Madoff Trustee Seeks Over $200 Million in Latest Round of Clawback Lawsuits

The trustee overseeing the liquidation of Bernard Madoff's defunct brokerage firm continued his quest to recover funds from investors of Madoff's largest feeder fund, filing five lawsuits seeking over $200 million from five entities.  Irving Picard, the court-appointed trustee, is seeking over $1 billion from entities who invested with Madoff through Fairfield Sentry.  Picard reached a settlement with Fairfield Sentry earlier this year that allowed him to pursue clawback claims against Fairfield customers.  Fairfield received over $3 billion during its relationship with Madoff, $1.6 billion of which was subsequently transferred to Fairfield customers.  Picard has now filed suits seeking over $1 billion of the $1.6 billion allegedly transferred from Fairfield to investors.  

Today's suits seek the return of funds from ABN AMRO Bank, Bank Luxembourg, Lighthouse Investment Partners, Nomura International PLC, and KBC Investments Limited.  In total, the latest round of suits seeks nearly $220 million consisting of the following amounts from each entity:

• ABN AMRO Bank - $25,469,129
• Bank Luxembourg - $50,082,651
• Lighthouse Investment Partners - $11,165,251
• Nomura International PLC - $21,449,920
• KBC Investments Limited - $110,000,000     

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.  

Copies of each complaint can be found here:  ABN AMRO, Bank Luxembourg, Lighthouse Investment Partners, Nomura, and KBC.

Related Ponzitracker coverage:

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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

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

The court-appointed trustee of Bernard Madoff's gigantic Ponzi scheme continued his quest to recover funds from investors in Madoff's largest feeder fund, filing five more lawsuits seeking over $95 million for defrauded investors. Irving Picard, the court-appointed trustee, filed the suits in the wake of a settlement with Fairfield Sentry, Madoff's largest 'feeder fund,' that allows him to "claw back" profits from investors who placed funds with Madoff through Fairfield. The latest lawsuits come on the heels of seven lawsuits filed last week seeking the return of at least $173 million.  Picard has now filed suits seeking nearly $470 million from Fairfield customers.

According to the complaints, a total of $3 billion was transferred from Madoff to Fairfield during the six-year period preceding BLMIS' bankruptcy filing.  Picard seeks to avoid the transfers - known as subsequent transfers - to each defendant from Fairfield Sentry under the powers granted under Sections 550 and 551 of the Bankruptcy Code.  The latest wave of lawsuits include the following defendants and amount sought:

• National Bank of Kuwait - $18,724,399 
• DEZ Financial Management Ltd. - $14,776,114
• Maple Key Market Neutral Cayman Islands LP - $14,509,369
• Unifortune Asset Management Sgr Spa and Unifortune Conservative Fund - $26,772,978
• Delta National Bank and Trust Company - $20,634,958 

Filing the lawsuits on behalf of Picard are Baker & Hostetler attorneys David J. Sheehan, Mark A. Kornfeld, Deborah A. Kaplan, Michelle R. Kaplan and Torello H. Calvani.

Each of the complaints may be found here.

Madoff Trustee Files Seven Clawback Lawsuits Against Feeder Fund Investors

The court-appointed trustee overseeing the liquidation of Bernard L. Madoff Investment Securities filed seven "clawback" lawsuits seeking the return of at least $173 million from entities that invested in one of the largest feeder funds to Madoff's scheme.  Irving Picard, the trustee, filed the suits after previously negotiating a settlement with the feeder fund, Fairfield Sentry, that allowed him to claw back profits from investors who placed funds with Madoff through Fairfield.  Last week, Picard filed suit against the Abu Dhabi Investment Authority seeking $300 million from investments with Fairfield.

The lawsuits, termed "clawback" suits, proceed under bankruptcy and state law allowing avoidance of transfers of funds made by Madoff to both initial transferees and any subsequent transferees.  According to the complaints, a total of $3 billion was transferred from Madoff to Fairfield during the six-year period preceding BLMIS' bankruptcy filing.  The seven entities sued by Picard and amount sought are as follows:

• Concord Management LLC - $10 million
• Parson Finance Panama S.A. - First Gulf Bank - $11.1 million
• Lion Global Investors Limited - $50 million
• Meritz Fire & Marine Insurance Co. Ltd. - $21.8 million
• Quilvest Finance Ltd. - $37.8 million
• Orbita Capital Return Strategy Limited - $30.6 million

The lawsuits were filed by David Sheehan, counsel to Picard.

Each complaint can be found here.

Madoff Trustee Seeks $300 Million From Abu Dhabi Investment Arm

Irving Picard, the court-appointed trustee tasked with recovering assets for defrauded investors of Bernard Madoff's massive Ponzi scheme, filed suit against the entity that acts as an investment arm of the Emirate of Abu Dhabi.  According to the complaint, the Abu Dhabi Investment Authority ("ADAI") withdrew approximately $300 million from investments with a Madoff feeder fund, Fairfield Sentry Limited, that are avoidable under New York and federal bankruptcy law.  

The lawsuit is the latest strategy taken by Picard, who, in his earlier settlement with Fairfield Sentry Limited, had negotiated for the right to 'clawback' profits from investors who had placed funds with Madoff indirectly through Fairfield's family of feeder funds.  At issue are so-called "subsequent transfers" made from Fairfield to ADIA.  Picard alleges that, of the over $3 billon withdrawn from Madoff's broker-dealer by Fairfield, approximately $300 million was subsequently transferred for the benefit of ADIA.  Picard is proceeding under Section 550 of the Bankruptcy Code, which allows a trustee to recover an avoidable transfer from the initial transferee or any immediate transferee of such initial transferee.  

Picard has filed more than 1,000 lawsuits seeking funds for Madoff victims, which have resulted in a recovery of over $10 billion to date.  Investors in Madoff's scheme are estimated to have lost $17.3 billion in principal.

A copy of the ADIA Complaint is here.