The highly publicized bankruptcy of MF Global has taken a new twist when the bankruptcy court announced they will not allow a committee to represent the customers who are missing more than $1.2 billion from their accounts. After the bankruptcy filing of MF Global, customer accounts that are believed to be holding $5.45 billion were frozen back on October 31, 2011. The US Commodity Futures Trading Commission froze the accounts when the New York arm reported a shortfall in funds. Originally, in the initial petition for the bankruptcy filing, it was reported an estimate of $600 million was missing and now has been raised to $1.2 billion yesterday by James Giddens, the bankruptcy trustee that was appointed by the court to liquidate the company and distribute funds to the customers.
The bankruptcy judge, Martin Glenn, has been overseeing the case of MF global filing bankruptcy. He stated, that he would deny any customers a request to form a committee to oversee the bankruptcy. He further stated that the bankruptcy trustee would work closely with the commodity customers.
This bankruptcy filing is pretty far-reaching as it affects 38,000 customers. This ruling by the bankruptcy court not allowing customers to be represented by a committee is believed to be a good ruling. Many say there is no legal precedent that would let the bankruptcy court grant some kind of official committee representing the customers to oversee the bankruptcy filing.