MF Global Judge to Review Insurance for Former Executives

The U.S. judge overseeing MF Global’s bankruptcy plans a closer review before deciding whether any of an estimated $190 million of insurance coverage for former company executives should instead go to customers. Opponents of the plan to cover former executives, including at least four customer groups, believe the funds should not go to people they hold responsible for the collapse of the futures brokerage. The $190 million includes at least $120 million covering the period surrounding the company’s demise.

MF Global Holdings Ltd., which was run by former New Jersey governor and U.S. senator Jon Corzine, filed for bankruptcy protection on Oct. 31. The $190 million was reserved to pay legal and other costs for onetime executives of the brokerage. The insurance was provided by the company’s MFG Assurance Co. insurance unit, and had been prepaid for the period from May 2011 to May 2012.

U.S. Bankruptcy Judge Martin Glenn at a hearing this month also authorized the hiring of several law and consulting firms to assist Louis Freeh, MF Global’s bankruptcy trustee and a former FBI director.