The trustee liquidating failed brokerage MF Global said on Thursday he has completed a third transfer of some $1.7 billion in customer property as he works to return about 72 percent of frozen client funds.
The total amount of the third tranche is $2.1 billion and the remaining $400 million will be transferred in the next couple of weeks, said Kent Jarrell, a spokesman for trustee James Giddens, who is liquidating MF Global Inc.
Giddens, who has been trying for nearly two months to get an estimated $5.5 billion in cash and collateral in MF Global's segregated accounts back to former customers, said the next stage would be returning more funds to clients whose estimated collateral had been reduced by MF Global's systems.
With the initial transfers of the third bulk transfer now complete, the Trustee intends to revalue margin collateral accounts without applying MF Global Inc's valuation 'haircut' and will consider upward adjustments to the estimated net liquidating values of customer accounts, the trustee said in a statement.
The haircut equates to around $15 million and the trustee said that money will be doled out in the next couple of weeks along with the remaining funds in the third tranche.
The trustee said it was faster to use MF Global's original calculations and make up the difference later, Jarrell said.
We used the valuation on the books, so it was much quicker to move it, he said.
More than $4 billion in customer funds will have been returned upon the full transfer of the third tranche, Jarrell said. Former MF Global customers will have recovered 72 percent of their funds by then, by the trustee's current estimate of total funds.
This does not include overseas (funds), Jarrell said. We've only made distributions on U.S. segregated funds.
(Reporting By Jonathan Leff and Jeanine Prezioso; editing by Andrea Evans and Bob Burgdorfer)