Some victims of the now infamous Bernard L. Madoff ("Madoff") Ponzi scheme may receive a partial distribution in the next few months. On May 4, 2011, Irving H. Picard, the Trustee appointed for the liquidation of the business of Bernard L. Madoff Investment Securities LLC ("BLMIS") under the Securities Investor Protection Act, 15, U.S.C.
The recent decision of the United States Bankruptcy Court for the District of Delaware in Friedman’s Inc. v. Roth Staffing Cos., L.P. (In re Friedman’s Inc.)1 should be a reminder of the preference risk that exists for creditors, such as critical vendors, whose pre-petition claims are paid by court order. This article discusses various ways in which this preference risk can be eliminated or minimized.
The Bankruptcy Court has now provided its long-awaited answer as to the scope of the Securities Investors Protection Corporation (“SIPC”) liability for investor accounts with Bernard L. Madoff Investment Securities LLC (“Madoff”). The ruling in favor of Irving Picard, the trustee responsible for the Securities Investor Protection Act (“SIPA”) liquidation of Madoff, precludes recovery for many of the victims of Bernard Madoff’s infamous ponzi scheme and leaves the scope of the SIPC protection uncertain in future cases.