The economic landscape is bleak across the entire nation, and not just for consumers. Many businesses are finding it necessary to file for commercial bankruptcy protection when expenses outweigh revenue. One commercial bankruptcy to have hit the news recently is that of MF Global, led by a former governor of New Jersey. The company first had trouble back in October in the wake of investor panic related to its exposure to European sovereign debt.
This company’s commercial bankruptcy is now heating up as a potential settlement is being negotiated. One party related to the commercial bankruptcy has proposed a $160 million settlement in which $130 million of that amount would go to former customers who were hard hit by MF Global’s collapse. The trustee for MF Global’s bankruptcy parent company, however, is expected to dispute that large of an allotment of money going to customers rather than creditors.
That same trustee obtained an extension of time to review the proposed commercial bankruptcy settlement. This suggests that he may challenge the fact that so much of the proposed settlement is being earmarked for customers.
Whether the trustee challenges the proposed settlement or not, at least it appears that progress is being made in this commercial bankruptcy. Financial difficulties are never easy to endure. On the flip side however, the U.S. Bankruptcy Code was designed to help both individuals and companies who are struggling with unbearable debt. Bankruptcy can help a business either restructure and get back on its feet or close swiftly, allowing the owners to move on to new opportunities.
Source: Reuters, “CME deal under MF Global trustee’s microscope,” Nick Brown, June 29, 2012