Barristers descend as Supreme Court tries to carve up MF Global pie

THE local fallout from the collapse of international derivatives trader MF Global is being played out in the NSW Supreme Court, where the liquidator, Deloitte, is asking how it can divvy up available sums to clients who are owed $309 million.

Twenty-one barristers lined up before Justice Ashley Black, representing the liquidator and the interests of 11,000 individual clients who held 16,000 accounts with MF Global Australia.

Fabian Gleeson, SC, for the liquidator, said when the company was placed in administration on November 1 last year, $150 million was held in accounts.

The liquidator has been able to recover $82 million of the $167 million owed by counterparties, and ''there are some substantial recoveries to come'', he said.

A further $30 million in futures money held by the Australian Securities Exchange was being claimed by both British and Australian liquidators.

MF Global, one of the biggest bankruptcies in US history, left clients stranded after it admitted using $700 million from client accounts to fund a liquidity shortfall brought about by a multibillion-dollar bad trade it made for itself on European bonds.

A month after the collapse, the Australian Securities and Investments Commission launched a market surveillance investigation when it emerged a legislative loophole had allowed clients' funds in CFD accounts to be co-mingled and fund hedging positions.

In notes to creditors and clients, Deloitte said the ''highly complex'' nature of the case had delayed distributions.

MF Global Australia dealt in four products - futures, CFDs, Margin FX and Online FX.

Futures clients, which include the class representatives Grain Corporation Ltd, and George Weston Foods, account for the bulk of funds owed - $209 million.

The hearing continues.