JOINT STATEMENT FROM THE SIPA TRUSTEE FOR THE LIQUIDATION OF BERNARD L. MADOFF INVESTMENT SECURITIES LLC
AND
THE KATZ WILPON SETTLING PARTIES

NEW YORK, NEW YORK – May 31, 2016 – The Katz Wilpon Settling Parties recently requested a modification to the June 1, 2012 Settlement Agreement with Irving H. Picard, Securities Investor Protection Act (SIPA) Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS). The Settling Parties asked the SIPA Trustee to allow payments owed in 2016 and 2017 to be extended over a longer period of time, while efforts continue on the part of the SIPA Trustee and his legal team to recover monies that can and will be used to offset those payments through future pro rata interim distributions.

Under the terms of the original, five-year settlement agreement, the Katz Wilpon Settling Parties owed a maximum amount of $162 million, with payments to be made to the SIPA Trustee from the Katz Wilpon Settling Parties’ allowed customer claims of $176,585,337.99, which they assigned to the SIPA Trustee. Due to the success of the Madoff Recovery Initiative to date and the six pro rata interim distributions equaling approximately 57.064 percent of the amount payable from the Katz Wilpon assigned customer claims, that $162 million has been reduced to a maximum amount of approximately $61 million. It is expected that the approximately $61 million currently owed by the Katz Wilpon Settling Parties will be further reduced as a result of the SIPA Trustee’s ongoing recovery efforts and future distributions. However, under the original settlement agreement, the approximately $61 million would be paid in two installments, $23,321,931 on June 1, 2016 and $37,911,412 on June 1, 2017.

After discussions, a revised agreement was reached. Under the terms of the revised agreement:

· The Katz Wilpon Settling Parties will make a payment of $16 million on or before June 1, 2016.

· The balance due on June 1, 2017 will be divided in four annual installments (2017 – 2020).

· Katz Wilpon Settling Parties will pay an interest rate of 3.5 percent on the unpaid balance, which is expected to result in additional payments to the BLMIS Customer Fund of at least an estimated $2,200,000 by 2020.

· Katz Wilpon Settling Parties’ principals, Mr. Fred Wilpon and Mr. Saul Katz, have increased their personal guarantees to cover the entirety of the remaining unpaid balance.

The SIPA Trustee has agreed to this updated arrangement as he believes this accommodation is reasonable given the additional value it will create for the Customer Fund and ultimately for customers with allowed claims.

A complete history of the liquidation, including the distributions to the SIPA Trustee from the Katz Wilpon Settling Parties’ assigned claims, can be found on the website (www.madofftrustee.com).

There will be no further comment beyond this statement.

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PRESS RELEASE OF IRVING H. PICARD

Trustee For Liquidation of Bernard L. Madoff Investment Securities Announces Unsealing of Complaint Against Sterling Equities, Its Partners -- Including Saul Katz And Fred Wilpon -- And Related Entities

NEW YORK, NY – February 4, 2011 – Irving H. Picard, the Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (“BLMIS”) today announced that his complaint against Sterling Equities (“Sterling”), its partners, their family members, and certain related trusts and entities (the “Sterling Defendants”) – initially filed under seal on December 7, 2010 in the United States Bankruptcy Court for the Southern District of New York – will be unsealed at the Trustee’s request and its details made available to the public.

“Given the high level of public interest in this matter and the equally high level of misinformation and incorrect assertions currently circulating, we are pleased that the facts in the complaint can now speak for themselves, clearly and convincingly,” said David J. Sheehan, counsel to the Trustee and a partner at Baker & Hostetler LLP, the court appointed counsel for the Trustee.

“Attempts to negotiate with the Sterling Defendants have not resulted in a resolution of the amount owed to the Madoff Customer Fund,” said Mr. Sheehan. “We believe that the Sterling Defendants received substantial funds – in the hundreds of millions of dollars – illegally through their BLMIS accounts and we seek these recoveries for ultimate distribution to BLMIS customers with valid claims.”

