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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: MF GLOBAL INC., Debtor. ORDER DIRECTING SIPA TRUSTEE TO FILE FURTHER DISCLOSURES CONCERNING DISINTERESTEDNESS A P P E A R A N C E S: HUGHES HUBBARD & REED LLP Counsel for James W. Giddens, Trustee for the SIPA Liquidation of MF Global Inc. One Battery Park Plaza New York, New York 10004 By: Anson Frelinghuysen, Esq. James B. Kobak, Jr., Esq. Christopher K. Kiplok, Esq. Jeffrey S. Margolin, Esq. ROBERT MARTIN Pro Se 3 Kenwood Road Saddle River, New Jersey 07458 MITCH FINE Pro Se 575 San Pablo Avenue Emeryville, California 94608-3325 Case No. 11-2790 (MG) SIPA

MARTIN GLENN UNITED STATES BANKRUPTCY JUDGE James W. Giddens (“Giddens” or the “Trustee”), the liquidation trustee of MF Global Inc. (“MFGI”), has moved the Court to determine the disinterestedness of the Trustee and his counsel, Hughes Hubbard & Reed LLP (“HHR”). (ECF Doc. #45). Giddens is a partner in HHR. The Trustee and HHR were selected for their respective roles in this SIPA liquidation

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(“SIPA Liquidation”) by the Securities Investor Protection Corporation (“SIPC”) pursuant to the Securities Investor Protection Act of 1970 (“SIPA”), as amended, 15 U.S.C. § 78eee(b)(3) (2006). Two customers of MFGI filed objections, focusing on “connections” between HHR and JP Morgan Chase & Co. and its affiliates (collectively, “JPM”) and Pricewaterhouse Coopers LLP (“PWC”). (ECF Doc. #202, #414 & #653). Under SIPA, a person is not disinterested if (i) such person is a creditor (including a customer), stockholder, or partner of the debtor; (ii) such person is or was an underwriter of any of the outstanding securities of the debtor or within five years prior to the filing date was the underwriter of any securities of the debtor; (iii) such person is, or was within two years prior to the filing date, a director, partner, officer, or employee of the debtor or such an underwriter, or an attorney for the debtor or such an underwriter; or (iv) it appears that such person has, by reason of any other direct or indirect relationship to, connection with, or interest in the debtor or such an underwriter, or for any other reason, an interest materially adverse to the interests of any class of creditors (including customers) or stockholders, except that SIPC shall in all cases be deemed disinterested, and an employee of SIPC shall be deemed disinterested if such employee would, except for his association with SIPC, meet the standards set forth in this subparagraph. 15 U.S.C. § 78eee(b)(6)(A). The initial disclosure made by HHR in support of the motion did not mention JPM by name. (ECF Doc. #45, Exs. A & B). The objections nevertheless show (based on information taken from the HHR Web site) that JPM is or was a client of HHR. At the November 22, 2011 hearing on this matter, the Trustee’s counsel acknowledged that HHR has represented JPM in other matters. At the hearing, the Court directed the Trustee’s counsel to file a supplemental disclosure regarding any connections between HHR and JPM. The supplemental declaration filed by HHR states that total fees received by HHR from JPM have been minimal as a

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percentage of revenue of HHR, but the declaration does not clearly disclose whether JPM is a current client of HHR.1 (ECF Doc. #509). The status of an entity as a current client (as opposed to a former client) can make an important difference in evaluating conflicts and disinterestedness. Numerous press reports and statements by counsel in this case, and in the parallel chapter 11 case, In re MF Global Holdings Ltd., Case No. 11-15059 (Bankr. S.D.N.Y.), have acknowledged that JPM is the agent and a lender to MF Global Holdings Ltd. and serves as the administrative agent of a $300 million secured facility between MFGI and several other lenders. Disclosures to the Court by the parties in these two cases regarding the facts and circumstances leading to the collapse of MFGI have been sparse, but press accounts have raised questions whether funds or property were transferred from MFGI to JPM in the days leading up to the filing of the SIPA Liquidation and chapter 11 case. Press accounts, of course, are not

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The supplemental declaration states: As a general practice firm of over 300 attorneys, the Firm represents many entities, including financial entities or investors, who may have been involved in the past with transactions in which MFGI, MFGI’s parent, or some MFGI affiliate was involved or may have been a counterparty. Some of these entities include parties-in-interest in this proceeding such as JPMorgan Chase Bank (“JPMC”) and PricewaterhouseCoopers LLP (“PwC USA”), which the Firm may from time to time represent on other unrelated matters. . . . In 2009 and 2010, fees generated from [representation of JPMC] constituted less than one-tenth of one percent of total Firm revenue for each year. In 2011, any such syndicate or other representations are projected to generate revenue constituting less than one one-thousandth of one percent of total Firm revenue for the year. . . . In 2009 and 2010, fees generated from [representation of PwC USA and its foreign affiliates] constituted 3.08% and 1.89% percent [sic] respectively of the Firm’s revenue. In 2011, these representations are projected to generate fees constituting less than one-half of one percent of the Firm’s revenue.

