Human WORDDD Moment
Judge approves $7.2 billion deal for Madoff investors.
A U.S. judge approved a $7.2 billion settlement on Thursday to pay former customers of the Madoff firm, the largest yet in the worldwide search for money lost in Bernard Madoff’s multibillion-dollar Ponzi scheme.
The settlement with the estate of longtime Madoff friend and investor Jeffry Picower could be appealed after U.S. Bankruptcy Court Judge Burton Lifland in New York dismissed objections to the deal, which was announced on December 17.
Investors who objected to the Picower deal are challenging the trustee in an appeals court over his method of calculating the “net winners” of the fraud. The “net winners” are clients who took out more than they deposited over the years from Bernard L. Madoff Investment Securities LLC (BLMIS).
Picard has put the amount of principal that investors lost in the fraud at about $20 billion. With the Picower settlement, Picard and his team of lawyers have secured about $10 billion.
The objectors to the Picower settlement argued in court that their claims against Picower were personal to them. They include claims for taxes paid on fictitious income and claims for the money stolen from them. Their lawyer, Helen Chaitman, said an injunction in the settlement that would prevent her clients from individually suing the Picower estate left them no choice but to appeal.
The money recovered in the settlement is to be distributed to investors under the auspices of the U.S. Department of Justice and the Securities Investor Protection Corporation, an agency established by Congress to help investors of failed brokerages.
The cases are Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court for the Southern District of New York No. 08-1789 and Picard v. Jeffry M. Picower No. 09-01197.
Many thought the trustee would barely get $1 billion back for investors. Now he’s at $10 billion with more fish to fry.