MF Global used customer funds to finance daily activities just days prior to bankruptcy

A preliminary report filed by MF Global’s bankruptcy trustee, James W. Giddens shows that the company used segregated customer funds to finance their daily activities.

The report shows that MF Global began to use customer funds beginning on October 26^th as the company began facing a liquidity problem, according to the Chicago Tribune. The funds were used to conduct the firm’s daily activities.

Almost $120 billion in customer funds went missing and bankruptcy trustees have been trying to trace where the funds went. Initially smaller sums were taken from the account but MF Global began taking large amounts after they ran into financial difficulties. In the week prior to MF’s bankruptcy filing $105 billion were transferred from customer accounts.

MF Global’s customers are attempting to recover the lost fund but are facing some hurdles because unsecured creditors take priority in the bankruptcy proceedings.

Giddens is trying to determine which entities received the customer segregated funds.

MF Global is one of the eight largest bankruptcies in history.

When a business is close to failing they can hire a bankruptcy attorney to advise them on what course of action to take.

If possible a bankruptcylawyer will suggest a filing that will allow the business to continue while they settle their debts with creditors. Some businesses cannot continue operations and must have a bankruptcy attorney work on reducing or eliminating their debt liabilities.