STATEMENTS & PRESS RELEASES
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June 01, 2020
Statement: United States Supreme Court Denies Certiorari on Crucial Issue of Extraterritoriality

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

Attributable to Heather Wlodek, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel

NEW YORK, NEW YORK – June 1, 2020 – The Supreme Court today denied a petition for a writ of certiorari that sought review of a February 25, 2019 Second Circuit ruling that allows the SIPA Trustee to recover funds stolen by Madoff and subsequently transferred overseas.

This denial paves the way for the SIPA Trustee to recover funds that were withdrawn from BLMIS by defendants in several dozen cases, including those against feeder funds and global banks, and subsequently redistributed to their managers. While the feeder funds themselves are largely insolvent, the SIPA Trustee will continue his recovery actions against subsequent transferees that received distributions originating with BLMIS. Chief Counsel David Sheehan estimates that the amount of potential recoveries at stake is approximately $3.2 billion, every penny of which would be distributed to BLMIS customers with allowed claims.

The SIPA Trustee and Mr. Sheehan would like to thank the attorneys who worked on this matter including: Seanna R. Brown and Torello H. Calvani of BakerHostetler; Roy T. Englert, Jr., D. Hunter Smith and Joshua S. Bolian of Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP; Howard L. Simon and Kim M. Longo of Windels Marx Lane & Mittendorf LLP; and Kenneth J. Caputo, Kevin H. Bell and Nathanael Kelley of the Securities Investor Protection Corporation.

Statement: United States Supreme Court Denies Certiorari on Crucial Issue of Extraterritoriality

April 23, 2020
Statement: Second Circuit Grants Madoff Trustee's Request for Direct Appeals in Legacy and Citibank Cases

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

NEW YORK, NEW YORK –April 23, 2020 –Today the U.S. Court of Appeals for the Second Circuit granted the SIPA Trustee’s request for direct appeals of the Bankruptcy Court judgments entered in Picard v. Legacy Capital Ltd., et al. and Picard v. Citibank, N.A., et al. Irving H. Picard issued the following statement in connection with the Second Circuit’s decision:

“The appeals arise from adversary proceedings the Trustee brought under SIPA and the Bankruptcy Code to recover property that was fraudulently transferred by BLMIS. After nearly a decade of litigating the Legacy action, the Citibank action, and other adversary proceedings before the Bankruptcy and District Courts, fundamental questions regarding the pleading standards for avoidance and recovery of fraudulent transfers in SIPA cases remain unsettled.

“The heart of the matter centers on a 2014 District Court decision. The District Court held that a SIPA trustee must plead the absence of good faith, with particularized allegations, as part of his prima facie case to avoid and recover transfers under the Bankruptcy Code, even though good faith is an affirmative defense under the Bankruptcy Code. In addition, the District Court discarded the ‘inquiry notice’ standard used to evaluate good faith in bankruptcy cases. In its place, the District Court set forth a heightened standard of willful blindness that the Trustee must meet in SIPA actions to recover fraudulent transfers.

“Through these direct appeals, we are asking the Second Circuit to reverse the rulings by the Bankruptcy and District Courts on the basis that they are inconsistent with precedent and wrongly preclude the SIPA Trustee from recovering hundreds of millions of dollars for distribution to those who were most affected by the Madoff Ponzi scheme – the hundreds of victims who, after all these years, have never received back what they deposited with BLMIS.”

Statement: Second Circuit Grants Madoff Trustee's Request for Direct Appeals in Legacy and Citibank Cases

March 11, 2020
Statement Regarding Thirty-Second Fee Application

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

Attributable to Heather Wlodek, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel:

On Wednesday, March 11, 2020, the SIPA Trustee and his Counsel at BakerHostetler filed their 32nd Interim Fee Application with the United States Bankruptcy Court for the Southern District of New York for their work on the global liquidation of BLMIS from August 1, 2019 through November 30, 2019.

• The Application seeks approval of fees, representing approximately 64,467.80 hours of professional and paraprofessional services, which were billed at an average, public interest discounted rate of approximately $465.75 per hour.

