The amount of each pro rata distribution is based on the original amount of a customer’s allowed BLMIS claim.
The $500,000 advance was requested on your behalf by the SIPA Trustee from the Securities Investor Protection Corporation (SIPC) once your claim was allowed. The funds were paid to you as an advance against future recoveries and distributions from the SIPA liquidation of BLMIS. $500,000 represents the maximum amount advanced by SIPC against any allowed claim in the BLMIS liquidation.
After you received the $500,000 advance, the balance of your claim was $300,000.
The first pro rata interim distribution, which commenced on October 5, 2011, paid approximately 4.6 percent of each allowed claim. Because your claim was allowed in the amount of $800,000, you received approximately 4.6 percent of $800,000 in the first pro rata interim distribution, approximately $36,800.
As of July 31, 2012, under this scenario, you have received a total of approximately $536, 800 and the balance remaining on your allowed claim is approximately $263,200.
On August 22, 2012, the SIPA Trustee’s July 26, 2012 motion for the allocation of approximately $5.5 billion to the Customer Fund and a second pro rata interim distribution of approximately $2.4 billion was approved by the Honorable Burton R. Lifland of the United States Bankruptcy Court for the Southern District of New York. The record date for the second pro rata interim distribution is September 12, 2012.
The amount of the distribution was dependent on several issues, including whether BLMIS claimants are entitled to “time-based damages” or payments based on the time elapsed while customer monies were deposited with BLMIS. More than 1,240 objections have been filed based on this issue, with some claimants seeking as much as 9 percent interest. In its Order, the Court instructed the SIPA Trustee to reserve 3 percent for the time-based damages issue.
Under this 3 percent scenario, you will be entitled to a second pro rata interim distribution of approximately 33.5 percent of your allowed claim amount of $800,000, until your claim is paid in full, which is approximately $268,000. Because the remaining balance on your account before the second pro rata interim distribution was approximately $263,200, you would receive $263,200 in the second pro rata interim distribution, which would fully satisfy your claim in the Madoff Ponzi scheme.