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Updated April 14, 2015: Where can I find information on the claims process and distributions of funds that were forfeited to the U.S. government in connection with the Madoff fraud?

Determination of claims and distribution of funds from the Madoff Victim Fund (MVF) will be done under the supervision of Richard C. Breeden, who was appointed Special Master of the MVF by the Department of Justice. The MVF consists of approximately $4 billion gathered to date through various criminal and civil forfeiture actions brought by the United States Attorney's Office for the Southern District of New York.

For further information regarding the Madoff Victim Fund, Special Master Richard C. Breeden, and forfeitures to the U.S. Department of Justice in the Madoff Ponzi scheme criminal cases, please visit www.madoffvictimfund.com or contact:

Madoff Victim Fund
P.O. Box 6310
Syracuse, New York 13217
(866) 624-3670
info@madoffvictimfund.com

The Special Master's customer service team can be reached Monday through Friday from 8:30 am to 5:00 pm EST.

 

Updated April 14, 2015: Why can’t all of the recovered funds be distributed now?

There are two primary reasons why significant funds are not available for distribution at this time: required reserves and ongoing appeals.

Required Customer Fund Reserves for Deemed Determined Claims

First, while the number of allowed claims is – to date – 2,552 and the dollar amount of allowed claims to date is approximately $13.568 billion, both the number of allowed claims and the dollar amount will increase. There remain 122 claims which have been "deemed determined" by the SIPA Trustee; however, the final status of each claim remains contingent on the outcome of its respective litigation. If a “deemed determined” claim becomes allowed, it would become eligible for all pro rata distributions to date, currently totaling up to 48.802 percent of the amount of the allowed claim. For this potential scenario, the SIPA Trustee has, to date, reserved approximately $2.232 billion. The ultimate amount of additional allowed claims depends on the outcome of litigation or negotiation, and could add billions of dollars to the total amount of allowed claims.

Court-Ordered Reserves for Time-Based Damages Issue

More than 1,200 objections have been filed relating to the time-based damages issue. The objections relate to additional payments based on the New York state statutory pre-judgment interest rate of 9 percent, inflation, or other damages calculations. On September 10, 2013, the United States Bankruptcy Court for the Southern District of New York approved the SIPA Trustee’s motion to deny time-based damages adjustments to customer claims. That decision was appealed by objecting parties on September 24, 2013 and on the same day an order was filed by the Bankruptcy Court certifying the order of September 10, 2013 for immediate appeal to the United States Court of Appeals. An immediate appeal was accepted by the Second Circuit on January 22, 2014, and oral arguments were heard on Tuesday, October 14, 2014.

On February 20, 2015, the Second Circuit reaffirmed the decision of the Bankruptcy Court that claimants in the SIPA liquidation of BLMIS are not entitled to time-based damages. The reaffirmation resolved the question regarding whether customers are entitled to some form of interest on the dollars deposited with BLMIS that were never invested, but instead were stolen to give to other customers. This decision clears the way for the SIPA Trustee to distribute more than $1.449 billion to customers with allowed claims. The only obstacle that could stand in the way of this additional distribution is the potential for a petition for certiorari by the defendants on this decision. The SIPA Trustee is hopeful that further delay will be viewed as pointless and that no petition will be filed. Regardless, he will file an application to the Bankruptcy Court seeking approval of an allocation authorizing him to distribute, as soon as possible, the funds that have been held in reserve awaiting the Second Circuit's time-based damages decision.

Other Customer Fund Required Reserves

As of April 14, 2015, approximately $32.9 million must be reserved in the Customer Fund for certain deferred payments, unallocated funds and other matters related to the liquidation.

Amount Unavailable to the Customer Fund Due to Required Reserves and Appeals

Portions of recoveries and settlement agreements have not yet been collected, due to appeals, the timing of payments of certain settlement monies and other issues. Therefore, these funds cannot be either allocated to the Customer Fund or distributed to BLMIS customers with allowed claims until these issues are resolved. As of April 14, 2015, approximately $236.7 million relating to settlement reserves and other matters must be held in reserve.