Bloomberg News

Madoff Trustee Pulls Appeal of $59 Billion UniCredit Ruling

April 11, 2012

The liquidator of Bernard Madoff’s firm withdrew a notice of appeal of a court ruling that tossed most of his $59 billion in claims against UniCredit SpA (UCG), Sonja Kohn and other defendants, leaving in place earlier appeals seeking to recover about $30 billion in damages from banks.

Madoff trustee Irving Picard gave notice to a U.S. appeals court in Manhattan last month that he might appeal U.S. District Judge Jed Rakoff’s February ruling in the case. Rakoff dismissed Picard’s claims under the racketeering statute, which allows for triple damages, saying he couldn’t prove his allegations. Picard’s withdrawal of his appeal, which he has the right to reinstate later, was approved by the appeals court yesterday, according to a filing.

Picard had $90 billion in claims before the appeals court, out of about $100 billion he had demanded in more than 1,000 suits to gather money for customers with Madoff Ponzi scheme losses. Rakoff and another district judge, Colleen McMahon, dismissed the claims in Picard’s suits against banks including JPMorgan Chase & Co., HSBC Holdings Plc, UBS AG and UniCredit, which is a defendant in the HSBC case as well as the Kohn suit.

In his written opinion on the UniCredit racketeering case, Rakoff said Picard made a “casual assertion” that the defendants “fed, perpetuated and profited from” Madoff’s Ponzi scheme, and failed to show a direct relationship between the alleged criminal acts and resulting injuries to the con man’s customers.

Common-Law Claims

Rakoff also dismissed common-law claims including unjust enrichment and conversion. He directed that the remaining claims be returned to bankruptcy court.

Marco Schnabl, a lawyer for UniCredit, didn’t immediately return a call seeking comment on the withdrawal of the appeal in the racketeering case. Picard spokeswoman Amanda Remus didn’t immediately respond to an e-mail seeking comment.

UniCredit, based in Milan, and other defendants are trying to move the diminished Kohn and HSBC cases back to district court again, saying that Rakoff’s rulings in the Mets owners’ case raise new issues about how much profit and principal the trustee can claw back and what he is required to prove.

Madoff, 73, is serving a 150-year sentence in a federal prison in North Carolina for running a Ponzi scheme that defrauded investors of an estimated $20 billion in principal. Picard and his law firm, Baker & Hostetler LLP, have charged about $273 million for their work on the Madoff estate so far.

The case is Picard v. Kohn, 11-CV-1181, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Linda Sandler in New York at; Bob Van Voris in New York at

To contact the editors responsible for this story: John Pickering at; Michael Hytha at

The Good Business Issue
blog comments powered by Disqus