MF Global employee lawsuits to be led by one firmPosted On: Jan. 31, 2012 12:00 AM CST
NEW YORK (Reuters)—The federal judge overseeing MF Global Holdings Ltd.'s bankruptcy appointed one law firm to represent brokerage employees who claimed to be fired unfairly, ending a "vitriolic battle" for that role.
Outten & Golden L.L.P. will lead litigation accusing James Giddens, the trustee liquidating the company's broker-dealer unit, of firing the unit's roughly 1,066 workers without providing 60 days notice as required under federal and New York state labor law.
U.S. Bankruptcy Judge Martin Glenn rejected a request of by firm Harwood Feffer L.L.P. to lead the case, noting that its own lawsuit was filed later and "appears to be a nearly-word-for-word copy" of the original Outten lawsuit.
The "vitriolic battle" has left defense lawyers "happily standing on the sidelines" and should be ended to avoid duplicate litigation, Judge Glenn wrote.
Harwood Feffer did not immediately respond to a request for comment.
The lawsuit is among a variety of litigation spawned by the Oct. 31 bankruptcy of MF Global, a large futures and commodities brokerage then led by former New Jersey Gov. Jon Corzine.
Three firms including Outten filed lawsuits between Nov. 11 and Nov. 14 seeking to lead the litigation on behalf of employees, only to have Harwood Feffer file a similar lawsuit on Dec. 1.
The original firms then pooled their efforts in a single lawsuit and argued that Harwood Feffer's copycat "tag-along" lawsuit added nothing.
Harwood Feffer countered that the other case had "numerous procedural defects" and that the firms had a "demonstrated unwillingness and inability" to work with other lawyers.
But in his decision, Judge Glenn said, "the putative classes are composed of the same members, and are organized to vindicate the same rights." He also said Outten's experience in similar cases "specifically tips the balance" in its favor.
"What matters here is the employees, and Judge Glenn's decision makes sense for the bankruptcy estate" in encouraging efficiency, Jack Raisner, a partner at Outten & Golden, said in an interview.
Investigators are still seeking missing MF Global customer money that Mr. Giddens has said could total $1.2 billion.
The lawsuits are all in the U.S. Bankruptcy Court, Southern District of New York. The worker lawsuits are Thielmann et al. vs. MF Global Finance USA Inc. et al., No. 11-ap-02880; Sivova vs. MF Global Holdings Ltd., No. 11-ap-02881; Abruzzo et al. vs. MF Global Holdings Ltd. et al., No. 11-ap-02882; and Greene et al. vs. MF Global Holdings Ltd. et al., No. 11-ap-02921. The main bankruptcy case is In re: MF Global Holdings Ltd. et al., No. 11-15059.