Fun while it lasted at MF Global…

October 31, 2011

Look: It’s Jon Corzine again!

Most of the frequent flyers around here are companies, but a few are people: Martha Stewart, the late Steve Jobs, and — of course — Corzine, whose MF Global (MF) filed for bankruptcy-court protection today (and has appeared in our pages at least a half-dozen times over the years).

We’ll leave it to others to wax on about MF Global’s disastrous European bond bets, his political aspirations, and his tenure at Goldman Sachs. You can check out some of the good coverage at DealBook and Deal Journal, He landed on our radar in earnest back in March 2010, when we footnoted his unusual working arrangement with MF Global.

Like most corporate chieftains, Corzine promised in his employment agreement to “spend substantially all of his business time and attention” on his job running MF Global, but the contract also recognized that he also had a gig as a visiting professor at Princeton University’s Woodrow Wilson School, and a third gig as an operating partner at private-equity firm J.C. Flowers & Co. Moreover, at J.C. Flowers, he could withhold even crackerjack investment opportunities from MF Global in favor of his side job, under certain conditions. In that first post on Corzine and MF Global, we said we hoped Corzine was better at juggling his various jobs than he was at winning re-election…

That pleasant arrangement got extended about a year later, which we footnoted on March 7 this year, with a $1.5 million retention bonus replacing his $1.5 million sign-on bonus (and we wondered whether the company would just keep finding new reasons for giving him an additional $1.5 million a year. We’ll see what the bankruptcy trustee has to say about it.) But the most surprising thing about that bonus was that he’d get to keep it if he left for public service, which, we noted at the time, was so broadly written that he could have left for some pretty lowly government jobs and still collected.

It may be to Corzine’s credit that he didn’t. Technically, executives still on board during a bankruptcy reorganization get to stand in line for the (usually unsecured) promises their employers have made to them. In practice, companies can sometimes convince courts that their top brass are so crucial that their big bucks should be kept flowing despite the bankruptcy. (If this sounds all too familiar, think of AIG’s pay practices in the time since the federal government took it under its wing in the fall of 2008.)

There’s even been some speculation that Corzine is likely to get the $12-million golden parachute listed in the company’s proxy. We’d just point out that Corzine would have to get canned to collect at all, and that the board would have to conclude that he was forced out without cause (a pretty narrow term encompassing, essentially, really bad behavior).

In any case, the company doesn’t seem to think such a payout is owed going into bankruptcy: Its court filing (posted by DealBook) doesn’t list a financial obligation to Corzine, and that filing’s list dips all the way down to $10,000 owed to a Chicago-area consultant. We’ll see what actually happens in court.

That filing, incidentally, has some interesting stuff in it. J.C. Flowers still held 1.5 million MF Global preferred shares; over at Forbes, Robert Lenzer has some scathing words for Flowers. Among MF Global’s other big stockholders: Hedge-fund manager Fine Capital Partners, which had been bulking up on MF Global shares in recent months — we found a couple Schedule 13D filings (on August 18 and September 30) that show its stake rising to 6.1% and then 7.4% most recently, making the unlucky firm MF Global’s third-biggest stockholder after FMR’s Pyramis Global Advisers and Guardian Life Insurance Co.’s RS Investments, according to the bankruptcy filing. A commenter over on DealBook notes that CNBC is seventh on the company’s list of creditors.

Its 24th biggest creditor, at $105,000? It’s simply labeled “Directors Fees” in the court filing, giving MF Global’s headquarters as the applicable address.

Think those will get paid?

Image source: Corzine campaign website

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