“There are thousands of victims of Bernard Madoff’s massive Ponzi scheme. Saul Katz is not one of them. Neither is Fred Wilpon. And neither are the rest of the Sterling Equities’ partners,” said Fernando A. Bohorquez, Jr., a Baker & Hostetler partner representing the Trustee. “In fact, Saul Katz, Fred Wilpon, the other Sterling partners, their families, their related trusts, and their various privately held entities were collectively one of the largest beneficiaries of Madoff’s fraud, reaping hundreds of millions in fictitious profits over Sterling’s quarter-century relationship with Madoff.”

The complaint states that the Katz and Wilpon families and businesses were deeply linked to Madoff for more than 20 years. The Sterling partners, their family members, trusts and Sterling-related entities held approximately 300 BLMIS accounts. “Saul Katz, Fred Wilpon and their partners capitalized on their close personal connection with Madoff and used their BLMIS investments to anchor the Sterling empire. Madoff money flowed through every aspect of Sterling’s business; whether real estate, baseball or private equity, virtually every Sterling business held investments with BLMIS,” said Mr. Bohorquez.

The complaint states that the Sterling partners all had close personal and business ties to Madoff, and used their fraudulent accounts with BLMIS as collateral for financing for more than two decades in order to secure capital under favorable terms. Additionally, Sterling steered close to 180 referrals to BLMIS – including their own employees through a 401(k) plan – thereby channeling hundreds of millions of dollars into the Madoff Ponzi scheme. Madoff also invested millions in various Sterling ventures.

“Given Sterling’s dependency on Madoff, it comes as no surprise that the partners willfully turned a blind eye to every red flag of fraud before them. The warning signs were many and varied, ranging from cautionary counsel from financial industry experts and trusted advisors to Madoff’s schemes to avoid regulatory scrutiny. The Sterling partners even invested in the Bayou Ponzi scheme before BLMIS’s collapse. That scheme bore similar markings to the Madoff fraud,” said Mr. Bohorquez.

“The Sterling partners are not your average investors; they are sophisticated real estate businessmen and major league baseball franchise owners who built a massive, diversified business empire,” said Mr. Bohorquez. “Despite being on notice and having every resource at their disposal to investigate the litany of legitimate questions surrounding Madoff, the Sterling partners chose to blindly accept their good fortune without conducting any investigation whatsoever.” In addition to Mr. Sheehan and Mr. Bohorquez, the Trustee acknowledges the contributions of the Baker & Hostetler attorneys who worked on this filing: Thomas Lucchesi, Lauren Resnick, Kathryn Zunno, Amanda Fein, Keith Murphy, Marc Skapof, and George Klidonas.

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Press release from the office of Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Trustee for Liquidation of Bernard L. Madoff Investment Securities Announces Filing of Amended Complaint Against Sterling Equities, It's Partners – Including Saul Katz and Fred Wilpon – and Related Entities

Recoveries sought now total more than $1 billion

NEW YORK, NEW YORK – March 18, 2011 – Irving H. Picard, the Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (“BLMIS”) today announced the filing of an amended complaint, in the United States Bankruptcy Court for the Southern District of New York, against Sterling Equities (“Sterling”), its partners, their family members, and certain related trusts and entities (collectively, the “Sterling Defendants”).

The amended complaint provides additional specific detail and quantification of the alleged fraudulent transfers from BLMIS received by the Sterling Defendants. In addition to the approximately $300 million in fictitious profits received by the Sterling Defendants cited in the original complaint, the amended complaint states that the Trustee seeks more than $700 million in alleged fraudulent transfers of principal received by the Sterling Defendants, bringing the total recoveries sought by the Trustee from the Sterling Defendants to more than $1 billion. The additional alleged fraudulent transfers of principal occurred during the six years prior to the December 2008 commencement of the BLMIS liquidation proceeding and include preferential transfers received by the Sterling Defendants within the 90-day period prior to the filing date.

