Madoff Claims for $231 Million Approved for Payment
By Erik Larson, Bloomberg.com
Securities Investor Protection Corp., the government-chartered agency liquidating Bernard Madoff’s defunct business, said $231 million has been committed from its reserves to pay 543 claims by the con man’s victims.
The agency, known as SIPC, said today the same claimants were approved to receive as much as $2.74 billion in future payments, depending on how much money is recovered in the wake of Madoff’s $65 billion Ponzi scheme. The 543 are the first of thousands of claims to be evaluated, according to SIPC. Tomorrow is the deadline for filing claims.
The actions announced today represent “major progress” in the effort to pay victims for their losses, SIPC President Stephen Harbeck said in a statement. The victims can get as much as $500,000 each from SIPC and more if the trustee, Irving Picard, recovers enough assets.
Madoff, 71, pleaded guilty in March and was sentenced two days ago to 150 years in prison for using money from new customers to pay off earlier investors. Trades reported on years of customer statements were never executed, according to Picard.
In addition to lawsuits, Picard has asked hundreds of victims to voluntarily return their “fictitious” profits from Madoff’s firm, New York-based Bernard L. Madoff Investment Securities LLC.
Loss Calculation
Picard, a lawyer at Baker & Hostetler LLP in New York, has been sued by some victims for calculating each investor’s loss by subtracting withdrawals from deposits.
Hundreds of victims argue that, under federal law, claims must be based on their final account statements including bogus returns.
Picard sued Madoff investors including financier Ezra Merkin and philanthropists Stanley Chais and Jeffry Picower. He claims the men knew or should have known of the fraud, and that they profited from years’ worth of fake profits.
Harbeck said in May that the liquidation could take more than 10 years. Picard’s spokesman, Kevin McCue, didn’t immediately return a call today for comment.
Last-minute filers can deliver their claims by hand to AlixPartners LLP in care of Baker & Hostetler LLP, 45 Rockefeller Plaza, New York, N.Y. 10111, until midnight tomorrow, SIPC said in its statement.
The case is In re. Bernard L. Madoff, 09-11893, U.S. Bankruptcy Court, Southern District of New York (Manhattan).