Tuesday, 24 May 2016
Last updated 15 hours ago
Oct 4 2011 | 1:32pm ET
The trustee for the liquidation of Bernard Madoff’s investment firm says he’ll begin paying out victims of Madoff’s Ponzi scheme on Wednesday, but the payout won’t be anywhere near the $8.7 billion he says he’s recovered for customers in his 33 months in the post.
Irving Picard says much of that money (including a $5 billion settlement with the estate of Jeffry Picower and a $220 million settlement with the Levy family) remains subject to court appeals.
An additional $52 million has been set aside for “settlement reserves and other matters,” and of the remaining funds, $1.7 billion can’t be distributed until the net equity issue is resolved (Picard refuses to use the “fictitious” November 2008 statements from Bernard L. Madoff Investment Services to determine the value of claims. A court has backed him on this, but some parties have asked that the Second Circuit rehear the case.)
This leaves $745 million but $433 million of that can’t be distributed because of ongoing litigation.
So, come Wednesday, the trustee will begin distributing about $312 million on claims relating to 1,230 accounts (about 4.6% of the losses incurred by customers whose claims have been accepted by the trustee).
“This initial distribution is the first return of stolen funds to Madoff’s defrauded customers,” said Mr. Picard. “Significant, additional funds—currently unavailable for distribution due primarily to appeals—will ultimately be returned to their rightful owners, as well as future monies yet to be recovered. The need among many Madoff customers is urgent, and we are working to expedite these distributions.”
This initial, interim distribution of recovered funds was supposed to have begun September 30 but was delayed due to last week’s opinion and order, issued by Judge Rakoff of the United States District Court for the Southern District of New York, regarding Picard’s claim against the owners of the New York Mets baseball team. Besides dismissing most of the trustee’s 11 claims against Saul Katz and Fred Wilpon, the judge’s order raised potential issues regarding the distribution. These have since been resolved.