• The public interest discount applied represents a reduction of 10 percent from standard rates and it resulted in a total voluntary reduction during the four-month Compensation Period of approximately $3,336,236.44. Additionally, the SIPA Trustee and BakerHostetler voluntarily adjusted their fees by writing off $1,539,577.20 (not including the 10% public interest discount), and wrote off expenses customarily charged to other clients in the amount of $153,153.08.

• The fees requested are reasonable based on the customary compensation charged by comparably skilled practitioners in Chapter 11 matters as well as comparable bankruptcy and non-bankruptcy cases in the competitive national legal market.

• After applying the public interest discount, the total fees requested for the period were $30,026,127.96 (of which $27,023,515.17 is to be paid currently and $3,002,612.79 is to be held back through the conclusion of the liquidation period or until further order by the Court). In addition, $316,885.66 was requested as reimbursement of the actual necessary costs and expenses incurred by the SIPA Trustee and BakerHostetler in connection with the recovery effort.

As noted in the Fee Application:

• During the Compensation Period of August 1, 2019 through November 30, 2019, without the need for protracted litigation, the SIPA Trustee settled 12 cases for $888,855,150.43. The SIPA Trustee entered into settlements subsequent to the Compensation Period that will bring additional funds into the Customer Fund.

• As of the end of the Compensation Period (November 30, 2019), the SIPA Trustee dismissed 281 Hardship Program applicant-defendants from avoidance actions after reviewing the facts and circumstances presented in each application and through additional information requested and verified by the SIPA Trustee.

The SIPA Trustee has recovered or entered into agreements to recover approximately $14.334 billion through January 31, 2020. This recovery far exceeds any prior restitution effort related to Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered.

The costs associated with the SIPA Trustee’s recovery and settlement efforts are paid by SIPC, which administers a fund drawn upon assessments on the securities industry. No fees or other costs of administration are paid from recoveries obtained by the SIPA Trustee for the benefit of BLMIS customers with allowed claims. 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 SIPA Trustee has distributed approximately $13.930 billion to BLMIS customers with allowed claims through February 28, 2020, which includes $848.2 million in funds committed to be advanced by SIPC.

The first pro rata interim distribution commenced on October 5, 2011 and to date equals approximately $884.6 million. A second pro rata interim distribution commenced on September 19, 2012 and to date equals approximately $6.431 billion. The third pro rata interim distribution commenced on March 29, 2013 and to date equals approximately $900.7 million. The fourth pro rata interim distribution commenced on May 5, 2014, and the SIPA Trustee has distributed approximately $605.9 million. In the fifth pro rata interim distribution, which commenced on February 6, 2015, he has distributed approximately $522.2 million. In the sixth pro rata interim distribution, which commenced on December 4, 2015, the SIPA Trustee distributed approximately $1.567 billion. The seventh pro rata interim distribution commenced on June 30, 2016 and to date equals approximately $246.7 million. The eighth pro rata interim distribution commenced on February 2, 2017 and to date equals approximately $326.4 million. The ninth pro rata interim distribution commenced on February 22, 2018, and the SIPA Trustee has distributed approximately $716.3 million. The tenth pro rata interim distribution commenced on February 22, 2019, and the SIPA Trustee has distributed approximately $512.1 million. The eleventh pro rata interim distribution commenced on February 28, 2020, and the SIPA Trustee has distributed approximately $369.3 million.

In addition, SIPC has made advances available to the court-appointed SIPA Trustee to distribute to accounts with allowed claims (up to $500,000 maximum), as a way to expedite financial relief to those account holders. To date, SIPC has committed $848.2 million to the BLMIS liquidation for this purpose. SIPC-committed advances will continue to increase as claims that are currently in litigation are allowed as a result of settlements or the conclusion of litigation. Under SIPA, SIPC must be reimbursed for its advances to customers. To date, SIPC has received approximately $237.5 million in reimbursement.

The Bankruptcy Court hearing for approval of the 32nd Fee Application has been scheduled for April 29, 2020 at 10 a.m.
The BakerHostetler attorneys who worked on behalf of the SIPA Trustee filing this Fee Application include David J. Sheehan, Seanna R. Brown and Heather R. Wlodek.

