Thursday, December 15, 2011

Return of funds in MF Global bankruptcy to be priority

Producers and business people from across the United States submitted testimony this past week before the Senate Committee on Agriculture, Nutrition and Forestry about the effects of MF Global’s bankruptcy filing.   CJ Blew, Castleton-area producer and MKC’s Board Chairman, was asked by Senator Pat Roberts to participate in those hearings on Tuesday.
Blew testified that although he did not personally have assets tied up in the MF Global bankruptcy, he was impacted.  “I rely upon my cooperative to manage my risk by forward pricing grain and my cooperative is impacted by the bankruptcy.” 

Blew further testified about the amount of time both MKC and Team Marketing Alliance (TMA) spent in the days following the bankruptcy filing trying to understand how and why various adjustments to account balances took place. 

Ted Schultz, Chief Operating Officer for TMA, and Advance Trading, TMA’s broker, continue to monitor the situation closely.  Schultz commented that the bankruptcy has not interfered with TMA’s daily business and that most funds have already been returned.

“Although TMA did have a significant amount of assets tied up in segregated accounts at the time of the bankruptcy filing, we have already received a large portion of those funds,” stated Schultz.  “More funds are scheduled to be released next week and we expect all funds to be returned over time.  The bankruptcy trustee and Commodity Futures Trade Commission have reaffirmed these funds have exclusive rights and will be made a priority.”

What, if any, financial impact does this have on MKC?  According to Danny Posch, Chief Financial Officer for MKC, no allowance has been made in the financial statements for any loss related to MKC’s relationship with MF Global. 

“All information we have received indicates we will be reimbursed 100% of our funds,” stated Posch.   “We are currently having our most successful year in the history of this coop and we don’t anticipate this transaction adversely affecting our financial condition under any scenario.”

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