The trustee liquidating MF Global Holdings Ltd's
U.S. Bankruptcy Judge Martin Glenn approved the payout at a hearing on Thursday in Manhattan.
The payout represents 60 percent of the $869 million that has been frozen across commodity customer accounts that contained only cash, the trustee James Giddens has said.
Some 22,000 customers will be entitled to share in the payout, which Giddens expects to begin by November 21.
Commodities traders and exchanges said the freeze on the cash-only accounts punished customers who liquidated their trading positions before MF Global's bankruptcy.
Some customers faulted the trustee for not distributing more, while others complained they were ineligible to join in the $520 million payout. Glenn turned aside the objections.
Nothing in the law requires that all customers receive similar rates of distributions at the same time, he said.
Still unclear is the whereabouts of about $600 million of customer funds that have been unaccounted for since MF Global's Chapter 11 filing, and whether MF Global might have improperly mixed customer funds with its own.
These matters are among those being investigated by federal prosecutors, the Securities and Exchange Commission and Commodity Futures Trading Commission. All are examining why MF Global collapsed in the seventh-largest U.S. bankruptcy.
MF Global was run by former Goldman Sachs & Co
The filing came after the New York-based company revealed that it made a $6.3 billion bet on European sovereign debt. Customers and counterparties began to flee, resulting in margin calls and a liquidity crunch. Corzine resigned on November 4.
(Reporting by Nick Brown and Jonathan Stempel in New York; Writing by Jonathan Stempel)