MT Senator calls MF Global bonus proposal ‘outrageous’


The Wall Street Journal reported on Friday that as many as 23 employees at MF Global might get bonuses for their assistance with the company’s bankruptcy investigation. The journal reports that president and CEO Bradley Abelow, chief financial officer Henri Steenkamp and general counsel Laurie Ferber could all take bonuses home with up to six figures each.

Louis Freeh, the man in charge of unwinding what is left of MF Global, is expected to ask a bankruptcy court judge to approve performance-related payouts for the officials.

With MF Global bankrupt and Montana farmers and ranchers missing millions of dollars, Senator Jon Tester is blasting a proposal to award the bonuses.

Tester calls plans by a bankruptcy trustee to distribute bonuses “outrageous” and demanded MF Global’s trustee reconsider his decision. He sent a letter to Freeh expressing his take on the situation.

“Quite simply, it is unacceptable for you to sanction the award of performance-based compensation before the recovery of client funds,” Tester wrote Louis Freeh, MF Global’s bankruptcy trustee.  “Rather than reward executives, I urge you to use these funds to repay the farmers and ranchers whose trust was so betrayed by MF Global.”

Tester also reminded Freeh that bankruptcy law significantly restricts his ability to compensate former firm executives.

 “Your authority as the bankruptcy trustee overseeing the liquidation of the MF Global should be used strictly to help maximize MF Global assets so that clients of the firm can see their funds returned,” Tester wrote.

Tester, the Senate’s only active farmer, called for a hearing in the Senate Banking Committee to examine the factors leading to MF Global’s collapse and demanded that the Justice Department conduct a comprehensive investigation.

Source: Office of Senator Tester