The trustee for convicted Ponzi scheme mastermind Bernard Madoff’s defunct brokerage, who has appealed a ruling by a Manhattan federal judge that permits New York Attorney General Eric Schneiderman to complete a $410 million settlement with Madoff investor J. Ezra Merkin, accused the judge of “abuse of discretion” in saying the trustee waited too long to stop the deal.
Trustee Irving Picard said he wasn’t trying to stop the settlement “for all time,” only until he had taken money from Merkin. U.S. District Judge Jed Rakoff also erred in “holding that the trustee had an obligation to rush to the courthouse and file suit,” rather than negotiating with Schneiderman for a delay, as he had tried to do, Picard said in a filing with the U.S. Court of Appeals in New York yesterday.
The settlement will compensate Merkin investors who lost money in the Ponzi scheme and aren’t eligible for compensation from the Madoff estate run by Picard, the attorney general has said. Picard, who also has appealed rulings barring him from collecting $30 billion from banks, seeks to take $500 million from Merkin for a different set of Madoff investors. Rakoff dismissed what he called Picard’s entire effort to “derail” the accord, saying that by law, he waited too long to assert his own claim as trustee.
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