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Madoff trustee’s “bluster” insufficient to block feeder fund settlement

Judge Jed Rakoff rejected Irving Picard’s bid to block a $410 million deal between the fund and the N.Y. Attorney General

U.S. District Judge Jed Rakoff has told Irving Picard, the trustee responsible for collecting money for Bernard Madoff’s victims, to mind his own beeswax.

Just as he threatened, Picard was attempting to block a settlement between N.Y. Attorney General Eric Schneiderman and J. Ezra Merkin, a hedge fund manager who fed client funds to Madoff. But Rakoff rejected this bid in a 26-page order on Monday, saying, “the trustee…having for more than three years issued empty threats to seek a halt to the attorney general’s suit, has lost his right to complain.”

Picard has claimed that settlements with feeder funds like Merkin’s are detrimental to his purpose—recovering funds for the poor souls who had the misfortune to invest in Madoff’s firm. The $410 million deal with Merkin is just the latest of many such settlements Picard has challenged.

However, Rakoff was less than moved by Picard’s noble intentions. “Even on the merits, moreover, his bluster proves to be without substance,” Rakoff wrote.

Read more at the Wall Street Journal.

 

For more InsideCounsel coverage of the Madoff fiasco, see below:

Judge will approve settlement in Madoff feeder fund case

Madoff trustee and N.Y. AG go to battle over settlement

Madoff victims’ payout may exceed $5 billion

9th Circuit says Madoff investors can’t sue SEC

Peter Madoff gets 10 years behind bars

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