International Business Times:
But there’s a kind of unsecured creditor that stands out. An analysis of the firm’s Chapter 11 filing by the International Business Times has found slightly over $2 million of the $10.17 million the company hasn’t paid others for delivered good and services is owed to media companies, public relations firms, branding advisers, Web advertising specialists and marketing experts. Taken together with other recent developments, the information on these creditors suggests that, even as it stared into the abyss of sinking share prices and possible bankruptcy, MF Global was engaged in a major initiative to promote its core brokerage business and increase brand awareness, particularly online.
A Different Kind of Creditor
The largest unpaid claim from a media company is owed to cable business news channel CNBC, a unit of NBC Universal. The bankrupt company owes them $845,397 for running its TV commercials.
Six other media-centric concerns are owed more than $100,000 and include Chicago-based Dean Media Group, a 17-employee full-service marketing firm that had created an online advertising campaign for MF Global’s agricultural commodities trading platform, and which is owed $309,000. The New York office of The Gate Worldwide, a global boutique branding firm which had been engaged in a channel marketing effort with MF Global since May, hasn’t been paid $229,739 for services.
Illinois-based Lever Interactive, a marketing management outfit that specializes in search engine optimization and Web analytics, holds a claim of $178,900. RR Donnelley (NASDAQ:RRD), a Chicago-based 58,000-person integrated marketing and communications company that had been MF Global’s go-to resource for managing investor communications, has an outstanding bill for $118,600.
New York-based Infinia Group, a graphic design firm whose long relationship with MF Global includes designing their “global identity,” hasn’t collected on $115,001. ADK America, an advertising firm owned by British giant WPP plc (NASDAQ:WPPGY), which had worked on print campaigns for the company’s industrial commodities trading platform, is on the hook for $101,958.
Other outstanding debts are smaller, though the companies that hold them might not see them that way. The Chicago office of St. Louis-based Fleischman Hillard, an international public relations firm that has handled MF Global’s communications in the past, is owed $42,000. Marketing automation and analytics concern Eloqua, whose direct business with MF Global is unknown, hasn’t been paid $33,000. Raleigh, North Carolina-based Media Two, which designed Web sites for MF Global and advised the firm on search strategy, hasn’t been paid $25,000 for its work.
As for what caused the bankruptcy, Jon Corzine’s bet on European debt:
MF met its financial downfall from the declining value of its $6.3 billion in holdings of sovereign debt owing by Belgium, Italy, Spain, Portugal and Ireland. After being downgraded to junk status last week by Fitch Ratings and Moody’s Investors Service, margin calls accelerated, straining liquidity, court papers said.
Heckuva’ job, Jon.