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Seventh pro rata interim distribution of recovered funds to Madoff customers

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Irving H Picard, Securities Investor Protection Act (SIPA) trustee for the liquidation of Bernard L Madoff Investment Securities (BLMIS), says the seventh pro rata interim distribution from the Customer Fund to eligible BLMIS customers commenced on 30 June 2016.

The SIPA trustee is distributing approximately USD190.247 million on a pro rata basis to BLMIS account holders with allowed claims, bringing the aggregate amount distributed to eligible claimants to approximately USD9.47 billion. This includes approximately USD836.6 million in committed advances from the Securities Investor Protection Corporation (SIPC).
 
The seventh distribution represents 1.305 per cent of each claim dollar and will be paid on claims relating to 972 BLMIS accounts to record holders of allowed claims as of 15 June 2016. When combined with the prior six distributions, in aggregate, at least 58.369 per cent of each customer’s allowed claim amount will be paid, unless that claim has been fully satisfied.
 
“I remain optimistic that the trustee and his team, together with SIPC, will achieve additional milestone distributions like the one announced today,” says SIPC president and CEO Stephen P Harbeck. “SIPC’s support of the liquidation continues, with our shared goal of maximising the return of stolen funds to eligible victims as quickly as possible.
 
“I’d also like to underscore the fact that all administrative costs of the Madoff Recovery Initiative are funded by SIPC, meaning that 100 per cent of recoveries are returned to the legitimate owners and none of the costs to right the wrongs done by Madoff are borne by his victims.”
 
The seventh interim pro rata distribution was reached as a result of the successful negotiations of the SIPA trustee and his legal teams – led by his Chief Counsel David J Sheehan – over the six months between November 2015 and May 2016 with a number of parties including Vizcaya Partners, entities of Bank J Safra, Asphalia Fund, Zeus Partners, Pictet et Cie, and entities related to Thybo Asset Management.
 
The average payment for an allowed claim issued in the seventh distribution will total USD195,727.68. The smallest payment totals USD136.69 and the largest payment is USD31,942,323.51. In addition, SIPC will be reimbursed for its advances to accounts that the seventh interim distribution has fully satisfied.
 
Currently, the SIPA trustee has allowed 2,597 claims related to 2,249 BLMIS accounts. Of these, 1,296 accounts will now be fully satisfied following the seventh interim distribution. All allowed claims totalling USD1,200,024.90 or less will be fully satisfied after the distribution.
 
To date, the SIPA trustee has recovered or reached agreements to recover approximately USD11.168 billion since his appointment in December 2008. These recoveries exceed similar efforts related to prior Ponzi scheme recoveries, in terms of dollar value and percentage of stolen funds recovered.
 
Ultimately, 100 per cent of the SIPA trustee’s recoveries will be allocated to the Customer Fund for distribution to BLMIS customers with allowed claims.

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