(Bloomberg News) MF Global Holdings Ltd. creditors looking to recover from the eighth largest bankruptcy in U.S. history may sue the company's advisors, search for assets overseas and seek information from a probe into the commingling of customer accounts at the brokerage, a bankruptcy lawyer said.

Creditors seeking a position on a committee that could shape the approach to recoveries are set to meet today at the Millennium Hilton hotel in Manhattan. A trustee overseeing the liquidation of the company's operating unit, MF Global Inc., started his investigation into possible fraud or misconduct on Nov. 4. The FBI has also started a probe, according to a person familiar with the matter. MF Global has until Jan. 30 to report a detailed list of its assets and debt.

"In a situation such as this where there seems to be building a view that asset values are not sufficient to provide a recovery, creditors will look to assert claims against various third parties either at MF Global, and its agents," said Lorenzo Marinuzzi, a partner at Morrison & Foerster LLP in New York, who isn't involved in the case.

MF Global listed $39.7 billion in debt and $41 billion in assets and said it has about $26 million in cash. About $593 million of MF customer funds are unaccounted for, according to a person with knowledge of regulatory probes into the firm's collapse. The FBI's formal criminal investigation began late last week, the person familiar with that matter said. It is in its preliminary stages and no documents had been requested as of Nov. 4, said the person, who didn't specify the focus or scope of the investigation.

Jon Corzine, the former co-chief executive officer of Goldman Sachs Group Inc., quit as MF Global's CEO that same day.


An MF Global Holdings investor, Joseph DeAngelis, sued Corzine and the company's board for allegedly making misleading statements about the firm's financial condition before its collapse.

Creditors and bankruptcy lawyers may hesitate to get involved in the case because of worries it may not have enough money to pay the committee's legal fees.

Fred Hodara, a partner at Akin Gump Strauss Hauer & Feld LLP said his firm is interested in representing the creditors' committee though he said he doesn't know enough about the cash situation to have a view of the risks.

"It's not out of the realm of possibility that large bits of cash are lurking in the system today, and that leads you to one set of conclusions," Hodara said. "And it's not out of the realm of possibility that significant funds have left the system."

Customers Organizing