Asia, seeking more financial information.

“The response from the provisional liquidators was very frustrating,” Michael Joseph Drennan, former head of sales for Asia, said in his complaint filed with the Singapore High Court. “I had to take a proactive approach to ensure that my interests as a creditor were being protected,” said Drennan, now head of North America Futures and Options at London-based interbroker ICAP Plc. (IAP) A closed hearing is scheduled for May 11.

The legal action by the seven former employees in Singapore, who claim in court papers they are owed at least S$3.5 million ($2.8 million) by MF Global Singapore, follows a claim filed in London. Employees of MF Global’s U.K. unit are seeking 39 million pounds ($63 million) of unpaid bonuses, severance pay and pension contributions from its administrator KPMG LLP.

While KPMG kept customers informed on the distribution of their funds via at least 13 public statements, creditors in Singapore were faced with a dearth of information, according to the lawsuit. MF Global Singapore was a solvent company, based on information he had access to before the liquidators were appointed, Drennan said in court papers.

Creditors elsewhere including in Australia, Canada, Hong Kong and the U.K. were also being kept informed through meetings and reports, the ex-employees said in their complaint.

Ashok Kumar, the lawyer advising the former employees, declined to comment.

‘Misguided’ Complaint

The complaint was “misguided” and should be dismissed, according to a court filing by Bob Yap, head of transactions and restructuring at KPMG in Singapore. The former employees appear to be fishing for information other than for the legitimate purposes of the liquidation, he said in court papers.

Yap declined to comment on ongoing litigation.

The seven former employees including John Hugh Bulford, general manager of Asia Pacific and Chief Risk Officer for Asia Matthew Levins are owed at least S$3.5 million ($2.8 million) by MF Global Singapore, according to the lawsuit. Drennan is claiming S$1.67 million, including S$1.3 million in guaranteed bonus.

The employees are seeking the right to inspect the resolutions made in the provisional liquidation, a list of the business’s liabilities and correspondence between KPMG and the official receiver, according to the lawsuit.

Meeting of Creditors

MF Global Singapore has paid money owed to more than 90 percent of customers from a court-approved fund of as much as $350 million, the liquidators said in an April 24 statement. It had 6,194 customers as at Oct. 31. Creditors have been invited to submit proofs of debt and the liquidators plan to hold a meeting of creditors before June 1, according to the statement.

MF Global Holdings, once run by Corzine, a Democrat who served in the Senate before becoming New Jersey’s governor, filed the eighth-largest U.S. bankruptcy on Oct. 31 after getting margin calls and bank demands for money at its brokerage unit MF Global Inc.

The case is Michael Joseph Drennan v. MF Global Singapore Pte. OS305/2012. Singapore High Court.

To contact the reporter on this story: Andrea Tan in Singapore at atan17@bloomberg.net

To contact the editor responsible for this story: Joe Schneider at jschneider5@bloomberg.net


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