[ by Melanie Gretchen ]

Peregrine Financial Group's 17,000 former futures customers may finally see the light at the end of the tunnel - subject to approval by the court and trustee Ira Bodenstein.  The court-appointed trustee, who is overseeing the liquidation of the company, currently has some $181 million on hand, according to a court filing on Wednesday.  What the customers can look forward to getting: $123 million - 30%, or $195 million, less than what the company initially told regulators it had in customer funds.

"A great deal of customers will be satisfied that something is coming back, rather than nothing at all.  "There should be a push to make the customers 100 percent whole -- but I don't know where those funds will come from." -- Chu Galloway, a former Peregrine customer and employee.

The first funds should be available on 9/28, almost 3 months after Peregrine, commonly known as PGFBest, filed for bankruptcy protection (7/10).  Those who have more at stake will have to wait longer: futures customers who had accounts of more than $50,000 will need to wait until as late as 10/15 before the trustee validates their balances and begins releasing funds, according to the filing.  In turn, the claims of the broker's other 7,000 customers, who traded currency and metals, "will be addressed separately," the filing said.

What's the Delay? James Koutoulas, lead attorney for customer advocacy group the Commodity Customer Coalition, blamed the trustee, who he said has taken too long to make the payout and had failed to be clear on exactly how the distribution will be made.

"The distribution ‘plan' has yet to make the simple determination of whether to issue the distribution via check, wire transfer, or bulk transfer to another futures commission merchant." -- Mr. Koutoulas, who was happy with the amount to be distributed.

The court filing asks that futures brokerages be permitted to take over the customer accounts through a bid process run by Mr. Bodenstein.  The trustee argued that he believes there are a "limited number" of brokers that would be interested in taking on Peregrine Financial's former customers.  Mr. Koutoulas contended that having another broker take over Peregrine's accounts would speed the process of moving customer funds into customer hands.  Specifically, cutting checks could delay the process.

In a filing earlier this week, the trustee said he was considering lawsuits to help him return the firm's money, stolen by founder Russell Wasendorf Sr., who admitted to his fraud in a suicide note.

For further details, go to [Reuters, 9/6/12].