NEW YORK (TheStreet) -- A group of MF Global (MFGLQ.PK) clients are arguing in court documents that JPMorgan Chase (JPM) was using cheap tactics to side-step them in the bankruptcy recovery process, the New York Post reported.
Last week, JPMorgan, along with Bank of America (BAC) and other investment firms was appointed to the MF Global Creditor Panel.
The group of customers, led by James Koutalas, chief executive of a Chicago-based commodities trading firm, are taking issue with a lien and other protections offered to JPMorgan in exchange for a $8 million loan the bank extended to MF on the first day of its bankruptcy, according to the report. That would allow JPMorgan the right to some assets over other creditors.
Koutalas called the loan a "farce" and is requesting in a motion that customers be given priority over any assets recovered if client accounts were found to have been wrongfully commingled with company funds, the New York Post reported.The bankruptcy judge Martin Glenn has acknowledged that he doesn't normally grant special rights to a lone lender and is to re-evaluate the matter. Koutalas is also requesting that he be granted a seat in the committee. --Written by Shanthi Bharatwaj in New York
>To contact the writer of this article, click here: Shanthi Bharatwaj. >To follow the writer on Twitter, go to http://twitter.com/shavenk. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV