Unsecured general creditors of defunct MF Global, Inc. (other than those of its parent company MF Global Holdings Ltd.) will receive a final payment from the firm, giving them a total recovery of 95 percent of their approved claims, under a proposal made last week by the overseers of the liquidation of the firm and its parent company.
In Re DTEK Finance BV,1 the English High Court decided that a change in the governing law of bonds from New York to English law, established a sufficient connection with the English jurisdiction for it to sanction the bonds' restructuring via a UK scheme of arrangement.
Background
The Supreme Court (unanimously dismissing the appeal in Trustees of Olympic Airlines SA Pension &Life Assurance Scheme v Olympic Airlines SA) has held that “economic activity” is central to the definition of “establishment” in the Insolvency Regulation1.
The United States bankruptcy judge overseeing the liquidation of MF Global Inc., approved the trustee’s proposal to pay all unsecured general creditors $461 million. Once paid, this distribution would result in total distributions to unsecured general creditors of 72 percent of their approved claims.
The New York State Attorney General settled a lawsuit against Ernst & Young related to its involvement in the financial statement preparation of Lehman Brothers Holding, Inc. The NY AG had alleged that the auditing firm had countenanced Lehman’s inclusion of certain repurchase transactions as sales and not as financings, which permitted the firm to remove “tens of billions of dollars” of securities from its balance sheet. According to the NY AG, the repo transactions—known as “Repo 105”—“served no legitimate purpose.
The trustee for the liquidation of MF Global Inc. is seeking permission from the bankruptcy judge overseeing the firm’s dissolution to make a distribution of US $461 million to unsecured general creditors. If approved, this distribution would result in total distributions to unsecured general creditors of 72 percent of their approved claims. To date, the trustee has distributed 100 percent of approved claims of MF Global’s customers (totaling US $6.7 billion), and 100 percent of approved secured, priority and administrative claims.
Six trade associations representing non-dealer swap market participants sent a letter to the Financial Stability Board on November 4, urging the FSB to reconsider its initiative to promote contractual waivers of default rights under industry-standard derivative master agreements. The letter, signed by the Managed Funds Association, the Alternative Investment Management Association Limited, the American Council of Life Insurers, the Association of Institutional Investors, the Commodity Customer Coalition and the Commodity Markets Council, responds to comments made by the FSB in the cons
Fourteen former MF Global executives, including Jon Corzine, the former chairman and chief executive officer, are entitled to access most of a US $200 million directors and officers liability insurance policy purchased by MF Global Holdings prior to the firm filing for bankruptcy in October 2011, under the decision of a US bankruptcy court in NYC last week. The executives had previously made a motion to access the insurance.
The High Court has rejected the argument that amounts owing to British Gas Trading Ltd (BGT) under post-administration, deemed contracts for the provision of gas and electricity are automatically classed as expenses of the administration. The court has reserved for consideration, however, whether and if so how an administrator’s conduct may give the liability super priority or bring the salvage principle into play.
Background and preliminary issue
In a case of importance to foreign representatives of foreign debtors seeking the assistance of US courts pursuant to chapter 15 of the Bankruptcy Code, the US Court of Appeals for the Second Circuit has held that the debtor eligibility requirements of section 109(a) of the US Bankruptcy Code apply in cases under chapter 15 as they would in cases under other chapters of the Bankruptcy Code. The decision in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), Case No. 13-612 (2d Cir. Dec.