UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK NOT FOR PUBLICATION

In re

MF GLOBAL HOLDINGS LTD., et al.,

 Debtors.

Case No. 11-15059 (MG) 

(Jointly Administered)

In re

MF GLOBAL INC.,

Debtor.

Case No. 11-2790 (MG) SIPA

MEMORANDUM OPINION CONCERNING DISCLOSURE STIPULATION AND 

PROTECTIVE ORDER

A P P E A R A N C E S:

HUGHES HUBBARD & REED LLP

Attorneys for the SIPA Trustee

One Battery Park Plaza

New York, New York 10004

By: James J. Kobak, Jr., Esq.

Ethan Litwin, Esq.

FREEH SPORKIN & SULLIVAN, LLP

Special Investigative Counsel for the Chapter 11 Trustee Louis J. Freeh, Esq.

1185 Avenue of the Americas

30th Floor

New York, New York 10036

By: Thomas McC. Souther, Esq.

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MORRISON & FOERSTER LLP

Counsel for Chapter 11 Trustee Louis J. Freeh, Esq.

1290 Avenue of the Americas

New York, New York 10104

By: Brett H. Miller, Esq.

Lorenzo Marinuzzi, Esq.

Melissa Hager, Esq.

FORD MARRIN ESPOSITO WITMEYER & GLESER, L.L.P.

Attorneys for Sapere Wealth Management, Granite Asset Management, and Capere CTA Fund, L.P.

Wall Street Plaza

23rd Floor

New York, New York 10005

By: John J. Witmeyer III, Esq.

Jon R. Grabowski, Esq.

Stephen R. Chuk, Esq.

DEWEY & LEBOEUF LLP

Counsel for the Statutory Creditors’ Committee of MF Global Holdings Ltd., et al.

1301 Avenue of the Americas

New York, New York 10019

By: Martin J. Bienenstock, Esq.

MARTIN GLENN

UNITED STATES BANKRUPTCY JUDGE

Pending before the Court is the Dual Notice of Presentment of Disclosure Stipulation Agreement 

and Proposed Protective Order (the “Protective Order”) (ECF Doc. # 443) between Louis J. Freeh, the 

Chapter 11 Trustee (the “Chapter 11 Trustee”) for MF Global Holdings Ltd, et al. (“MFGH”) and James 

W. Giddens, Trustee (the “SIPA Trustee” and together with the Chapter 11 Trustee, the “Trustees”) for 

the SIPA Liquidation of MF Global Inc. (“MFGI”). The Trustees seek Court approval of the Protective 

Order that provides a limited waiver by the Chapter 11 Trustee of certain privileges and protections with 

respect to documents, communications, and information relating to the business operations of MFGI, the 

Debtors (as defined in the Protective Order) and their direct and indirect subsidiaries, including but not 

limited to documents relating to or concerning segregated funds of MFGI, during the period between 

October 17, 2011, and October 31, 2011.

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Sapere Wealth Management, Granite Asset Management, and Sapere CTA Fund, L.P. (“Sapere”) 

object to the Protective Order as it is currently proposed (the “Objection”). (ECF Doc. # 457.) The 

Trustees have both responded to the Objection. (ECF Doc. ## 486, 488.) Through the Objection, 

Sapere requests that the Court require the inclusion of certain language or, in the alternative, refuse to 

approve the Protective Order as it is currently drafted. Sapere’s Objection is without merit, and its 

proposed changes are unwarranted. Indeed, Sapere cites no law in support of its position and instead 

relies on a misguided understanding of the effect that this Protective Order would have, as well as 

general allegations that the Protective Order would constitute an impermissible advisory opinion. 

Accordingly, Sapere’s objection is overruled and the Protective Order will be approved.