“The amended complaint sheds more light on the deep dependency of the Sterling business organization on the continuation of the Madoff fraud and certain knowledge of indicia of fraud by the Sterling partners,” said David J. Sheehan, counsel to the Trustee and a partner at Baker & Hostetler LLP, the court-appointed counsel for the Trustee.

“Perhaps the most telling evidence of Sterling’s dependency on Madoff is the fact that postrevelation of Madoff’s fraud, the Sterling partners were forced to negotiate with at least seven lender banks, including Bank of America, JPMorgan Chase, Citibank, HSBC, M&T, Wachovia, and Bank of New York (the “Lender Banks”), to restructure more than a half-billion dollars in collective debt – not just the millions of dollars of debt secured by the Leveraged KW BLMIS Accounts,” said Fernando A. Bohorquez, Jr., counsel to the Trustee and a partner at Baker & Hostetler LLP. As described in the amended complaint, in the aftermath of the discovery of the Madoff fraud, with full notice of the potential liability to the Trustee faced by the Sterling Defendants, Sterling and the Lender Banks entered into various restructuring credit facilities containing certain provisions that attempted to circumvent any potential recovery action initiated by the Trustee.

“The restructuring demonstrates both Sterling’s and the Lender Banks’ serious concerns regarding potential recoveries by the Trustee, and supports the Trustee’s contention that the Sterling Defendants were inextricably bound to the Madoff fraud,” said Mr. Bohorquez.

The amended complaint also provides additional substantiation of the inter-dependent relationship between Sterling and BLMIS as well as certain Sterling partners’ knowledge of Madoff’s dishonesty in his investment advisory business. For instance, the amended complaint details a multi-milliondollar interest- and cost-free bridge loan from Madoff to Sterling in connection with its purchase of the broadcast rights for the New York Mets from Cablevision. This transaction was documented by a single letter agreement that falsely described the loan as an “investment” by Ruth Madoff in the company that would later become the SNY network.

The Sterling complaint was initially filed under seal on December 7, 2010 in the United States Bankruptcy Court for the Southern District of New York. The original complaint was unsealed on February 4, 2011.

In addition to Mr. Sheehan and Mr. Bohorquez, the Trustee acknowledges the contributions of the Baker & Hostetler attorneys who worked on this filing: Lauren Resnick, Kathryn Zunno, Steven Goldberg, Amanda Fein, Keith Murphy, Marc Skapof, George Klidonas, and Henry Bodenheimer.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee and Counsel at Baker Hostetler:

On Thursday, February 16, 2012, Counsel to SIPA Trustee, Irving H. Picard, filed two briefs on his behalf in the matter of Picard v. Katz, et al. with the United States District Court for the Southern District of New York:

1) Trustee’s Reply Memorandum of Law in Further Support of Trustee’s Motion for Partial Summary Judgment

This reply memorandum of law was filed in further support of the Trustee’s motion for partial summary judgment to avoid and recover as fraudulent transfers to the Two-year New Winner Defendants. Katz Wilpon, et al., by Bernard L. Madoff Investment Securities LLC for which the Defendants failed to provide value –ie fictitious profits- sought in Count One of the Trustee’s Amended Complaint (filed on March 18, 2011.)

2) Trustee’s Reply Memorandum of Law In Support of the Trustee’s Motion to Strike the Expert Reports and Testimony of John Maine

The above filings can be found on the Trustee’s website on the court filing tab:www.madofftrustee.com.

Baker & Hostetler Counsel to the SIPA Trustee who work on Picard v. Saul Katz et al. include:

David Sheehan, Fernando Bohorquez, Regina Griffin, Lauren Resnick, Mark Kornfeld, Timothy Susanin, Tracy Cole, Karin Scholz Jenson, Kathryn Zunno, Jody Schechter, Stacey Bell, Melissa Kosack, Amanda Fein, Brian Song, Marco Molina, Madiha Zuberi and Jacqlyn Rovine.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee and his Counsel at Baker Hostetler:

On Friday, April 13, 2012, on behalf of Irving H. Picard, the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), Counsel to the Trustee filed the following with the District Court for the Southern District of New York with regard to Picard v. Katz et al.:

