(Updates with judge’s name in second paragraph.)
June 28 (Bloomberg) -- A judge approved a $212 million settlement between the trustee liquidating Bernard Madoff’s firm and two bankrupt U.S. funds related to the Fairfield Greenwich Group, the biggest so-called feeder fund in Madoff’s Ponzi scheme.
U.S. Bankruptcy Judge Burton Lifland approved the deal today in bankruptcy court in Manhattan.
Trustee Irving Picard made changes to the deal after investors in Fairfield Sentry Ltd., a related fund, objected to the settlement, which is part of a total $4 billion deal with funds related to the Fairfield Greenwich Group. He agreed they could sue fund managers to try to recoup their losses.
Under the agreement with Greenwich Sentry LP and Greenwich Sentry Partners LP, Picard will drop claims of $212 million against the funds. The funds in return will reduce their claims against the Madoff bankruptcy estate and sign over claims they had made against Fairfield Greenwich Group, according to court papers.
Greenwich Sentry will cut its claim against the Madoff estate to $35 million, from more than $140 million, and the other fund’s claim will drop to about $2 million from $2.5 million.
Last month, Picard said he would end his effort to collect $3.8 billion that three offshore Fairfield funds allegedly withdrew from the Madoff firm in the final six years of the fraud. The offshore funds agreed to cut their claims on the Madoff estate.
Fairfield Greenwich Group, founded by Walter Noel, invested about $7 billion with Madoff, according to court documents.
The main case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
--Editors: John Pickering, Stephen Farr
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