Madoff Trustee Seeks $189 Million in Clawback Suits

The trustee overseeing the liquidation of Bernard Madoff's failed Ponzi scheme filed another set of lawsuits seeking to "claw back" nearly $180 million from four entities that invested with Madoff through investment accounts with 'feeder fund' Fairfield Sentry.  Fairfield Sentry was the largest of the so-called 'feeder funds' that funneled billions of dollars into Madoff's scheme.  Irving Picard, the court-appointed trustee, earlier this year reached a settlement with Fairfield Sentry that allows Picard to pursue clawback actions against Fairfield Sentry investors.  According to Picard, Fairfield Sentry received approximately $3 billion in avoidable transfers from Madoff during the six years preceding the collapse of the scheme.

Picard is seeking the return of nearly $190 million from Atlantic Security Bank ("ASB"), Trincaster Corporation ("Trincaster"), Bureau of Labor Insurance ("BLI"), and Naidot & Co ("Naidot").  With the exception of New Jersey-based Naidot, the remaining three companies are foreign companies, with ASB based in Panama, Trincaster in Switzerland, and BLI in China.  A list of the amounts sought from each entity is provided below:

  • Atlantic Security Bank - $120,168,691
  • Trincaster Corporation - $13, 311,800
  • Bureau of Labor Insurance - $42,123,406
  • Naidot & Co. - $13,654,907

These clawback actions derive their authority from various federal and state laws.  Under Sections 550 and 551 of the Bankruptcy Code and various sections of the New York Debtor & Creditor Law, initial and subsequent transfers from a debtor within the six-year time period preceding the filing of a bankruptcy petition are subject to avoidance.  

Including the four suits filed today, Picard has now filed clawback lawsuits seeking nearly $1 billion from Fairfiield Sentry customers, including lawsuits against the investment arm of Abu Dhabi (LINK) and the National Bank of Kuwait.

The Complaints against each entity are here: Atlantic Security, Bureau of Labor Insurance, Naidot, and Trincaster

Related Ponzitracker coverage:

Madoff Trustee Files Seven Clawback Lawsuits Against Feeder Fund Investors

Madoff Trustee Fires Next Salvo of Clawback Lawsuits

Madoff Trustee Files Five More Clawback Lawsuits Against Feeder Fund Investors Seeking Nearly $100 Million

Madoff Trustee Seeks $300 Million From Abu Dhabi Investment Arm