BACKGROUND

A. The Protective Order

The Protective Order between the Trustees provides for a waiver of certain privileges and 

protections concerning information relating to MFGI from October 17, 2011, through October 31, 2011 

(the “Relevant Period”). Specifically, the Chapter 11 Trustee agrees to allow the SIPA Trustee to 

review:

[A]ll documents, communications or information that either are in the 

possession, custody or control of the SIPA Trustee or are in the 

possession, custody or control of the Chapter 11 Trustee that are subject to 

claims of attorney-client privilege, shared privilege or work product 

protection, concerning the business operations of MFGI, the Debtors and 

their direct and indirect subsidiaries, including but not limited to 

documents relating to or concerning segregated funds of MFGI 

(collectively, the “Subject Matters”).

Protective Order at 3. Additionally, the Protective Order provides that, given the investigations of 

MFGI’s and the Debtors’ business operations that are being conducted by various state and federal 

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government agencies, all documents, communications, and information relating to the Subject Matters 

will be made available to the Government Authorities.

1

 Protective Order at 4. 

Additionally, the Protective Order provides that the agreed-upon waiver between the Trustees 

does not constitute a broader waiver under Federal Rule of Evidence (“FRE”) 502(a)(3), and that the 

Protective Order will not affect ‘any claim or waiver of attorney-client or shared privilege and/or work 

product protections held by persons or parties other than the Chapter 11 Trustee. Protective Order at 5.

B. Sapere’s Objection

Through its Objection, Sapere requests that the Court either refuse to approve the Protective 

Order or require the Trustees to include additional language to address what it believes to be 

fundamental deficiencies in the Protective Order. However, Sapere’s Objection cites no law in support 

of its position, and Sapere’s issues arise out of what can only be explained by a fundamental inability to 

understand the basic nature and effect of stipulated waivers.

Sapere first takes issue with the Trustees’ attempt to limit the Chapter 11 Trustee’s waiver to 

documents, communications, and information relating to the Subject Matters during the Relevant Period, 

and not further, arguing that the approval of that provision of the Protective Order “would . . . be a 

judicial determination that a privilege continues in yet-undisclosed documents, communications or 

information despite [FRE] 502(a)(3).” Obj. at 2. Second, Sapere argues that the Protective Order is too 

narrow in defining the Relevant Period, and that it should define that period, at a minimum, as the period 

from the beginning of Jon Corzine’s tenure at MFGI through October 31, 2011. Obj. at 3-4. Third, 

Sapere requests that language be added to the paragraph of the Protective Order that reserves the rights 

of persons other than the Chapter 11 Trustee. 

 1 The Protective Order defines the Governmental Authorities as the Commodity Futures Trading Commission, the 

Securities and Exchange Commission, the United States Attorneys’ offices for the Southern District of New York and the 

Northern District of Illinois and the Congress of the United States. Protective Order at 4.

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And last, Sapere believes that the Court should refuse to approve the Protective Order because of 

fundamental problems relating to the first decretal paragraph of the Protective Order. Sapere argues that 

the Trustees are attempting to obtain a “non-waiver ‘protective’ order” from the Court to allow the 

Trustees to share material, “as to which the Court will not be asked to adjudicate the issue of privilege.” 

Obj. at 8. Sapere further asserts that the Trustees are attempting to use FRE 502 to “allow the transfer of 

information between [the Trustees] . . . immune from the law of waiver.” Id.

C. The Trustees’ Responses

The Trustees have both responded to the Sapere Objection. According to the SIPA Trustee, the 

Protective Order will “facilitate the parallel investigations currently conducted by governmental 

authorities” and provide those authorities with efficient access to documents, “reducing costs to both 

estates.” (ECF Doc. # 488; SIPA Trustee’s Resp. at 2.)

