On Wednesday, a New York bankruptcy judge approved nearly $600 million worth of additional settlements to benefit victims of Bernard Madoff’s massive Ponzi scheme.
Irving Picard, the trustee in charge of recovering assets, has to date collected or reached deals to collect roughly $10.5 billion of the $17.3 billion in principal lost to fraud.
Receives blessing from bankruptcy judge
The nearly $600 million worth of settlements were approved by Judge Stuart Bernstein at a hearing in the U.S. Bankruptcy Court in Manhattan Wednesday. The settlement involves a $95 million deal struck with Senator Fund SPC and a $497 million deal to collect money from Herald Fund SPC and Primeo Fund. These three feeder funds pooled investors’ cash and then fed the money to Madoff. He paid out what was later revealed to be phony returns to the feeder funds, which then distributed the money among their individual investor.
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The agreement reached with Senator Fund represents 100% of the principal that fund withdrew from Mr. Madoff’s investment firm, as the investment fund put in more money than it took out. Meanwhile, Herald Fund will receive a $1.6 billion claim against Mr. Madoff’s investment firm as part of the deal. Primeo received $139.35 million in the six years before Mr. Madoff’s firm shut down.
The judge also approved the consolidation of two suits against would-be opt-outs from an earlier $7.2 billion with mega-investor Jeffry Picower.
As reported by ValueWalk, Picard’s team had recovered $5 billion from the estate of Jeffry Picower, who began investing with Madoff in the 1970s. The trustee named Picower as the biggest beneficiary of Madoff’s scheme. Picower had a heart attack and drowned in a pool in Florida in October 2009.
Madoff trustee reached deals worth about $10.5 billion
Bernard Madoff, one of the most notorious financial criminals in living memory, orchestrated a Ponzi scheme in which investors lost over $17 billion. He was sentenced to 150 years in prison in June 2009. The trustee in the Bernard Madoff case, Irving Picard, has been exploring all avenues, including another opportunity to sue defendants such as Credit Suisse Group, Royal Bank of Canada and Credit Agricole.
Of the recovered funds, over $5 billion has been returned to investors to date.