1. Trustee’s Motion and Memorandum for Entry of Order Pursuant to Section 105(a) of the Bankruptcy Code and Rules 2002(a)(3) and 9019(a) of the Federal Rules of Bankruptcy Procedure Approving Settlement Agreement
2. Trustee’s Affidavit in support of Motion and Memorandum for Entry of Order pursuant to Section 105(a) of the Bankruptcy Code and Rules 2002(a)(3) and 9019(a) of the Federal Rules of Bankruptcy Procedure Approving Settlement Agreement
3. Settlement Agreement and Release


Summary/highlights of the Settlement:

• The Settlement Agreement represents a good faith, complete and final settlement between the two parties. It is a practical and fair compromise of complex litigation issues and avoids a protracted and expensive trial and lengthy appeals. The settlement is in the best interests of the BLMIS Customer Fund and the BLMIS customers with allowed claims – who were defrauded by the Madoff Ponzi scheme – who will ultimately receive distributions of recovered monies from the Customer Fund.
• The Agreement enables the BLMIS Customer Fund to recoup six years (2002 through 2008) of fictitious profits of $162,000,000 and enables the SIPA Trustee to increase the fund of customer property (the Customer Fund) by $162 million. 


• The settlement payment schedule – details of which are fully outlined in the Agreement – is structured to make the settlement fully collectable, and creates a way to work around the restrictive issues faced by the Defendants that include constricted cash flow and lender covenant issues. The Trustee believes that without a solution such as this settlement presents, he would not have been able to recover more for the BLMIS Customer Fund by litigating to the point of judgment.
• The Trustee’s financial due diligence confirmed the basis for the settlement and the representations made by the Katz et al. Defendants.
• The Defendants’ allowed claims of approximately $178 million (BLMIS accounts in which the Defendants had deposited more money than they had withdrawn – their “net loser” accounts) will be unconditionally assigned to the Trustee. Any payments against the allowed claims that the Defendants are assigning to the Trustee will reduce the amount owed by the Defendants and will be added to the Customer Fund. If the settlement has not been fully satisfied in three years, Katz et al. Defendants must each pay their respective remainder of the settlement amount. If any of the Defendants are unable to do so, Saul Katz and Fred Wilpon will be personally responsible for any shortfall up to $29 million.
• The Katz et al. Defendants agree to withdraw their petition for a writ of certiorari filed with the United States Supreme Court from the Second Circuit Net Equity Order and also agree not to pursue or join any other litigation involving the Trustee or SIPC arising out of or relating to the BLMIS liquidation. The termination of such litigation will help speed additional distributions to BLMIS customers with allowed claims.

A hearing for approval of the settlement before the District Court for the Southern District of New York has been scheduled for Tuesday, May 15, 2012, at 4:00 p.m.

Counsel to the SIPA Trustee at Baker Hostetler who worked on the settlement filings with regard to Picard v. Saul Katz et al. include: David Sheehan, Fernando Bohorquez, Geraldine Ponto, Regina Griffin, Steven Goldberg, Karin Jenson Scholz, Henry Bodenheimer, Katherine Zunno, and Jody Schechter.

All three of the above filings and their respective supporting documents can be found on the Trustee’s website on the court filing tab: www.madofftrustee.com.

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Press release from the office of Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS)

Trustee For Liquidation of Bernard L. Madoff Investment Securities Opposes Motion to Dismiss Complaint Against Sterling Equities

NEW YORK, NY – May 19, 2011 – Irving H. Picard, the Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (“BLMIS”), today filed his opposition brief in the United States Bankruptcy Court for the Southern District of New York against the motion by Sterling Equities (“Sterling”), its partners, their family members, and certain related trusts and entities (the “Sterling Defendants”) seeking either the dismissal of the Trustee’s complaint against them or summary judgment.

