Some customers regard the Picower settlement as unfair because it stops them from suing the Picower estate themselves.
Picard says he can't distribute the Picower money until there's a final court order that can't be appealed. He didn't have to lock himself into waiting for finality, as Picower's estate didn't make that a condition of forfeiting money, Chaitman said in a court filing.
The delay in paying customers "is totally of the trustee's own making," she said. Chaitman has also challenged most of his fee requests.

"Unfortunately, Madoff's victims have not received the benefits of Mr. Picard's services," Chaitman said in an e-mail.

Overlapping Claims

Picard opposes her right to sue the Picower estate, saying her claims overlap with his, which take priority as he is trustee. Moreover, if Chaitman wins the right to sue the Picower estate for her customers, and wins her suit, she may be choosing who gets the money. Only the trustee can claw back and allocate money allegedly stolen from Madoff customers, Picard has said.

Picard's claim to an exclusive right to sue for Madoff recoveries has embroiled him in a battle with California Attorney General Kamala Harris over investment adviser Stanley Chais's estate. Harris is trying to pursue a $270 million action against the estate, alleging Chais passed himself off as an "investment wizard" and collected fees for "doing nothing more than funneling all of his investors' capital into an epic Ponzi scheme."

Picard sued Harris Jan. 4 in U.S. Bankruptcy Court in Manhattan, saying her suit interferes with the collection of assets needed to help compensate Madoff victims. A Manhattan court hearing is set for May 17.

Tremont Group

Madoff customers also have challenged Picard's $1 billion deal with Tremont Group Holdings Inc. and a $220 million settlement struck with the heirs of Norman F. Levy. Chaitman alleges that Levy, who died in 2005 at age 93, financed Madoff's Ponzi scheme to the tune of about $100 billion.

Picard also won't pay out any more from the customer fund without a "final unappealable decision" on whether he owes them not only the money they invested, but also the fictitious profit on their brokerage statements, according to his website.

The owners of the New York Mets baseball team, whom Picard had sued for $1 billion, were among those challenging Picard's calculation of how they should be paid, until they reached a $162 million settlement that doesn't require them to pay any money for at four years, if ever.