(Reuters) - The trustee liquidating MF Global’s MFGLQ.PK brokerage does not have a conflict of interest stemming from prior work done for one of MF Global’s key lenders, a bankruptcy judge said on Tuesday.
Trustee James Giddens and his law firm, Hughes Hubbard & Reed, are sufficiently “disinterested,” Judge Martin Glenn said in a ruling in U.S. Bankruptcy Court in Manhattan.
The ruling came in response to accusations from some customers that past work done by the firm for JPMorgan Chase & Co (JPM.N), one of MF Global’s main lenders, constituted a conflict of interest.
Glenn ordered Giddens to turn over details on his firm’s relationship with the bank, saying initial disclosures “lacked sufficient information to resolve the important issues raised” by customers.
Giddens responded by saying in court papers that JPMorgan is no longer a Hughes Hubbard client and that “to remove any doubt” the firm would end its ongoing patent work for the bank.
That was enough for Glenn, who said the filing “remedied” concerns about conflicts.
Giddens acknowledged that it is not clear whether PricewaterhouseCoopers, a client and auditor of Hughes Hubbard, is a creditor of MF Global’s brokerage.
In Tuesday’s order, Glenn said that if future conflicts arise on particular issues, another trustee or lawyer may have to be appointed to handle those matters.
As trustee, Giddens has the job of sorting through the assets of the failed broker-dealer unit of MF Global Holdings Ltd and recovering money on behalf of its customers.
The liquidation is In re MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-2790.
Reporting by Nick Brown; Editing by Steve Orlofsky