The filing is available on the Bankruptcy Court’s website: www.nysb.uscourts.gov; Case No. 08-01789. The Fee Application as well as additional information on recoveries, settlements and court filings can be found on the SIPA Trustee’s website: www.madofftrustee.com.

 

Statement Regarding Thirty-Second Fee Application

March 03, 2020
Statement Regarding Court Order Related to Victim Letters and Communications

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

Attributable to Heather Wlodek, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel

Bernard L. Madoff filed a motion on February 5, 2020 in the United States District Court for the Southern District of New York (the “Court”) for a sentencing reduction pursuant to 18 U.S.C. § 3582 and the First Step Act. The Honorable Denny Chin, U.S. Circuit Judge, invited Madoff’s victims to submit letters with their views on this motion by February 28, 2020.

The Reporters Committee for Freedom of the Press, and other news organizations, recently asked the Court to make those victim letters publicly available without redaction of the victims’ last names. Any objections to this requested relief must be made by 5:00 p.m. on March 6, 2020. For further information, please visit the Court’s Order posted on the SIPA Trustee’s website:

https://www.madofftrustee.com/document/dockets/009978-09-cr-00213usa-v-madoff-court-orderecf2203220.pdf

Statement Regarding Court Order Related to Victim Letters and Communications

February 28, 2020
Press Release: Eleventh Pro Rata Interim Distribution of Recovered Funds to Madoff Claims Holders Commences; Totals Approximately $369 Million

ELEVENTH PRO RATA INTERIM DISTRIBUTION OF RECOVERED FUNDS
TO MADOFF CLAIMS HOLDERS COMMENCES;
TOTALS APPROXIMATELY $369 MILLION

Aggregate Distributions Now Reach More Than $13.93 Billion

NEW YORK, NEW YORK and WASHINGTON, DC – February 28, 2020 – Irving H. Picard, Securities Investor Protection Act (SIPA) Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), announced that the eleventh pro rata interim distribution from the Customer Fund to eligible BLMIS customers commenced today.

The SIPA Trustee is distributing approximately $369 million on a pro rata basis to BLMIS account holders with allowed claims. The aggregate amount distributed to eligible BLMIS customers will total more than $13.93 billion, which includes approximately $848.2 million in advances committed by the Securities Investor Protection Corporation (SIPC). The eleventh interim distribution represents 1.975 percent of each allowed claim and will be paid on claims relating to 854 accounts.

When combined with the prior ten distributions, in aggregate, 68.608 percent of each customer’s allowed claim will be paid, unless that claim has been fully satisfied.

“Eleven years into the Madoff Recovery Initiative, the team is still achieving significant settlements, allowing the Trustee to return additional funds to BLMIS customers with allowed claims,” said Josephine Wang, SIPC President and CEO. “When this case began, no one could have imagined that the Trustee would have returned almost $14 billion to eligible customers. I congratulate the Trustee, his legal team, and the SIPC team, on their remarkable successes as they work tirelessly to achieve SIPA’s goal of customer protection. We remain hopeful of additional distributions to customers in the future.”

The eleventh pro rata interim distribution was reached as a result of settlements and recoveries achieved by the SIPA Trustee, his Chief Counsel David J. Sheehan, and their legal teams since the last interim distribution in February 2019. The most notable recovery in 2019 was the $860 million payment to the BLMIS Customer Fund by Kingate Global Fund, Ltd. and Kingate Euro Fund, Ltd., BLMIS feeder funds incorporated in the British Virgin Islands.

The average payment for an allowed claim in the eleventh interim distribution totals $432,385.93. The smallest payment totals $310.47 and the largest payment is $48,341,830.59. Currently, the SIPA Trustee has allowed 2,646 claims relating to 2,282 BLMIS accounts. Of these 2,282 accounts, 1,469 will be fully satisfied following the eleventh interim distribution. All allowed customer claims up to $1.588 million will be fully satisfied after the distribution.

As of January 31, 2020 and since his appointment in December 2008, the SIPA Trustee has amassed nearly $14.334 billion as a result of recoveries and settlement agreements. These recoveries exceed similar efforts related to prior Ponzi scheme recoveries, in terms of dollar value and percentage of stolen funds recovered.

