Sunday, 26 June 2016
Last updated 2 days ago
Aug 11 2014 | 5:11am ET
A federal appeals panel has handed the receiver in the Bernard Madoff case another setback.
The U.S. Second Circuit Court of Appeals in New York on Friday rejected Irving Picard’s bid to throw out nearly $500 million in settlements with Madoff feeder funds. The three-judge panel unanimously upheld the lower-court ruling that preserved the settlements, which Picard insisted that he had the right under federal bankruptcy law to block.
Picard complains that the deals, with J. Ezra Merkin and Fairfield Greenwich Group, will limit the amount he is able to collect for victims, and are barred until he finishes his own work.
But the Second Circuit found that Picard “is incapable of establishing either that the settlements would in fact have an immediate adverse economic consequence for the BLMIS estate, or that the estate is likely to suffer irreparable harm.”
The settlements in question are a $410 million deal between Merkin and New York State, and an $80 million settlement with Fairfield Greenwich. Picard said he will continue his litigation against both anyway.
Picard, who has collected nearly $10 billion of the $17 billion lost in Madoff’s Ponzi scheme, has suffered a series of legal reversals recently. Last month, the U.S. Supreme Court refused to hear his appeal of rulings that limited his ability to go after Madoff’s banks, and last year a settlement with Madoff feeder fund Kingate Management foundered after a U.S. Justice Department fund for Madoff victims announced it would offer restitution to indirect investors, hurting Kingate’s claim value.
Picard is still waiting on a Second Circuit ruling about how much he’ll be permitted to seek from Madoff investors who made money with the fraudster.