Tuesday, October 30, 2012

MF Global U.K. Judge Asked to Set Asset Valuation Date


MF Global Holdings Ltd. (MFGLQ)’s U.K. administrators asked a judge to decide whether customer assets held by the brokerage should be valued as of the day of its collapse, a year ago tomorrow, or when they were liquidated.

KPMG LLP said it needs court guidance because about 700 customers would gain or lose on their trading positions, depending on which method was applied, according to a statement on its website.

At a two-day trial in London that began today, two investors with claims in the administration were selected to argue for and against the so-called hindsight principle.

Attestor Value Master Fund LP, a distressed-debt fund registered in the Cayman Islands, would see its claim increase by about $3 million if valued on Oct. 31 of last year. On the other side, Schneider Trading Associates Ltd.’s claim would lose about $500,000 in value if tied to that date and not when the securities were liquidated days later.

MF Global filed the eighth-largest U.S. bankruptcy when it got margin calls and bank demands for money from its brokerage after the company invested in distressed European sovereign debt. KPMG, appointed to wind up its U.K. unit, by March had recovered about $900 million of funds frozen in customer accounts.

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