Subject to Court approval, 100 percent of the SIPA Trustee’s recoveries are allocated to the Customer Fund for distribution to BLMIS customers with allowed claims. None of the money recovered is used to pay administrative costs. All Trustee, legal and accounting fees, as well as administrative expenses, are paid by SIPC.

More information on overall recoveries to date and the liquidation can be found on the SIPA Trustee’s website: www.madofftrustee.com.

Ms. Wang and Messrs. Picard and Sheehan would like to thank BakerHostetler attorneys Seanna Brown and Heather Wlodek, who worked on the eleventh pro rata interim distribution and its related filings, as well as BakerHostetler, Windels Marx, and all of the attorneys and professionals whose work has led to the distribution. They would also like to thank Vineet Sehgal and his colleagues at AlixPartners, as well as Kenneth Caputo, Kevin Bell, Nathanael Kelley, and their colleagues at SIPC, for their ongoing work and participation in the Madoff Recovery Initiative.

Press Release: Eleventh Pro Rata Interim Distribution of Recovered Funds to Madoff Claims Holders Commences; Totals Approximately $369 Million

February 12, 2020
Statement Regarding Madoff’s Motion for a Sentencing Reduction

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

Attributable to Heather Wlodek, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel

On February 5, 2020, Bernard L. Madoff filed a motion with the United States District Court for the Southern District of New York for a sentencing reduction pursuant to 18 U.S.C. § 3582 and the First Step Act.

Madoff’s victims may submit their views on this motion to the Honorable Denny Chin, U.S. Circuit Judge. The Court has set a deadline of February 28, 2020. For further information, please visit the Notice To Former Bernard L. Madoff Investors on the U.S. Attorney’s Office website:

https://www.justice.gov/usao-sdny/madoff-sentence-reduction

Statement Regarding Madoff’s Motion for a Sentencing Reduction

January 08, 2020
Statement Regarding Bankruptcy Court Approval of Eleventh Pro Rata Interim Distribution

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

Attributable to Heather Wlodek, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel:

The United States Bankruptcy Court for the Southern District of New York today approved the SIPA Trustee’s request for an allocation of more than $988 million in recoveries to the BLMIS Customer Fund and has authorized the SIPA Trustee to proceed with the eleventh pro rata interim distribution from the Customer Fund to BLMIS customers with allowed claims.

As previously announced, with today’s court approval, the SIPA Trustee will allocate more than $988 million to the BLMIS Customer Fund, with more than $332 million available for immediate distribution to customers with allowed claims. The remaining allocation will be held in reserve for claims that are deemed determined pending the resolution of litigation as well as other issues.

This eleventh pro rata interim distribution, when combined with the prior ten distributions, will equal at least 68.5 percent of each customer’s allowed claim amount, unless that claim has been fully satisfied. The aggregate amount distributed to eligible BLMIS customers will total more than $13.89 billion, which includes advances committed by the Securities Investor Protection Corporation (SIPC). All allowed customer claims up to $1,574,852.48 will be fully satisfied after the distribution. The distribution is expected to commence by late February.

The Eleventh Customer Fund Allocation and Distribution 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). It can also be found on the SIPA Trustee’s website along with more information on the BLMIS liquidation at www.madofftrustee.com.

Link to the December 18, 2019 Press Release: https://www.madofftrustee.com/document/news/000978-press-release-eleventh-allocation-distribution.pdf

Statement Regarding Bankruptcy Court Approval of Eleventh Pro Rata Interim Distribution

December 18, 2019
Press Release: Madoff Trustee Requests Allocation of More Than $988 Million to Customer Fund and Court Approval to Distribute More Than $332 Million to BLMIS Customers with Allowed Claims

MADOFF TRUSTEE REQUESTS ALLOCATION OF MORE THAN $988 MILLION TO CUSTOMER FUND AND COURT APPROVAL TO DISTRIBUTE MORE THAN $332 MILLION TO BLMIS CUSTOMERS WITH ALLOWED CLAIMS

Eleventh Pro Rata Interim Distribution Will Bring Aggregate Customer Payout in Global Madoff Liquidation to More Than $13.89 Billion

NEW YORK, NEW YORK and WASHINGTON, DC – December 18, 2019 – 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 for an allocation of more than $988 million in recoveries to the BLMIS Customer Fund and an authorization for an eleventh pro rata interim distribution of more than $332 million from the Customer Fund to BLMIS customers with allowed claims. A hearing on the motion has been scheduled for Thursday, January 9, 2020 at 10:00 a.m. EST.

