If corporations are persons, JP Morgan Chase and all other unsecured creditors will just have to get in line…the Child comes first.
New York (PRWEB) February 07, 2012
The legal principle of “corporations are ‘persons’” is set to be tested in the current MF Global bankruptcy case after a former MF Global client, Adam Furgatch of Hawaii, filed a motion on Monday in Federal Bankruptcy Court that asks the Court to treat MF Global Holdings, Ltd. as a “person” instead of a corporation.
The filing asserts that because the U.S. Supreme Court has ruled that a corporation such as MF Global Holdings is a “person”, then MF Global, Inc. -- the subsidiary brokerage whose customers are still missing at least $1.2 billion in segregated funds -- is a “child” of the MF Global Holdings “parent company.” The filing then cites specific statutes in the Bankruptcy Code that mandates that a child’s support claims shall have super-priority status over all other unsecured creditors.
“The Chapter 11 bankruptcy laws apply equally to corporations and individuals,” said Mr. Furgatch in a pre-filing interview. “If, instead of a corporation, the MF Global Brokerage is treated as the Child Person of the Parent Company Person, then the statute on priority status for unsecured creditors’ claims is unambiguous. It’s right there in U.S.C. Title 11, Section 507. Spousal and child support obligations come first, before all other creditors’ claims.”
Mr. Furgatch therefore concludes that “If corporations are persons, JP Morgan Chase and all other unsecured creditors will just have to get in line…the Child comes first.”
The motion also asks the bankruptcy judge to order the “Parent Company Person” trustee, Mr. Louis Freeh, to immediately release from the parent company’s declared $41 Billion in assets, all child support funds necessary to restore the stricken, injured “Brokerage Child Person” to wholeness and health.
The motion cites Bankruptcy Code statutes that support the judge’s power to grant this request for immediate release of trustee-controlled assets. The child support funds being asked for include the reported $1.2 Billion in customer segregated funds that have yet to be returned to the ex-MF Global Brokerage customers. Mr. Furgatch is currently missing at least 30% of his pre-bankruptcy MF Global account funds.
The federal judge presiding in the case, Martin Glenn, is expected to promptly consider the motion and make a ruling.
Mr. Furgatch, a fresh, creative voice in financial and political commentary, has published a copy of the motion and additional background information concerning this legal action on his website: http://www.AdamFurgatch.com
The MF Global brokerage bankruptcy case is Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Contact: Lia Martin: 310-464-6225