Lawsuits in the liquidation of Bernard L. Madoff Investment Securities LLC are frozen in place until the U.S. Court of Appeals rules on whether the trustee can reach back six years rather than two years to recover fictitious profits some customers were able to take out before the Ponzi scheme collapsed. On the Bloomberg bankruptcy podcast, Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle explain why the case might reach the appeals court next year, or years from now, depending on a ruling to be made soon my U.S. District Judge Jed Rakoff. Rochelle explains how the lawsuit between Innkeepers USA Trust and Cerberus Capital Management LP demonstrates the importance of carefully negotiating a liquidated damage clause that often seems like insignificant boilerplate. The podcast ends with discussion of a case where the U.S. Court of Appeals in Boston refused to let an insurance company use an insured's bankruptcy as a get-out-of-jail free card.
Running time 12:04