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BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103 Telephone: (215) 875-3000 Facsimile: (215) 875-4671 Counsel for Kay P. Tee, LLC, Thomas G. Moran, John Andrew Szokolay, Donald Tran, William Fleckenstein, and Mark Dwyer

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ____________________________________ : In re: : : MF GLOBAL, INC., : : Debtor. : ____________________________________:

Case No. 11-2790 (MG) SIPA

FUTURES CUSTOMERS’ NOTICE REGARDING OBJECTION TO SIPA TRUSTEE’S UNAUTHORIZED DEMAND FOR AN ASSIGNMENT AND RELEASE OF CLAIMS FROM FUTURES CUSTOMERS Kay P. Tee, LLC, Thomas G. Moran, John Andrew Szokolay, Donald Tran, William Fleckenstein, Mark Dwyer, Robert Marcin, Charles Andrews, Jr., Thomas S. Wacker, and Summit Trust Company (collectively, the “Futures Customers”), by and through their undersigned counsel, respectfully notify the Court of an unexplained, unauthorized, and inappropriate demand by the SIPA Trustee James Giddens (“Trustee”): that MF Global’s customers—whose money was stolen from their accounts—release, assign, and transfer a broad array of important legal rights in exchange for receiving any further distributions in MF Global’s SIPA liquidation. The Futures Customers file this Notice out of a serious concern that the Court

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may not be aware of the contents of the “Declaration, Release and Assignment” (Exhibit A) being mailed to tens of thousands of MF Global commodity customers. Included within the Trustee’s “Declaration, Release and Assignment” form (“Release and Assignment Form”), which was enclosed with the “Notice of Trustee’s Determination of Claim” (“Determination Notice”) recently mailed to some customers,1 is a very broad—indeed, overbroad—release and an unwarranted assignment of claims. A redacted copy of the Trustee’s communication, including both the Determination Notice and Release and Assignment Form, is attached to this Notice as Exhibit A. As the Futures Customers will explain in detail in the Motion to be filed as soon as possible, there are a number of problems with both the substance of the Release and Assignment Form and the procedure by which it was foisted upon the unrepresented class members. Most importantly, the release and assignment are broad, requiring customers not only to release claims that the customer may have against the MF Global Inc. Estate (and others, including defendants in the pending class actions), but also to assign all claims against “any party, arising out of or relating to the Claim, the circumstances that gave rise to the Claim, and the Account, to the extent of the Consideration.” See Exh. A (second and fourth paragraphs of the Release and Assignment Form). Although it is unclear precisely what this provision means or is intended to mean, it may be interpreted to release claims being asserted in the numerous class action lawsuits filed by aggrieved customers. It could also potentially be asserted as a bar to recovery by some or all of the defendants joined in these lawsuits, including claims in the suits against parties
1

It is unclear when the Trustee began mailing Determination Notices with enclosed Release and Assignment Forms, but he appears to have done so on a rolling basis beginning at least as early as February 17, 2012 (see Dkt. No. 944, Letter Re: Trustee’s Determination of Claim (attaching Determination Notice dated Feb. 17, 2012)) and as recently as February 29, 2012 (see Exh. A to this Notice). Further, at the recent March 6 hearing before this Court, the Trustee indicated his intent to send the Release and Assignment form to all MF Global commodity customers. 2

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alleged to be responsible for the misappropriation of customer funds, currently before Judge Victor Marrero in the Southern District of New York.2 In addition, as far as the Futures Customers can tell, the Trustee at no point sought or received authorization to demand that customers execute a release and assignment of customer claims in order to receive distributions of their funds, let alone the broad release and assignment demand that the Trustee has put before the customers. See Exh. A at 4 (language in bold). The Claims Process approved by this Court does not authorize the Trustee to send this Release and Assignment Form to customers. See Dkt. No. 144 (Trustee’s Expedited Application for Entry of an Order Establishing Parallel Claims Processes, Nov. 15, 2011); Dkt. No. 423 (Order Approving Trustee’s Expedited Application, Nov. 23, 2011). Significantly, prior to

disseminating the Determination Notice, the Trustee made at least three separate distributions to customers without requiring them to execute a release or assignment of any kind.3