“SIPC commends the SIPA Trustee and his team for their unwavering commitment to pursuing customer monies converted by Bernard Madoff,” said Josephine Wang, President and Chief Executive Officer of the Securities Investor Protection Corporation (SIPC). “Even after more than a decade, the Trustee and his team, with SIPC’s support, continues to recover significant amounts, all of which will go to BLMIS customers with allowed claims. SIPC is proud to be part of this ongoing, successful effort for the benefit of customers.”

“Our worldwide team was assembled to deliver exceptional results for the victims of Madoff’s fraud, and that is what we must continue to do,” said Mr. Picard. “Thanks to the team’s persistence and diligent work, we have restored nearly 69 percent of the money stolen through the Ponzi scheme.”

“Make no mistake, even after 11 years, we have substantial potential recoveries ahead,” said David J. Sheehan, Chief Counsel to the SIPA Trustee. “Litigation involving approximately $3.2 billion is still at stake, and approximately 223 lawsuits remain pending in the United States, involving defendants in many jurisdictions around the world. With the support of SIPC, we will continue pursuing these recoveries that rightfully belong to the customers of BLMIS.”

Eleventh Distribution Will Bring Total Amount Restored to More Than $13.89 Billion

Plans for the eleventh pro rata interim distribution are the result of more than $988 million in settlements and recoveries achieved by the SIPA Trustee and the legal teams since the last interim distribution in February 2019, most notably the $860 million settlement agreement between the SIPA Trustee and Kingate Global Fund, Ltd. and Kingate Euro Fund, Ltd., BLMIS feeder funds incorporated in the British Virgin Islands.

When combined with the prior ten distributions, the eleventh distribution will equal 68.411 percent of each customer’s allowed claim amount, unless that claim has been fully satisfied. The aggregate amount distributed to eligible BLMIS customers will total more than $13.89 billion, including approximately $848.199 million in advances committed by SIPC.

As of October 31, 2019, the SIPA Trustee has recovered or reached agreements to recover approximately $14.294 billion. This recovery far exceeds any prior restitution effort related to Ponzi schemes both in terms of dollars and percentage of stolen funds recovered.

No funds recovered in the Madoff Recovery Initiative are used to pay costs associated with the recovery. All trustee, legal, and accounting fees, as well as administrative expenses, are paid by SIPC.

The Eleventh Customer Fund Allocation and Distribution 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). It can also be found on the SIPA Trustee’s website along with more information on the BLMIS liquidation at: www.madofftrustee.com.

Ms. Wang and Messrs. Picard and Sheehan would like to thank Seanna Brown and Heather Wlodek of BakerHostetler, who worked on the eleventh pro rata interim distribution and its related filings, as well as BakerHostetler, Windels Marx and all of the attorneys and professionals whose work has led to the distribution. They would also like to thank Vineet Sehgal and his colleagues at AlixPartners, as well as Kevin H. Bell, Nathanael Kelley and their colleagues at SIPC, for their ongoing work and participation in the Madoff Recovery Initiative distributions.

 

Press Release: Madoff Trustee Requests Allocation of More Than $988 Million to Customer Fund and Court Approval to Distribute More Than $332 Million to BLMIS Customers with Allowed Claims

November 12, 2019
Statement Regarding Thirty-First Fee Application

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

Attributable to Heather Wlodek, spokeswoman for Irving H. Picard, SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and his counsel:

On Tuesday, November 12, 2019, the SIPA Trustee and his Counsel at BakerHostetler filed their 31st Interim Fee Application with the United States Bankruptcy Court for the Southern District of New York for their work on the global liquidation of BLMIS from April 1, 2019 through July 31, 2019.

