Madoff-case trustee seeks to stop Kingate transfers

NEW YORK (Reuters) - The trustee recovering money for the defrauded customers of swindler Bernard Madoff's firm asked the court to stop two Kingate funds and the Bank of Bermuda from transferring money.

Trustee Irving Picard said in court documents that Kingate Global Fund Ltd and Kingate Euro Fund Ltd were actively seeking to unfreeze their accounts through the Bermuda Supreme Court.

He asked the court for a temporary restraining order and preliminary injunction to stop them from moving the funds in filings made late on Wednesday.

The trustee filed a lawsuit in U.S. Bankruptcy Court in New York in April saying that the Kingate funds had received $255 million from Bernard L. Madoff Investment Securities LLC last October and November.

Madoff was arrested in December on charges he ran the biggest investment fraud in Wall Street history that took in about $65 billion over two decades. He pleaded guilty on March 12.

Picard has sued several feeder funds to try to recover money that it plans to distribute to victims of Madoff's fraud including hedge fund founder Ezra Merkin.

Picard said that if Kingate is successful in court, it believes it will make the recovery of the funds impossible. The court documents say that $100 million of the Madoff payments are in the Bank of Bermuda account.

(Reporting by Caroline Humer, editing by Dave Zimmerman)