The Chapter 11 Trustee, in a similar vein, requests that the Court approve the Protective Order 

and overrule the Sapere Objection. (ECF Doc. # 486.) In an effort to correct Sapere’s 

misunderstandings regarding the Protective Order, the Chapter 11 Trustee reiterates that it “intends to 

waive the . . . privileges and/or . . . protection concerning the Subject Matters during the Relevant 

Period.” Ch. 11 Trustee’s Resp. ¶ 3. Further, the Chapter 11 Trustee reiterates that the purpose of the 

Protective Order is simply to “protect the Debtors against any claim that the stipulated waiver implicitly 

effectuates a broader waiver outside the Subject Matters and beyond the Relevant Period.” Id. The 

Chapter 11 Trustee correctly notes that such “cabined waivers” have been allowed in this District. See, 

e.g. SEC v. Bank of America Corp., 09-CV-6829 (JSR), 2009 WL 3297493 (S.D.N.Y. Oct. 14, 2009).

DISCUSSION

In SEC v. Bank of America Corp., Judge Rakoff approved a protective order that “allow[ed] the 

Bank of America to waive attorney-client privilege and work-product protection regarding certain 

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categories of information material to [the] case (and seemingly also relevant to certain ongoing state and 

federal inquiries) without thereby waiving such privilege and protection regarding other information that 

may be of interest in related private lawsuits.” 2009 WL 3297493, at *1. In approving that protective 

order—which is strikingly similar to the Protective Order in this case—Judge Rakoff expressly found 

that it comported with FRE 502. Further, Judge Rakoff noted the protective order:

[S]imply protect[s] Bank of America against any claim that the stipulated 

waiver here attached implicitly effectuates a broader waiver; but the 

Protective Order in no way precludes any party in this or any other case 

from challenging on any other ground Bank of America’s assertion of 

attorney-client privilege or work-product protection regarding any 

information.

Id. The language of the protective order approved by Judge Rakoff in SEC v. Bank of America Corp. is 

almost exactly the same as the language in the Protective Order proposed by the Trustees, and the effect 

of the Protective Order in this case would be exactly the same. 

Sapere’s contention that the Court’s approval of the Protective Order would constitute a judicial 

determination that any privileges would continue in other documents entirely misses the mark. As Judge 

Rakoff made abundantly clear in SEC v. Bank of America, the Protective Order provides a waiver—to 

the extent that any privilege exists—of privileges and protections relating to all documents, information, 

and communications related to the Subject Matters during the Relevant Period, and not further. Rather 

than a determination that privilege exists as to items outside the Subject Matters and Relevant Period, 

the Protective Order only provides that, to the extent a privilege and/or protection exists as to those 

items, the Protective Order does not effect a waiver of that privilege and/or protection.

Second, Sapere’s objection to the Trustees’ narrow definition of the Relevant Period lacks any 

legal support. The Court has been asked to approve a Protective Order granting a limited waiver of 

certain privileges and protections covering a specific time period mutually agreed upon by the Trustees. 

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The Trustees agreed upon the terms governing the waivers at issue; Sapere requests that the waiver 

cover a longer time period, but provides no legal basis to reject the negotiated agreement of the Trustees.

Third, Sapere’s suggested additional language would not alter the legal effect of the Protective 

Order. In fact, the proposed language appears redundant in light of the second decretal paragraph, 

which provides for a reservation of rights as to parties other than the Chapter 11 Trustee. 

Last, Sapere’s argument that the Protective Order generally cuts against the intended purpose and 

nature of FRE 502 is entirely without merit. In support of its position, Sapere is unable to cite any 

relevant law, and offers arguments that are based on a misunderstanding of the nature of the Protective 

Order. Specifically, Sapere contends that the Protective Order is designed to perform an end run around 

FRE 502, and to allow the Trustees to transfer and use the information relating to the Subject Matters 

during the Relevant Period “immune from the law of waiver.” Obj. at 8. This is, in fact, not the case. 

The Trustees are proposing a Protective Order that would waive privilege as to certain documents, 

communications, and information, all of which is consistent both with FRE 502 and case law from this 

district.

CONCLUSION

For the reasons explained above, Sapere’s objection is overruled and the Protective Order will be 

approved.

Date: New York, New York

March 7, 2012

__ ___/s/Martin Glenn_______

MARTIN GLENN

United States Bankruptcy Judge

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