(Troubled Company Reporter - Feb. 14, 2011
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Bankruptcy Judge Burton R. Lifland granted the request of Irving H. Picard, Esq., trustee for the substantively consolidated Securities Investor Protection Act liquidation of Bernard L. Madoff Investment Securities LLC, and Bernard L. Madoff, for an order (i) enforcing the automatic stay and the December 15, 2008 stay order and related orders of the United States District Court for the Southern District of New York and declaring the actions brought in various jurisdictions by certain defendants -- Third Party Plaintiffs -- against Ruth Madoff, Peter Madoff, Andrew Madoff, Mark Madoff, and Shana Madoff void ab initio as against the Madoff Defendants; and (ii) enjoining the Third Party Plaintiffs from litigating the Third Party Actions, or any related actions, against the Madoff Defendants pending completion of the SIPA Trustee's actions against the Madoff Defendants. Certain, but not all, of the Third Party Plaintiffs have filed briefs in opposition to the Motion.
The cases are Securities Investor Protection Corporation, v. Bernard L. Madoff Investment Securities LLC, (Substantively Consolidated); and Irving H. Picard, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, v. Richard I. Stahl, et al., Adv. Pro. Nos. 08-01789 and 10-03268 (Bankr. S.D.N.Y.),
A copy of Judge Lifland's February 9, 2011 Memorandum Decision is available at http://is.gd/jXJ3N0 from Leagle.com.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion.
On December 15, 2008, the Honorable Louis A. Stanton of the U.S.
District Court for the Southern District of New York granted the
application of the Securities Investor Protection Corporation for
a decree adjudicating that the customers of BLMIS are in need of
the protection afforded by the Securities Investor Protection Act
of 1970. The District Court's Protective Order (i) appointed
Irving H. Picard, Esq., as trustee for the liquidation of BLMIS,
(ii) appointed Baker & Hostetler LLP as his counsel, and (iii)
removed the SIPA Liquidation proceeding to the Bankruptcy Court
(Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr.
Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The
petitioning creditors -- Blumenthal & Associates Florida General
Partnership, Martin Rappaport Charitable Remainder Unitrust,
Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert
US$64 million in claims against Mr. Madoff based on the balances
contained in the last statements they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751).
The Chapter 15 case was later transferred to Manhattan. In June
2009, Judge Lifland approved the consolidation of the Madoff SIPA
proceedings and the bankruptcy case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to
150 years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.)
As of October 29, 2010, a total of US$5.69 billion in claims by
investors has been allowed, with US$741.2 million to be paid by
the Securities Investor Protection Corp. Investors are expected
to receive additional distributions from money recovered by
Mr. Picard from lawsuits or settlements.
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