The trustees and foreign authorities overseeing the bankruptcy of MF Global Holdings Ltd. face competing and conflicting duties that are delaying the return of customer and creditor funds, one of the company’s trustees said in testimony prepared for a U.S. Senate hearing today.
Louis Freeh, the New York-based firm’s trustee, said in testimony prepared for the Senate Banking Committee that he’s still trying to uncover what led to the company’s collapse, and seeking funds that can go to repay creditors. Those funds, according to his testimony, may include $1 billion transferred in October to the broker-dealer subsidiary, MF Global Inc.
“It is clear even at this early stage that the competing, and perhaps at times conflicting, obligations and duties of the two trustees and various foreign administrators has and will continue to have the effect of extending” the time needed to “make distributions to customers and/or creditors,” Freeh said in the prepared remarks.
Read more here.