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$277 Million Accord with Money Manager's Family Reached by Madoff Trustee


10/29/2016


$277 Million Accord with Money Manager's Family Reached by Madoff Trustee
A settlement deal that would provide more than $277 million to victims of Madoff's Ponzi scheme was reached between the court-appointed trustee liquidating Bernard Madoff's firm and the family of late Beverly Hills money manager Stanley Chais. The deal was reached on Friday, Bernard Madoff's firm said.
 
Along with the rights to $30.7 million of assets that are expected to be sold, victims will receive at least $232 million of cash, Irving Picard, the trustee, said.
 
Resolving litigation by California's Attorney General Kamala Harris, and which had been brought in 2009 by her predecessor, California Governor Jerry Brown was a separate $15 million fund which will pay claims by California investors.
 
Approval by U.S. Bankruptcy Judge Stuart Bernstein in Manhattan, who oversees the liquidation of Bernard L. Madoff Investment Securities LLC would be required for the settlement that was announced on Friday. A hearing for the same is scheduled for Nov. 22.
 
The sum that Picard has recovered for former Madoff customers, or 65 percent of their estimated $17.5 billion loss, was $11.46 billion and this cash addition would boost that amount. Nearly half of the accounts that had valid claims have already been paid off. Picard has said that the total number of such claims accounts were 2,597. After pleading guilty to running a decades-long fraud uncovered in December 2008, Madoff, 78, is serving a 150-year prison term.
 
Chais been a close friend of Madoff since the 1960s and he had once handled investments for elite Hollywood clients like Oscar-winning director Steven Spielberg,. Chais had died in September 2010 at the age of 84.
 
Picard had claimed that Chais defendants, including Chais' widow Pamela, withdrew from Madoff's firm $1.32 billion of "fictitious profits" that he claimed which had claimed to have recouped.
 
In June 2009, the U.S. Securities and Exchange Commission filed a related civil lawsuit against Chais. That suit claimed that Madoff's seemingly steady returns were bogus were signs of something sinister and potentially dangerous were ignored by Chais.
  
The settlement represented "a good faith, complete and total compromise" and it tended to cover all of Stanley Chais' estate and substantially all of his widow's assets, Picard's lawyers said about the settlement in a court filing. Chais had maintained that he was the one who had as  as he was himself a Madoff victim.
 
Lawyers for the Chais defendants did not immediately respond to requests for comment.
 
A Thursday court filing shows that including $370.2 million for consultant fees and another sum of $824.6 million for legal fees for Picard's law firm Baker & Hostetler, more than $1.42 billion has been spent on recovery efforts through Sept. 30.
 
Madoff victims would also be compensated by a $4 billion fund overseen by former SEC Chairman Richard Breeden.
 
The cases are Picard v Chais et al, U.S. Bankruptcy Court, Southern District of New York, No. 09-ap-01172; and In re: Bernard L. Madoff Investment Securities LLC in the same court, No. 08-01789.
 
(Source:www.reuters.com) 


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