Levine Lee News

Settlement with Koch Entities Obtained for MF Global Trustee

On behalf of the Trustee for MF Global Inc. (“MFGI”), Levine Lee reaches a favorable settlement of an adversary proceeding (Adv. Pro. No. 12-01754) commenced by Koch Supply & Trading, LP (“KS&T”), an affiliate of Koch Industries, Inc., pending in the U.S. District Court for the Southern District of New York. KS&T was seeking a declaratory judgment that, as a former customer of MFGI, it did not have liability under the Bankruptcy Code in connection with a $20 million letter of credit. The firm counterclaimed on behalf of the Trustee that, pursuant to Part 190 of the Commodity Futures Trading Commission’s (“CFTC”) regulations and the Bankruptcy Code, the proceeds of the $20 million letter of credit were property of the MFGI customer estate. The CFTC intervened in both the U.S. Bankruptcy Court and the U.S. District Court in support of our client’s interpretation of the Part 190 Regulation. Following multiple rounds of summary judgment briefing and oral argument, the settlement filed today has the parties jointly agreeing to the dismissal of all pending claims. Kenneth E. Lee, Scott B. Klugman and Miriam L. Alinikoff worked on the matter.

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