MF Global deal frees funds due to creditors in UK
Sunday 23 December 2012
Thousands of clients at the failed broker MF Global could finally get their money back after administrators settled a long-running legal dispute.
KPMG, which is winding down the broker's UK arm, said it had agreed to hand between $500m and $600m to US administrators. They had claimed that a large chunk of the $2.5bn (£1.5bn) collected in the UK following the company's demise last year was owed to US clients.
The dispute had been due to be heard in the High Court in April, meaning both sides will now avoid costly legal fees. Sources said the administrators had "worked around the clock" to get the deal done before Christmas.
Richard Heis, joint administrator at KPMG, said: "This settlement, if concluded, will allow a major escalation [in returning money back] … we will move quickly to get money in agreed claimants' pockets at the earliest opportunity."
MF Global filed for bankruptcy protection in New York last October after making disastrous $6.3bn bets on the bonds of Europe's most indebted countries. The company's 6,500 UK creditors have been highly critical of the time it has taken for them to get their money back.
KPMG, which has already made some interim payments, said the agreement was a significant landmark. "The deal will clear important obstacles and significantly reduce the reserves that have blocked us from making additional distributions to the former customers and creditors of MF Global," Mr Heis added.
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