(Bloomberg News) The trustee liquidating Bernard L. Madoff's former firm won an appeals court ruling that affirmed his method of determining which investors can recover money lost in the Ponzi scheme.

The federal appeals court in New York said today that trustee Irving Picard can calculate losses by subtracting the amount withdrawn from an investor's account from the total placed with Madoff, the so-called net investment method.

A group of Madoff victims urged the court to require Picard to use their final account statements, reflecting fictitious profits on money Madoff never invested, to determine losses. Today's ruling limits the number of victims who can claim money from the fund Picard oversees and reduces the amount of many eligible claims.

"Mr. Picard's selection of the net investment method was more consistent with the statutory definition of 'net equity' than any other method advocated by the parties or perceived by this court," Chief U.S. Circuit Judge Dennis Jacobs wrote in the opinion.

Picard has sued investors, banks and others he claims profited from Madoff or should have known of his fraud, seeking a total of about $100 billion. He has raised more than $8.6 billion, or almost half the $17.3 billion in principal he calculates investors lost in the fraud, including a $1 billion settlement with hedge-fund firm Tremont Group Holdings Inc., which was announced July 28.

Money From Accounts

Madoff investors who removed more from their accounts than they invested, including the owners of the New York Mets baseball team, stand to lose from today's ruling. Picard has claimed $300 million in fictitious profits from a group of defendants tied to Mets owners Fred Wilpon and Saul Katz. He is also seeking $700 million in principal from Wilpon and Katz, claiming they should have known Madoff was running a fraud.

Karen Wagner, a lawyer for Wilpon and Katz, didn't immediately return calls seeking comment on the ruling.

Picard's loss calculation method also reduces the amount of payouts to Madoff investors by the Securities Investor Protection Corp., which reimburses defrauded investors up to $500,000 per account. Picard represents SIPC.

'Investor Confidence'