SIPC Trustee Press Release Regarding Motion for Third Bulk Transfer (Press Release, Brief Proposed Order)

SIPC Trustee Press Release Regarding Motion for Third Bulk Transfer (Nov. 29)

SIPC Trustee Motion Regarding Third Bulk Transfer (Nov. 29)

The Trustee for the liquidation of MF Global Inc., filed an expedited motion with the United States Bankruptcy Court for the Southern District of New York seeking approval of a bulk transfer and distribution of up to $2.1 billion to former MF Global Inc. commodities customers, which should restore two-thirds or more of US segregated customer property to all commodities customers on a pro rata basis.

The proposed third bulk transfer will complement the first two bulk transfers and the expedited claims process that were approved by the Bankruptcy Court earlier this month. The approval of this bulk transfer will mean that approximately $4.1 billion will have been distributed to former customers of MF Global Inc.

The third distribution seeks to get customers with the following types of accounts an approximately two-thirds recovery:

(1) Trade to Zero Accounts: Accounts that contained open U.S. exchange-traded commodity contracts on the Filing Date that customers liquidated or traded to zero between the Filing Date and the date that the First Bulk Transfer was effectuated.

(2) Additional Cash-Only Accounts: Additional cash-only accounts not included in the First and Second Bulk Transfers because they contained cash related to foreign futures or because of anomalies discovered in consultation with the CME.

(3) Bounced Check Accounts: Accounts from which checks were issued but were dishonored.

(4) First Bulk Transfer Accounts: Accounts with open commodity contracts that were transferred with related margin in the First Bulk Transfer, but the margin transferred resulted in less than a sixty percent distribution to the respective customers.

(5) Second Bulk Transfer Accounts: Accounts with only cash or cash equivalents as of the Filing Date that have received (or are in the process of receiving), via bulk transfer, sixty percent of cash associated with U.S. exchange-based commodity futures trading as part of the Second Bulk Transfer.

Cross References: CFTC Rule 190.06(h)