The judge overseeing a lawsuit against Bernard Madoff feeder hedge fund manager J. Ezra Merkin says he plans to rule soon on whether Merkin should be allowed to remain at his firm’s helm.
New York University, which says it lost $24 million it invested with Merkin in the Madoff scandal, has asked New York State Supreme Court Justice Richard Lowe to remove Merkin as manager of his Ariel Fund and appoint a liquidator to sell off its assets. Ariel and Merkin’s other two funds had more than $2 billion invested with Bernard L. Madoff Investment Securities.
Lowe says he plans to rule on the motion soon.
“Merkin garnered hundreds of millions of dollars of fees by violating the trust of investors,” NYU alleged in a court filing. “There is no reason to believe that he will alter his cynical approach to his fiduciary obligations if he is left in control of Ariel’s remaining assets.”
For his part, Merkin has suggested an “oversight committee” to wind down the funds over the next several years. At a hearing on Tuesday, a lawyer for NYU called the proposed committee “simply figureheads” that leave Merkin with complete control.