(ECF Doc. 509, ¶¶ 2-4 (footnotes omitted)).

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evidence. But, at a minimum, in order for the Court to determine whether the Trustee and HHR are disinterested under SIPA and the Bankruptcy Code, further specific disclosures are required. Therefore, the Court will provide one further opportunity to HHR to provide the information necessary for the Court to make the required determinations. The Trustee’s counsel (or SIPC, to the extent appropriate) shall file supplemental disclosures and memoranda of law on or before 5:00 p.m., Monday, December 12, 2011, addressing the following factual and legal questions: FACTUAL QUESTIONS 1. Are JPM, PWC, or any lenders involved in MFGI’s $300 million secured credit facility current clients of HHR? 2. Are any other current clients of HHR creditors of MFGI? If so, please provide details. 3. If the answers to Questions 1 or 2 are affirmative, provide details of each current matter, including the name of the client, a description of the matter and the nature of the services being provided by HHR, the date when HHR was retained, an estimate of when the matter will be concluded, the amount of fees billed and/or collected to date, and, if possible, an estimate of future fees before the matter is concluded. 4. Are JPM or PWC creditors of MFGI? If so, please provide details. 5. Can HHR commence legal action against JPM, PWC, or any other current clients that are creditors of MFGI, if necessary and appropriate? If JPM, PWC, or any other creditors of MFGI are current clients of HHR and you state that you can commence legal action against any of them, provide the legal basis for that conclusion.

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6. Does HHR have an engagement letter with JPM, PWC, or any other current clients that are creditors of MFGI, that addresses whether HHR may be adverse to those clients in other unrelated matters? If so, please provide details. 7. Based on information currently available to HHR, during the ninety days prior to the commencement of the SIPA Liquidation, did MFGI make any payments or transfers of property or funds belonging to MFGI or to any of MFGI’s customers, to or for the benefit of JPM, or to any other current clients of HHR? 8. Based on information currently available to HHR, if there were such payments or transfers, do you believe that the Trustee or any of MFGI’s customers have a basis in fact and law to seek to recover any payments or transfers that were made to or for the benefit of JPM or other current clients of HHR? 9. If necessary and appropriate to commence legal action to recover any payments or transfers, can HHR do so with respect to each recipient of such payment or transfer? 10. What, if any, policy or practice has SIPC followed with respect to selecting “conflicts counsel” to handle any matters that a trustee’s counsel may not handle in a SIPA liquidation because of a conflict of interest? 11. What, if any, policy or practice has SIPC followed with respect to addressing issues customarily addressed by a SIPA trustee if the trustee has a conflict of interest in a particular matter? LEGAL QUESTIONS 1. Can HHR threaten or bring an action on behalf of the Trustee against JPM or any other current client of HHR?

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2. Can “conflicts counsel” be used in a SIPA liquidation proceeding if a trustee’s counsel is precluded by ethical rules from undertaking a conflicting representation? 3. If HHR is not disinterested in a particular matter in this SIPA Liquidation, is the Trustee who is a partner in HHR likewise not disinterested? 4. If the Trustee is not disinterested with respect to a particular matter within this SIPA Liquidation, may SIPC act instead of the Trustee in that matter? See 15 U.S.C. § 78eee(b)(6)(A) (stating that “except that SIPC shall in all cases be deemed disinterested, and an employee of SIPC shall be deemed disinterested if such employee would, except for his association with SIPC, meet the standards set forth in this subparagraph”). 5. Please address at least the following cases and other authorities in any further memorandum of law filed in response to this Order: Cases In re AroChem Corp., 176 F.3d 610 (2d Cir. 1999) In re Crivello, 134 F.3d 831 (7th Cir. 1998) Rome v. Braunstein, 19 F.3d 54 (1st Cir. 1994) In re Blinder, Robinson & Co., 131 B.R. 872 (D. Colo. 1991) In re Allegheny Int’l, Inc., 117 B.R. 171 (W.D. Pa. 1990) In re Project Orange Assocs., LLC, 431 B.R. 363 (Bankr. S.D.N.Y. 2010) In re Granite Partners, L.P., 219 B.R. 22 (Bankr. S.D.N. Y. 1998) In re Leslie Fay Cos., 175 B.R. 525 (Bankr. S.D.N.Y. 1994) In re Perry, Adams & Lewis Sec., Inc., 5 B.R. 63 (Bankr. W.D. Mo. 1980) Other Authorities RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 128 (2000) (stating that a lawyer may not “represent one client to assert or defend a claim against or brought by another client currently represented by the lawyer, even if the matters are not related”) MODEL RULES OF PROF’L CONDUCT R. 1.7 & cmt. (2010) (discussing rule and general principles of conflicts of interest regarding current clients)

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JOINT RULES OF THE APPELLATE DIVISIONS OF THE SUPREME COURT, RULES OF PROFESSIONAL CONDUCT R. 1.7 (2009) (stating New York rule on “Conflict of Interest: Current Client”). IT IS SO ORDERED. Dated: December 7, 2011 New York, New York. _____/s/Martin Glenn_______ MARTIN GLENN United States Bankruptcy Judge

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