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MF Global, Creditors Seek Outside Administrator

November 22, 2011
MF Global formally requested the Bankruptcy Court Judge to permit it to appoint a trustee to run the Chapter 11 bankruptcy.  Not to be confused with James Giddens, the trustee liquidating MF's broker-dealer unit in a separate proceeding, the Chapter 11 trustee for MF Global and its creditors' committee would take control of its assets.  Such a request is rare, and usually is reserved for cases in which a bankrupt entity's executives are accused of wrongdoing, or when it is in the estate's best interest. The filing also notes that JPMorgan Chase, a member of the creditors' committee, ha offered to provide $26 million to keep MF Global afloat in bankruptcy if the company agrees to appoint a trustee. Meanwhile, MF Global remains under investigation by regulators over what trustee Giddens projects is $1.2 billion in customer funds missing from accounts.  The big question is whether the company improperly comingled customer funds with the firm's own funds.  An MF Global spokeswoman declined to elaborate on the request for a trustee.   [Reuters, 11/21/11]