MF Global enters insolvency proceedings on both sides of the pond

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MF Global, one of the world's leading broker/dealer firms entered into insolvency proceedings in both the US and the UK on 31 October 2011. US entities MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code in the Bankruptcy Court for the Southern District of New York. Also on 31 October, the US Securities Investor Protection Corporation ("SIPC") initiated the liquidation of MF Global, Inc. a jointly registered futures commission merchant and broker-dealer, under the Securities Investor Protection Act ("SIPA"). The US District Court for the Southern District of New York entered an order granting SIPC's request for SIPA protections for customers of MF Global, Inc.

The UK subsidiary, MF Global UK Limited, was placed into a new special administration regime for investment banks, the first company to enter this regime. Under the special administration regime the special administrators' objectives are to ensure the return of client assets as soon as is practicable, to engage with exchanges, clearing houses and other authorities, and the winding up of the company for the benefit of creditors.

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Published In: Bankruptcy Updates, Finance & Banking Updates, International Trade Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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