In the opposition brief, the Trustee describes two critical components of the fiduciary mandate which form the basis of his claims against the Sterling Defendants. The first is to locate and recover fictitious profits, or “other people’s money,” that the Sterling Defendants received from BLMIS and to redistribute those assets equitably to those who withdrew less than they deposited.

The second critical component of the Trustee’s claims against the Sterling Defendants emanates from the bankruptcy law concept of good faith. A lack of good faith under the bankruptcy law does not require that the defendant actually did something illegal or knew that it was dealing with a Ponzi scheme. Instead, under bankruptcy law, a defendant did not act in good faith if what it knew about BLMIS gave it a reason to inquire further, but instead it turned a blind eye and continued to take money from an enterprise it should have known might be a fraud.

“Fred Wilpon, Saul Katz and the Sterling Partners are holding $300 million in fictitious profits consisting of ‘other people’s money,’ stolen money that they received from Bernard Madoff. Yet they refuse to return this stolen money,” said David J. Sheehan, counsel to the Trustee and a partner at Baker & Hostetler LLP, the court-appointed counsel for the Trustee.

“This case is one of many actions undertaken by the Trustee to fulfill his fiduciary obligation to return stolen money to the rightful owners, who are BLMIS customers and creditors with approved claims,” said Mr. Sheehan. “As today’s filing shows, the law and the facts verify the Trustee’s allegations against the Sterling Defendants. There is no rationale – in law or in fact – that justifies their retention of stolen money.”

The opposition brief submits evidence – including information and testimony presented for the first time – which substantiates the Trustee’s allegations against the Sterling Defendants, including that they disregarded warnings from trusted advisors and their own suspicions that BLMIS might be a fraud, because they were “fixated on continuing to profit from their access to Madoff and his returns.”

“The law does not permit ‘bad faith’ investors to retain money they received from an enterprise after indicia of possible fraud becomes apparent,” said Fernando A. Bohorquez, Jr., counsel to the Trustee and a partner at Baker & Hostetler LLP. “Even if the Sterling Defendants did not specifically know that BLMIS was a Ponzi scheme, they cannot keep the hundreds of millions of dollars in principal transfers they received under circumstances indicating that they should have known of possible fraud at BLMIS.”

The Sterling Defendants must return to the Trustee all of the money that they received from BLMIS if they were on notice of facts suggesting that BLMIS might be a fraud, but failed to conduct a diligent investigation. The Trustee’s pre-complaint investigation yielded evidence that shows that the Sterling Defendants were aware that BLMIS might have been a fraud but failed to investigate, including:

• In 2001, the Sterling Partners explored purchasing “fraud insurance” for their BLMISinvestments that would cover a Ponzi scheme;

• Sterling Partner David Katz’s own testimony that by 2002, he was “screaming for diversification” of the Sterling Partners’ investments away from Madoff because “we don’t know what he does” and so created their own hedge fund, Sterling Stamos, to achieve “Madoff-like returns”;

• Testimony of one of the Sterling Partners that he had heard Madoff might be front-running,which he understood meant that Madoff might be taking “information and us[ing] it illegally . . . to his own benefit or to benefit his clients”;

• Testimony that the Sterling Partners were warned by their hedge fund business partners of the danger that their hundreds of millions of dollars at BLMIS could be frozen if there were an investigation into Madoff’s operations.

Sterling Stamos Documents and Testimony Show that the Sterling Partners Were Warned

Of particular note, the opposition brief provides more detail from the testimony of Peter Stamos, the chief executive officer of Sterling Stamos, the hedge fund co-founded by Mr. Stamos and the Sterling Partners. After describing his high opinion of Madoff, Peter Stamos in the very next breath stated that Sterling Stamos’s due diligence protocols would have “stopped [Madoff] at the door” and that he conveyed this information to a Sterling Partner.

Within days of the collapse of BLMIS, there were written communications from Sterling Stamos stating that they had recommended to the Sterling Partners for years that they should have taken their money out of BLMIS, but that they had refused to do so despite these warnings. In particular, a December 2008 email by Sterling Stamos’s chief investment strategist read: “In fact, we had recommended to them [Sterling Partners] to redeem [from BLMIS] for years but they kept their investment independent of our recommendation.”

