Bloomberg News

Rye Portfolio Seeks to Move Madoff Suit, Cites Mets Case

September 29, 2011

(Updates with Mets ruling in second paragraph.)

Sept. 29 (Bloomberg) -- Rye Select Broad Market XL Portfolio Ltd., sued by the liquidator of Bernard Madoff’s firm, asked a federal district judge to take the case out of U.S. bankruptcy court, citing a ruling on the trustee’s $1 billion lawsuit against the owners of the New York Mets.

U.S. District Judge Jed Rakoff this week cut to about $386 million the amount at stake in trustee Irving Picard’s case against the Major League Baseball team owners, Fred Wilpon and Saul Katz. Cayman Islands-based Rye said its case was a similar one involving Madoff customers’ securities transactions, and that the district court sided with the defendants saying such settlement payments were protected by so-called safe harbor law.

Rye is a defendant in a larger lawsuit involving transfers of funds allegedly originating at the Madoff money management firm, via swap transactions, according to Picard’s lawsuit. Picard is seeking the return of $400 million from Rye.

David Sheehan, a lawyer for Picard, told reporters after a court hearing yesterday that Rakoff’s ruling would cut the amount of money the trustee could recover for investors who lost money in the Ponzi scheme.

The bankruptcy court case is Picard v. ABN Amro Bank (Ireland), 10-ap-05355, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Michael Hytha, Mary Romano

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net;

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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