MF Global, Inc.
- Selected by Securities Investor Protection Corporation (“SIPC”) and appointed by the U.S. District Court for the Southern District of New York (the “District Court”) to be Trustee in the liquidation of MF Global Inc. (“MFGI”), a securities broker-dealer and futures commission merchant (“FCM”), under the Securities Investor Protection Act of 1970 (“SIPA”), and one of the largest bankruptcies in history.
- Fiduciary administering four pools of property: (i) commodity customer property segregated in U.S. depositories pursuant to Section 4d of the Commodity Exchange Act; (ii) commodity customer property secured in foreign depositories pursuant to 17 C.F.R. Section 30.7 (“Rule 30.7”); (iii) securities customer property reserved under SIPA and the Securities Exchange Act; and (iv) general estate property.
- Supervision of a staff of several hundred employees with offices in NYC and Chicago to deal with the largest commodities firm liquidation to date;
- Distributing nearly $4 billion to former MFGI retail commodities customers with U.S. futures positions via three bulk transfers approved by the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) which has restored 72% of U.S. segregated customer property to such customers within the first weeks of the liquidation;
- Asserting claims against MF Global UK for approximately $640 million in client funds held by the MF Global UK Special Administrators, pursuant to Rule 30.7, that the Special Administrators preliminary have objected to the classification of a significant portion of these funds as being either client money or client assets under relevant Financial Services Authority (FSA) rules;
- Serving as a client representative on the MF Global UK creditors’ committee;>
- Establishing a Bankruptcy Court approved claims process for commodities, securities and general creditor claims and beginning the process of analyzing and determining such claims, including over 27,000 commodities customer claims asserted before the January 31, 2012 deadline with a face value of roughly $7.2 billion after accounting for duplicative claims; and
- Conducting a statutory investigation of MFGI’s demise and lessons that may be learned from a regulatory and legislative perspective with a preliminary determination that MFGI had a shortfall in commodities customer segregated funds of at least $1.6 billion and determining how best to pursue possible recoveries and the extent to which applicable law would support claims against particular recipients of funds, affiliates and possibly other parties.
Lehman Brothers, Inc.
- Selected by Securities Investor Protection Corporation (“SIPC”) and appointed by the U.S. District Court for the Southern District of New York (the “District Court”) in September 2008 to be Trustee in the liquidation of Lehman Brothers Inc. (“LBI”) under the Securities Investor Protection Act of 1970 (“SIPA”), the largest stock broker liquidation and one of the largest bankruptcies in history. Administrating assets in excess of $117 billion in a complex liquidation which includes:
- Consummating the transfer of more that 110,000 accounts aggregating more than $92 billion;
- Analyzing over 14,000 customer claims in excess of $50 billion that involve legal questions as to whether financial products, valuations dates or contractual arrangements qualify for customer status under SIPA, including the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) upholding the Trustee’s position that claims arising To-Be-Announced (“TBA”) contracts were not entitled to customer status under SIPA, see In re Lehman Brothers Inc., 462 B.R. 53 (Bankr. S.D.N.Y. 2011);
- Moving on December 1, 2011 for Bankruptcy Court approval for the allocation of a total of $18.3 billion out of an approximately $20.6 billion of currently available assets to the fund of customer property based on the principles of allocation approved by the Bankruptcy Court on Marc 2, 2012 (such motion remains subject to potential litigation with principal interested parties in liquidation);
- Reaching a settlement in principle (subject to documentation and Bankruptcy Court approval) with Lehman Brothers Holdings Inc. and certain affiliates regarding over 600 disputed customer claims aggregating over approximately $19.9 billion;
- Liaising with all of the 76 Lehman-related insolvency proceedings in 16 countries, including obtaining a ruling from the U.K. Supreme Court on February 29, 2012 as to client money held at Lehman Brothers International Europe (“LBIE”) that should lead to greater recoveries for LBI customers;
- Litigating with LBIE (trial likely to occur in 2013 before the Bankruptcy Court) regarding purported customer claims of approximately $17 billion, even after allowance of approximately $8.3 billion as compounded largely duplicative and overlapping claims of approximately 300 LBIE client hedge funds;
- Engaging in appellate litigation with Barclays Capital Inc. (“Barclays”) regarding a $6.2 billion dispute with Barclays arising out of the sale of substantial estate assets to Barclays at the commencement of the liquidation; and
- Conducting a statutory investigation of LBI’s demise and lessons that may be learned from a regulatory and legislative perspective that formed the basis of the Trustee’s preliminary report regarding the collapse of LBI that will be provided to the U.S. Congress, regulators and the Bankruptcy Court in August 2010.
- Negotiating and “closing-out” complex financial transactions with thousands of global counter-parties
Other Broker-Dealer Matters
- Trustee for other major brokerage firm liquidations under the Securities Investor Protection Act, Weis Securities, Hanover Square, A.R. Baron & Co., Inc. and New Times Securities Services, Inc.; Appointed Administrator by Securities and Exchange Commission of the Investor Restitution Fund in A.R. Baron & Co., Inc.
- Representation of Goldman Sachs & Co. as Financial Advisor to the United States in the privatization public-offering sale of Conrail.
- Counsel to major parties in other cases, including BRANIFF, CONTINENTAL and EASTERN AIRLINES; miscellaneous FDIC matters, ENRON; REFCO and PARMALAT.