Judge Martin Glenn of the Federal Bankruptcy Court in Manhattan, has approved a request by MF Global to continue using about $21.3 million of its cash on hand, allowing the bankrupt brokerage firm to continue operating under Chapter 11. Judge Glenn’s decision to let MF Global continue using its cash on hand followed days of negotiations between the trustee overseeing MF Global’s bankruptcy case, Louis J. Freeh and various objectors to the motion.  The judge wrote that the need for use of the so-called cash collateral was “obvious”: It would pay for Mr. Freeh and the cadre of lawyers seeking to recover money for creditors. By Wednesday, one objection remained, from a group of customers arguing that at least some missing client money was improperly mixed into the cash. The group’s primary concern was that if MF Global were allowed access to the $21.3 million in cash, some customer money might be irretrievably lost. “If the money’s spent, there’s no way to unspend it,” James Koutoulas, a lawyer for the group, said at Wednesday’s court hearing. He asked for either a $10 million cap on MF Global’s use of the money, or the opportunity to conduct an inquiry. Judge Glenn overruled the objection, saying that the customer group had not proved its case. Lawyers for both Mr. Freeh and Mr. Giddens have said in court filings that they do not believe that the $21.3 million includes any customer money. But Judge Glenn added at Wednesday’s court hearing that he was “sensitive” to customers’ concerns and he ordered Mr. Freeh to begin a limited investigation into whether that cash included customer money. A preliminary report is due within 60 days. The trustee liquidating the firm’s trading operations, James W. Giddens, has estimated that MF Global is missing at least $1.2 billion in customer money. As part of his decision to approve MF Global’s use of its remaining cash, Judge Glenn also stipulated that the firm’s estate publicly disclose its weekly budgets with the bankruptcy court.  [Dealbook 12/14/11]