The futures brokerage firm run by former New Jersey Gov. Jon Corzine (D) has filed for bankruptcy, ending a series of frantic attempts by Corzine to find last-minute backers to buy its assets.
The bankruptcy is a blow to Corzine, who was at the helm of MF Global as it expanded its investment in European debt.
But it could be a personal financial boon to the former governor: if the company terminates him without cause, he is entitled to a $9 million severance payment, plus a $3 million annual bonus, according to Securities and Exchange Commission filings.
MF Global will enter bankruptcy proceedings with $41 billion in assets and $39 billion in liabilities, according to documents filed in federal bankruptcy court. The firm's largest debtor, JPMorgan Chase, is owed about $1.2 billion in bond debt.
Corzine, a former CEO of Goldman Sachs who represented New Jersey in the Senate before becoming governor, has remained a prominent political force since being defeated by now-Gov. Chris Christie (R-N.J.) in 2009. He showed up on a list of bundlers who raised more than one-half million dollars for President Obama's reelection during the third quarter of 2011, and has been floated as a possible replacement for Treasury Secretary Timothy Geithner.
Financial analysts saw tea leaves in August when reports emerged about a so-called "Obama clause" built in to Corzine's contract with MF Global. The clause promised to pay investors an extra percentage point of interest on their investment if Corzine left the company for a job with the federal government before July 2012.