A Virgin Islands-based liquidator and a court-appointed trustee presiding over the bankruptcy of Bernie Madoff’s investment fund have agreed not to sue each other, instead pledging to work jointly to recover investors’ assets stolen in the Ponzi scheme, officials said.
The agreement was announced Monday between Irving Picard, the New York-based trustee, and the firm KRyS Global, which is acting as liquidator for the Fairfield Funds. The funds were three VI-registered “feeder funds” that were used to channel money to Mr. Madoff’s investment fund.
After news of the massive Ponzi scheme broke in 2008, the trustee filed a claim for more than $3 billion that the funds withdrew from Mr. Madoff’s fund between 2002 and 2008, according to a press release from KRyS Global. The KRyS firm then filed claims for $1.2 billion against the Madoff fund under the Securities Investor Protection Act, though the trustee asserted those claims should be disallowed, the release stated.
Under the deal reached Monday, Fairfield Sentry, the largest of the feeder funds, will pay $70 million to the trustee; in exchange, the trustee will allow Fairfield Sentry to make a customer claim of $230 million, according to the release.
See the May 12, 2011 edition for full coverage.