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Madoff firm trustee wins right to pay $2.4 billion to victims
NEW YORK |
NEW YORK (Reuters) - The Madoff firm trustee won approval from a judge on Wednesday to make a second payment that could reach $2.4 billion to former clients of epic conman Bernard Madoff.
The trustee, Irving Picard, had sought the approval of the distribution last month from U.S. Bankruptcy Judge Burton Lifland in Manhattan. The trustee has already distributed $1.1 billion to former customers of the convicted Ponzi schemer.
Approval of the second distribution had previously been expected. Objectors have 14 days to appeal the latest decision.
A large chunk of the recoveries have been put in reserve because of litigation with victims who contend they are owed more.
Picard had measured losses as the difference between the amounts that customers deposited and the amounts they withdrew from the Madoff firm before the fraud was uncovered in December 2008. Some customers wanted recoveries based on their final account statements, even if the amounts shown were made up.
Picard has estimated that Madoff victims lost about $20 billion from the fraud.
Bernard Madoff, 74, pleaded guilty in March 2009 and is serving a 150-year sentence in a North Carolina federal prison.
The new distribution by the trustee is likely to boost the mini-market of trading in the rights to any potential recoveries. Bankruptcy claims trading in the Madoff case has moved in fits and starts, according to traders.
It's unclear how many Madoff investors have sold their claims, or at what prices. There is no legal requirement for claims trades to be made public because Madoff's firm was unwound under the auspices of the Securities Investor Protection Corp that helps clients of failed brokerages, instead of through a Chapter 11 bankruptcy.
The case is Securities Investor Protection Corp v Bernard L. Madoff Investment Securities LLC in U.S. Bankruptcy Court, Southern District of New York, No. 08-ap-01789.
(Grant McCool; additional reporting by Nate Raymond; editing by Andrew Hay)
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