Bloomberg News

Peregrine Judge Gives Bankruptcy Trustee Role-Clarifying Order

July 23, 2012

Peregrine Financial Group Inc.’s bankruptcy trustee obtained a federal court order clarifying his role in the marshaling of assets belonging to the collapsed commodity futures brokerage.

U.S. District Judge Rebecca Pallmeyer in Chicago today granted Trustee Ira Bodenstein’s request after his lawyer told the judge that while $24 million in firm funds had been located, some banks holding that money would not allow them access to it because of her earlier restraining order in a lawsuit filed against Peregrine by the U.S. Commodity Futures Trading Commission.

“At least one financial institution has expressed concern that its compliance with the Trustee’s request for the transfer of funds may violate the ‘asset freeze’ provisions of the order,” Bodenstein’s attorneys told Pallmeyer in a July 20 filing.

Peregrine, a Cedar Falls, Iowa-based firm, filed for U.S. Bankruptcy Court liquidation in Chicago on July 10, hours after the CFTC filed a lawsuit accusing the firm and founder Russell Wasendorf Sr. of misappropriating at least $200 million in client funds.

Wasendorf has been charged with making false statements to federal regulators. He is in U.S. custody pending a bail hearing scheduled for July 27 before U.S. Magistrate Judge Jon Scoles in Cedar Rapids, Iowa.

Bodenstein, in a motion filed separately with U.S. Bankruptcy Judge Carol A. Doyle on July 19, asked for permission to pay a $25 million bond premium with the Peregrine funds. Argument on that request is scheduled for July 24.

The Peregrine bankruptcy case is Peregrine Financial Group Inc., 12-27488, U.S. Bankruptcy Court, Northern District of Illinois (Chicago). The CFTC regulatory case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net; Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus