Who said doing wrong doesn’t pay?
Just as the MF Global case is heating up, a judge ruled in Jon Corzine’s favor, allowing him to rely on insurance money to pay legal fees, even as customers demanded a piece of that action.
Here’s what Judge Martin Glenn of U.S. Bankruptcy Court in Manhattan decided, via the WSJ:
Judge Martin Glenn of U.S. Bankruptcy Court in Manhattan approved the request by MF Global to free up insurance money from two separate entities: a total of $150 million in potential coverage from a subsidiary called MF Global Assurance and as much as $225 million from U.S. Specialty Insurance Co.
With $375 million in proceeds potentially available, Judge Glenn said he will place a “soft cap” of $30 million for the defense costs, with the parties required to come back to court for approval of further use of the funds. He overruled several customer objections.
“Although [MF Global] commodity customers have unquestionably suffered severe financial harm, accusations of misconduct provide no basis for denying the Individual Insureds insurance protection under the MFGA Policies,” Judge Glenn wrote in his opinion.