Some customers had objected to today's motion, saying it wouldn't be fair to customers who had some open positions but mostly cash. The distribution "is going to cause great inequity amongst account holders at MFG," wrote Anthony Garner, 56, of London, England in a Nov. 16 e-mail. Garner said he has only two open positions, and has received only 5 percent of the net equity in his account, as opposed to the 60 percent that an all- cash customer will get.
At a hearing yesterday, Glenn said he was "sympathetic" to customers, including a farmer in Tennessee, who had written into the court, holding up a thick folder of faxes of messages his staff had reviewed.
Customer accounts with $5.45 billion were frozen Oct. 31, the day after a unit of the New York-based brokerage reported a "material shortfall" in customer funds that are required to be segregated under rules of the U.S. Commodity Futures Trading Commission.
Scott D. O'Malia, a CFTC commissioner, said MF Global's frozen funds have affected confidence in the markets and customers in Australia, Canada, Germany, Singapore, the U.K. and other countries. Although the trustee has been working to return funds faster, it still hasn't happened quickly enough, he said.
"The livelihood of market participants has been dangling by a thread for over two weeks," O'Malia said, according to a speech posted on the CFTC's website.
Five customers have asked to steer an ad-hoc group of 66 commodity customers and have the committee's fees reimbursed by the estate, saying the trustee assigned to oversee the brokerage's liquidation has experience with securities broker liquidations, not commodity liquidations, the group said.
Thomas A. Butler and three other customers also asked Nov. 8 to have their cash collateral returned or transferred to a new broker, saying the 11 percent shortfall should let the trustee return at least 85 percent of customer accounts immediately.
In its Oct. 31 bankruptcy filing, parent company MF Global Holdings listed debt of $39.7 billion and assets of $41 billion. The firm said it has about $26 million in cash. Jon Corzine, the former co-chief executive officer of Goldman Sachs Group Inc., quit as MF Global's CEO on Nov. 4.
The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent's bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).