WASHINGTON, July 24, 2015 /PRNewswire/ -- The Securities Investor Protection Corporation (SIPC) praised James W. Giddens, Trustee for the liquidation of MF Global Inc. (MFGI), and the Plan Administrator of MF Global Holdings Ltd. (MFGH) who today filed a joint motion with the U.S. Bankruptcy Court for the Southern District of New York seeking approval for a final, cumulative 94 to 95 percent distribution by the MFGI Trustee on all allowed general unsecured creditor claims other than the MFGH claims.
SIPC President Stephen Harbeck said: "The size and scope of the case, coupled with a 94 to 95 percent distribution, make this case virtually unprecedented under the Securities Investor Protection Act, or any other bankruptcy. This is an extraordinary achievement and Trustee Giddens and his staff have demonstrated that the Securities Investor Protection Act is an effective mechanism in the most complex liquidation proceedings."
This significant milestone in the MFGI liquidation follows the Trustee's full satisfaction of allowed customer, secured, administrative and priority claims, and two interim distributions for allowed unsecured claims. Thus far, the Trustee has distributed:
- Customer claimants - $6.7 billion to cover 100 percent of allowed claims
- Secured, administrative and priority general claimants - $33.2 million to cover 100 percent of allowed claims
- Unsecured general claimants - $991.6 million in two interim distributions to cover 74 percent of allowed claims
Seven claims against MFGI remain in dispute, and the Trustee is seeking to establish a final unsecured claims reserve to account for those claims, while releasing all unnecessary reserves. After the remaining claims are resolved, the Trustee intends to close the MFGI estate, ending the liquidation proceeding.
The Securities Investor Protection Corporation (http://www.sipc.org) is the U.S. investor's first line of defense in the event of the failure of a brokerage firm owing customers cash and securities that are missing from customer accounts. SIPC either acts as trustee or works with an independent court-appointed trustee in a brokerage insolvency case to recover funds.
The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities - such as stocks or bonds -- that are already registered in their names or in the process of being registered. At the same time, funds from the SIPC reserve are available to satisfy the remaining claims for customer cash and/or securities held in custody with the broker for up to a maximum of $500,000 per customer. This figure includes a maximum of $250,000 on claims for cash. From the time Congress created it in 1970 through December 2014, SIPC has advanced $ 2.3 billion in order to make possible the recovery of $134 billion in assets for an estimated 773,000 investors.
SOURCE Securities Investor Protection Corporation (SIPC)