U.S. court OKs trustee for MF Global brokerage
(Reuters) - A U.S. judge has appointed a trustee to oversee the liquidation of the U.S. brokerage unit of Jon Corzine's MF Global Holdings Ltd, which filed for bankruptcy protection on Monday, a federal agency said.
James Giddens will oversee the liquidation of MF Global Inc, according to the Securities Investor Protection Corp, which helps recover funds for customers of failed brokerages.
Giddens has for the last three years also been trustee for the U.S. broker-dealer of Lehman Brothers Holdings Inc, the largest U.S. company to fail. His law firm, Hughes Hubbard & Reed, will be counsel to the trustee.
In a filing with the U.S. District Court in Manhattan, the SIPC said MF Global Inc is "unable to meet its obligations as they mature," justifying the agency's intervention.
The SIPC is a federally chartered agency that supervises brokerage liquidations. Federal law limits SIPC protection to $500,000 per valid claim.
MF Global filed for Chapter 11 protection from creditors after the New York-based company made bad bets on European sovereign debt.
The Federal Reserve Bank of New York terminated on Monday the company's designation as a primary dealer of U.S. government securities.
MF Global's bankruptcy is the seventh-largest in U.S. history. Corzine once ran Goldman Sachs Group Inc and is a former New Jersey senator and governor.
The case is Securities Investor Protection Corp v. MF Global Inc, U.S. District Court, Southern District of New York, No. 11-07750.