More than £330 million (US $500 million) is to be returned to customers of failed broker dealer MF Global.
Initially, customers will benefit from a share of a £66.1 million (US $100 million) cash distribution after JP Morgan agreed to the payout ahead of a second subsequent payment.
The second cash distribution of £275 million (US $417 million) will be paid out after MF Global’s bankruptcy trustee and JPMorgan release further funds.
James Giddens, the trustee tasked with liquidating MF Global Inc has also confirmed that JP Morgan will return more than US $29 million of funds held by the bank.
In a statement, Giddens said: “The settlement agreement resolves claims by the trustee and customer representatives against JPMorgan that would otherwise result in years of costly litigation between the parties with an uncertain outcome.”
JPMorgan was one of several businesses to make a $1.2 billion loan to MF Global as well as being one of MF Global’s clearing banks before the broker-dealer was declared bankrupt.
In the UK, KPMG has been handling the fortunes of MF Global UK which last month confirmed an improved estimate of distribution to unsecured creditors.
This was contingent on the agreements made with the US MF Global entities in December 2012 becoming unconditional.