Recoveries & Settlement Agreements Reported as of May 17, 2013:
All amounts approximate
Third Pro Rata Interim Distribution (4.721%):
The third pro rata interim distribution from the Bernard L. Madoff Investment Securities LLC (BLMIS) Customer Fund to eligible customers commenced March 29, 2013, with a record date of March 22, 2013. As of May 17, 2013, approximately $507.9 million has been distributed to BLMIS accounts with allowed claims in the third distribution, representing approximately 4.721 percent of the allowed claim amount of each individual account, unless the claim is fully satisfied. After the third pro rata interim distribution, 1,073 accounts with allowed claims remain partially satisfied and entitled to participate in future interim distributions.
Second Pro Rata Interim Distribution (33.556%):
The second pro rata interim distribution from the Bernard L. Madoff Investment Securities LLC (BLMIS) Customer Fund to eligible BLMIS customers commenced September 19, 2012, with a record date of September 13, 2012. To date, approximately $3.638 billion has been distributed to BLMIS accounts with allowed claims through the second pro rata interim distribution.
First Pro Rata Interim Distribution (4.602%):
As of May 17, 2013, approximately $501.5 million has been returned to BLMIS customers with allowed claims via the first pro rata interim distribution, which commenced on October 5, 2011.
Amount of SIPC advances reimbursed to SIPC on fully satisfied accounts - $102.81 Million
SIPC is authorized to administer funds to customers of failed brokerage firms as an advance against recovered assets. In this case, SIPC to date has advanced to the court-appointed SIPA Trustee approximately $808.2 million in funds to distribute to BLMIS customers with allowed claims.
According to the provisions of SIPA, SIPC is reimbursed for its advances to customers once each respective customer claim is fully satisfied. As of the third pro rata distribution in the BLMIS liquidation proceeding, SIPC received $102.81 million in reimbursement from the Customer Fund for advances paid on fully satisfied, leaving $705.4 million in SIPC advances outstanding.
One hundred percent of the SIPA Trustee's recoveries will be allocated to the Customer Fund for distribution to BLMIS customers with allowed claims. The reimbursements to SIPC are for the cash advances to BLMIS customers with allowed claims, which are made when the BLMIS customer claim is first allowed.
Additional unresolved matters remain that require determination, including “time-based damages,” or payments based on the time elapsed while customer funds were deposited with BLMIS. All of these matters will be heard and determined by the courts and, until resolved, require reserves. In addition, 170 claims have been “deemed determined pending litigation” and the SIPA Trustee must establish sufficient reserves to ensure that he would be able to make all pro rata distributions to date to all potentially eligible claimants, whether or not their claims are allowed at the time of distribution.
Required reserve for deemed determined claims: Approximately $2.783 billion
Required 3-percent reserve ordered by Bankruptcy Court for issue of time-based damages: Approximately $1.358 billion
Other reserves, including reserve for deferred payments and unallocated funds: Approximately $10.363 million
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. Required reserves include the $220 million settlement with the Norman F. Levy family and approximately $222.8 million relating to settlement reserves and other matters must be held in reserve.