Investors take Madoff to bankruptcy court

Bilked clients demand $64 million from Madoff in new filing.

April 16, 2009 07:22
1 minute read.
Investors take Madoff to bankruptcy court

madoff faces media 248.88. (photo credit: AP)


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A small group of investors took Bernard Madoff to bankruptcy court on Monday, saying the disgraced financier bilked them out of nearly $64 million. A Manhattan judge cleared the way for the newly filed Chapter 7 petition last week by granting a request from the same investors to lift a temporary order barring bankruptcy for Madoff. They had argued that a bankruptcy case was needed to protect their rights amid an ongoing scramble to seize his assets. Madoff, 70, pleaded guilty last month to federal charges his secretive investment advisory service actually was a multibillion Ponzi scheme in which he paid longtime clients with money from new ones. He is jailed, awaiting a June sentencing for charges that carry a sentence of up to 150 years in prison. Federal authorities already have begun forcing Madoff to forfeit property they allege was paid for by his fraud. In addition, a court-appointed trustee is liquidating assets from his securities firm to help play claims from thousands of burned investors. The investors who sought bankruptcy believe it was the best way to make sure "all the property available would go to the victims," their lawyer, Jonathan Landers, said on Monday. They include a general partnership in Florida that claims it lost $30.2m. and another Madoff client who says he lost about $29m. in personal and charitable trust accounts. The claims are based on amounts listed in the last statements they received from Madoff - documents investigators say were fictitious. Landers said he expected the bankruptcy court to appoint a second trustee to oversee distribution of his personal assets since Madoff "can't conduct his affairs from jail." A summons for Madoff listed his address as the Metropolitan Correctional Center in lower Manhattan. In a document prepared for the US Securities and Exchange Commission late last year, Madoff claimed he and his wife had $823m. in assets at the end of last year, including $22m. in properties stretching from New York to the French Riviera, a $7m. yacht and a $2.2m. boat named Bull. But the bulk of Madoff's assets, according to the document, consisted of an estimated $700m. value put on his investment firm.

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