MF Global wins Court approval to acquire assets of SIPA estate
Client(s) MF Global Reorganized Debtors
Jones Day represents MF Global Holdings Ltd. ("Holdings") as Plan Administrator in the implementation of its Plan of Liquidation. On August 19, 2015, Holdings won court approval of a joint motion brought with James Giddens, the SIPA trustee responsible for liquidating MF Global Inc. ("MFGI") to have the SIPA estate sell its remaining claims, estate assets, contracts, documents and data to parent Holdings (or its assignee). Judge Glenn wrote: "In many ways, these Motions mark a signal accomplishment in these very difficult cases. The Sale Agreement negotiated by these parties represents a creative and novel way to move these cases toward successful conclusions."
The sale includes MFGI's claims and discovery obligations in litigation against former MF Global CEO Jon Corzine and other former executives. Under the deal, Holdings will assume MFGI's rights and liabilities related to the assigned claims, and MFGH and affiliated entities will forbear distributions on more than $1.16 billion in allowed general unsecured claims (representing 85 percent of the allowed claims in the MFGI estate) in exchange for the assigned rights. The deal allows Giddens to make a final distribution to its non-MFGI affiliated unsecured creditors for a cumulative 94-95 percent payout to that group. The approval of this transaction paves the way for the final shutdown of the MFGI estate, with the transferred assets to be liquidated by the Plan Administrator for the pro rata benefit of the MF Global entities who held claims against MFGI.