ASK THE SIPA TRUSTEE

Ask The Trustee
Have a question about the recovery effort? Submit your inquiry by clicking on the “Submit a Question” button and filling out the requested fields. Your name and e-mail address will be kept confidential and will never be distributed, sold or appear on the site anywhere.

SUBMIT A QUESTION

Updated July 23, 2014: 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 July 23, 2014: 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 – 2,521 and the dollar amount of allowed claims to date is approximately $11.419 billion, both the number of allowed claims and the dollar amount will increase. There remain 151 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 46.059 percent of the amount of the allowed claim. For this potential scenario, the SIPA Trustee has, to date, reserved approximately $2.865 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. The immediate appeal was accepted by the Second Circuit on January 22, 2014, where it is currently pending.

Until a final, unappealable order is reached on the issue of time-based damages, the SIPA Trustee must hold the 3 percent court-ordered reserve of approximately $1.445 billion (as of July 23, 2014). 

Other Customer Fund Required Reserves

As of July 23, 2014, approximately $19.9 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 July 23, 2014, approximately $236.7 million relating to settlement reserves and other matters must be held in reserve.