Print Email this page In the News

On February 24, 2009, DealBook, which is the Financial News Service of The New York Times, reported that the U.S. Bankruptcy Court in Manhattan had ruled that a late investor of $10 million in Bernard L. Madoff’s reputed $50 billion Ponzi scheme will have to stand in line with everyone else trying to recover what’s left of their money. Judge Burton R. Lifland dismissed the investor’s claim at a hearing on Tuesday, saying that later investors with Mr. Madoff should not be treated differently than earlier ones.

In another ruling on Tuesday, the judge denied a request to delay the deadline for filing claims by three investors who had withdrawn money, including their profits, from Bernard L. Madoff Investment Securities before it collapsed. The article reported that those investors feared that  they could become targets of a “clawback” lawsuit, which would seek to require them to return any profits made from their investment with Madoff.

Pryor Cashman Bankruptcy Partner Richard Levy was interviewed for the article and told The New York Times that should Irving H. Picard, the trustee overseeing the bankruptcy of Mr. Madoff’s former firm, seek to recover profits made by investors who pulled their money out early, those investors could have the right to file a claim to recover some of their capital. However, if the investors file a claim before they are sued by Picard, they would waive any rights to a jury trial.

As reported in the article, Pryor Cashman represents Madoff customers with about $350 million in claims.

To read the article by Zachery Kouwe entitled “Judge Rules Against Late Investor With Madoff,” please click here.

Levy has also authored a Legal Update on "Considerations Relating To The Bernard Madoff Securities Fraud." To read this update, please click here.