By Nate Raymond
NEW YORK, July 3 Customers of MF Global's
failed broker-dealer unit and the trustee overseeing its
liquidation won court approval on Wednesday for a $546 million
settlement with JPMorgan Chase & Co.
The settlement, announced in March, resolved claims levied
by James Giddens, the trustee winding down MF's broker-dealer
unit MF Global Inc, and by the broker's former customers, who
are pursuing a federal class action over MF Global's collapse in
MF Global, the commodities brokerage headed by ex-New Jersey
Governor Jon Corzine, filed for bankruptcy amid concerns by
investors about its exposure to $6.3 billion in sovereign debt.
Approval of the JPMorgan settlement comes a week after the
Commodity Futures Trading Commission sued Corzine over the
collapse and announced a $100 million settlement with MF's
At a rare joint hearing in Manhattan, U.S. Bankruptcy Judge
Martin Glenn, who is overseeing the liquidation, and U.S.
District Judge Victor Marrero, who presides over the class
action, approved the JPMorgan accord.
"I find the proposal fair, reasonable and in the best
interests of the class," Marrero said.
Giddens has said the settlement will allow him to eventually
return 100 percent of customers' money, which was frozen when MF
Global went bankrupt. Most customers have already recovered
around 90 percent of their funds.
JPMorgan had been the lead on a $1.2 billion revolving
credit facility to MF Global's parent and one of its primary
clearing banks leading up to its bankruptcy.
Under the settlement, JPMorgan will pay $100 million to
benefit former customers. It has also agreed to return more than
$29 million in brokerage funds and to release claims on $417
million it earlier returned to Giddens.
The latest settlement also ties up a loose end in Giddens'
settlement with MF Global's UK unit, announced earlier this
year. That settlement, expected to bring in $500 million to $600
million for the broker-dealer's estate, required a resolution of
"The overall settlement unlocks over $1 billion for
customers and other creditors," James Kobak, the lead attorney
for Giddens, said at Wednesday's court hearing.
The bank will make a seperate $7.5 million payment for
attorneys' fees and expenses to lawyers representing the
customers in the class action, court papers show. Marrero
approved the fees Wednesday.
The cases are In re: MF Global Inc, U.S. Bankruptcy Court,
Southern District of New York, No. 11-2790, and Deangelis v.
Corzine, U.S. District Court, Southern District of New York, No.