NEW YORK: A judge approved the appointment of a bankruptcy trustee for MF Global Holdings Ltd, wresting control of the remains of the futures brokerage once run by Jon Corzine from its current management.
MF Global and JPMorgan Chase & Co, one of its main lenders, had made the request for a trustee. No one has yet been named to the role.
In approving the request, US Bankruptcy Judge Martin Glenn in New York also authorized JPMorgan to pledge $26 million of collateral, up from $8 million, to keep MF Global operating in bankruptcy.
A trustee is often appointed when it may serve the bankruptcy estate's best interest, or when company executives are suspected of wrongdoing.
Corzine, a former New Jersey governor and chief of Goldman Sachs & Co, has not been accused of wrongdoing.
Separately, Glenn approved the adoption of a parallel claims process for securities customers and commodities customers of MF Global's broker-dealer unit, whose liquidation is being overseen by a separate trustee, James Giddens.
James Kobak, a lawyer for Giddens, said at the hearing that the estimated $1.2 billion shortfall of commodity customer funds, first revealed on Monday and twice the prior estimate of regulators, could rise or fall.
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