madoff after court 248.88 ap.
(photo credit: AP)
A US Bankruptcy Court judge on Tuesday approved the transfer of $28.1 million to cover expenses tied to the liquidation of Bernard Madoff's investment firm.
Madoff is accused of running an elaborate pyramid scam that duped investors - including individuals, charities and large banks - out of potentially $50 billion.
Irving Picard, the trustee presiding over the liquidation of Madoff's investment firm, said he needed the $28.1m. to cover employee salaries and other costs, according to court documents. Bank of New York Mellon Corp. previously agreed to transfer the funds, but Bankruptcy Judge Burton Lifland first had to approve the transfer.
Richard Bernard, a lawyer with Baker Hostetler who was representing Picard at the hearing, said the transferred funds will not affect any recovery for investors. The funds are being transferred from one account that had already been frozen. Lawyers continue to investigate if Madoff had any other accounts that have not yet been frozen, Bernard said.
BNY Mellon already transferred about $883,000 to cover costs tied to the liquidation.
Picard will oversee the liquidation of assets from Madoff's investment firm as the Securities Investor Protection Corp. attempts to help investors recoup their money. SIPC was created by Congress in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts. Funds can be used to satisfy the remaining claims of each customer up to a maximum of $500,000. The figure includes a maximum of up to $100,000 on claims for cash.
Madoff faces a Wednesday deadline to provide the Securities and Exchange Commission with a written accounting of his assets, liabilities and properties. The report will likely provide insight into how much money investors could recover.
Madoff agreed to list all assets, funds or property he held and the names and locations of entities, bank accounts, brokerage accounts, investments or assets held by his business, Bernard L. Madoff Investment Securities LLC.
On Monday, a judge presiding over civil claims against Madoff said he may be willing to consider extending relief to those who invested in Madoff's business through third parties. To consider allowing investors who invested through third parties to file claims with SIPC, US District Judge Louis L. Stanton said he needs a formal application and briefing from SIPC, the Securities and Exchange Commission, a trustee for Madoff's business and representatives of investors.