Securities Investor Protection Corporation v. MF Global, Inc.
Filing
3
ORDER: On the Complaint and Application of the Securities Investor Protection Corporation ("SIPC"), it is hereby: I. ORDERED, ADJUDGED and DECREED that the customers of the Defendant, MF Global Inc., are in need of the protection afforded by the Securities Investor Protection Act of 1970, as amended ("SIPA," 15 U.S.C. §78aaa et seq.). II. ORDERED that pursuant to 15 U.S.C. §78eee(b)(3), James W. Giddens is appointed trustee for the liquidation of the business of the Defendant with all the duties and powers of a trustee as prescribed in SIPA, and the law firm of Hughes Hubbard & Reed LLP is appointed counsel for the trustee. The trustee shall file a fidelity bond satisfactory to the Court in the amount of $50,000.00. ORDERED that all persons and entities are stayed, enjoined and restrained as set forth in this Order. ORDERED that the stays set forth above shall not apply to the actions and amendments of this Order as set forth herein. (Signed by Judge Paul A. Engelmayer on 10/31/2011) (djc) (Main Document 3 replaced on 11/1/2011) (jar). (Main Document 3 replaced on 11/1/2011) (jar).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES INVESTOR PROTECTION
CORPORATION,
Plaintiff-Applicant,
v.
MF GLOBAL INC.,
Defendant.
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Civil Action No.
l \ -,\~ D'11-St> (fAt)
UlDCSoNY
DOCUM&NT
ILaCnOJOC"LL" ,ILED
DOCf:,_ _ _ _ __
DATlnLD: toI2'lI2011
ORDER
On the Complaint and Application of the Securities Investor Protection Corporation
("SIPC"), it is hereby:
I.
ORDERED, ADJUDGED and DECREED that the customers of the Defendant,
MF Global Inc., are in need of the protection afforded by the Securities Investor Protection Act
of 1970, as amended ("'SIPA;' 15 U.S.C. §78aaa et seq.).
II.
ORDERED that pursuant to 15 U.S.C. §78eee(b)(3), James W. Giddens is
appointed trustee for the liquidation of the business of the Defendant with all the duties and
powers of a trustee as prescribed in SIP A, and the law finn of Hughes Hubbard & Reed LLP is
appointed counsel for the trustee. The trustee shall file a fidelity bond satisfactory to the Court in
the amount of $50,000.
III.
ORDERED that all persons and entities are notified that, subject to the other
provisions of 11 U.S.c. §362. the automatic stay provisions of 11 U.S.C. §362(a) operate as a
stay of:
A.
the commencement or continuation, including the issuance or employment of
process, of a judicial, administrative or other proceeding against the Defendant
that was or could have been commenced before the commencement of this
proceeding, or to recover a claim against the Defendant that arose before the
commencement of this proceeding;
B.
the enforcement against the Defendant or against property of the estate of a
judgment obtained before the commencement of this proceeding;
C.
any act to obtain possession of property of the estate or property from the estate;
D.
any act to create, perfect or enforce any lien against property of the estate;
any act to create, perfect or enforce against property of the Defendant any lien to
the extent that such lien secures a claim that arose before the commencement of
this proceeding;
F.
any act to collect, assess or recover a claim against the Defendant that arose
before the commencement ofthis proceeding;
O.
the setoff of any debt owing to the Defendant that arose before the
commencement of this proceeding against any claim against the Defendant; and
H.
the commencement or continuation of a proceeding before the United States Tax
Court concerning the Defendant's tax liability for a taxable period the Bankruptcy
Court may determine.
IV.
ORDERED that all persons and entities are stayed, enjoined and restrained from
directly or indirectly removing. transferring. setting off. receiving, retaining, changing, selling,
pledging, assigning or otherwise disposing of, withdrawing or interfering with any assets or
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property owned, controlled or in the possession of the Defendant, including but not limited to
denying access to, charging for access to, or refusing to cooperate with requests for access to, the
books and records and computer and information systems, stock record and other information of
or pertaining to the Defendant and customers' securities and credit balances, except for the
purpose of effecting possession and control of said property by the trustee.
V.
ORDERED that pursuant to 15 V.S.C. §78eee(b)(2)(B)(i), any pending
bankruptcy, mortgage foreclosure, equity receivership or other proceeding to reorganize,
conserve or liquidate the Defendant or its property and any other suit against any receiver,
conservator or trustee of the Defendant or its property, is stayed.
VI.
ORDERED that pursuant to 15 V.S.c. §§78eee(b)(2)(B)(ii) and (iii), and
notwithstanding the provisions of 11 V.S.c. §§362(b) and 553, except as otherwise provided in
this Order, all persons and entities are stayed, enjoined and restrained for a period of twenty-one
(21) days, or such other time as may subsequently be ordered by this Court or any other court
having competent jurisdiction of this proceeding, from enforcing liens or pledges against the
property of the Defendant and from exercising any right of setoff, without first receiving the
written consent of SIPC and the trustee.
VII.
ORDERED that, pursuant to 15 V.S.c. §78eee(b)(2)(C)(ii), and notwithstanding
15 V.S.C. §78eee(b)(2)(C)(i), all persons and entities are stayed for a period of twenty-one (21)
days, or such other time as may subsequently be ordered by this Court or any other court having
competent jurisdiction of this proceeding, from foreclosing on, or disposing of, securities
collateral pledged by the Defendant, whether or not with respect to one or more of such contracts
or agreements, securities sold by the Defendant under a repurchase agreement, or securities lent
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under a securities lending agreement, without first receiving the written consent of SIPC and the
trustee.
