Partner Richard Levy, Jr. was quoted in The Deal Pipeline article, “In the hunt for Madoff’s billions, Irving Picard goes for broke.” SIPA trustee Irving Picard is appealing a December 8th ruling by the Second Circuit that prevents the trustee from going beyond the two-year window specified by the federal bankruptcy code to claw back money, even though New York state law allows for a six-year clawback period. Picard has filed a petition for Supreme Court review.

The issue over the timeframe surfaced when Picard sued to retrieve approximately $1 billion from some individuals who withdrew more from Madoff than they invested. Judge Jed S. Rakoff of the Southern District ruled against Picard, citing the two-year limit. A three-judge panel affirmed an earlier decision, which held that some of those funds were protected by the Bankruptcy Code's safe-harbor provision.

"The statute prevents avoidance of a transfer unless it was made with actual fraudulent intent within the two years before the bankruptcy case. The language applies only to transfers made pursuant to a securities contract or securities settlement payments that were made by or to a broker,” Levy explained.

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