Before the collapse of the Madoff Ponzi scheme, other credible investment advisors expressed similar misgivings to the Sterling Partners about Madoff, including:

• A Merrill Lynch executive who told Saul Katz that Madoff would not pass Merrill Lynch’s due diligence process;

• A consultant to the Sterling Defendants who told Saul Katz that he “couldn’t make Bernie’s math work” and “Something wasn’t right.”

“Instead of listening to the advice of their own, hand-picked hedge fund managers and other advisors, the Sterling Defendants restructured Sterling Stamos to accommodate Madoff’s unorthodox demands for secrecy,” said Mr. Sheehan. “Peter Stamos’s testimony confirms that, to appease Madoff’s desire to avoid disclosures regarding the Sterling Partners’ investments with BLMIS, Sterling Stamos’s operations and management were entirely restructured at great time and expense.”

Bayou Fund Ponzi Scheme – A Lesson Ignored

In addition to warnings from experienced investment advisors, the Sterling Partners had previous experience with another Ponzi scheme in 2005. The Trustee’s opposition brief details the lessons that the Sterling Partners should have learned from the Bayou Fund Ponzi scheme and that they should have applied to Madoff, but deliberately failed to do so.

“The facts are undeniable and inescapable. The Sterling Partners used their BLMIS accounts and the consistent, steady returns as a source of liquidity for their various businesses, including the Mets. They also used their BLMIS accounts for leverage, borrowing against them to obtain additional capital which they then reinvested into their BLMIS accounts to double their returns,” said Mr. Sheehan. “As our evidence shows, the Sterling Defendants were aware of and ignored indicia of fraud, despite a series of escalating warnings about Madoff. Of this there is no doubt.”

The Sterling complaint was initially filed under seal on December 7, 2010 in the United States Bankruptcy Court for the Southern District of New York. The original complaint was unsealed on February 4, 2011, at the Trustee’s request, and amended on March 18, 2011.

A copy of the opposition brief and other motions in this matter are available on the Trustee's website at www.madofftrustee.com or on the Bankruptcy Court’s website at www.nysb.uscourts.gov; Docket No. 10-5287 (BRL). The Bankruptcy Court will hold a hearing on the Sterling Defendants’ motion on Wednesday, June 29, 2011.

In addition to Mr. Sheehan and Mr. Bohorquez, the Trustee acknowledges the contributions of the Baker & Hostetler attorneys who worked on this filing: Lauren Resnick, Regina Griffin, Tracy Cole, Tom Warren, Keith Murphy, Kathryn Zunno, George Klidonas, and Amanda Fein.

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Statement from the office of the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC

Attributable to Amanda Remus, spokeswoman for the SIPA Trustee & his Counsel at BakerHostetler:

POTENTIAL IMPACT OF PICARD V. KATZ RULING ON RECOVERIES
AND DISTRIBUTIONS

The Picard v. Katz, et al. motion to dismiss opinion and order issued in September 2011 by Judge Rakoff of the United States District Court for the Southern District of New York has significant potential ramifications that could affect recoveries as well as distributions to BLMIS customers with allowed claims. The ruling – insofar as it affects the Katz Wilpon case – has changed the look-back period from six years or more, as permitted under New York State law, to two years. If that decision were to be upheld and applied to other pending litigation, the impact, under a worst-case scenario, would be to preclude the Trustee from seeking approximately $2.6 billion in fictitious profits, as well as an additional $8.3 billion in principal sought from "bad faith" customers and feeder funds. In addition, the Judge’s ruling could preclude the return of approximately $160 million in preference payments – funds withdrawn during the 90-day period prior to the start of the liquidation. Thus, the total potential reduction in recoveries would be approximately $11.1 billion. The Trustee believes there are multiple bases to challenge the ruling, and he is seeking authority for immediate appeal of the order.

