May 6, 2010 / 10:57 PM / 8 years ago

Fees for Madoff trustee's law firm top $50 million

* $50.9 million payment OK’d to Baker & Hostetler

* Trustee on verge of multi-billion dollar recovery

By Jonathan Stempel

NEW YORK, May 6 (Reuters) - A law firm employing the trustee winding down Bernard Madoff’s investment firm has won court approval to be paid $20.3 million of additional fees, pushing its total to $50.9 million for 13-1/2 months of work.

In an order made public on Thursday, U.S. Bankruptcy Judge Burton Lifland in Manhattan authorized the additional payment to Baker & Hostetler LLP, plus reimbursement of $390,200 of expenses, covering the Oct. 1, 2009 to Jan. 31, 2010 period.

Baker & Hostetler has been awarded $59.8 million of fees overall, but is deferring 15 percent, or $9 million, until the liquidation of Bernard L. Madoff Investment Securities LLC is complete, court records show.

Irving Picard, the court-appointed trustee and a Baker & Hostetler partner, has been trying to recover assets for victims of Madoff and his estimated $65 billion Ponzi scheme. He has separately been awarded $1.93 million in fees.

Lifland’s order came over the objections of some Madoff victims. They believe Picard either undervalues some claims, allows claims to be paid too slowly, or has a conflict of interest because he also represents the interests of the Securities Investor Protection Corp against the victims.

The SIPC is a federally-chartered agency that supervises the liquidation of brokerages. Federal law limits SIPC protection to $500,000.

Through Jan. 31, the payment of more than $57.6 million of fees to lawyers and consultants involved in liquidating Madoff’s firm has been authorized. Many agreed to accept a 10 percent or greater discount from their normal billing rates.

In its filing requesting the latest payment, Baker & Hostetler said it conducted more than 64,739 hours of work on behalf of Picard in the four months ended Jan. 31, 2010.

David Sheehan, a partner, maintained that no document “could comprehensively set forth all of the tasks engaged in by the trustee and Baker & Hostetler since their appointment” on Dec. 15, 2008, four days after Madoff’s arrest.

Through April 30, Picard has reviewed 12,453 claims of alleged victims, and allowed 2,061 totaling $5.39 billion, according to the website ((

Picard has said he has recovered some $1.5 billion of assets for Madoff victims.

A Monday court filing said he is “on the verge” of recovering a “multibillion-dollar sum” from the estate of Florida philanthropist Jeffry Picower, who died in October.

Madoff turned 72 last week. He is serving a 150-year sentence in a North Carolina federal prison.

The case is In re: Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court, Southern District of New York, No. 08-1789. (Reporting by Jonathan Stempel; Additional reporting by Grant McCool, editing by Bernard Orr)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below