Reuters: Regulatory News: Judge denies request to block MF Global execs from insurance

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Judge denies request to block MF Global execs from insurance May 1st 2012, 01:41 Mon Apr 30, 2012 9:41pm EDT * Judge had allowed release of up to $30 mln insurance funds * Customers lose bid to put order on hold pending appeal * Policies cover liability from acts of directors, employees * Jon Corzine ran MF Global before its October bankruptcy By Jonathan Stempel NEW YORK, April 30 (Reuters) - A U.S. judge refused to block former MF Global Holdings Ltd Chief Executive Jon Corzine and other company officials from tapping as much as $30 million of insurance money to defend lawsuits over the futures brokerage's collapse. Judge Martin Glenn of the U.S. bankruptcy court in Manhattan on Monday rejected a request by three plaintiffs including Sapere Wealth Management LLC to put the funds' release on hold while they appeal his April 10 decision allowing officials to access the money. Many onetime customers of MF Global, which filed for Chapter 11 bankruptcy protection six months ago, believe the funds should be set aside for them and not go to executives they hold responsible for the company's bankruptcy. "Settled case law...establishes that the individual insureds cannot be denied contractually provided insurance protection when their employers are insolvent because others may have claims on the insurance policies," Glenn wrote in a brief order. A lawyer for Sapere did not immediately respond to requests for comment. In his April 10 decision, Glenn wrote that MF Global officials facing lawsuits would "suffer significant hardships" if they could not tap their insurance policies. Last Monday, the U.S. Judicial Panel on Multidistrict Litigation consolidated more than 20 lawsuits by MF Global shareholders and customers into a single case in Manhattan federal court. MF Global filed for Chapter 11 bankruptcy protection amid a liquidity crunch prompted by worries over its $6.3 billion bet on European sovereign debt. About $1.6 billion of customer money remains missing, the trustee for the MF Global Inc brokerage unit has estimated. Corzine testified before the U.S. Congress in December that he did not know where the missing money is. The cases are In re: MF Global Holdings Ltd et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059; and In re: MF Global Inc in the same court, No. 11-02790. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions