Timothy Butler, a lawyer who filed a lawsuit on behalf of three commodities traders seeking the return of 85 percent of their $2.5 million in combined frozen funds, said he's taking on new clients and hopes if his suit is successful it will recover that amount for all customers with all-cash accounts. Because the $593 million shortfall represents 11 percent of the customer funds that FTC rules require to be segregated, customers should be able to get 85 percent back up front, he said.

Stay Request

Butler has requested that U.S. Bankruptcy Judge Martin Glenn in Manhattan lift the so-called stay that protects companies in bankruptcy from lawsuits and other actions that can let one creditor withdraw money before another. Butler said customers of the brokerage unit should come before all other creditors, as their money was held in supposedly segregated accounts. Butler's request will be heard Nov. 22.

Giddens has said he can't release funds immediately because the trustee's job is to distribute assets equally among all customers. Kent Jarrell, a spokesman for Giddens, said the trustee doesn't have the authority to make transfers until his teams of forensic accountants have confirmed whether the shortfall is greater or less than $593 million.

Even when forensic accountants have located money, there may still be disputes among clearinghouses and banks about whose it rightfully is, Jarrell said.

"We can't give out money we won't have at the end of the game," he said.

To customers like Andrew Abraham, 49, of commodity trading adviser Abraham Investment Management in Israel, the trustee's role is troubling; "Do the bankruptcy laws allow you to sweep titled segregated accounts into the assets of MF Global?" Abraham asked in an open letter to Giddens.

Abraham said in a phone interview that without the immediate return of customer cash, the costs of the trustee -- who has hired lobbying firm APCO Worldwide to represent him to the media -- will eat into assets that should belong to customers. Republican lawmakers have criticized Giddens' work in liquidating Lehman Brothers, where he billed $891 an hour, saying his work would cost more than $640 million.

Legal obstacles to quick recovery of the frozen cash could also include concern about whether some customers aren't entitled to be repaid as much as others, and customers who transferred money out of their accounts prior to the bankruptcy could be subject to clawback rules, Butler noted.

Those like Monjure who liquidated their positions on the day of the bankruptcy to avoid a drawn-out recovery process, said they feel aggrieved because they had to sell at a loss and can't get any of their cash. Customers who still had open positions have been transferred to new brokerages with about 60 percent of their cash collateral, and now face margin calls for the rest, which is locked up at the MF Global accounts.