Irving H Picard, SIPA trustee for the liquidation of Bernard L Madoff Investment Securities, is currently distributing approximately USD506.2m on a pro rata basis to BLMIS account holders with allowed claims.
This third interim distribution brings the amount distributed to eligible claimants to USD5.44bn, which includes approximately USD807.2m in committed advances from the Securities Investor Protection Corporation (SIPC).
When combined with the funds previously returned to BLMIS customers, the distribution fully satisfies more than 50 per cent of the total current accounts with allowed claims.
In the third distribution, allowed claim holders will receive approximately 4.721 per cent of the allowed claim amount of each individual account, unless the claim is fully satisfied. Currently, 2,178 account holders have allowed claims and, of these account holders, 1,106 will be fully satisfied following the third interim distribution. The average payment in this distribution is approximately USD459,000 and the largest payment is approximately USD116m.
“This distribution is another important milestone in the global Madoff Recovery Initiative,” says Picard. “Significant recoveries remain on hold, however, pending appeals and court rulings. Our twin priorities are not only to continue building the Customer Fund with additional recoveries, but also to keep pushing hard for resolutions that will enable further distributions this year.”
“This is one of the most difficult, complex and time-consuming cases in history and SIPC’s deep involvement and its funding of the litigation have contributed significantly to the recoveries that have been achieved,” says Stephen P Harbeck, president and chief executive of SIPC. “The SIPA trustee’s priorities are the same as SIPC’s, to recover and distribute funds as quickly as possible to BLMIS customers with allowed claims.”
Funds for the third distribution are drawn primarily from the allocation of approximately USD1.2bn from the Tremont Funds settlement and other funds recovered by the SIPA Trustee since the second interim distribution in September 2012 through 28 February 2013.
“While we cannot predict the timing of the next distribution, we expect that 2013 will bring significant advances on a number of legal fronts, particularly in international matters,” says David J Sheehan, chief counsel to the SIPA Trustee. “We are confident in our legal positions and we look forward to more good news this year for BLMIS customers.”
Approximately USD3.626bn has been distributed to date to BLMIS accountholders with allowed claims through the second pro rata interim distribution and approximately USD499.8m through the first pro rata interim distribution.
The SIPA trustee has recovered or reached agreements to recover approximately USD9.320bn since December 2008, representing more than 53 per cent of the approximately USD17.5bn in principal estimated to have been lost in the Ponzi scheme by BLMIS customers who filed claims. These recoveries exceed similar efforts related to prior Ponzi schemes, in terms of dollar value and percentage of stolen funds recovered.
One hundred per cent of the SIPA trustee’s recoveries will be allocated to the Customer Fund for distribution to BLMIS customers with allowed claims. All administrative costs of the SIPA liquidation of BLMIS have been funded by SIPC. Recoveries for the Customer Fund are paid to BLMIS customers in accordance with SIPA.