Madoff Trustee Can Appeal $19 Billion JPMorgan Ruling, But Not The $1 Billion NY Mets Ruling.  

In New York probate and estate administration, there is typically someone appointed either by the court or through the wishes of the deceased who is supposed to act on behalf of the estate. That includes ensuring that the heirs receive what is rightfully theirs, and that rightful claims against the estate are satisfied. To help illustrate this, it may well be worthwhile to examine the actions of the trustee who is acting on behalf of the estate of Bernard L. Madoff Investment Securities LLC.

Last year, the trustee filed a $19.9 billion lawsuit against JP Morgan, which was Madoff's main bank for two decades, to attempt to recover funds for former customers. However, a district court judge in Manhattan reduced that amount to $425 million, saying that any claims against the bank for harm caused to former Madoff customers must be made by those customers themselves. The judge told Trustee Picard he could go ahead and appeal her ruling after getting JPMorgan's consent to do so. Picard did get JPMorgan's consent in exchange for his agreement to put his remaining claims against JPMorgan on hold while he appeals. Rulings by district judges McMahon and Jed Rakoff have knocked more than $28 billion off of Picard's claims against banks and may cost him as much as $11 billion in recoveries from other cases aimed at benefiting investors who lost money in the Ponzi scheme.

Interesting enough, on January 17, 2012, Picard was blocked from immediately appealing a different ruling limiting how much the New York Mets' owners might have to give up to other investors.

U.S. District Judge Jed Rakoff said letting trustee Irving Picard appeal his September ruling would delay a trial set for March 19 and slow a final resolution of the case. In the earlier ruling, the judge limited what the Mets' owners might have to pay to $386 million, depending on how much of what they received from Madoff was fictitious profits and how much was principal.

Picard was seeking $1 billion. He said the Mets' owners received $83.3 million in fictitious profits and $301 million in principal in the two years before Madoff's fraud was revealed in 2008. He accused them in court papers of ignoring warnings that Madoff's high returns might not be real.

Estate administrators such as the trustee in this situation have a duty to perform their responsibilities with all due diligence. Thus, they must act on behalf of the estate to ensure that all rightful claims made against it are eventually satisfied to the fullest extent possible while also preserving as much wealth as possible for the heirs. In order to help make sure that estates are not constantly tied up in lawsuits, it may be worthwhile to meet with a qualified New York attorney.

In this case, the trustee is not acting on behalf of the estate of a deceased person but rather of a bankrupt company. Nonetheless, the duties remain largely the same. Here, the trustee is attempting to satisfy the claims of creditors. These creditors are the customers who lost money due to the criminal conduct of Madoff as he carried out his infamous Ponzi scheme.

Feel free to contact Dolores or Steven to discuss your particular situation.