The trustee appointed to maximize the assets in the estate of MF Global Holdings Ltd. during its bankruptcy proceedings has told a congressional panel that he will not award bonuses to the senior executives who remain with the firm and are helping him untangle its finances. About $1.6 billion in customer funds is unaccounted for at this point.
Louis Freeh, a former FBI director, said the three executives who stayed on at MF Global even after its Oct. 31 collapse are providing “invaluable support” in helping understand the complex transactions between and among the firm's entities. But he said he will not recommend bonuses for the trio, who continue to receive salaries for their work.
“It was never my intention to pay any bonuses; I never had a plan in place to pay any bonuses to senior executives,” Mr. Freeh told members of the Senate Banking Committee on Tuesday. “Bonuses are not part of my consideration now and they have not been in the past.”
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Mr. Freeh's written testimony said that in conversations about retaining the executives, as well as 15 other employees who are helping to go through the books of MF Global and its entities, he had “discussed at various times the possibility of establishing a retention program.” But there was never a formal program created for senior executives, he said.
Last month, both Democratic and Republican members of the Senate Agriculture Committee sent Mr. Freeh a letter critical of any plans to award bonuses. A March article in The Wall Street Journal reported that the trustee planned to ask the federal bankruptcy judge in the case for approval to give six-figure bonuses to its chief operating officer, finance chief and general counsel.
In his first question to witnesses, Senate Banking Committee Chairman Tim Johnson, D-S.D., required Mr. Freeh to confirm that his office will not be seeking bonuses for any former or current MF Global employee.
The hearing was held to discuss whether changes were needed in the rules governing the oversight of futures firms such as MF Global, which collapsed under the leadership of chief executive Jon Corzine, formerly chairman of The Goldman Sachs Group Inc., governor of New Jersey and member of the U.S. Senate.
