Supreme Court Lets Madoff Trustee Seek $3 Billion Transferred Abroad
Originally posted on Bloomberg
The U.S. Supreme Court let the liquidator of Bernard Madoff’s investment firm press ahead with efforts to recoup $3 billion from European banks and other overseas investors.
The justices, without comment on Monday, turned away an appeal by investors led by HSBC Holdings Plc who said trustee Irving Picard was impermissibly trying to apply U.S. bankruptcy law to foreign transactions. A federal appeals court let Picard sue the investors.
The case affects foreign customers of Fairfield Greenwich Group and other offshore feeder funds that channeled investors’ money to Bernard L. Madoff Investment Securities LLC. The investors include Koch Industries, whose chairman and chief executive officer, Charles Koch, is a major Republican patron.
The investors allegedly withdrew more money than they put in before Madoff’s Ponzi scheme collapsed in 2008.
The money is the biggest remaining bucket of cash being sought by Picard as he tries to compensate customers who lost $19 billion in principal after Madoff’s arrest. So far Picard has recovered more than $14 billion and distributed more than $13 billion to victims — significantly more than many predicted when he was appointed in 2008.
Picard told the Supreme Court he’s seeking $3 billion after reaching an $860 million settlement last year with a pair of offshore funds, Kingate Global Fund Ltd. and Kingate Euro Fund Ltd.
The Supreme Court action came after U.S. Solicitor General Noel Francisco, the Trump administration’s top courtroom lawyer, urged the court to reject the appeal.
Madoff, 82, is serving a 150-year sentence in a federal prison in North Carolina.
The case is HSBC v. Picard, 19-277.