(Bloomberg News) Irving Picard, who said last year he hoped to pay investors in Bernard Madoff's defunct firm as much as $65 billion, has only put his hands on about $2.6 billion to actually give back to customers.

More than three years after Madoff's epic swindle collapsed, Picard, the trustee responsible for liquidating the firm, has paid investors back about $330 million, while holding about $2.3 billion in customer accounts. About $6.4 billion that Picard has won in settlements with former Madoff investors is being challenged in court and is unavailable for disbursement.

So far, winding down the Madoff estate has cost more than Picard has sent to customers, with total administrative spending as of March 31 at about $554 million, including fees for Picard, his firm and consultants he hired, according to his April 25 report.

At the same time, Picard's strategy of filing $100 billion of lawsuits to claw back money from Madoff winners has largely collapsed, as federal judges led by U.S. District Judge Jed Rakoff in New York have dismissed about $90 billion of Picard's claims.

"There is a huge risk about making predictions, because you can never be sure what a court will do," said Chip Bowles, a bankruptcy lawyer with Bingham Greenebaum Doll LLP in Louisville, Kentucky. "People can object to his fees if he spent millions on litigation and promised a lot of stuff and it didn't work out."

Claim Prices Slump

As a result of Picard's setbacks in court, bids for claims on the Madoff estate, which peaked at about 70 cents on the dollar in January 2011, now sell in "the low 50s," said Joseph Sarachek, CRT Capital Group LLC's managing director of claims trading.

The price also reflects the likelihood that the payoff for investors who lost money in Madoff's fraud may be far off, Sarachek said. That in turn makes it harder for claimholders to sell their IOUs at attractive prices. "It does look like the case is going on for several years," he said.

Amanda Remus, a Picard spokeswoman, didn't immediately respond to an e-mail asking if the trustee has revised his estimate of how much he will ultimately pay Madoff customers.

Picard's latest estimate of the con man's fictitious customer statements is $52 billion. That includes $17.3 billion in actual money invested, with the rest being the fake profits Madoff invented for customer statements. As of December, Picard estimated the total at $65 billion, before the withdrawal of some claims.

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