By Nick Brown
NEW YORK (Reuters) - Former customers of Jon Corzine's collapsed brokerage MF Global would recover most, and probably all, of their money under the latest projections by the trustee liquidating its bankrupt parent company.
In a court filing late on Friday, trustee Louis Freeh, the former FBI chief, outlined an amended version of a plan for how to divvy up MF Global's assets and distribute them among various creditor classes.
Freeh projected MF Global's U.S. broker-dealer unit could have up to a $120 million surplus, which would mean full payback for the traders whose money was frozen when the brokerage went bankrupt in October 2011.
But Freeh also said the broker-dealer unit could wind up with a $6 million shortfall. While that is a small number in the context of the $1.6 billion hole customers were thought to face at the beginning of the case, and one that could likely be bridged through other sources of recovery, it is a less certain forecast than the version of the payout plan released last month.
In that plan, issued by a group of unsecured creditors led by Silver Point Capital, Knighthead Capital and Cyrus Capital Partners, customers were slated to receive "payment in full."
The proposal from Freeh on Friday, released in cooperation with the Silver Point group, incorporated more recent financial data.
In addition to conceding a possible deficit at the broker-dealer, the latest plan narrows recovery ranges for holders of MF Global's $2.2 billion in unsecured claims. Such creditors, which include the Silver Point group, are now projected to recover between 13.4 percent and 38.9 percent of claims, a range that had been pegged at between 11.5 percent and 41.5 percent in the earlier plan.
The updated proposal specifies that lender JPMorgan Chase & Co
Recovery estimates are conservative, said Brett Miller, a lawyer for Freeh.
The amended plan represents the first time Freeh has publicly laid out creditor payback projections since MF Global declared bankruptcy.
MF Global was led by former New Jersey Governor and Goldman Sachs Group Inc
The plan is slated to go before Judge Martin Glenn in U.S. Bankruptcy Court in Manhattan for approval on February 14.
Freeh's latest projections follow a deal reached in December between Freeh and the trustees representing MF Global's U.S. and British brokerage customers. That deal was approved by Glenn on Thursday.
The bankruptcy is In re MF Global Holdings Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.
(Reporting by Nick Brown; Editing by Maureen Bavdek)