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UPDATE: MF Global Strikes Settlement With J.P. Morgan Over Claims

By Joseph Checkler
MF Global Holdings Ltd. has struck a deal with J.P. Morgan Chase & Co. ( JPM ) that calls for the bank to pay MF Global a portion of what the bank recovers in the case, a settlement that MF Global’s administrator says avoids “years of costly and complex litigation.” In a Wednesday filing with the U.S. Bankruptcy Court in Manhattan, MF Global laid out settlement terms that call for J.P. Morgan to pay MF Global based on how much it recovers on its claim against the trustee unwinding the company’s brokerage. The higher the amount J.P. Morgan recovers, the higher percentage MF Global gets to return to its creditors. If the amount is higher than $50 million, for instance, every dollar after the $50 million will go to MF Global’s estate. In return, J.P. Morgan would be off the hook for any claims against it in MF Global’s bankruptcy case. The settlement, if approved by Judge Martin Glenn at a hearing currently scheduled for Aug. 22, would bring to an end one of the remaining uncertainties in MF Global’s 21-month-old bankruptcy. More on Nasdaq here.

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