Madoff Trustee Allots $2.6 Billion for Ponzi Scheme Payouts

Wednesday, 04 May 2011 03:39 PM

 

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The trustee liquidating Bernard L. Madoff’s firm said he would allocate $2.6 billion to a fund for investors who lost money in the Ponzi scheme and pay an initial $272 million to those with approved claims.

“We can now begin to return stolen funds to their rightful owners,” the trustee’s lawyer, David Sheehan, said in a statement today.

Trustee Irving Picard, who has filed more than 1,000 suits seeking money for Madoff investors, said in the statement that he had recovered $7.6 billion, or about 44 percent of the estimated principal of $17.3 billion lost in the Ponzi scheme. He and his law firm, Baker & Hostetler LLP, have requested $175.5 million in fees for their efforts.

Because of court challenges, most of the money isn’t available to put in the customer fund or distribute, Picard said. Two appeals have been filed against Picard’s $5 billion share of a settlement with the estate of Jeffry Picower, he said.

The main case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-ap-1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).


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