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MF Global payout plan approved for creditor vote

Published on Feb 20, 2013 6:12 AM
The sign marking the MF Global Holdings Ltd. offices at 52nd Street in midtown Manhattan is seen in New York in this Nov 2, 2011, file photo. -- FILE PHOTO : REUTERS

NEW YORK (REUTERS) - A bankruptcy judge on Tuesday approved the outline of a plan by liquidators and creditors of failed brokerage MF Global to repay the company's creditors, a key step toward ending its US$40 billion (S$49.5 billion) Chapter 11 bankruptcy.

At a hearing in United States Bankruptcy Court in Manhattan, Judge Martin Glenn green-lighted the outline, which was amended to address minor concerns Glenn had raised in refusing to approve an earlier version of the outline last week.

MF Global, which had been led by former New Jersey Gov. Jon Corzine, is liquidating after declaring bankruptcy in October 2011. Investors ran for the hills after the company revealed exposure to risky European sovereign debt.

The case became a political fire storm when regulators discovered an estimated US$1.6 billion hole in the trading accounts of the broker's trading customers, later determined to be caused by the improper use of customer money to plug liquidity gaps.

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