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Madoff Trustee requests allocation of USD247m to customer fund

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Irving H Picard, Securities Investor Protection Act (SIPA) Trustee for the liquidation of Bernard L Madoff Investment Securities LLC (BLMIS), has filed a motion in the United States Bankruptcy Court for the Southern District of New York seeking approval for an allocation of recoveries to the BLMIS Customer Fund and an authorisation for a seventh pro rata interim distribution from the Customer Fund to BLMIS customers with allowed claims. 

A hearing has been scheduled for Wednesday, 15 June, 2016, at 10:00 am EDT.

Plans for a seventh interim pro rata distribution may now be made, as a result of the SIPA Trustee and his legal teams – led by his Chief Counsel, David J Sheehan – having successfully reached recovery agreements during the past six months with a number of parties, among them: Vizcaya Partners Limited, entities of Bank J Safra, Asphalia Fund, Ltd., Zeus Partners Limited, Pictet et Cie, and entities related to Thybo Asset Management Ltd. With these and other additional funds, the SIPA Trustee stands ready to make a seventh pro rata distribution to allowed claimants of 1.173 per cent on each allowed claim.

If the motion is approved, the SIPA Trustee will allocate approximately USD247.013 million to the BLMIS Customer Fund, with approximately USD171.016 million available for immediate distribution to customers with allowed claims and approximately USD75.997 million held in reserve for claims that are deemed determined pending the resolution of litigation, as well as other issues.

This seventh interim distribution, when combined with the prior six distributions, will equal 58.237 per cent of each customer’s allowed claim amount, unless that claim has been fully satisfied. The amount distributed to eligible BLMIS customers will total approximately USD9.45 billion, which includes more than USD836.63 million in advances committed by the Securities Investor Protection Corporation (SIPC).

Stephen P Harbeck, President and CEO of SIPC, says: “Time is of the essence for Madoff’s victims. We applaud the ongoing, unflagging efforts of the SIPA Trustee and his teams to put money back in the hands of the Madoff victims.”

“It is vital to move expeditiously to return stolen Madoff funds to the rightful owners,” says  Picard. “The victims have waited years for restitution. This distribution is somewhat smaller than our prior actions, but it is still significant, especially for the additional claimants whose claims now will be fully satisfied.”

“Our ongoing ability to return funds to Madoff’s victims is a testament to the strength of our litigation activities as well as to our successful settlement negotiations,” says Sheehan. “With this positive momentum, we are confident we can deliver additional recoveries and distributions this year.”

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