The trustee supervising the liquidation of MF Global Holding Ltd.'s brokerage on Friday said that more than $1.6 billion in customer cash remains out of his grasp, more than previously estimated.
Included in that figure for the first time is roughly $700 million in client money residing in the U.K., which is likely to be the center of a legal fight with KPMG, the U.K.-based administrator overseeing the unwinding of MF Global's London-based division.
"We now know we're in for a long haul with the U.K. administrator," said a spokesman for James Giddens, the court-appointed trustee for MF Global's brokerage in New York.
Mr. Giddens this past week was cleared by U.S. Bankruptcy Court to hire Slaughter & May, a London law firm, as the process of securing funds from MF Global's foreign-based operations plays out.
The $1.6 billion deficiency outlined by the trustee Friday comes after more than three months of investigation by federal authorities and the filing of claims by former customers of the broker-dealer, which filed for bankruptcy Oct. 31.
Friday's notice to former customers offered more detail into the makeup of that figure. About $900 million in funds linked to U.S. commodity trading accounts remains unaccounted for, as well as $700 million believed to be in the U.K.
Mr. Giddens included the latter figure as it became apparent that this money won't be repatriated soon, his spokesman said.
The prior $1.2 billion estimate had included the U.S. commodity account money as well as a rough estimate of funds linked to securities accounts held at MF Global, a smaller business for the firm compared with its presence in futures. The trustee currently doesn't have an estimate for unattainable assets tied to these accounts.
There are no current plans to distribute any more cash to MF Global's former customers, who so far have received about 72 cents on the dollar for their money held in accounts at the firm.
Mr. Giddens reiterated that he is required by law to keep an "appropriate" amount of funds in reserve until disputed claims are resolved. For now, that figure stands at $1.4 billion, according to Friday's notice.