MF Global amends plan of liquidation to add convenience claims class

By Caroline Salls

Pittsburgh, Feb. 13 - MF Global Holdings Ltd. filed an amended plan of liquidation and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the Southern District of New York to add a convenience claims class.

Under the amended plan, holders of convenience claims against the holding company will recover 45% in cash, and holders of convenience claims against the MF Global Finance USA and MF Global Holdings USA debtors will recover 37.5% in cash.

Holders of convenience claims against these debtors can elect to have their claims treated as general unsecured claims instead.

In addition, holders of general unsecured claims of more than $500,000 can elect to reduce their claims to $500,000 to be treated as convenience claims.

As previously reported, the plan calls for the liquidation by a plan administrator of all of the property of the estate of each debtor, including prosecution and collection of claims against third parties, periodic distributions to holders of allowed claims and allowed interests and rejection of all executory contracts and unexpired leases that were not previously assumed, assigned or rejected and are not being assumed as part of the plan.

Creditor treatment

Treatment of creditors under the plan will include the following:

• Administrative claims, priority non-tax claims, liquidity facility secured claims and priority tax claims will be paid in full in cash;

• Holders of secured claims will either be paid in cash, receive the collateral securing the claims or receive the proceeds from the sale of that collateral;

• Holders of liquidity facility unsecured claims, general unsecured claims and subordinated claims will receive a share of available cash;

• All preferred interests and common interests in the holding company will be cancelled, and plan trust stock will be issued to a plan trust on the plan effective date.

Each holder of a preferred interest and common interest in the holding company will not receive any distribution on account of those interests. However, if all other claims are paid in full, they may receive a share of any remaining available cash; and

• Holders of common interests in debtors other than the holding company will receive no distribution unless all other claims are paid in full, in which case they would receive a share of any remaining available cash.

The disclosure statement hearing is scheduled for Feb. 14.

MF Global Holdings, a New York-based commodity and derivatives broker, filed for bankruptcy on Oct. 31, 2011. Its Chapter 11 case number is 11-15059.

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