JURIST - Paper Chase: Madoff trustee asks court to release over $2.5 billion for victims

[JURIST] Madoff trustee Irving Picard has asked a bankruptcy court to approve the release of between $2.5 and $3.5 billion in recovered assets so that it can be distributed to victims of the Bernard Madoff [JURIST news archive] Ponzi scheme. Picard has recovered over $9 billion in assets on behalf of Madoff victims but was previously delayed in his attempts to distribute the money due to disputes over how to calculate money owed to individual victims. To date, only $336 million has been distributed to victims. In order to move forward, Picard's request must be approved by Bankruptcy Judge Burton Lifland of the Southern District of New York. Lifland is scheduled to make a decision [Reuters report] on the distribution on August 22. If approved, funds could be distributed within weeks of Lifland's decision.

In March, Picard and the owners of the New York Mets reached a $162 million settlement for victims of the Madoff scheme [JURIST report], avoiding a trial that would determine whether the owners, Fred Wilpon and Saul Katz, were "willfully blind" to the Madoff scheme. Judge Jed Rakoff ruled in January that Picard could not appeal a ruling [JURIST report] that precluded them from taking an interlocutory appeal on his earlier judgment throwing out 9 of the 11 claims sought by the plaintiffs. This ruling allowed Picard to pursue only $300 million of the original $1 billion dollar suit. Last July the court approved [JURIST report] the first payouts to Madoff's victims. Picard filed almost 60 lawsuits [JURIST report] for victims of Madoff's fraud in December 2010, including suits against JPMorgan Chase and HSBC. Judge Louis Stanton made Picard the trustee of Bernard L Madoff Securities, LLC in December 2008. Madoff was sentenced [JURIST report] in June 2009 to 150 years in prison for securities fraud stemming from his Ponzi scheme. He pleaded guilty [JURIST report] to 11 counts of securities fraud in March 2009.