Louis Freeh, the trustee for MF Global’s holding company, has said in a court filing that he is seeking to settle with both James Giddens, trustee for MF Global’s brokerage arm, and an overseas administrator tending to the firm’s British unit, citing the cost of the nearly yearlong process of winding up the company.
Chances for a settlement appear slim, as discord among the trustees has escalated recently, with Giddens joining a lawsuit filed by former customers against MF Global’s top executives. More fundamentally, the two may find it difficult to reconcile their underlying goals. While Freeh’s obligation is to institutional creditors who are seeking to recover more than $2 billion in claims against the brokerage unit, Giddens is responsible for recovering as much as possible of the $1 billion in customer funds that disappeared when the company imploded.
Although Freeh’s settlement attempt may be the trustees’ last chance at reconciliation, Kent Jarrell, a spokesman for Giddens, said that the two are already “cooperating to the greatest extent possible,” and pointed out that a number of the defendants in the case joined by Giddens are currently employed by Freeh.