Jump to Navigation

Bankrupt hedge fund facing $90 million settlement

Last month, a United States District Judge approved a settlement between a hedge fund and investors who claimed losses as a consequence of a trader based in Tennessee losing $141.5 million on wheat futures contracts in 2008. The judge's ruling clears the way for a $90 million settlement reached in January by investors and the hedge fund.

However, the hedge fund filed for bankruptcy in October. It listed $39.7 billion in debts and $41 billion in assets in its bankruptcy filing. The hedge fund was heavily invested in the government bonds of several European nations and it suffered considerable losses when the debt crisis took hold of the continent.

The trouble for the hedge fund began in 2009. It seems the hedge fund failed to check in on one of its traders based in Memphis, a man whose speculation on wheat futures contracts cost the hedge fund over $100 million in losses. The man involved was charged with wire fraud and violating the U.S. commodity laws.

In the wake of the District Court ruling approving the settlement, a bankruptcy judge will now decide if the bankrupt company will pay out cash for its settlement with investors.

When a company is forced into bankruptcy, the implications of that action can be difficult to manage. However, as many Tennessee business owners know, a struggling economy can make running a business even tougher. Bankruptcy can offer a viable solution to mounting debt. Business owners that are struggling financially may find it beneficial to seek the advice of an experienced bankruptcy attorney.

Source: The Commercial Appeal, "MF Global trader in Memphis lost big on wheat," Ted Evanoff, Nov. 22, 2011

No Comments

Leave a comment
Comment Information

What's Your Situation:

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Subscribe to This Blog's Feed Visit Our Bankruptcy Website

Our Office Location:

Richard Banks & Associates

393 Broad Street, N.W.
Cleveland, TN 37364-1515
Map & Directions

Phone: (423) 244-0009
Toll Free: (866) 596-8527
Fax: (423) 478-1175

FindLaw Network

Privacy Policy | Business Development Solutions by FindLaw, a Thomson Reuters business.