Irving H. Picard, the court-appointed trustee overseeing the recovery of assets for victims of Bernard Madoff's $65 billion Ponzi scheme, announced today that checks totaling $2.5 billion had been mailed out to victims representing the second pro rata distribution of funds recovered to date. When combined with funds already returned to victims through both the first interim distribution and monies advanced by the Securities Investor Protection Corporation ("SIPC"), victims have now each received more than 50% of their allowed claim. According to Picard, the average payment in the current distribution will be slightly more than $2 million, with the smallest check written for $1,784 while the largest check was over $500 million. Picard also indicated a desire to make "additional distributions as soon as practicable."
The distribution dwarfs the first interim distribution made in September 2011, which featured an average payment to victims of just $222,551.12. The disparity between the first and second distribution was due to the fact that the majority of funds recovered by Picard at the time of the first distribution, including the $5 billion settlement with the estate of Jeffrey Picower, were required to be held in reserve pending various legal challenges. Where the first distribution represented just over 4% of each investor's net loss, the second distribution is approximately 1/3 of each investor's total net loss. Not including the amount advanced to each investor from SIPC, Picard has now paid nearly 40% of allowed claims.
While receiving over 16,000 claims from purported victims, Picard allowed 2,436 claims. 892 of those claims were satisfied with the first SIPC advance and the first interim distribution, and the second distribution will fully satisfy an additional 182 claims. After the second distribution, 1,048 claims will remain outstanding and entitled to participate in further distributions.
Picard has also provided a chart on his website, www.madoff.com, to illustrate his progress thus far:
While various legal and administrative fees have totaled over $600 million, Picard is quick to note that "not one penny of the funds recovered by the SIPA trustee has been used to pay any administrative expenses in the proceeding." Instead, these expenses are funded by SIPC, which is an industry-created group that collects donations from industry members. A look at how SIPC operates is here.