• The Application seeks approval of fees, representing approximately 72,332.90 hours of professional and paraprofessional services, which were billed at an average, public interest discounted rate of approximately $455.25 per hour.

• The public interest discount applied represents a reduction of 10 percent from standard rates and it resulted in a total voluntary reduction during the four-month Compensation Period of approximately $3,658,802.30. Additionally, the SIPA Trustee and BakerHostetler voluntarily adjusted their fees by writing off $1,871,417.00 (not including the 10% public interest discount), and wrote off expenses customarily charged to other clients in the amount of $285,711.94.

• The fees requested are reasonable based on the customary compensation charged by comparably skilled practitioners in Chapter 11 matters as well as comparable bankruptcy and non-bankruptcy cases in the competitive national legal market.

• After applying the public interest discount, the total fees requested for the period were $32,929,220.70 (of which $29,636,298.62 is to be paid currently and $3,292,922.08 is to be held back through the conclusion of the liquidation period or until further order by the Court). In addition, $578,705.53 was requested as reimbursement of the actual necessary costs and expenses incurred by the SIPA Trustee and BakerHostetler in connection with the recovery effort.

As noted in the Fee Application:

• During the Compensation Period of April 1, 2019 through July 31, 2019, without the need for protracted litigation, the SIPA Trustee settled 7 cases for $3,838,010.00. The SIPA Trustee entered into settlements subsequent to the Compensation Period that will bring additional funds into the Customer Fund.

• As of the end of the Compensation Period (July 31, 2019), the SIPA Trustee dismissed 281 Hardship Program applicant-defendants from avoidance actions after reviewing the facts and circumstances presented in each application and through additional information requested and verified by the SIPA Trustee.

The SIPA Trustee has recovered or entered into agreements to recover nearly $14.286 billion through October 31, 2019. This recovery far exceeds any prior restitution effort related to Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered.

The costs associated with the SIPA Trustee’s recovery and settlement efforts are paid by SIPC, which administers a fund drawn upon assessments on the securities industry. No fees or other costs of administration are paid from recoveries obtained by the SIPA Trustee for the benefit of BLMIS customers with allowed claims. 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 SIPA Trustee has distributed approximately $13.49 billion to BLMIS customers with allowed claims through October 31, 2019, which includes $847.70 million in funds committed to be advanced by SIPC.

The first pro rata interim distribution commenced on October 5, 2011 and to date equals approximately $879.6 million. A second pro rata interim distribution commenced on September 19, 2012 and to date equals approximately $6.395 billion. The third pro rata interim distribution commenced on March 29, 2013 and to date equals approximately $895.6 million. The fourth pro rata interim distribution commenced on May 5, 2014, and the SIPA Trustee has distributed approximately $602.5 million. In the fifth pro rata interim distribution, which commenced on February 6, 2015, he has distributed approximately $519.2 million. In the sixth pro rata interim distribution, which commenced on December 4, 2015, the SIPA Trustee distributed approximately $1.558 billion. The seventh pro rata interim distribution commenced on June 30, 2016 and to date equals approximately $245.3 million. The eighth pro rata interim distribution commenced on February 2, 2017 and to date equals approximately $324.5 million. The ninth pro rata interim distribution commenced on February 22, 2018, and the SIPA Trustee has distributed approximately $712.3 million. The tenth pro rata interim distribution commenced on February 22, 2019, and the SIPA Trustee has distributed approximately $509.2 million.

In addition, SIPC has made advances available to the court-appointed SIPA Trustee to distribute to accounts with allowed claims (up to $500,000 maximum), as a way to expedite financial relief to those account holders. To date, SIPC has committed $847.70 million to the BLMIS liquidation for this purpose. SIPC-committed advances will continue to increase as claims that are currently in litigation are allowed as a result of settlements or the conclusion of litigation. Under SIPA, SIPC must be reimbursed for its advances to customers. To date, SIPC has received approximately $222.9 million in reimbursement.

The Bankruptcy Court hearing for approval of the 31st Fee Application has been scheduled for December 12, 2019 at 10 a.m.