2

The Futures’ Customers’ class action suit, in Kay P. Tee, LLC et al v. Corzine, et al., 12-cv00195, consolidated under the first filed securities class action case DeAngelis v. Corzine, et al., 11-cv-07866, asserts claims under state and federal law against Jon S. Corzine, Henri J. Steenkamp, Bradley I. Abelow, Michael G. Stockman, Edith O’Brien, Richard W. Gill, Laurie R. Ferber, Christine A. Serwinski, Dennis A. Klejna, David Simons, CME Group, Inc., JP Morgan Chase & Co., and John Does 1-10. There are seven futures customers’ class actions in this district alone. Class plaintiffs in five of these actions join this Notice.
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Futures Class Counsel do not want to interfere with the orderly return of funds from the MFGI Estate to the futures customers; our concern is with the extraction of a release and assignment as a precondition to any further return of funds, as threatened in bold print in the Trustee’s Determination Notice (Exh. A at 4). We acknowledge that any return of customer funds acts to set off/reduce the compensatory damages claims of MF Global Inc. futures customers. Further, undersigned counsel have assured their class representative clients that no fees will be sought from any funds returned to clients by the Trustee’s actions, and the district court can ensure similar conditions with respect to any other class counsel who have not yet made this assurance in the pending class actions. But the Trustee can act to recover funds for the Estate—and the customers—without extracting broad releases and assignments that threaten to extinguish all or part of the customers’ valuable claims against, e.g., Messrs. Corzine, Abelow, Steenkamp, the CME Group, or JPMorgan Chase. 3

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As of the March 6, 2012 hearing before this Court, many customers had already executed Release and Assignment Forms and returned them to the Trustee, as reported by the Trustee’s Counsel at the hearing.4 The Form does not even admonish customers to consult a lawyer and can easily be misinterpreted to require prompt return to the Trustee. Given the significance of the Trustee’s unauthorized demand that customers either broadly relinquish all legal rights related to the unprecedented losses they suffered when MF Global collapsed, or forfeit funds to which they are legally entitled, the Futures Customers believe that this issue requires immediate attention and resolution by this Court. Counsel for the Futures Customers tried to alert the Court to this issue at the March 6, 2012 hearing, and the Court directed that a Motion be filed. The Futures Customers respectfully request the Court to establish an expedited briefing and hearing schedule through which the Court may determine the propriety of the Determination Notice and Release and Assignment Form, or act to limit its scope and application. Further, the Futures Customers will respectfully ask the Court to void any signed Release and Assignment Forms and require that the Trustee seek Bankruptcy Court and District Court approval for any such customer communications going forward. Futures Customers will follow the Court’s

4

See, e.g., Dkt. No. 989 (executed Release and Assignment form filed with the Court yesterday by a claimant). This was apparently the first docketed copy of the actual Release and Assignment Form. 4

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procedures set forth in the Case Management Order (Dkt. No. 418) and have attempted to contact the Trustee’s Counsel in an effort to agree upon a schedule. Respectfully Submitted,

/s/ Merrill G. Davidoff Michael C. Dell’Angelo Daniel Walker Molly Tack-Hooper BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103 Telephone: (215) 875-3000 Facsimile: (215) 875-4671 mdavidoff@bm.net mdellangelo@bm.net Counsel for Kay P. Tee, LLC, Thomas G. Moran, John Andrew Szokolay, Donald Tran, William Fleckenstein, and Mark Dwyer Linda P. Nussbaum Matthew P. Morris Shelly L. Friedland GRANT & EISENHOFER P.A. 485 Lexington Avenue New York, NY 10017 Telephone: (646) 722-8500 mpmorris@gelaw.com Counsel for Robert Marcin Michael C. Rakower LAW OFFICE OF MICHAEL C. RAKOWER, P.C. 747 Third Avenue, 32nd Floor New York, NY 10017 Tel: 212-650-5550 Fax: 212-660-5551 mrakower@rakowerlaw.com -and-

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Irwin B. Levin Richard E. Shevitz Scott D. Gilchrist COHEN & MALAD, LLP One Indiana Square Suite 1400 Indianapolis, IN 46204 Tel: 317-636-6481 Fax: 317-636-2593 ilevin@cohenandmalad.com rshevitz@cohenandmalad.com sgilchrist@cohenandmalad.com Co-Counsel for Charles Andrews, Jr. Keith M. Fleischman FLEISCHMAN LAW FIRM 565 Fifth Avenue, 7th Floor New York, New York 10017 Telephone: (212) 880-9571 -andFrancis P. Karam FRANCIS P. KARAM, LLC 12 Desbrosses Street New York, NY 10013 Telephone: (212) 489-3900 Co-Counsel for Thomas S. Wacker Benjamin Y. Kaufman Andrei V. Rado Carla Fredericks MILBERG LLP One Pennsylvania Plaza, 49th Floor New York, NY 10119 Tel: 212-594-5300 Fax: 212- 868-1229 bkaufman@milberg.com bkaufman@milberg.com cfredericks@milberg.com -and-

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Jeffrey R. Krinsk Mark Knutson C. Michael Plavi, II FINKELSTEIN & KRINSK LLP 501 West Broadway, Suite 1250 San Diego, CA 92101 Tel.: (619) 238-1333 Fax: (619) 238-5425 jrk@classactionlaw.com mlk@classactionlaw.com cmp@classactionlaw.com Co-Counsel for Summit Trust Co.

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