Madoff feeder fund settles; victims' recovery tops US$10.6 billion

Madoff feeder fund settles; victims' recovery tops US$10.6 billion

NEW YORK - The trustee recovering money for Bernard Madoff's victims on Monday announced a settlement to recoup US$93 million from a "feeder fund" that sent client money to the swindler's firm, boosting the total sum raised to roughly US$10.65 billion.

Irving Picard, the trustee, said the settlement calls for the Defender Ltd feeder fund to receive a $522.8 million claim in the liquidation of Bernard L. Madoff Investment Securities LLC because it deposited more there than it withdrew.

Defender, which was incorporated in the British Virgin Islands, will get "catch-up" payments from distributions that Picard previously made to Madoff customers. The first $93 million of the payments will go to other Madoff customers, and Defender will get its share of future payouts.

Picard has recouped roughly 60 per cent of the $17.5 billion of principal he has estimated that Madoff's victims lost in a decades-long Ponzi scheme.

The trustee is separately asking the US Supreme Court to reverse a Dec. 8 lower court ruling that bars him from clawing back alleged "fictitious profits" made to some customers more than two years before Madoff's firm collapsed.

Picard said that ruling prevents him from distributing nearly $2 billion to Madoff's victims, and calls into question $2 billion of potential payouts.

The Defender settlement requires US bankruptcy court approval.

Madoff, 76, pleaded guilty to fraud in March 2009 and is serving a 150-year prison term.


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