MF Global Holdings won final approval of its plan to repay creditors, paving the way for the eighth-largest bankruptcy in US history to wind down under court protection.
US bankruptcy judge Martin Glenn in Manhattan yesterday overruled remaining objections to the plan. An outline of its terms was filed in January, and most major objections, including one from JP Morgan Chase, were resolved before the hearing.
Glenn's ruling came a day after the holding company's trustee, Louis Freeh, published a report that said former chief executive Jon Corzine and others mismanaged the company and failed to fix risk controls, leading to its demise.
The parent company of brokerage MF Global filed for bankruptcy on October 31, 2011, after a wrong-way US$6.3 billion trade on its own behalf on bonds of some of Europe's most indebted nations. The company, once run by former New Jersey governor and Goldman Sachs Group co-chairman Corzine, listed assets of US$41 billion and debts of US$39.7 billion.
A major hurdle to the plan was overcome in March when a JP Morgan unit resolved a dispute over the plan's treatment of an intercompany settlement, which it said had not been negotiated at arm's length.
JP Morgan also reached a US$100 million settlement over the New York-based bank's conduct in the days before and after the brokerage's collapse. That agreement followed a year of talks and resolved claims against JP Morgan, one of the brokerage's primary banks and a repository for customer property.