Bankruptcy Trustee|Sues Jon Corzine

MANHATTAN (CN) - The trustee liquidating MF Global Holdings sued its former CEO Jon Corzine in bankruptcy court for the $1 billion collapse of the company on Halloween 2011.

Corzine's "risky trading strategies ... strained the company's liquidity and could not be properly monitored," bankruptcy trustee Louis Free said in the filing in federal bankruptcy court.

Corzine, the former governor of New Jersey, placed bad bets on European sovereign debts, among other things, while running the company like a poobah, according to the extensive news coverage on the collapse.

Also sued were MF Global's CFO Henri Steenkamp and COO Bradley Abelow.

Freeh accused them of breach of fiduciary duties and breach of faith.

MF Global couldn't meet margin calls on more than $6 billion of its gambles on European debt, and when the company collapse, $1.6 billion or so was missing from customers' accounts.

The bankruptcy court approved MF Global's reorganization plan 2 week ago, which would pay unsecured creditors about 34 cents on the dollar.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit