The CCC seeks the immediate return of 100% of customer assets held by MF Global. We need your help to do so.
The ongoing legal campaign consists of several motions designed to influence and inform the bankruptcy court. The CCC and its affiliates have filed several motions to effect a quick claims process, appoint a representative for customers to the bankruptcy's creditors committee, affirm the super-priority status of segregated customer funds and (if need be) pierce the corporate veil and liquidate the assets of MF Global's estate to restore customer funds.
It is the position of the CCC that customer segregated accounts have a super-priority lien to the assets in MF Global's estate. In a bankruptcy proceeding like this one, assets are divided into two parts: a fund of customer property and a general estate of corporate assets. The SIPA liquidation Trustee believes that if there is a shortfall in the fund of customer property, that the loss will have to be shared on a pro-ratable basis with the creditors of the estate. The CCC contends if there is a shortfall of any kind, it must represent a co-mingling of funds between customer property and the corporate assets. If the estate has excess equity--of which MF Global listed $1.2 billion in their bankruptcy filing--this entitles segregated account holders to that super-priority lean. Basically, the Trustee has to liquidate assets in the estate to make segregated account holder whole first.
The Trustee has two methods to distribute customer funds: via a 'bulk transfer' and via a 'claims process'. Accounts with positions have seen just 60% of the margin moved along with their positions to new FCMs via the bulk transfer process. The week of Thanksgiving, 60% of accounts holding only unencumbered cash as of October 31, 2011 will be transferred to new FCMs via the bulk transfer process as well. The judge overseeing the bankruptcy case, the Honorable Martin Glenn, has indicated that he wants to 'true-up' all accounts to 60% of their assets ahead of the claims process using bulk transfers. He wants the Trustee to arrange for bulk transfers of as much money as is possible to send as soon as it is possible.
Meanwhile, the Trustee has proposed a slow claims process to deal with remaining customer funds. His proposal would involve opening a several months long claims window where customers would gather evidence and file their claims by mail. We have proposed a technology driven claims process which we believe can return most assets to customers in a matter of days, not weeks, months or years. There is a hearing on November 22nd to deal with the claims process. Please review our revised motion for a new claims process.
One thing the CCC must have in order to represent customers to the bankruptcy court is the standing to do so. To this end, we need as many MF Global customers as possible to sign engagement letters allowing the CCC to represent them. Please click here to see how you can engage the CCC.
Public Relations Campaign
Our PR campaign is designed to advise and inform the players involved involved in the bankruptcy process, elected officials and public opinion. To this end, we are encouraging our membership to use various resources to communicate with Trustee, the bankruptcy court, Congress, regulators and the media at large.
Initally the CCC is reaching out to Congress to voice their support for our efforts to Judge Glenn and the Trustee. We are asking that members of Congress sign on to a Letter of Support which we will be sending to the court and Trustee.
As the fallout from MF Global’s collapse continues, our efforts will shift to lobbying Congress for regulatory reform to ensure an orderly, transparent process for an FCM bankruptcy becomes law and that existing regulations are updated to prevent future meltdowns like MF Global's from happening. We will also ask Congress to review the actions of all involved via hearings before various committees with jurisdiction.
Contacting Trustee & the Court
The most important decision makers in the initial stages of the bankruptcy are Judge Martin Glenn and the SIPA liquidation Trustee James W. Giddens of the law firm of Hughes, Hubbard & Reed, LLP. We encourage CCC members and affiliates to contact them to communicate their support for the CCC mission.
Contacting Regulators & Exchanges
The CCC is also spearheading an effort to communicate its mission for the return of 100% of segregated customer assets in the MF Global bankruptcy to the various regulators with jurisdiction in the case. Please click here to learn more.