$32M recovery agreement reached w/ Cohmad in Madoff liquidation; court approval hearing set for November 30
Press release from the offices of Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), and Stephen P. Harbeck, President and Chief Executive Officer of the Securities Investor Protection Corporation (SIPC)
MADOFF TRUSTEE REACHES RECOVERY AGREEMENT OF APPROXIMATELY $32 MILLION WITH COHMAD SECURITIES CORPORATION, THE ESTATE OF MAURICE “SONNY” COHN, MARCIA B. COHN & MARILYN COHN
$11.491 Billion Recovered for Madoff Victims to Date in BLMIS Liquidation
NEW YORK, NEW YORK and WASHINGTON, DC – November 4, 2016 – Irving H. Picard, Securities Investor Protection Act (SIPA) Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), filed a motion today in the United States Bankruptcy Court for the Southern District of New York, seeking approval of a settlement agreement with Cohmad Securities Corporation (“Cohmad”), the Estate of Maurice “Sonny” Cohn, Marcia B. Cohn and Marilyn Cohn (the “Cohmad Parties”). An approval hearing has been set for November 30, 2016 at 10 a.m.
Under the terms of the agreement with the Cohmad Parties, the settlement will immediately benefit the BLMIS Customer Fund by approximately $32 million. It represents more than 100 percent of the amount transferred by BLMIS to Sonny Cohn, Marilyn Cohn and Marcia Cohn as withdrawals from their Investment Advisory Accounts during the six-year period prior to the BLMIS liquidation filing, as well as more than 100 percent of the fees for referrals made to BLMIS that Sonny Cohn and Marcia Cohn received during the six-year period prior to the BLMIS liquidation filing.
“Cohmad is one of the earliest and best-known names affiliated with Madoff, and this highly successful settlement brings one important chapter of the Cohmad Securities Corporation story to a close,” said BakerHostetler co-lead attorney Kathryn M. Zunno. “We negotiated and reached this agreement despite the fact that Cohmad has been insolvent and non-operational, and a key principal (Sonny Cohn) is now deceased. We look forward to further resolution as we pursue the ongoing Cohmad-related litigation.”
Stephen P. Harbeck, President and Chief Executive Officer of SIPC, stated, “The customers of Madoff’s brokerage firm will receive all of the proceeds of this settlement. No administrative expenses, such as legal fees, forensic accounting fees, or other administrative costs will be deducted. In this case, SIPC advances funds to the SIPA Trustee to pay all administrative expenses to maximize the return to the customers. SIPC looks forward to additional settlements and additional distributions in the near future.”
This is the second recovery agreement reached in the BLMIS liquidation in two weeks. On October 28, a $277 million, global settlement was announced in Chais, et al., that will bring an immediate benefit of $232 million to the Customer Fund. With these new recovery agreements, the SIPA Trustee has recovered or has reached agreements to recover more than $11.491 billion. Distributions to BLMIS customers now total more than $9.467 billion, which includes $836.6 million in committed advances from the Securities Investor Protection Corporation.
The SIPA Trustee will continue to pursue his claims against the remaining defendants in Picard v. Cohmad et al., including certain Cohmad registered representatives who received substantial fees for referring investors in the Ponzi scheme. Under the agreement, the Cohmad Parties agree to cooperate with future discovery requests from the SIPA Trustee and make themselves available for depositions and any trials that may assist in recovering additional funds related to Cohmad for the SIPA Trustee’s ongoing recovery efforts.
BakerHostetler co-lead attorney Esterina Giuliani added, “This settlement is a key step in the overall Cohmad-related litigation that is part of the overall liquidation of BLMIS. We will now focus on pending litigation against remaining Cohmad defendants, as our team continues its global efforts to recover money stolen by Madoff to return to its rightful owners.”
The SIPA Trustee’s motion can be found on the United States Bankruptcy Court’s website at http://www.nysb.uscourts.gov/; Bankr. S.D.N.Y., No. 08-01789 (SMB) / Adv. Pro. No. 09-01305 (SMB). The motion – as well as further information on recoveries to date, other legal proceedings, further settlements, and general information – can also be found on the SIPA Trustee’s website: www.madofftrustee.com.
In addition to Ms. Zunno and Ms. Giuliani, Messrs. Harbeck and Picard, and David J. Sheehan, Chief Counsel to the SIPA Trustee, would like to thank the Securities Investor Protection Corporation’s Josephine Wang and Kevin Bell, as well as BakerHostetler attorneys Oren J. Warshavsky, Thomas L. Long, Elizabeth M. Schutte, Shawn Hough, Frank M. Oliva, Kevin M. Wallace, Samuel M. Light, Lauren R. Weinberg, and Brian F. Allen, who assisted with the work on this settlement.