The BakerHostetler attorneys who worked on behalf of the SIPA Trustee filing this Fee Application include David J. Sheehan, Seanna R. Brown and Heather R. Wlodek.

The filing is available on the Bankruptcy Court’s website: www.nysb.uscourts.gov; Case No. 08-01789. The Fee Application as well as additional information on recoveries, settlements and court filings can be found on the SIPA Trustee’s website: www.madofftrustee.com.

Statement Regarding Thirty-First Fee Application

July 17, 2019
Press Release: Madoff Trustee Reaches Recovery Agreement with Kingate Funds

MADOFF TRUSTEE REACHES RECOVERY AGREEMENT
WITH KINGATE FUNDS

SETTLEMENT DELIVERS IMMEDIATE BENEFIT TO BLMIS CUSTOMER FUND OF $860 MILLION

NEW YORK, NEW YORK and WASHINGTON, DC – July 17, 2019 – 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 recovery agreement with Kingate Global Fund, Ltd. and Kingate Euro Fund, Ltd. (the “Kingate Funds”), by Paul Pretlove, Tammy Fu and John C. McKenna, in their capacity as Joint Liquidators of the Kingate Funds. An approval hearing for the agreement has been set for August 8, 2019 at 10:00 a.m.

The Kingate Funds were BLMIS feeder funds incorporated in the British Virgin Islands and were founded by Federico Ceretti and Carlo Grosso and operated through various service providers. Through this settlement, the SIPA Trustee will immediately recover $860 million for the BLMIS Customer Fund, representing 100 percent of the transfers received from BLMIS in the six years preceding the commencement of BLMIS’s SIPA proceeding and approximately 93 percent of the transfers received from BLMIS over the life of the Kingate Funds’ accounts.

“We congratulate the SIPA Trustee and his team for their success in reaching this important settlement agreement,” said Josephine Wang, President and Chief Executive Officer of SIPC. “The Kingate recovery is one of the largest in the Madoff recovery efforts by the SIPA Trustee.”

The SIPA Trustee will allow the customer claims of the Kingate Funds upon receipt of the $860 million payment. The Kingate Funds will receive a pro rata share of the catch-up distribution that will be paid to investors of the Kingate Funds.

The settlement with the Kingate Funds ensures that all the benefits go to its investors – individuals or entities that were not direct clients of Madoff but invested with BLMIS through the Kingate Funds. All distributions made by the SIPA Trustee to the Kingate Funds will be paid to the investors of the Kingate Funds, except that no payments will be made to either Messrs. Ceretti and Grosso, or to other individuals and entities associated with Messrs. Ceretti and Grosso and the Kingate Funds.

“This important settlement with one of the largest Madoff feeder funds is another significant benchmark for our recovery efforts,” said David J. Sheehan, Chief Counsel to the SIPA Trustee and BakerHostetler partner. “The structure is consistent with our dedicated approach to ensure that the benefits of these settlements go to innocent investors.”

“The Kingate settlement sets an important precedent for international recoveries,” said Michelle R. Usitalo, BakerHostetler associate. “Even as we await the outcome of the appeal of the Second Circuit’s recent decision supporting the SIPA Trustee’s position on extraterritoriality, Kingate provides a template for our team to pursue additional cross-border recoveries.”

The SIPA Trustee has recovered approximately $13.403 billion to date and distributed approximately $12.381 billion to BLMIS customers with allowed claims. SIPC has advanced a net $623 million to be used by the Trustee to satisfy customer claims, and the Trustee has distributed $11.758 billion from the Customer Fund.

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. 09-01364 (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.

Ms. Wang and Messrs. Picard and Sheehan would like to thank the Securities Investor Protection Corporation’s Kenneth J. Caputo, Kevin H. Bell, and Nathanael Kelley, as well as BakerHostetler attorneys Geraldine E. Ponto, Gonzalo S. Zeballos, John J. Burke, Michelle R. Usitalo, Joanna F. Wasick, and Marshall J. Mattera, SCA Creque, Browne Jacobson LLP, and Williams Barristers and Attorneys, who assisted with the work on this matter.

Press Release: Madoff Trustee Reaches Recovery Agreement with Kingate Funds