LONDON (Reuters) - MF Global’s MFGLQ.PK European administrator KPMG has won the backing of the British High Court to return 54 million pounds ($84 million) of client assets next month in an early victory for creditors seeking over 1 billion pounds of assets.
KPMG, made special administrator when the broker collapsed in October last year, said on Wednesday the High Court had approved its distribution plan, meaning the administrator can start returning the assets on August 1.
“Today’s court hearing represents an important milestone in returning some 54 million pounds of agreed client assets,” said Richard Heis, the joint special administrator of MF Global UK.
The 54 million pounds of assets represents the first large return of financial assets by KPMG as it prepares for a lengthy courtroom battle with MF Global’s U.S. based trustee.
A British judge said last month the case, which sees the trustees squaring up over $639 million of assets, will not reach court until April next year.
At a June hearing, Justice David Richards, who said he was keen to start the case as soon as possible, said: “I will direct that the start of the trial be fixed on April 9.”
The dispute centers on whether the $639 million the U.S. trustee wants from KPMG is drawn from funds ringfenced when the broker collapsed, a claim that would mean an earlier pay-out for U.S. creditors but less upfront for European clients.
The case with the U.S. trustee, which a source close to KPMG said could take years, is one of several the administrator is pursuing as it tries to claw back 1 billion pounds of assets for 6,000 of MF Global’s former European clients.
MF Global, a U.S.-based futures broker, collapsed on October 31 last year after making bad bets on European sovereign debt.
($1 = 0.6401 British pounds)
Editing by Mark Potter