Thursday, 26 November 2015
Last updated 11 hours ago
Jul 28 2011 | 3:44pm ET
The trustee for the liquidation of fraudster Bernard Madoff’s firm has reached a settlement worth over $1 billion with one of the biggest Madoff feeder fund networks, the Rye, New York-based Tremont Group Holdings.
Madoff trustee Irving Picard announced Thursday he’d reached a settlement with more than a dozen domestic and foreign investment funds, their affiliates and a former Rye chief executive as well as three co-defendants in the suit—Oppenheimer Acquisition an affiliate of the Oppenheimer family of mutual funds which acquired Tremont Group in 2001; and Oppenheimer’s parent corporations, MassMutual Holding and the Massachusetts Mutual Life Insurance Company.
The defendants will pay over $1 billion into the Customer Fund for distribution to those clients of Bernard L. Madoff Investment Securities whose claims have been recognized by the trustee.
Picard says the latest settlement brings the total in the fund (including the $5 billion settlement with the estate of the late Jeffrey Picower which is being appealed) to over $8.6 billion or almost 50% of the $17.3 billion in principal lost to Madoff’s Ponzi scheme by those investors who filed claims.
Picard’s suit, filed last December, claimed the Tremont Group was aware, through internal communications and public information, that Madoff’s company could be a fraud.
“We believe this settlement—coupled with the trustee’s recent settlements with the Fairfield Sentry, Greenwich Sentry and Greenwich Sentry Partners feeder funds—sends a strong message that the financial community cannot deliberately ignore indicia of fraud,” said David J. Sheehan, a partner at Baker & Hostetler LLP, the court-appointed counsel for the trustee.
The settlement agreement states that both sides wish to avoid the “risk, expense and delay associated with litigation.”
Picard says he will allow customer claims related to the Rye Select and Tremont funds against the BLMIS estate of more than $3 billion, with four of the funds each receiving $500,000 in SIPC advances—a total of $2 million—which will be available for distribution to investors in the funds.
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