Tuesday, 28 March 2017
Last updated 1 day ago
Dec 17 2010 | 1:00pm ET
The trustee overseeing the liquidation of Bernie Madoff’s investment firm has recovered $7.2 billion from the estate of Madoff investor Jeffry Picower.
Irving Picard says the total represents $5 billion to resolve claims against Picower’s estate and an additional $2.2 billion the Picower group has forfeited to the U.S. government.
Picard filed suit against Picower in May 2009, claiming Picower should have realized Madoff was running a Ponzi scheme. Picower died in October 2009. Friday’s settlement represents the full amount for which Picard had sued Picower and it adds considerably to the $2.5 billion Picard has recovered for defrauded Madoff investors to date.
“Every penny of the $7.2 billion recovered through these two settlements will be distributed to BLMIS customers with valid claims,” said Picard in a statement. “As soon as is practicable after the settlement is approved by the bankruptcy court, we will ask the court to approve an initial distribution from the customer fund to BLMIS customers with allowed claims.”
Picard also seemed to backpeddle on his claims that Picower should have recognized Madoff’s business for the fraud it was: “When we filed suit against Mr. Picower and others in the spring of 2009, the records available led us to allege that Mr. Picower might have or should have known of Mr. Madoff’s fraud. With the benefit of additional records, I have determined that there is no basis to pursue the complaint against Mr. Picower, and we have arrived at a business solution instead.”
The settlement was reached in cooperation with Picower’s widow, Barbara, who said in a statement of her own that her husband had been “committed to overcoming the devastation resulting from Bernard Madoff's fraud by reaching a fair and generous settlement with Mr. Picard and also by continuing the important charitable work that had been the focus of our lives for so many years.”
Picard reiterated his belief that investors who made money with Madoff, even if ignorant of the fraudulent nature of his business, should compensate those who lost money.
It’s a position squarely opposed by a group of Madoff investors calling themselves the Network for Investor Action and Protection. Their president, Ron Stein, said he hoped the recovery of $7.2 billion from the Picower estate meant Picard would “spare innocent victims from further lawsuits.”
“It is clear the trustee will exceed expectations in his settlements with the complicit,” said Stein in a statement, “and there is no reason why he should continue to claw back investors who played no role in the fraud.”
Picard has recognized claims worth $5.9 billion from Madoff investors. He has filed hundreds of lawsuits claiming over $50 million from banks, feeder funds and individuals who benefited from and/or abetted Madoff's fraud. Madoff is serving a 150-year sentence for the $65 billion Ponzi scheme that fell apart in 2008.