Presumably it will be used to pay the Bankruptcy Trustees and lawyers who decided that it belongs to MF Global and not the cheated customers whose accounts have been looted.
JPM apparently cut a deal with the Trustee saying they could have the cash if MFG granted JPM a lien on ALL the company's assets.
So much for the superior claim of the customers as asserted by the CFTC.
This whole notion of the 'missing money' is puzzling because with the new banking laws it seems almost impossible that there is not an electronic trail of bank transfer in any size, much less over a billion. What happened to the anti-moneylaundering provisions?
This is not a routine bankruptcy. This is a crime scene.
P.S. After the bell the CME witness contradicted Corzine's testimony saying that an employee told him he knew of the transfers. This will be interesting.
Bloomberg
MF Global Cash at JPMorgan Presumed Its Own, Freeh Says
By Tiffany Kary
Dec 12, 2011 8:39 PM ET
MF Global Holdings Ltd.’s $25.3 million in cash held at JPMorgan Chase & Co. (JPM) is presumed to be its own, the bankrupt company’s Chapter 11 trustee said in response to customer objections to its bid to use the money.
MF Global Holdings should be allowed to use the cash collateral of JPMorgan, trustee Louis J. Freeh said in papers filed today in U.S. Bankruptcy Court in Manhattan. Customers of the company’s failed brokerage, MF Global Inc., had asserted that the money may have been part of the $1.2 billion believed to be missing from their segregated accounts.
“The customers have failed to provide this court with any actual evidence in support of their position,” Freeh said in court papers. MF Global Holdings owns the New York-based bank account with JPMorgan, and under New York law, it is presumed that funds deposited in an account belong to the account holder, the trustee said.
The company has been in talks with JPMorgan, its largest lender, on the use of cash collateral to pay the costs of its bankruptcy, a lawyer for Freeh said last week. U.S. Bankruptcy Judge Martin Glenn said Dec. 9 that he would reconsider the use of cash at a hearing Dec. 14 after customers objected.
JP Morgan, agent to a $1.2 billion loan, agreed at the outset of MF Global Holdings’ bankruptcy to let it use $26 million, subject to an agreement that gives the bank a lien on all of the company’s assets...
On the other hand they can always queue up with the general creditors.
Bloomberg
MF Global Trustee Seeks Creditors’ Money for Customers
By Tiffany Kary
December 13, 2011, 2:11 PM EST
Dec. 13 (Bloomberg) -- MF Global Inc.’s customers will be refunded from the failed brokerage’s general creditors’ estate if necessary, said James Giddens, trustee for the liquidating brokerage, in a prepared statement to the U.S. Senate.
“If commodity customer claims are not satisfied from the segregated commodity account estate, the remaining claim will automatically go against the general creditors’ estate,” Giddens said in the statement. A spokesman for Kent Jarrell, a spokesman for Giddens, said that the general creditors’ estate is the estate of MF Global Inc. only, and not that of parent company MF Global Holdings Ltd. He couldn’t immediately confirm whether the customers would have recourse to any money from the general estate of the parent company.
Giddens has said he intends to return 100 percent of customer funds if possible...
