People gather in front of a mural containing a likeness of former Penn State football coach Joe Paterno, right, at a candlelight memorial on the first anniversary of his death, Tuesday, Jan. 22, 2013, in State College, Pa. (AP Photo/Gene J. Puskar)
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People gather in front of a mural containing a likeness of former Penn State football coach Joe Paterno, right, at a candlelight memorial on the first anniversary of his death, Tuesday, Jan. 22, 2013, in State College, Pa. (AP Photo/Gene J. Puskar)
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Momentos surround the headstone at the grave of former Penn State head football coach Joe Paterno, Tuesday, Jan. 22, 2013, in State College, Pa. Supporters of Paterno are marking the 1-year anniversary of his death with a candlelight vigil Tuesday night. (AP Photo/Gene J. Puskar)
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A sign of support is displayed in the front yard of Sue Paterno's home on the first anniversary of the death of her husband former Penn State head football coach Joe Paterno, Tuesday, Jan. 22, 2013 in State College, Pa. (AP Photo/Gene J. Puskar)
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A sign of support is displayed near the site where a bronze statue of former Penn State head coach Joe Paterno once stood outside Beaver Stadium in State College, Pa., Tuesday, Jan. 22, 2013. Supporters of Paterno are marking the 1-year anniversary of his death with a candlelight vigil Tuesday night. (AP Photo/Gene J. Puskar)
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"Joe Knows Football" t-shirts and sweatshirts hang on a sales rack outside a shop in State College, Pa., Tuesday, Jan. 22, 2013. Supporters of Paterno are marking the 1-year anniversary of his death with a candlelight vigil Tuesday night. (AP Photo/Gene J. Puskar)
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Penn State students Dan Hamm, left, a freshman from Williamsport, Pa., and Nick Bucci, a freshman from Dayton, Md., visit the grave of former Penn State head football coach Joe Paterno in State College, Pa. Supporters of Paterno are marking the 1-year anniversary of his death with a candlelight vigil Tuesday night. (AP Photo/Gene J. Puskar)
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FILE - In this Sept. 12, 2009 file photo, Penn State coach Joe Paterno walks the field before their college football game against Syracuse in State College, Pa. The Hall of Fame coach died of lung cancer on Jan. 22, 2012, at age 85. On Tuesday, Jan. 22, 2013, exactly a year after his passing _ community residents have organized a vigil at a downtown mural that includes a depiction of Paterno. (AP Photo/Carolyn Kaster, File)
MF Global trustee says clients may be made whole
NEW YORK (
AP) — Former brokerage customers of
MF Global could fully recover cash that was frozen when the trading firm collapsed, according to the bankruptcy trustee in the Chapter 11 case.
The projection is based on the latest analysis of recoverable assets available in MF Global's bankruptcy, versus pending claims, the trustee, former FBI Director Louis Freeh, said in a court filing Saturday.
The report outlines a potential range of recovery for brokerage customers, depending on various scenarios, from a shortfall of $6 million to a surplus of $120 million. Those figures are based on calculations that recoverable assets range from about $6.857 billion to $6.983 billion, versus claims of $6.863 billion.
If there's a surplus, customers whose money was frozen when MF Global collapsed in October 2011 could get a full recovery of their losses.
That does not include other classes of creditors, such as lenders with unsecured claims, which are not expected to fully recover their claims. For example, one such group of lenders is expected to receive a distribution ranging from 14 percent to about 34 percent, according to the filing, with potentially no recovery for other groups.
Freeh's update was filed with Judge Martin Glenn in U.S. Bankruptcy Court for New York's Southern District. Freeh is a former federal judge who served as director of the Federal Bureau of Investigation from 1993 through 2001. He's now chairman of Freeh Group International Solutions LLC, a global risk-management firm.
His filing came after an agreement was reached in December that could speed up payment to customers of MF Global. That agreement resolved competing claims filed against MF Global's main brokerage unit and the company's United Kingdom operations.
New York-based MF Global, which specialized in trading futures and options, was headed by former New Jersey Governor and U.S. Senator Jon Corzine. It collapsed in Oct. 2011 after making a disastrous bet on European debt.
Regulators have been investigating whether MF Global tapped money from clients' accounts as its financial condition worsened. That would violate securities laws because brokerages are required to keep customer money separate from the firm's money.
Much of the money that went missing belonged to farmers, ranchers and other business owners who used MF Global to reduce their risks from fluctuating prices of commodities like corn and wheat.
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