Over $100 Million Proposed Settlement Reached with JPMorgan in MF Global Litigation
Counsel for MF Global Customers and James W. Giddens, Trustee for the liquidation of MF Global, Inc., have announced a settlement worth over $100 million with JPMorgan Chase Bank, NA. The proposed Settlement, which is subject to Court approval, will resolve all of the Customer Representatives’ and Trustee’s potential claims against JPMorgan arising both from transfers of Customer Property during the days preceding MFGI’s collapse and from JPMorgan’s conduct as one of MFGI’s primary banks and repositories of Customer Property, provides a sizable benefit to the Settlement Class of former customers of MFGI. The Settlement provides for a $100 million cash payment from JPMorgan for distribution to MFGI’s former customers.
In addition to the $100 million cash payment, the Settlement also provides for the return of approximately $29 million in proprietary MFGI funds held by JPMorgan to secure potential obligations under a certain revolving credit facility agreement and JPMorgan’s clearance and other agreements with MFGI, as well the release of JPMorgan’s retained liens and set off rights in approximately $417 million of proprietary MFGI funds it previously remitted to the Trustee, permitting these funds to be made available to MFGI’s customers and creditors.
Upon approval, the Settlement will enable the Trustee to immediately seek to allocate $250 million to the 4d Customer Estate for the benefit of MFGI customers who engaged in commodity transactions on domestic exchanges (“4d Customers”) and $50 million to the 30.7 Customer Estate for the benefit of customers who transacted on foreign exchanges (“30.7 Customers”). Moreover, the Settlement with JPMorgan will satisfy an important condition to the effectiveness of the settlement between the Trustee and the Joint Special Administrators of MF Global UK Limited (“MFGUK”), approved by the Bankruptcy Court on January 31, 2013, which will facilitate the recovery from MFGUK of approximately $500-$600 million (over time) for additional distribution to customers and general creditors. All told, the Settlement will ultimately enable the Trustee to distribute to customers an amount approaching $1 billion.
The Class is continuing to pursue its claims against the former directors and officers of MFGI, including Jon Corzine, and against MFGI’s former auditor, PricewaterhouseCoopers and MFGI’s primary regulator, the CME Group.
McCulley McCluer PLLC represents Lead Plaintiff H. Rogers Varner, Jr.