On Friday, the creditor factions of MF Global decided to settle their dispute over the allocation of a $130 million payment from CME Group Inc, according to papers filed at the U.S. Bankruptcy Court in Manhattan. However, the agreement reserves the rights to dispute how the trustees divide the money.

The trustee for MF Global Holdings’ bankruptcy creditors, Louis Freeh, agreed not to challenge a settlement under which the exchange regulator CME would pay $130 million to be split between former trading customers of MF Global. Earlier this month, the deal was delayed when Freeh raised concerns about the settlement and James Giddens, Freeh’s counterpart working for the customers, had to delay sending the deal to court for approval.

The issues raised by Freeh included whether Giddens had the authority to allocate money to customers, when the money was not segregated as customer cash. Though the issue has been put to rest for the moment by Freeh’s agreement, he reserved the rights to challenge the CME settlement retroactively, and also retained the rights to challenge future settlements that have similar issues.

  

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MF Global went bankrupt last year when investors were scared by its exposure to European debt. The fight is again on between secured and unsecured creditors. Big corporate creditors like JPMorgan & Chase are on one side, and customers and unsecured creditors on the other. Regulators have estimated that there is approximately $1.6 billion shortfall in customer accounts caused by mixing up corporate and client accounts.

While Freeh is fighting for the creditors, Giddens is trying to recoup money for the customers of MF Global.

James Koutoulas, the head of the advocate group for former MF Global customers said, “What we really need is for the judge to issue a decision on exactly what priority customers have with certain assets.”