AMBAC FINANCIAL GROUP, INC. 
Lawyers for the trustee Nader Tavakoli and MF Global's bankruptcy plan administrator on Wednesday night asked a U.S. bankruptcy judge to approve the payout, saying it "provides closure and maximizes recoveries to the estates' creditors."
A substantial majority of the payout would be made by insurers on behalf of Corzine and other defendants, including MF Global's former Chief Operating Officer Bradley Abelow and former Chief Financial Officer Henri Steenkamp.
They have denied mismanaging MF Global, and did not admit liability in agreeing to settle.
Individual defendants, whose identities are confidential, would fund part of the payout, which includes interest payments to customers who have already recouped their funds.
The accord "will provide for much greater recoveries for creditors than they could have expected when MF Global filed for bankruptcy," Tavakoli said in a phone interview on Thursday.
A lawyer for Corzine did not immediately respond to a request for comment.
MF Global filed for bankruptcy on Oct. 31, 2011 after investors grew anxious over credit rating downgrades, margin calls, Corzine's $6.3 billion wager on European sovereign debt, and news that customer funds were used to shore up liquidity.
Wednesday's settlement leaves Corzine and former MF Global Assistant Treasurer Edith O'Brien still facing a 2013 civil lawsuit by the U.S. Commodity Futures Trading Commission, but sets up a fund to cover their defenses and possible settlements.
The CFTC accused Corzine of failing to implement necessary risk controls and monitor how customer funds were used, and O'Brien of aiding and abetting the misuse of those funds.
Corzine is also a former U.S. senator and former co-chairman of Goldman Sachs (>> Goldman Sachs Group Inc).
Last July, he and other MF Global officials reached a $64.5 million settlement of litigation by investors.
Through May of this year, insurers had covered $97 million of defense costs for company officials, court papers show.
In his lawsuit, which he took over from former FBI director and MF Global trustee Louis Freeh, Tavakoli accused Corzine, Abelow and Steenkamp of breaching their duties of care and loyalty to MF Global.
Tavakoli is also suing PricewaterhouseCoopers over its accounting advice to MF Global. He serves separately as chief executive of Ambac Financial Group Inc (>> Ambac Financial Group, Inc.).
The case is In re: MF Global Holdings Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.
(Reporting by Jonathan Stempel in New York; Editing by Bernard Orr and Tom Brown)
By Jonathan Stempel