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As a follow-up to the press release issued March 19, 2012, David J. Sheehan, Chief Counsel to the SIPA Trustee, made an additional statement the same day, as part of the announcement of the settlement of Picard v. Katz, et al.:

“In reaching this settlement agreement, or any settlement agreement, the SIPA Trustee takes an array of circumstances, factors and other strategic issues into consideration with the benefit of the BLMIS Customer Fund always top of mind. Here, consistent with the Memorandum of Understanding entered into the Court record this morning, the Trustee took into account many and various factors – including the uncertainty, cost and time-consuming nature of the litigation, a review of the evidence, and the personal and financial circumstances of the parties – to determine that he will no longer pursue the willful blindness claims against the Sterling parties to trial and possibly beyond.

“The recovery of the full $162 million of six years of fictitious profits – especially given that the Court had limited the Trustee’s recovery in this case to roughly half that figure – provided the best outcome to enhance the Customer Fund for the victims of Madoff’s fraud.

“The SIPA Trustee has repeatedly said that, where possible, he would rather negotiate than litigate. Most important in any negotiation is the willingness and the spirit to compromise by both sides. That is what occurred here."

PRESS RELEASE OF IRVING H. PICARD

SETTLEMENT REACHED IN PICARD V. KATZ, ET AL.

New York, New York – March 19, 2012 – A settlement has been announced in the United States District Court for the Southern District of New York regarding the dispute between the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and the partners of Sterling Equities and related persons and entities.

The essential terms of the agreement, which are subject to certain approvals, are that the Sterling parties have agreed to pay a sum to the BLMIS Customer Fund equal to 100 percent of the fictitious profits of approximately $162 million that were withdrawn by the Sterling parties during the six-year period prior to the BLMIS liquidation proceeding -- the District Court had previously ruled that the Sterling parties were liable for fictitious profits spanning only the two-year period prior to the liquidation proceeding -- and that the SIPA Trustee has elected to dismiss the amended complaint that alleged that the Sterling parties were willfully blind to the fraud conducted by Bernard L. Madoff.

The Sterling parties’ customer claims – which total approximately $178 million – will be allowed in full and will be entitled to recovery on the same basis as other BLMIS customers. The Sterling parties’ allowed claims are now assigned to the SIPA Trustee and any pro rata distributions will be used to reduce the Sterling parties’ settlement obligation.

David J. Sheehan, Chief Counsel to the SIPA Trustee states, “The SIPA Trustee believes that this settlement represents the best possible outcome for BLMIS Customers with allowed claims, as it provides for the recovery of 100 percent of the $162 million in fictitious profits for the six-year period. We believe that this is a fair and just settlement. At the same time, the SIPA Trustee has withdrawn all willful blindness claims against any Sterling party. All settlements negotiated by the SIPA Trustee are predicated on the fact that the SIPA Trustee works for the best interests of BLMIS customers. Settlement terms are reached to create the maximum recovery for the BLMIS Customer Fund, taking into consideration factors such as the vicissitudes of time-consuming litigation and the financial situation of the parties involved.”

The SIPA Trustee thanks Governor Mario Cuomo, who was appointed by the United States Bankruptcy Court for the Southern District of New York to mediate the dispute between the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and the partners of Sterling Equities and related persons and entities, over the past year. He also thanks the Wilpon and Katz families and the other Sterling Partners for setting a positive example by returning 100 percent of the six-year fictitious profits to the Customer Fund.

At the appropriate time, the SIPA Trustee will file a Bankruptcy Rule 9019 motion with the court, which will include details of the settlement.

In addition to Mr. Sheehan, the Baker & Hostetler Counsel to the SIPA Trustee who worked on Picard v. Saul Katz et al. include: Fernando Bohorquez, Regina Griffin, Tracy Cole, Karin Scholz Jenson, Lauren Resnick, Mark Kornfeld, Timothy Susanin, Kathryn Zunno, Jody Schechter, Stacey Bell, Melissa Kosack, Amanda Fein and Brian Song.

Additional information and updates will be available on the SIPA Trustee's website:
www.madofftrustee.com.

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