December 14, 2011 / 3:38 PM / 7 years ago

Judge approves cash for MF Global bankruptcy

NEW YORK (Reuters) - A bankruptcy judge approved on Wednesday a deal to allow collapsed broker MF Global Holdings Ltd MFGLQ.PK to finance the rest of its bankruptcy with about $21 million in cash pledged as collateral to JPMorgan Chase & Co (JPM.N), one of its primary lenders.

Judge Martin Glenn green-lighted the deal at a hearing in U.S. Bankruptcy Court in Manhattan, but was also receptive to an objection from customers who worried that the cash could be part of an estimated $1.2 billion in funds missing from their accounts at MF Global’s brokerage.

Glenn said he may order James Giddens, the trustee liquidating the brokerage, to investigate whether customers might have a right to the money.

“I’m sensitive to this, because if I wait a year from now, most of the money in this account may have been spent and won’t be able to be recovered,” Glenn said.

He did not make a final ruling on the investigation, but said he would issue an order later on Wednesday.

The liquidation case is In re MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-2790.

The MF Global bankruptcy is In Re MF Global Holdings Ltd, in the same court, No. 11-15059.

Reporting by Nick Brown, Editing by Gerald E. McCormick

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