Jon Corzine has reached a settlement with the trustee for the former New Jersey governor’s collapsed brokerage MF Global Holdings Ltd, as part of a series of accords expected to provide about $132 million to creditors, according to court papers.
The trustee, Nader Tavakoli, on Wednesday night asked a U.S. bankruptcy judge to approve payments being made on behalf of Corzine and several other defendants, including MF Global’s former Chief Operating Officer Bradley Abelow and former Chief Financial Officer Henri Steenkamp.
Insurers will make payments on behalf of the defendants, who did not admit wrongdoing, the court papers show.
The accord does not resolve the U.S. Commodity Futures Trading Commission’s civil lawsuit against Corzine and Edith O’Brien, a former MF Global assistant treasurer, but provides a reserve to help fund their defenses.
Law360, New York (July 7, 2015, 1:38 PM ET) — Former New Jersey Gov. Jon Corzine and other former MF Global executives will pay $64.5 million to settle claims that they swindled investors by touting the brokerage’s financial health before its fall 2011 collapse, during which $1.6 billion worth of customer money went missing, according to a Tuesday filing.
Onetime New Jersey Gov. Jon Corzine is among the former MF Global executives who will shell out nearly $65 million to settle claims they lied to investors about the company’s financial stability. (Credit: AP) The proposed settlement…
MF Global Settlement With JPMorgan Unit Approved by Judge
A JPMorgan Chase & Co. (JPM) unit’s $100 million settlement with MF Global Inc. liquidators won court approval, paving the way for the return of more money to the failed brokerage’s former customers.
The agreement will allocate $100 million for the return of customer property, according to an order entered today in bankruptcy court in Manhattan. The agreement resolves claims against JPMorgan arising from transfers of customer property in the days before MF Global entered bankruptcy, as well as its actions as one of the brokerage’s primary banks.
“The motion is granted in all respects and the settlement agreement is authorized,” U.S. Bankruptcy Judge Martin Glenn said in the order.
MF Global, J.P. Morgan in Deal on Chapter 11 Case
MF Global Holdings Ltd. (MFGLQ) bankruptcy trustee Louis Freeh struck a deal with J.P. Morgan Chase & Co. (JPM) in their dispute over more than $900 million in intercompany claims, removing one of the key roadblocks to the holding company’s Chapter 11 liquidation plan.
Under the settlement, some $275 million of the more than $1.8 billion that MF Global’s holding company says a c
ompany finance subsidiary owes it will be subordinated, that is ranked below the $1.2 billion owed to a lending group led by J.P. Morgan.
“The settlement is in the best interest of creditors (as) it removes a major hurdle to confirmation of the plan,” said Mr. Freeh in a statement Tuesday.
Read more: http://www.foxbusiness.com/news/2013/03/06/mf-global-jp-morgan-in-deal-on-chapter-11-case/#ixzz2MoKpSTjk
The trustee liquidating the failed MF Global Inc. (MFGLQ) brokerage said only 200 of more than 28,000 commodities and securities customer claims filed haven’t been completed in the past six months.
“However, the size and timing of future distributions on customer claims remains dependent on the resolution of the major contingencies facing the trustee,” particularly disputes over claims with the brokerage’s U.K. affiliate and parent company, trustee James W. Giddens said yesterday in a report filed in U.S. Bankruptcy Court in Manhattan.
Well, the players got played. And we wonder why Congress has the lowest approval rating and trustworthy to the American people?
New York — Yesterday the House Financial Services Committee confirmed what we already know, namely that former Goldman Sachs CEO Jon Corzine deliberately stole customer funds when he was CEO of MF Global. See Blomberg News story below:
But what the Republican Committee report does not say is that the mechanism that allows Corzine and many others to walk away from such disasters without any civil liability for fraud is the 2005 Bankruptcy Reform Act, which the Republicans sponsored almost unanimously. And we wonder why nobody is pursuing this for the theft that it clearly involved?
By the bankruptcy code Congress adopted and which congress alone can change: (i) Bankruptcy Judges are PRECLUDED from appointing “receivers” (Sec. 105(b)), (ii) the stay precludes creditors who were robbed from pursuing a receiver at the District Court, (iii) state receiverships are collapsed into the bankruptcy when it is filed and (iv), at least in the 2nd Cir., only a receiver can pursue claims based on theft.
Ergo: There is almost no way to go after people to collect stolen money in corporations that are subject to the Bankruptcy Code (particularly in NYC). As one veteran litigator told me yesterday: “AND WE CONSIDER OURSELVES AS A NATION GOVERNED BY “THE RULE OF LAW”?
Jon Corzine’s lawyers say allegations that he fraudulently ran MF Global Holdings Ltd make “no sense” and that a lawsuit seeking to hold him and others responsible for the futures brokerage’s
bankruptcy must be thrown out.
Corzine, former colleagues and several banks, including JPMorgan Chase & Co and Goldman Sachs Group Inc, filed papers on Friday night to dismiss investor litigation over MF Global’s collapse. The company’s Oct. 31, 2011, bankruptcy was Wall Street’s biggest meltdown since 2008.
Plaintiffs led by the Virginia Retirement System and the province of Alberta, Canada, have accused MF Global in the U.S. District Court in Manhattan of inflating its ability to manage risk, obscuring risks from a big bet on European sovereign debt and improperly accounting for deferred tax assets.
But lawyers for Corzine, MF Global’s former chairman and chief executive officer, said there was no securities fraud. They said the allegations merely suggested that Corzine mismanaged the company, was too optimistic, or failed to predict a liquidity squeeze prompted in part by credit rating downgrades.
Read more: http://www.foxbusiness.com/industries/2012/10/22/corzine-banks-want-to-close-mf-global-fraud-lawsuit/#ixzz2A36UUIW6