MF Global together with its creditors have resolved a point of conflict with JP Morgan Chase. This dispute stems from the valuation of intercompany claims in MF Global's estate. With the resolution, there is no more hindrance to the creditor repayment plan for the bankrupt brokerage.
The settlement was borne out of court ordered mediation would increase the recovery opportunities of JP Morgan according to the brokerage firm's trustee Louis Freeh. The deal would subordinate US$275 million of the total claims against the brokerage firm amounting to US$1.887 billion. JP Morgan has a US$1.2 billion against the estate.
The current plan agreed upon between MF Global's hedge fund creditors and the trustee, unsecured creditors of MF's parent would be able to recover between US$0.134 and US$0.39 on the dollar while finance unit creditors would receive US$0.147 and US$0.34 on the dollar. There is no clarity as to how the new settlement would affect those bottomline figures.
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