The trustee overseeing the liquidation of Bernard Madoff's $50 billion Ponzi scheme continued his efforts to recover assets for the victims in filing two lawsuits seeking over $1 billion from customers of feeder funds that invested through Madoff. The trustee, Irving Picard, is seeking the return of funds transferred from two feeder funds, Fairfield Sentry Limited ("Fairfield") and Harley International (Cayman) Limited ("Harley"), to investors through authority under the Bankruptcy Code and New York state law. These clawback suits, as they are known, constitute the majority of the over-1,000 lawsuits filed thus far by Picard in his quest to maximize recovery by victims of Madoff's fraud.
In the two suits, Picard is seeking the return of over $86,000,000 from Somers Dublin Limited (“Somers Dublin”) and Somers Nominees (Far East) Limited (“Somers Nominees”) (collectively, the “Somers Defendants”), and over $975,000,000 from BNP Paribas Arbitrage SNC (“BNP Arbitrage”). While Picard has filed a number of clawback suits against subsequent transferees of Fairfield, these two suits represent the first believed attempt to retrieve funds from subsequent transferees of Harley thus far by Picard.
Harley, also itself the subject of a liquidation, was the previous target of a Picard suit. Picard alleged that Harley received transfers of $1.07 billion from Madoff. After failing to file an answer to Picard's complaint, United States Bankruptcy Judge Burton R. Lifland entered a default judgment for $1.07 billion. Of those transfers, Picard is now seeking $80 million from the Somers Defendants and $975 million from BNP Arbitrage, which constitutes nearly all of the alleged transfers made from Madoff to Harley.
A copy of the Somers Defendants complaint is here.
A copy of the BNP Arbitrage complaint is here.
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