* Freeh appointed trustee for assets of MF parent company
* Tells court he has paid visit to company's offices
* Judge OKs another extension of cash for MF from JPMorgan
By Nick Brown
NEW YORK, Nov 30 The trustee tapped to control
the assets of MF Global Holdings promised an
"independent" approach to the futures broker's bankruptcy in
his first public comments since accepting the post.
Former FBI Director and federal judge Louis Freeh spoke
briefly at a hearing on Wednesday in U.S. Bankruptcy Court in
Manhattan, telling Judge Martin Glenn he understood the
"urgency" of the case.
"I will commit to doing this job in the most efficient way
while keeping my independence," Freeh said.
Not to be confused with James Giddens, the trustee charged
with winding down MF's broker-dealer unit, Freeh was appointed
to take over the assets of the MF parent company in bankruptcy.
Such appointments are rare, and are usually made when a
bankrupt company's own leaders are deemed unfit or unable to
handle the job.
MF's chief executive, former New Jersey Governor Jon
Corzine, resigned earlier this month, after the highly
leveraged company filed for bankruptcy with about $40 billion
in liabilities. It was made insolvent by losses on big bets on
While no accusations of wrongdoing have been levied,
authorities are investigating a massive shortfall in MF's
customer fund pool and are trying to determine whether MF
improperly commingled those funds with its own money.
Freeh told the court he has met with Giddens and with MF's
creditors' committee, and also visited the company's offices to
"I spoke to the people there which, as everyone knows, are
in sort of a battered state," Freeh said. "I introduced myself,
told them what we're going to be doing."
His appointment means lawyers from law firm Skadden Arps
are effectively off the bankruptcy case. Skadden's Ken Ziman,
who represents MF Global Holdings, said he was "passing the
baton" to attorneys from Morrison & Foerster, who represent
Judge Glenn told Freeh he expected regular updates about
progress in the search for MF's missing customer money, which
Giddens has estimated could be about $1.2 billion.
"I read more about it in the press," Glenn said. "I think
parties are entitled to fuller reports here."
Freeh declined to speak with reporters after the hearing.
Glenn granted an extension through Dec. 9 for MF Global to
fund its bankruptcy using $8 million from lender JPMorgan Chase
& Co. It is the third time the deal has been extended since the
filing of the bankruptcy case on Oct. 31.
The cash, technically property of MF, was pledged as
collateral to JPMorgan, but the bank allowed MF to use it in
bankruptcy in exchange for a lien on certain assets.
The deal has met with criticism from at least one lawyer
representing customers of MF's commodities brokerage. Attorney
James Koutoulas said the bank should not be entitled to any
lien on property that could end up belonging to customers.
Koutoulas on Wednesday voiced concern that his objection
has been postponed with each extension of the deal, saying the
terms of the agreement could leave open "the possibility thatcontinues the very sovereign debt trades that caused the
bankruptcy to begin with."