Workers’ Trial
Five members of Madoff’s inner circle, who worked for the con man for decades, are on trial in Manhattan federal court on charges of helping to perpetuate the fraud to get rich. The five have pleaded not guilty.
Picard’s accord, which resolves his claims against JPMorgan in bankruptcy court and a related class-action lawsuit, must be approved by a bankruptcy judge. A court hearing on the matter is scheduled for Feb. 4 in Manhattan.
The JPMorgan settlement money will become available to victims once the deal is approved by a judge and can’t be appealed, Picard said in the statement.
JPMorgan approached Picard about a settlement several months ago, according to the statement. The deal avoids the risk and costs associated with continuing the dispute in court, the trustee said.
“This compromise with JPMorgan allows us to sidestep those pitfalls while recovering additional, significant monies,” David Sheehan, Picard’s lead lawyer in the case, said in the statement.
Billionaire Picower
Before yesterday’s JPMorgan accord, Picard’s team had recovered $9.5 billion through lawsuits and out-of-court settlements, including $5 billion from the estate of billionaire Jeffry Picower, who began investing with Madoff in the 1970s. Picower, whom Picard called the biggest beneficiary of Madoff’s Ponzi scheme, had a heart attack and drowned in a pool in Florida in October 2009.
U.S. investigators had recovered about $2.3 billion for Madoff investors before yesterday, including $2.2 billion from Picower’s estate and $100 million from Madoff’s Midtown Manhattan penthouse apartment and other belongings. The JPMorgan deal brings the U.S.’s total recoveries to $4 billion -- a sum it will distribute through a separate process from the one used by Picard.
The liquidation case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08- bk-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).