Ezra Merkin’s bankrupt Ariel and Gabriel funds, so-called feeder funds for Bernard Madoff’s Ponzi scheme, will pay investors $226 million within 10 business days, the liquidator said.
The interim cash payment, approved by a New York Supreme Court judge in Manhattan, will bring distributions so far to almost $400 million, “appearing to be the most to date by any Madoff-invested entities,” according to an e-mailed statement on behalf of the liquidator, Bart M. Schwartz.
Schwartz said in the statement today that he expects to ask the court to approve another distribution relatively soon, probably in 60 to 90 days.
Merkin was sued by Andrew Cuomo, then New York’s attorney general, for allegedly steering $2.4 billion to Madoff in exchange for almost $500 million in fees. Madoff is serving 150 years in prison after pleading guilty in 2009 to running the biggest Ponzi scheme ever.
Schwartz sued Merkin in state court in September 2010, accusing the investment adviser of breaching his fiduciary duty, gross negligence and fraud.
Investors including prominent charities entrusted their funds to Merkin. Institutions that have alleged they lost money in Merkin’s investments with Madoff include New York University, Yeshiva University and New York Law School.
U.S. District Judge Deborah Batts in Manhattan in September dismissed lawsuits filed by Merkin investors, ruling that they can’t show that Merkin lied about money invested in Madoff’s fund.
The cases are Cuomo v. Merkin, 450879/2009; and Schwartz v. Merkin, 651516/2010, New York State Supreme Court (Manhattan.)
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