Tuesday, 5 May 2015
Last updated 3 hours ago
Jan 7 2009 | 5:25pm ET
A judge has barred a prominent Bernard Madoff feeder hedge fund from liquidating until at least next month.
J. Ezra Merkin, who in addition to running Ascot Partners serves as chairman of GMAC Financial, saw a restraining order against him extended. The order, sought by New York University, which has sued Merkin and his hedge funds for investing with Madoff without notifying investors and of due diligence failures, forbids Merkin from withdrawing, liquidating or dissolving assets of his Gabriel Capital or Ariel Fund.
Madoff was charged last month with running a $50 billion Ponzi scheme. Ascot and its funds have some $1.8 billion of exposure to the alleged fraud.
NYU sued Merkin and the funds on Dec. 23, alleging that it had at least $24 million in losses related to Merkin’s Madoff investment, and could have lost as much as all $94 million it had invested with Merkin. At yesterday’s hearing, a lawyer for the university, the largest private university in the U.S. by enrollment, accused Merkin of engaging in “purposeful deceit” and “grossly negligent conduct.”
“If it continues, NYU won’t see of dollar of that investment,” the lawyuer, Beth Kaswan, told New York State Supreme Court Justice Richard Lowe.
In a statement issued after the hearing, Merkin’s attorney, Andrew Levander, called his client a “victim” of the Madoff scandal and “categorically denied” that his client had misled NYU.
“Mr. Merkin has always acted in good faith and did not deceive NYU or any other investors,” Levander said. He also rejected NYU’s claim that the restraining order was necessary due to the “exceptional circumstances” surrounding the Madoff case.
“Every hedge fund and every mutual fund in America has had exceptional losses,” he said.
Judge Lowe has scheduled a hearing for Feb. 17 to consider a preliminary injunction on his ban on liquidating the Merkin funds. The judge also order both Merkin and an unidentified NYU official to testify under oath, and said he will hear arguments on whether he should appoint a receiver to liquidate the Merkin funds.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…