MF Global Inc.’s workforce of 1,066 broker-dealer employees has been fired effective immediately, the trustee liquidating the unit said.
The former employees will be paid through Nov. 15, according to a statement today from the office of the trustee, James Giddens. As many as 200 former employees are being hired to assist in the liquidation of the broker-dealer, Giddens said.
MF Global Holdings Ltd., which was run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for Chapter 11 bankruptcy Oct. 31 after a $6.3 billion bet on the bonds of some of Europe’s most indebted nations prompted regulator concerns and a credit rating downgrade.
Giddens, overseeing the liquidation of the bankrupt company’s brokerage unit, is managing the subsidiary’s wind-down under the Securities Investor Protection Act. He will try to close the broker-dealer’s New York offices as soon as possible and find cheaper space in the city, according to the statement. The unit’s Chicago offices will stay open as the business is wound down, Giddens said.
The firings were mandated under the SIPA, Giddens said. The action is necessary to “preserve assets and identify and marshal other property to maximize the estate in a manner that is fair to all customers and other creditors,” he said in the statement.
Customer Accounts
About 17,000 in customer account positions and $1.5 billion in account funds have been moved to other future commodity merchants, Giddens said.
“We are saddened by the trustee’s actions today to terminate so many of our colleagues,” Diana DeSocio, an MF Global spokeswoman, said in an e-mailed statement.
The brokerage’s parent listed $39.7 billion in debt and $41 billion in assets in its bankruptcy filing. Owners of the parent company’s senior unsecured debt may get back 10 cents to 30 cents on the dollar without an asset sale, credit-ratings company Fitch Ratings said in a report.