VIII.
ORDERED that the stays set forth above shall not apply to:
A
any suit, action or proceeding brought or to be brought by the United States
Securities and Exchange Commission ("Commission"), the Commodity Futures Trading
Commission ("CFTC"), or any self-regulatory organization of which the Defendant is now a
member or was a member within the past six months; or provided that notice and prompt and
periodic accountings are pro\'ided to the trustee;
B.
the exercise of a contractual right of a creditor to liquidate, terminate, or
accelerate a securities contract, commodity contract, forward contract, repurchase agreement,
swap agreement, or master netting agreement, as those terms are defined in 11 U. S. C. §§ 101,
741, and 761, to offset or net termination values, payment amounts, or other transfer obligations
arising under or in connection with one or more of such contracts or agreements, or to foreclose
on any cash collateral pledged by the Defendant, whether or not with respect to one or more of
such contracts or agreements: or
C.
the exercise of a contractual right of any securities clearing agency to cause the
liquidation of a securities contract as defined in II U.S.c. §741 (7) and the contractual right of
any derivatives clearing organization C'DCD") to cause the liquidation of a commodity contract
as defined in 11 U.S.c. §761(4); or
D.
the exercise of a contractual right of any stockbroker or financial institution, as
defined in 11 U.S.C. §lOL to use cash or letters of credit held by it as collateral, to cause the
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liquidation of its contract for the loan of a security to the Defendant or for the pre-release of
American Depository Receipts or the securities underlying such receipts; or
E.
the exercise of a contractual right of any "repo" participant, as defined in 11
U.S.C. §10 I, to use cash to cause the liquidation of a repurchase agreement, pursuant to which
the Defendant is a purchaser of securities, whether or not such repurchase agreement meets the
definition set forth in 11 U.S.c. §101(47); or
F.
any setoff or liquidating transaction undertaken pursuant to the rules or bylaws of
any securities clearing agency registered under section 17A(b) of the Securities Exchange Act of
1934, 15 U.S.C.§78q-l(b), or any DCa registered under the Commodity Exchange Act ("CEA"),
or by any person acting under instructions from and on behalf of such a securities clearing
agency or DCa; or
G.
any settlement transaction undertaken by such securities clearing agency using
securities either (i) in its custody or control, or (ii) in the custody or control of another securities
agency with which it has a Commission approved interface procedure for securities transactions
settlements, provided that the entire proceeds thereof, without benefit of any offset, are promptly
turned over to the trustee; or
H.
any transfer or delivery to a securities clearing agency or DCa by a bank or other
depository, pursuant to instructions given by such clearing agency or DCa, of cash, securities, or
other property of the Defendant held by such bank or depository subject to the instructions of
such clearing agency or DCa and constituting a margin payment as defined in 11 U.S.C. §741(5)
or 11 U.S.c. §761(15); or
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I.
the exercise of a contractual right, as such tenn is used in 11 U.S.C. § 555, in
respect of (i) any extension of credit for the clearance or settlement of securities transactions or
(ii) any margin loan, as such tenn is used in 11 U.S.C. § 741(7), by a securities clearing bank, or
the exercise of a contractual right as such tenn is used in 11 U.S.C. §556 in respect of any
extension of credit for the clearance or settlement of commodity contracts by a commodity
broker as defined in 11 U.S.C. §101. As used herein, "securities clearing bank" refers to any
financial participant, as defined in 11 U.S.C. § 101(22A), that extends credit for the clearance or
settlement of securities transactions to one or more Primary Government Securities Dealers
designated as such by the Federal Reserve Bank of New York from time to time.
IX.
ORDERED that pursuant to 15 U.S.C. §78eee(b)(4), this liquidation proceeding is
removed to the United States Bankruptcy Court for the Southern District of New York.
X.
ORDERED that pursuant to 11 U.S.C. §721, the SIPA Trustee, as appointed
herein, is authorized to operate the business of MF Global Inc. to: (a) conduct business in the
ordinary course until 6:00 p.m. on November 3,2011, including without limitation, the purchase
and sale of securities, commodities futures and option transactions, and swaps and securities
based swaps, and obtaining credit and incurring debt in relation thereto; (b) complete settlements
of pending transactions, and to take other necessary and appropriate actions to implement the
foregoing, in such accounts until 6:00 p.m. on November 7,2011; and (c) take other action as
necessary and appropriate for the orderly transfer of customer accounts and related property.
XI.
ORDERED that the Clerk of the Court is directed to immediately open the docket
inthis proceeding and that this Order be entered on the docket immediately.
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XII.
ORDERED that the Clerk of the Court is directed to produce seventy-five (75)
copies of this Order, at the regular cost, immediately upon the Order's entry onto the docket.
XIII.
ORDERED that the Trustee shall have immediate possession of the property of
Defendant, wherever located, including but not limited to the books and records, in any fonn,
and infonnation of and pertaining to the Defendant, , and to open accounts and obtain a safe
deposit box at a bank or banks to be chosen by the Trustee, and the Trustee may designate such
of his representatives who shall be authorized to have access to such property
SO ORDERED in New York, New York this
2011.
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31 Hday
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