Madoff's Victims To Get $534+ Million in Payments

by Lisa Palladino (RSS feed)
Oct 29th 2009 at 6:01PM

The latest in the Bernie Madoff saga is actually a bit of good news for his myriad victims. Reuters reports that they will receive more than $534 million in payouts, according to court-appointed trustee Irving Picard, who is trying to recover Madoff's assets.

The sum is less than one-eighth of the $4.44 billion of claims that Picard has so far deemed valid and is less than 3% of the $21.2 billion of losses suffered by holders of 2,335 Madoff accounts. These losses are up from the $13 billion the government estimated in June, when Madoff was sentenced to 150 years in prison.

Picard, a partner at the law firm Baker & Hostetler LLP, said he has reviewed 2,861 direct customer claims, allowing 1,558 and rejecting 1,303. He said 15,974 customer claims were submitted and noted that he has recovered $1.4 billion of Madoff assets, an amount that should reach $1.5 billion by year end.

Picard has filed lawsuits to recover $15 billion from Madoff investors he calls "net winners." Of the 4,903 accounts at Madoff's firm on December 11, 2008, when Madoff was arrested, 2,568 received more money than they deposited, he said.

Picard also said he will pursue the recovery of $7.2 billion from the estate of billionaire philanthropist Jeffry Picower, who recently drowned in a swimming pool at his Palm Beach, Fla., home following a heart attack.

The Securities Investor Protection Corp, a federally chartered agency that supervises the liquidation of brokerages, has been "the only source of distributed funds" to victims so far, agency president Stephen Harbeck said, adding that the $534.25 million of committed advances is more than in the SIPC's 321 combined prior liquidations since 1970. Federal law limits SIPC protection to $500,000.

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