If as a generally informed person who had not yet seen MF Global’s bankruptcy petition, you were to guess who’s going to be knocking on MF’s door most forcefully, you might come up with a list something like this:

1. The banks that were repo’ing its $6.3 billion in Eurozone exposure
2. The lenders on its $1.3 billion in credit facilities that it drew last week (oops!)
3. Bondholders on its four series of public debt totaling ~$1bn
4-99. Other repo, derivatives, securities lending, etc. etc. counterparties and clearinghouses, including maybe the Fed
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.
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100. John Corzine, for his $12mm severance
101. CNBC, for advertising and/or Dick Bové’s strategic advice
102-…. Law firms, accountants, PR firms, Bloomberg, and other trade creditors.

If you then went and checked your work against the actual petition, you might be a bit surprised. At the top of the list are JPMorgan as admin agent for the credit facility (misleadingly listed as trustee for public bonds) and the indenture trustees for the bonds. Those top five total about $2.2 billion. The rest is trade creditors, maybe $10mm or so. CNBC is there, as are Bloomberg and a bevy of law firms and consultants. (Not nearly as many as there will be!)

But there’s not a repo counterparty in sight, and the total of about $2.3 billion in listed claims seems pretty light compared to the total liabilities of $39.7 billion. (Corzine’s not there either, though to be fair that severance is not crystallized quite yet.) If all you had was this petition, you might think that MF Global was in the business of raising money just to buy exposure on CNBC.

So where’d the other $37 billion or so go? Continue reading »