MF Global Bankruptcy is the Eighth Largest in History

MR Global Holdings is not a household name like Goldman Sachs or Lehman’s Bros., but they are a large investment bank, which announced that they would be filing for Chapter 11 bankruptcy earlier this week. Their bankruptcy is one of the eight largest in U.S. history, according to Bloomberg news.

MF Global Holdings, who is headed by former New Jersey Governor and CEO for Goldman Sachs, John Corzine, listed assets worth $41 billion and debts totaling $39 billion.

The company, who primarily traded in derivatives, now faces investigation after they lost millions of dollars of client’s money, which was supposed to be kept separate from the rest of the business. A lawyer for the firm told the bankruptcy court that he did not have knowledge of the shortfall, but other sources say the client shortfalls could be close to $700 billion.

The company admitted Tuesday that, client funds were diverted, but the exact amount is unknown at this time.

MF Global is filing for Chapter 11 reorganization, a filing often facilitated by bankruptcy attorneys to help companies continue operations while they work on eliminating debt. They originally attempted to find a buyer, but the news that they lost clients’ money deterred a buyout.

Bankruptcy lawyers are crucial to any business that can no longer meet their debt requirements. With their help they will know which structure is feasible.  A bankruptcy lawyer will examine assets and liabilities to determine how they can settle their debts.