MF Global Holdings’ bankruptcy administrators want to make sure that the collapsed futures broker’s creditors get paid, even if it is at the expense of its former executives.
The administrators last week asked a bankruptcy court judge to cancel or subordinate some claims against the estate filed by former CEO Jon Corzine and other former executives, some of whom face litigation stemming from MF Global’s failure. If the request isn’t approved, it could take “years” to repay creditors, they warned.
U.S. Bankruptcy Judge Martin Glenn should limit claims related to defense costs to $5 million, and estimate other costs at “zero dollars,” the Thursday filing said.
“These contingent and unliquidated claims will unduly delay the administration of the Chapter 11 cases and prevent the plan administrator from making distributions to all creditors,” the wrote. A hearing is set for June 19.
Glenn has already approved some $40 million in insurance funds to pay the defense costs of Corzine and two other former MF Global executives.