Bloomberg News

Madoff Investor Asks Appeals Court to Review Picower Deal

July 19, 2011

(Updates with judge’s decision in second paragraph.)

July 19 (Bloomberg) -- An investor in Bernard Madoff’s Ponzi scheme who unsuccessfully challenged a $7.2 billion settlement by the U.S. with the estate of Jeffry Picower asked a federal appeals court to review the district judge’s decision.

Adele Fox filed the appeal yesterday in response to U.S. District Judge Thomas Griesa’s decision in May to uphold the settlement with the billionaire’s estate. Rejecting Fox’s argument that Madoff investors had a right to recoup funds from the estate themselves, he said that “victimhood does not create an interest in forfeited property.”

The settlement struck in December by the U.S. and the Madoff firm’s liquidator Irving Picard dwarfs the $2.6 billion of other funds set aside to date for distribution to the con man’s investors. The appeal means the Picower funds will continue to be tied up in court.

Picower, one of the largest of Madoff’s investors, may have suspected the con man was running a Ponzi scheme, according to Picard. Picower drowned in 2009, and his estate forfeited the money to the U.S. and Picard.

The settlement also is being challenged by lawyer Helen Chaitman on behalf of investors.

Picard, who has filed more than 1,000 suits seeking money for Madoff investors, has estimated the principal lost by all Madoff investors at $19 billion. He and his law firm, Baker & Hostetler LLP, have collected about $179 million in fees since Madoff’s 2008 arrest.

The main case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-ap-1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The Fox district court case is U.S. v. $7.2 billion, 10-cv-09398, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Andrew Dunn, Glenn Holdcraft

To contact the reporter on this story: Linda Sandler in New York at

To contact the editor responsible for this story: John Pickering at

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